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:
- 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;
- 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
- 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’.