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Oracle Fusion Cloud Enterprise Resource Planning (ERP) transformation and downstream applications
Global Chart of Accounts (“COA”) and ERP Implementation with the existing downstream applications helps in creating efficiencies in business insight processes and the ability to access data in a common language while also helping to reduce downstream impacts.
Industry-leading financial services clients often recognize Oracle Cloud ERP implementations as one of the crucial drivers of innovation and a strategic pathway to help attain competitive advantage. Fundamental to substantial ERP-led transformation initiatives is typically the establishment of a new enterprise structure including ledgers, business units, and a redesign of global chart of accounts (COA). The redesign of the COA can present many clients with a valuable opportunity to modernize outdated business processes and help enhance analytics capabilities.
Clients undergoing finance redesign initiatives encounter substantial changes not only in the applications being replaced but also in the upstream (feeders) and downstream applications (consumers). The downstream remediation scope is typically evaluated separately from the upstream changes which can lead to a potential time lag that may result in significant disruptions to business processes, potentially jeopardizing the success of the transformation initiative in delivering value within the expected timeframe.
Addressing downstream system retrofitting can be time-consuming and, in some instances, may not be entirely feasible. To help mitigate the risk to the transformation program and, depending on the downstream application landscape, a solution such as a reverse map or an approach from the new chart back to the legacy chart enables downstream applications to operate with fewer disruptions. Having remediation plan upfront, allows for a phased and more manageable implementation of the transformation, helping to reduce the likelihood of business process disruptions.
Considerations for Oracle Cloud ERP transformation and downstream
It is important to have a clear objective and strategy for addressing downstream applications needs during a Global ERP implementation. PwC can provide the industry-leading capabilities needed for Oracle Cloud ERP implementations in addition to helping determine banking industry specific requirements and provide the structured approach to address them. When preparing for a finance transformation, be sure to evaluate downstream applications on the following parameters:
Potential solutions for Oracle Cloud ERP transformation and downstream applications
As one of the leading Oracle Cloud ERP implementors, PwC has evaluated several solutions to help mitigate the impact on the downstream applications. Below are some key solution options to consider during global implementations, including Chart of Accounts (COA) redesign, aimed at minimizing the disruption to the downstream applications and processes. These strategies can be reinforced through a downstream impact analysis, evaluating the nature, extent, and feasibility of downstream remediations in alignment with implementation timelines.
1. Rule-based mapping engine
Establish a comprehensive reverse mapping for data, guided by account management governance through a consistent rule-based mapping approach. This ensures data integrity, data lineage and facilitates smooth transitions between new and legacy COAs.
2. Ledger construct
Utilize the scalable Oracle General Ledger construct to help establish an enterprise structure supported by a rule engine. This helps direct transactions with mappings for both new and legacy COAs, thereby reducing the complexity of reverse mapping rules.
3. Retrofitting downstream applications
Mandate downstream applications transition to the new COA, providing a consistent solution across various applications. This approach ensures uniformity, data lineage and reduces discrepancies within the financial data across the enterprise.
Rule-based mapping engine and ledger construct (Options 1 and 2) are both automated solutions that can leverage delivered - ERP functionality whereby new chart-to-old-chart ‘reverse mapped’ rules can be housed within the Oracle ecosystem leveraging PaaS application, Oracle Financial Services Analytical Applications (OFSAA) or Enterprise Data Management Cloud Service (EDMCS) and/or Accounting Hub Cloud Service (AHCS). These options provide a streamlined and efficient approach to managing the transition and the need for extensive manual interventions.
While retrofitting downstream applications to the new COA offers a consistent solution, maintain operational efficiency, it is a complex, costly, and time-intensive process. It often requires external vendor support and/or beyond project team to manage and implement the changes effectively within the downstream applications. Due to these challenges, Options 1 and 2 are often the preferred choices for banks and financial services clients. These options will be covered in greater detail in the subsequent sections.
Solution 1 Rule-based reverse mapping engine
Approach overview
This reverse mapping approach involves the establishment and ongoing maintenance of rule-based mappings until each downstream application successfully adopts the new Chart of Accounts (COA) for input, processing, and reporting. In this approach, clients can use any of the Oracle products like OFSAA, EDMCS, PaaS application, and/or Accounting Hub to house and maintain mapping rules. This strategy allows organizations to transition smoothly to the new COA while ensuring continuity and accuracy in downstream applications.
By implementing the reverse mapping solution, organizations can achieve a balance between adopting a new COA and maintaining the integrity and functionality of downstream applications. This approach minimizes disruption and provides a clear path toward long-term integration and automation.
Solution 2 Ledger construct
Approach overview
The ledger construct approach leverages Oracle General Ledger to establish an enterprise structure that maintains data in both the new and legacy Chart of Accounts (COA). This method involves extracting legacy COA data from the ledger and interfacing it with downstream applications, ensuring smooth operations during the transition period. AHCS ensures source feeds get recorded in both new and lecUser access is controlled to ensure all operations are conducted within a single general ledger, minimizing manual processes and AHCS ensures source feed.
By implementing the ledger construct approach, organizations can achieve a balance between adopting a new COA and maintaining the integrity and functionality of downstream applications. This approach minimizes disruption and provides a clear path toward long-term integration and automation. It allows business users to operate efficiently on a single general ledger while ensuring that downstream systems continue to function correctly.
Navigating downstream impact mitigation: key success factors
Clear strategy
Define clear solution strategies to help mitigate downstream impacts
Determine downstream's alignment with new COA, necessitating an interim or permanent solution
Finalize the need for a secondary ledger and/or required level of reverse mapping and plan to maintain them
Well-defined solution rollout strategy
Integrate downstream solutions into the main capability rollout or subsequent phases
Align downstream solutions with the sequence of global rollouts based on capabilities (e.g., HR, Finance, SCM)
Stronger technology solution capabilities
Implement a scalable and extendable solution to help accommodate future growth, expansions, and regulatory changes
Incorporate analytical and reporting capabilities for data-driven decisions for both data in the new chart as well as in legacy chart
Engage in a deal skill mix: Oracle functional, Oracle Tech and Business SME
Involve Oracle Functional SMEs in the configuration of reverse mapping and/or secondary ledger
Leverage Tech SMEs with knowledge of data relationships of upstream/downstream systems
Engage business process SMEs to help address varying downstream reporting needs across groups/companies
Active collaboration with stakeholders
Integrate downstream impacts and solutions into the communication strategy
Collaborate with local stakeholders, Operations SMEs, business partners, customers, and suppliers
Effective governance
Establish industry-leading processes as the standard, with steering committee-approved exceptions for exception application needs
Establish a global and 'application-specific' Project Management Office (PMO) structure for governance and control
Conduct architectural reviews for overall and respective downstream application and technology solutions
Let PwC help you future proof your finance transformation with Oracle Cloud. Get in touch and explore services and solutions from PwC and Oracle Alliance.
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