ERP

Managing Multiple Accounting & Reporting Standards

Many of our multi-national clients have the same challenge – local reporting on one accounting standard (normally local GAAP);  group reporting (normally a flavour of IFRS) on another; as well as specific reporting requirements for regulators in certain verticals.

The difference between accounting standards can be summarised as follows:

  • Differences in report definitions (for example, the balance sheet may be presented in an different order, granularity or definitions); and
  • Differences in accounting policy (say development cost may be expensed under one standard and capitalised under another).

From my experience as an auditor, report definitions should be treated as an integral part of a company’s financial reference data, as they are one of the major reasons for material disclosure errors. Oracle Hyperion Data Relationship Manager (DRM) is a dedicated financial metadata management tool that we have implemented successfully at our clients to govern metadata and report definitions.

Historically differences in accounting policies are normally tackled by using adjustment ledgers or separate ledgers. This often introduces a governance problem, in that different subsets of a chart needs to be shared across multiple ledgers, and kept aligned.

Oracle Hyperion DRM is adept at defining these types of business rules and controlling the complete ERP metadata. It is application independent and can therefore integrate with ERP’s from any vendor. We have found it to be a very useful and flexible tool to manage multiple accounting and reporting standards, as well as many other historically challenging scenarios.

 

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UK's Favourite Retailer selects Seismi and Oracle DRM!

Some good news to share! We have started a comprehensive BI (Business Intelligence) Finance initiative for the UK’s favourite retailer. We have been asked to design a solution to use Oracle Hyperion DRM  (Data Relationship Manager) as the single repository of all the retailer’s financial masterdata.  Oracle Hyperion DRM will provide them with a comprehensive governance solution enabling efficient maintenance of all their core financial masterdata.

Oracle Hyperion DRM’s scope will encompass Oracle EBS, ERPi (Enterprise Resource Planning Integrator), FDM (Financial Data Quality Management), HFM, Essbase and OBIEE (Oracle Business Intelligence Suite Enterprise Edition) applications and tools.

This represents another great opportunity to show how masterdata management (MDM)  should be a primary consideration at the start of any EPM (Enterprise Performance Management) initiative, not, an afterthought.

We look forward to sharing more over the course of the project. Off to celebrate!

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Webcast | Is Chart of Accounts Management Costing You More Than It Should?

This free webcast will be happening at 1pm (GMT) on Tuesday 17 April 2012 and will show how you can save 1000’s of man days effort yearly by centralising Chart of Accounts management and building efficiencies into your organisation by eliminating Human Middleware and automating your process.  Register here

Any good business knows the importance of having a well-aligned Chart of Accounts (CoA) to enable effective analysis, reporting and decision-making. But manually organising data and meta data from fragmented systems can be a complex and costly process damaging data integrity, impeding financial controls, and driving up costs.

Oracle Hyperion Data Relationship Management (DRM) allows you to seamlessly integrate chart of accounts and other meta data from multiple systems, simplifying data analysis and delivering reliable information to all your decision-makers.

Seismi have been invited by Oracle to discuss relevant case studies and explain how to avoid common project errors, and show how you can:

  • Increase efficiency with proven best practices in CoA design and maintenance;
  • Accelerate ERP upgrades and consolidations with a streamlined CoA;
  • Mitigate governance risk by consolidating disparate systems into a single, unified view; and
  • Gain a clear financial understanding of acquired companies with rapid analysis of critical information.

The webcast will be useful for the following:

  • Financial Controllers;
  • Financial Directors;
  • Finance Managers;
  • Finance Systems Managers; and
  • Anyone involved or embarking on any finance systems transformation program!

Don’t miss this opportunity to see how you can prevent Chart of Accounts management from costing you more money than it should.

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Video | Using Masterdata Governance to overcome Business Challenges (Part 4)

This week we will building on what we saw last week where we looked at using Oracle Hyperion Data Relationship Manager (DRM) to govern an ERP system – Oracle E-Business Suite (EBS) but it could be any ERP suite. In addition to governing Oracle EBS, Oracle Hyperion DRM will be used to govern the Hyperion Financial Management (HFM) consolidation tool and a reporting tool (Oracle Essbase).

As you will see in the video the user interface is very intuitive and we aim to build on your understanding of the true power and potential of Oracle Hyperion DRM. We will see that we can control structures in our transactions, consolidation and reporting applications. This demonstration will also show how easy it is to implement business rules and that users, of Oracle Hyperion DRM are forced to consider the impact of their changes on all other related applications.

See you next week where we will be looking at how using an integrated Oracle Hyperion DRM template allows us to extract data out of Oracle EBS, supply it with a mapping and load it into Essbase & HFM in an automated and reliable way.

 

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Video | Using Masterdata Governance to overcome Business Challenges (Part 3)

In last week’s video blog Ross Gilfillan continued on our theme of how Oracle Hyperion Data Relationship Manager (DRM) can be used to solve business issues. Specifically he looked at how integrated templates can be used to both reduce implementation risks and costs as well as rapidly deploy solutions.

This week he starts to explore integrated templates in more detail and starts at looking how they can be used to govern Oracle E-Business Suite. As you will also see Oracle Hyperion DRM’s user interface is much more user friendly and intuitive than the native Oracle EBS interface.

Ross will continue to look at the flexibility, adaptability and other benefits of integrated templates in his next video where he will show that integrated templates can be used to govern multiple applications when it will be used to govern Oracle Hyperion Essbase and Oracle Hyperion Financial Management (HFM).

As always we encourage people to get in touch if they want to explore these key benefits in more detail.

 

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Video | Using Masterdata Governance to overcome Business Challenges (Part 2)

In our last video blog Ross Gilfillan looked at how Masterdata Governance, using Oracle Hyperion Data Relationship Manager (DRM) can be used to solve key business issues.

This week Ross will show how Oracle Hyperion DRM can be rapidly deployed using integrated templates and the benefits this provides. In addition he will make the distinction between integrated templates and standalone templates and specifically the additional functionality that integrated templates deliver to clients.

As always we encourage people to get in touch if they want to explore these key benefits in more detail.

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Video | Using Masterdata Governance to overcome Business Challenges (Part 1)

This week Ross Gilfillan will be introducing the start of a series of video blogs that explore how masterdata governance, using Hyperion Oracle’s Data Relationship Manager (DRM) tool, can be used to overcome a number of common business challenges.

These challenges include ongoing governance of disparate and distinct chart of accounts; integrating acquisitions; implementing and updating charts of accounts; and mapping.

Over the next few weeks Ross will look in detail at how Oracle Hyperion DRM can be used to govern Oracle’s E-Business Suite, Hyperion Financial Management and Hyperion Essbase.

Please do contact us if you would like to explore these topics in more detail. Ross’s contact details are also included at the end of the video.

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Integrating Acquisitions | More than just a consolidation exercise!

A blog focusing on mergers and acquisitions (M&A) may not seem to be topical in the context of the current economic malaise. However, the recent flurry of M&A activity shows that companies that have weathered the storm may have stronger balance sheets and be in a position to take advantage of market sentiment and acquire underperforming targets.

Once an M&A transaction completes all post-merger integration projects have one thing in common: a shortage of time! At best, the financial controller has 3 months to: align accounting policies and processes; create a data repository; and implement a short-term consolidation solution, all before the first quarterly return.

Most acquiring companies are of sufficient size and complexity to already have a consolidation tool sitting on top of their general ledger. The standard approach is to map the acquired company to the existing consolidation instance of the acquirer. The key challenges to this approach include the following:

1) How to physically manage these mappings, which can easily run to more than 200,000 data points? This is way too large to store in a spread sheet or to review and manage in a relational database.

2) How to ensure the accuracy and completeness of the mapping? Given that:

(a) the process of mapping is very time pressured;
(b) the source and target may use very different structures; and
(c) source and target are both moving!

In parallel to this immediate requirement, the post-merger integration team will also need to decide on the end state of the ERP (Enterprise Resource Planning) and management reporting. There are broadly 2 approaches: go for an immediate ERP conversion, or run the 2 ERP’s in parallel. There are distinct advantages to both approaches which I can go into in another blog. What is relevant to this blog, is that both require a robust and efficient solution to manage the account mappings.

To summarise, to optimally manage mappings during post-merger integration requires the following two key considerations:

(A) Requires a specialist masterdata tool to ensure the mapping process is efficient, accurate, complete, flexible and robust; and

(B) Is not just a tactical objective. Although the mappings are required for the short term financial consolidation, management reporting and ERP conversion, they will also be required when eventually you understand the strategic direction of your financial applications.

Experience with our clients has shown that using a combination of Oracle Hyperion Data Relationship Management (DRM) and Oracle Hyperion Essbase delivers rapid benefits in a highly controlled, robust and flexible environment. If you would like to learn more please get in contact.

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Chart of Accounts Conversion | Common Pitfalls (Part 2)

Last week we looked at the fundamental challenges associated with chart conversion projects. This week we thought that it would be useful to identify the common pitfalls that we see repeatedly. These include:

  • Treating accounting policies and practises as an afterthought – Many organisations only consider accounting policy very late in the project cycle, when either looking at standardising month-end processes or like-for-like reporting.  However, even a small accounting policy change can have a fundamental impact on your standard chart of accounts. For instance, a small change to how overhead costs are allocated could impact on the chart design, ERP logic, month-end close process or EPM design. As such accounting policy should be agreed as one of the first tasks of your project rather than one of the last;
  • Defining code logic before understanding reporting requirements – Often we see organisations define their standard chart first, and then define their report requirements. This creates an iterative process as every change to report requirements has to be reflected in the chart. This gradually  invalidates the code logic and creates rework. Reporting requirements should be prioritised so that there is a definite understanding of requirements prior to defining the code logic, therefore ensuring your new chart is fit for purpose. Your report requirements should then be validated by the business, using real data, before creating your chart logic and codes; and
  • Big Bang doesn’t work – As mentioned last week, coping with the impact of change on your budgeting and consolidation systems is one of the major challenges of a SCoA project. A common pitfall is to attempt to change your chart in your ERP and EPM applications at the same time. This greatly increases the complexity of your initiative, puts increased pressure on your project resources and can create a highly iterative chart design process. Changes required to meet planning requirements drive changes to the chart design and vice versa.  This is a difficult cycle to stop and will prove expensive and frustrating.

If you would like to understand any more about our approach, methodology or company, then please give us a call.

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Chart of Accounts Conversion | The Challenges (Part 1)

Standard chart of accounts (SCoA) conversion projects have the potential to be complex and risky. As such we thought it would be useful to investigate chart conversion over two blogs, starting this week with some of the following fundamental challenges:

  • Business Engagement – SCoA initiatives tends to arise when a legacy chart of accounts has become unwieldy through uncontrolled change whether dictated by mergers and acquisitions (M&A) or organic growth.  This change in business focus results in the need for better financial processes and reporting and often results in a SCoA project (although this is not the only option, but we will save that for a later blog).   The new SCoA needs to be ratified by multiple areas of an organisation, all fighting for their specific needs to be addressed.  Without careful management, this can become a very iterative process and the results can be an aggregated chart as opposed to a truly standardised structure;
  • Validation – Whilst it is an accepted fact that each area in the organisation will fight for its specific needs to be addressed, they are usually reluctant to sign off the chart until they see the impact on their reports and month end processes. In most cases, these numbers are only produced after a trial conversion to the new standard chart (with all the pain that accompanies that process). In our experience this is too late in the process and can result in many expensive iterations and trial conversions;
  • Satellite Systems Impact – A chart conversion will usually affect the interfaces between your various financial applications. In the worst case this can invalidate the design of existing consolidation, reporting and planning applications. Trying to change the interfaces and re-implement all of these applications whilst changing your chart of accounts dramatically increases the scope, complexity and risk of a SCoA project. Devising an effective approach to managing the impact of a chart conversion on your satellite applications is a major challenge for a SCoA project; and
  • Change Management – The existing financial applications continue to change during the CoA design and conversion process. This creates a challenging masterdata governance problem as masterdata created  during this period needs to be extracted and included in the design process. This creates multiple versions of the truth and can create a real headache for the design team. Similarly, managing multiple versions of SCoAs, report definitions, and mapping files is difficult.

Next week we will look at some of the common pitfalls of chart conversion.  If you would like to find out more about howSeismi helps our clients tackle these challenges, then please do not hesitate to get in contact.

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