Monthly Archives: October 2011

Governing EBS | Using Masterdata Governance to solve the 'Human Middleware' Problem (Part 2)

Following on from last week’s blog article where we discussed the issue of ‘human middleware’ this week we want to examine three of the typical challenges that our over-worked “human middleware” have to contend with.

1) Manual Governance – forecasting, consolidation and reporting systems typically use dimension structures that are derived from the Oracle E-Business Suite (EBS) chart of accounts, but which are customised depending on the specific system.  For example, a planning solution may require additional masterdata to support driver based budgeting.  Our poor human middleware has to understand the differences between each of the satellite applications and EBS; ensure completeness of mapping tables;  and finally prove data passed between the necessary application and EBS reconciles (usually supported by nothing more than a trusty spreadsheet that very few people understand and the burning of some serious midnight oil);

2) Report Definitions – obviously reporting happens at every level of an organisation: from an individual line manager reporting on his specific area of responsibility, to the CFO trying to understand the financial direction of his company.  Each of these reports may be produced from separate reporting tools storing different definitions for key reporting constructs. (e.g. revenue).  This poses our downtrodden human middleware with a new set of issues, principally trying to align definitions across multiple reporting applications and then explaining any differences to the user community; and, finally

3) Integration – non-Oracle subledgers often share masterdata with EBS.  These subledgers should be made aware of any changes in valuesets, but also need to respect the business rules in EBS, specifically around valid combinations.

As you can see, our poor, embattled ‘human middleware’ could do with a hand.  Their lives would be made considerably easier if they had a single tool capable of understanding and storing structures, properties, mappings and relationships associated with their core masterdata in a single location, as well as automating these processes. Masterdata governance is the tool that can provide a real boost, not only to their working lives and overall productivity, but also to improve the quality of information reported as well as the ability of your company to react to inevitable change.

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Governing EBS | Using Masterdata Governance to solve the ‘Human Middleware’ Problem (Part 1)

Oracle E-Business Suite (EBS) has in-built functionality to maintain a chart of accounts. This includes: defining the segment structure of the chart of accounts; the value sets; creating basic reporting terms using parents and summary accounts; controlling the relationships between segments (using either cross validation rules or a combinations table).

So why bother with governing EBS? Very few EBS instances operate in isolation. For example, you need to forecast, consolidate and report using the data in the EBS General Ledger, and you need to load data from your forecasting systems and non-Oracle subledgers into EBS. The number of interfaces can be truly breath-taking yet for many large companies this business problem is managed using ‘human middleware’: accountants who spend month-end extracting and transforming data in spreadsheets to load into other systems, followed by reconciliation, error checking, re-running  and more reconciliation…

This reliance on ‘human middleware’ has a pervasive effect on the finance function:

  1. Reduction in analysis – By focusing on data transformation, reconciliation and report creation, the finance function surrenders its role as proactive business analysts who direct the strategy of the organisation and who are first to identify and react to tactical threats and opportunities;
  2. Obstacle to change – The consequence of the highly manual month end process is that the finance function is reluctant to change the way the business is measured or forecast because of the additional risk and addition effort this entails. The finance function thus unwittingly becomes an obstacle to change, rather than the champion it should be; and
  3. Loss of confidence – ‘human middleware’, despite incredible dedication, inevitably results in errors. As a result, the business starts to doubt finance function reports and starts performing its own reconciliation, data collection and analysis…

In next week’s blog we will explore what we see as the three key issues of manual governance, report definitions and integration as well as how masterdata can provide a real solution to ‘human middleware’.

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