Multinational Implementation Challenges - Panel

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Multinational Implementation Challenges - Panel

• Northern California GEO Group Training Day Jan 24
  2006
• Sponsored by the
• OAUG Multi-National Special Interest Group
• Hans Kolbe, Celantra Systems, Inc. Chairperson
  MN-SIG
• Kranti Atluri, Silicon Storage Technology, Inc.
• Nga Do, Salesforce.com
• Paul Kirch, Independent Consultant

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Goals of the Multi-National Special Interest
Group?

• Cross-Module and Cross-Geographies
• Processes and Issues specifically facing global
  or multi-country Oracle applications users
• Organize exchange of ideas and experiences
• Take active role in OAUG Enhancement process with
  Oracle Corporation
• Synchronize with other SIGs and GEOs

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Objectives of Global Implementation Workshops

• Communicate and Share Oracle Functionality
  Improvements, Third Party solutions and in-house
  solutions
• Collect Feedback for Oracle CAB and Liaison
  sessions
• Communicate program and project experiences

• Previous Multi-National SIG Workshops at Oracle
  Open World and at OAUG conferences in 2003-05,
  Paris June 2004, Oct 03, London June 03, NorCal
  July 2003).

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Global Implementation Key Issues

• Key project and business decisions
• Central versus local or regional control
• Containing and tracking variations without
  compromising integrity (DFF, Transaction Types,
  COA etc.)
• Customer, Vendor, Item global visibility, naming
  conventions, and maintenance
• Project Management across countries and regions,
  central team, local teams, external sources
• Key Oracle functionality issues remain
• Multi-org restrictions as related to Shared
  Services and Supply Chain Visibility
• Uncertainty about Legal Compliance tools
  (Globalizations, GAE, VAT) and varying legal
  requirements
• Intercompany models are not sufficiently
  developed
• Language issues (NLS, MLS)
• Single instance Issues (Performance, Time Stamp,
  Sys Admin complexities)

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MN SIG Workshop Results

• Significant shift to Global Implementations with
  11I Upgrade consolidate instances, global COA,
  global or regional business processes, SSCs.
• Biggest issues confirmed Multi-Org, IC, Legal
  Compliance
• Better direction from Oracle required to avoid
  lengthy investigation and verification by each
  individual client. Requesting recommendation of
  alternatives and complimentary tools. Example
  Sales tax or Trade compliance). No Global
  Implementation is known without significant
  customizations.
• Negative Feedback (if used at all) GlS, Global
  Accounting Engine, MLS, Multi-Byte, MRC, Euro
  Conversion,
• Positive Feedback Improvements to PA Accounting
  including cross-charging, OM, GL consolidation
  tools, IC Drop-Ship functionality in 11.5.9.,
  Internal Sales Orders in 11.5.9 Patch Set H and
  11.5.10. High hopes for Release 12 to be
  confirmed.

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Norcal OAUG September 7, 2015 International and
Global Implementation Karen McGrath Assistant
Controller
S i l i c o n S t o r a g e T e c h n o l o g
y, I n c.
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Company and Background

• SST is a leading provider of nonvolatile memory
  solutions
• Is a fabless company headquartered in Sunnyvale,
  CA
• Running on a single Instance with multi-org
• 17 Legal entities in 12 countries
• 24 Sets of Books with 5 inventory orgs, 5 have
  sub-ledgers, the others are used for GL
  consolidation with TB entry

SST Proprietary and Confidential
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Project Background

• Currently running on Oracle 11.0.3 since Jan 2000
• Use AR, AP, GL, FA, OE, PO, BOM, WIP, INV and
  Costing modules
• Large customizations include systems to process
  Vendor data and invoice automation
• Currently all ERP support is centralized in SV,
  CA with one person in Macao for local support on
  local time zone

SST Proprietary and Confidential
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Major Implementation Goals

• Plan to upgrade to 11.5.10 and implement OSFM,
  HRMS, I-Procurement and ASCP in Phase II
• Plan to implement B2B solution with the trading
  partners to process vendor data
• Implement Oracle as primary transaction system
  for most sub-ledgers. Plan to implement multi
  currency and multi language
• Decentralize Accounting functions to offshore
  locations using local language and local currency
• Phase out Local Accounting systems like UFS and
  VAT System used in offshore locations and have
  everyone use Oracle ERP

SST Proprietary and Confidential
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Challenges and Concerns

• Uncertainty of VAT and local Accounting
  requirements
• Local HR requirements not easy to access to give
  requirements to the implementation team to setup
• Language issues and reporting requirements for
  local compliance
• Currency translations and reconciliations between
  Inter Company transactions

SST Proprietary and Confidential
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Introduction

• Paul Kirch (paul_kirch_at_yahoo.com, cell
  408-316-5899)
• Independent Oracle consultant with 10 years
  experience with Oracle Apps
• Specialized in international implementations,
  with project experience in South America, Middle
  East, Europe and Asia, including Japan, PRC, and
  Taiwan
• CPA, MBA in International Finance, and a
  candidate for CFA (Certified Financial Analyst)
  designation
• Current Project Full suite of Oracle apps in
  rollout to 40 countries around the world,
  including China, India, Japan, 15 European
  countries, and the US
• Topic Global Multi-org design at Portland-based
  company, with principal manufacturing sites in
  Hillsboro, Ore., Peabody, Mass, Acht,
  Netherlands, and Brno, Czech Republic

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Multi-Org Alternatives
A) Standard Model - one SOB per country/currency
one legal entity/operating unit per legal entity.
A country/legal based model.
B) Inverted Model shared operating unit for
shared business processes - local GL SOB for
legal/statutory reporting. A business process
efficient model.
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Standard Oracle (Silo) Multi-Org Model All
Subsidiaries are Parallel Entities
Ledger Consolidation
Central L1410
Ger 1462
Fra 1475
U.K 1473
Ita 1463
Swe 1444
Den 1432
Hol 1461
Bel 1442
Swi 1465
Aus 1415
Spa 1467
Pol 14xx
Spa
Fra
Swe
Den
Por
Nor
EE
Mea
Fin
Inventory
Per Operating Unit One Validation Org for VAT
rates , One Planning Org , Global Master.
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Enterprise Consolidation With Push Down/Push
Up Model
WW Consolidated SoB GL
Eliminations and Consolidations Entries
Book of Record
Company Europe
Company Asia and U.S
Local Legal Adjustment Entries are booked at
country level
IT
FR
DE
HK
SG
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Shared Operating Unit Model General Concept
Shared Processes for Sales and Service Entities
Global Operating Unit GL, OM, AR, INV
Entity Separation by Balancing Segment
Local Legal Adjustment Entries are booked at
country level
Unit A
Unit B
Unit C
Unit D
Unit E
Unit F
Local Processes (AP, FA, Payroll?)
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More versus Fewer Inventory Org Tradeoffs
Issue More Inventory Organizations Fewer Inventory Organizations
Global MRP and Global Visibility to WIP Requires more MRP runs. No global MRP Spares and MFG have different MRP requirements
Inter-org Transfer Transactions More difficult as need to issue and receive Not needed if move within 1 inventory org
Financial Transactions (AR and AP invoices) Supported through Trading Networks Not supported within 1 inventory org
Global Visibility to Inventory and Demand More difficult with less visibility with gt orgs Less difficult (ideal is a single inventory org)
Ability to forecast and measure More difficult without Advanced Supply Chain Less difficult (ideal is a single inventory org)
Global Cost NA NA
Global Item Maintenance NA N/A