Oracle Financials Accounting Hub in Banking Industry

Transcription

1 Oracle Financials Accounting Hub in Banking Industry Anil Patil FUJITSU AMERICA 0

2 Agenda Introduction Case Study - Overview Integration Challenges in a non FAH world FAH Solution Offerings FAH Process Overview Implementation Approach Lessons Learnt Application Snapshot Q&A 1

3 Global Oracle Practice Fujitsu / Oracle 20+ Year Relationship End-to-End Solutions Strategic Assessments, Implementations &Upgrades Hosting Managed Services / Support Center of Excellence Thought Leadership Proof of Concept Environment ROI Discovery Sessions 2

4 Oracle Global Strategic Partner 3

5 Case Study - Overview One of the largest Japanese Bank Current Oracle footprint Oracle EBS Oracle GL, AP, FA Many legacy systems interfacing directly to GL Reporting Data extracted from various sources The Big Question R12 upgrade with or without FAH? How to handle multiple GAAP reporting? Proof of Concept Engagement Three Legacy System 4

6 Case Study - Overview POC - Objectives Multi-GAAP Accounting Drill Down from GL to Sub-Ledger Journals and Supporting Reference Data Supporting Reference with Balances User Transaction Identifiers Draft Accounting Foreign Currency Transaction Accounting User Transaction Identifier Addition Accounting Rule change and its Impact Event Modeling v/s Pass through Journal Entries Other FAH capabilities like Import Export and Copy application definitions 5

7 Integration Challenges (Non FAH World) System 1 System 2 System 3 System 4 Black Box (Rules, Mappings, Acct Derivations etc.) Oracle General Ledger System n 6

8 Integration Challenges (Non FAH World) Not Capable for Multi GAAP Accounting Entire Intelligence of generating the Accounting entries is hidden The Flow is One-Directional Complete Audit trail is not possible System is not Flexible No Standardization System is not Scalable Reusability is very Limited Reconciliation Issues Lack of confidence in the Financial Figures High Cost of Maintenance Reclassification of Journal Entries after Journals are created in GL 7

9 Integration Challenges (Non FAH World) New System Integration Big IT Project Testing Cycles are huge Integration is time consuming Increased Manual Intervention Addition to the Black Box Intelligence still hidden Increased Lack of confidence in the financial figures 8

10 FAH Solution Offerings Single of Accounting Truth Loans System Deposits Payments Centralized Accounting Rules Centralized Accounting Repository Maintains configurable, detailed Information Contextual transaction information for reconciliation Quickly update Accounting Rules Financial Accounting Hub Multiple GAAP representation Drill down from GL to FAH to System Configurable Supporting Reference Balances Intuitive User Interface for Business Analyst Inbuilt Validations, Error Handling, Version Control General Ledger Analytics Reporting 9

11 FAH Solution Offerings Multiple Accounting Representation Primary Ledger (US GAAP) Secondary Ledger (IFRS) US GAAP Subledger Accounting Method IFRS Subledger Accounting Method US GAAP Application Accounting Definition Financial Accounting Hub IFRS Application Accounting Definition Accounting Event 10

12 FAH What s not in it Data Extraction Event Creation Calculation Engine for System calculations Inbuilt Intelligence for IFRS Accounting or any GAAP Accounting 11

13 Financial Accounting Hub Process Overview 12

14 Accounting Method Builder Accounting Method Builder (Building Accounting Rules) Application Event Entities System Transaction Identifiers Event Classes s User Transaction Identifiers Transaction Objects Event Types Journal Line Definition Header Assignments Header Description & Supporting References Journal Line Types Account Derivation Rules Line Description Supporting References 13

15 Financial Accounting Hub Uptake Process 14

16 Event Model Event Model Sub Ledger Application Entity Code 1 Entity Code 2 Event Class 1 Event Class 2 Event Type 1 Event Type 2 15

17 Event Model: Event Types Event Model Sub Ledger Application Entity Code 1 Entity Code 2 Event Class 1 Event Class 2 Event Type 1 Event Type 2 16

18 Event Model: Event Types Lowest level of the Event Model Represent the business operation that can be performed on a transaction/document Event Types determine which Accounting Rules should be used Journal Information (lines, accounts, descriptions, supporting references) are associated with event types Provides the accurate name and description of the business event which gave rise to the subledger journal entry 17

19 Event Model: Event Classes Event Model Sub Ledger Application Entity Code 1 Entity Code 2 Event Class 1 Event Class 2 Event Type 1 Event Type 2 18

20 Event Model: Event Classes Groups accounting event types into user oriented transaction categories. (Invoice creation, Invoice Approval, Invoice Cancellation are grouped in a class called Invoices) Accounting definitions usually differs by Event Classes Transaction Objects, s, default assignments of accounting attributes are made at the Event Class level. GL Journal Categories are tied with Event Classes 19

21 Event Model: Event Entities Event Model Sub Ledger Application Entity Code 1 Entity Code 2 Event Class 1 Event Class 2 Event Type 1 Event Type 2 20

22 Event Model: Event Entities Highest level grouping of similar transactions Groups event classes into technical transaction model All underlying transactions share the same identifier (System Transaction Identifier) All underlying transactions share the same data structure Often logically corresponds to a single document used as a basis for several related transactions 21

23 Event Model: Subledger Application Event Model Sub Ledger Application Entity Code 1 Entity Code 2 Event Class 1 Event Class 2 Event Type 1 Event Type 2 22

24 Event Model: Subledger Application Partitioning of Subledger Data GL Journal is aligned at this level Generally this level aligns with a third party source system Multiple source systems can link to the same subledger application Application Accounting Definitions cannot be shared across applications 23

25 Event Model: Example Event Model Payables Invoices Payments Standard Invoice Prepayment Invoice Credit Memo Invoice Validation Invoice Cancellation Invoice Adjustment 24

26 Implementation Road Map Implementation Approach Current Architecture Future Architecture System 1 System 1 System 2 System 2 System 3 System 4 Custom Build Accounting Transformation Engine Oracle General Ledger System 3 System 4 Oracle Financial Accounting Hub Oracle General Ledger System n System n 25

27 Incremental Implementation Approach Current Architecture System 1 System 2 System 3 System 4 System n Custom Build Accounting Transformation Engine Oracle General Ledger 26

28 Incremental Implementation Approach Introduce FAH Pass-Through System Incremental Approach System 1 System 2 System 3 System 4 System n Custom Build Accounting Transformation Engine (Light Mode) FAH Pass Through events 27 Oracle General Ledger Events are processed in the custom engine Mapping between legacy Accounts and new Accounts now handled by FAH Multi GAAP Accounting Possible Validations managed by FAH No Accounting Rules in FAH pass-through system yet. Accounting repository starts to get maintained Additional information can be introduced in FAH at this stage by UTI and supporting references FAH framework is introduced in the architecture

29 Incremental Implementation Approach Move one system to Event Based Accounting FAH Model Incremental Approach System 1 System 2 System 3 System 4 System n Custom Build Accounting Transformation Engine (Light Mode) Event Based FAH Pass Through events Oracle General Ledger Move the accounting rules from the custom engine to FAH Leverage the full capabilities of the FAH transaction model User Transaction Identifiers and Supporting references are fully configured Maintain Audit trail and full drilldown functionality 28

30 Incremental Implementation Approach Continue moving one system at a time to the Event based Accounting FAH model Incremental Approach System 1 System 2 System 3 System 4 Event Based Oracle General Ledger Move the accounting rules from the custom engine to FAH Leverage the full capabilities of the FAH transaction model User Transaction Identifiers and Supporting references are fully configured Maintain Audit trail and full drilldown functionality System n Custom Engine (Light Mode) FAH Pass Through events 29

31 Incremental Implementation Approach All legacy systems directly integrated using Event based Accounting FAH model Entire custom accounting engine can be decommissioned Low Risk approach Lessons learnt from one phase can be effectively applied to future phases thereby creating a highly efficient Financial Accounting Hub Future Architecture System 1 System 2 System 3 System 4 Oracle Financial Accounting Hub Oracle General Ledger System n 30

32 Implementation Considerations Big Bang or Incremental Implementation Approach How many Applications should you define Event Model & Transaction Objects Model Event Creation Mechanism (Pull or Push) Legacy Application Interface Strategy Supporting References with Balances Data Volume and Performance Security Model 31

33 Lessons Learnt Spend sufficient time for Event Modeling and Data Modeling (Transaction Object Analysis and Build) Document entire Transaction life cycle and each event therein Avoid Using Custom s Give Unique names to Columns across transactions Move mapping rules logic from custom code to FAH Consider Inquiry and Reporting requirements during Design phase Start small during design and build, but perform load testing with full volume before Go-Live Keep it simple, yet keep it Agile for future requirements 32

34 Application Snapshot 33

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58 Q&A Anil Patil 57

59 Anil Patil 58