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Final Report
Final
Multi Org Precondition Definition
Final Report
Final
Doc: 365750636.doc
Contents
1 Introduction
2 Organisational model
2.1 Libertel structure
2.2 Intercompany relations
5 Security
5.1 Users and responsibilities
3
7 Action points
Enclosure
I Environments Libertel
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1 Introduction
Since the Oracle Applications Multi Org Set-up touches business decisions
(including strategic direction) which are out of scope of the running Oracle
projects like iZi and Kolibri, Libertel has decided to install a task force which
will define the preconditions for the Oracle Applications Multi Org Set-up for
Libertel corporate wide. These preconditions are needed as input for other
Oracle projects like Kolibri Logistics and LVS and LCP Finance but also for
impact Oracle projects that are already live, like iZi.
This report describes the organisational model, the Multi Org set-up and set-up
consequences for LNO, the framework for procedures for sharing data within
one instance, the procedures for Application support and control and gives
guidelines for the current projects within Libertel.
Input for this preconditions report were various interviews and information
provided by Libertel. A key document in the design of the Oracle organisational
model is the memo drafted by Michel Boots, dated December 24th 1999.
The following company abbreviations will be used throughout this document.
Abbreviation Company
LNV Libertel NV / Libertel Group
LNO Libertel Network Operations bv
LVS Libertel Verkoop & Services bv
LBP Libertel Business Point bv (profit centre of LVS)
LCP Libertel City Point bv
LDA Libertel Data
LIN Libertel Interactive
SCMO Libertel Supply Chain Management Organisation (cost centre
of LNV)
SY Syntrack
ME Mobile Exchange
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2 Organisational model
The first step in modelling the Multi Org set-up is describing the desired
organisational structure and the intercompany transactions between the Libertel
companies.
As of the first of April 2000 a new business unit will be operational (Supply
Chain Management Organisation) which will perform all logistic handling for the
Libertel companies. This business unit will be part of Libertel NV and will not
own any inventory.
The new logistic organisation SCMO will change the way logistics are handled
within Libertel. Basically, SCMO will be the only Libertel Company that can
issue purchase orders to suppliers besides operating unit specific or non-logistic
procurement. All other companies order their requirements from SCMO.
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Forecast / MRP
Libertel Supply
Chain Management Manage Inventorie s
Organisation
INV IN V IN V IN V
LNO LVS LBP LCP
Adm. In ventory
Physical In ventory
INV
Supplier
SCMO
Fin ancial
Intercompany
Transaction
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INV
LCP
Libertel Supply
INV Chain Management
LVS
INV
LVC
INV
LBP
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3. LCP buys from LVS with shipment from LNO warehouse by SCMO
Purchase Order
Shop IN V
LCP Libertel City Points
AP &
AR In
vo ic es
Financial
Sale s Order Intercompany
IN V Transaction
LNO
Libertel Supply IN V
LNO
Chain Management
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3.1 Definitions
Before describing the Multi Org set-up we need to explain the Multi Org entities
that Oracle uses in modelling the business.
Business Group: Represents the highest level in the structure. The consolidated
enterprise or a major division of a company. Currently Business Group has no
other purpose but to segregate HR information. If you request a list of
employees (in any module) you will only see those employees in the Business
Group of which your Operating Unit is a part. Multiple Legal Entities can
relate to a single Business Group.
Set of Books: This is the highest level at which the financial entities are
segregated. Any entity that has a particular chart of accounts structure,
functional currency or calendar must be a separate Set of Books.
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There may be multiple companies within the same structure, each of these must
balance within itself. All required inter-company entries will automatically be
created within the Set of Books to ensure companies could never get out of
balance.
Security Rules: Security rules limit (by responsibility) the values of a Flexfield
which the user will see. For example a user will only see the Department values
in the Accounting Flexfield which they have authority to see.
1. Incorporate SCMO in current LNO operations, LVS & LCP Finance start
each in their own Operating Unit;
2. Exclude LNO, LDA and LIN from current Operating Unit into a new
Operating Unit.
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Libertel Groep
Business Group
ies
an
omp
C
Legal Entity SCMO, LNV, LNO, LDA , LIN, SY, ME LVS / LBP LCP
Operating Unit SCMO, LNV, LNO, LDA , LIN, SY, ME LVS / LBP LCP
Inventory Organisation
LNV LNO
To create maximal flexibility for Libertel all Libertel companies will work within
one Business Group and one General Ledger (Set of Books). A new Set of
Books can be created later for consolidating purposes.
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The Company segment within GL determines the balancing segment for financial
reporting.
The legal entity has no functionality (yet). We propose to keep the existing legal
entity for LNO, LNV, LND, LIN, SY and ME (one legal entity). For LVS and
LCP a new legal entity will be created.
LNV, LNO, LND, LIN, SY and ME will share one operating unit for the
subledgers (AP, AR, PO, OE, INV) but will report to their own company code.
LVS/LBP and LCP will have their own operating unit, reporting to their own
company code. Integrating LVS and LCP into one Operating Unit will give
operational disadvantages and accounting problems for encumbrances
(purchasing) and inventory.
We have chosen to integrate the SCMO Operations into the existing LNO
Operating Unit because this will require no new financial implementation and
data conversion for SCMO. A new Operating Unit for SCMO would require the
implementation of PO, AP and GL.
Furthermore it will not endanger the current LNO operations (for example iZi
and WEB) since these will remain in there own Inventory Organisation yet
shared within one Operating Unit. Finally the new WEB functionality of the
LNO Operating Unit can also be used (in a next phase) by SCMO.
The existing LNO Inventory Organisation (iZi) will be extended with an extra
inventory organisation (LNV) within the same Operating Unit. This new
Inventory Organisation will handle all Libertel logistics, except iZi.
As a start, SCMO will have six subinventories: LNO, LVS, LVI (LVS Indirect),
LVC (LVS Corporate), LBP and LCP. LNO will keep its current subinventories
for Nelipak (NEL), Bosman (BOS) and Libertel.
Minimally the following modules and functionality will now be available per
company.
Libertel NV Libertel Libertel Libertel City Libertel Data,
Network Verkoop & Points Interactive,
Organisation Services Syntrack, Mobile
Exchange
GL GL GL GL GL
PO PO PO PO PO
AP AP AP AP AP
OE OE OE AR AR
AR AR AR
INV INV
WIP WIP
BOM BOM
MRP MRP
All logistic transactions will be processed within the LNO Operating Unit by:
The LNO unit within the LNO Inventory Organisation (iZi);
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The SCMO unit within the SCMO Inventory Organisation (Other logistics).
LVS and LCP will only use PO and AP for internal inventory purchases (by
SCMO) and non inventory external purchases (expenses).
3.2.4 Phase two can be implemented when the SCMO group is fully operational and
takes over the LNO logistic operations (iZi). The current LNO Operating Unit
will be operated by SCMO (LNV). The same situation for LNO will then be
created as for LVS and LCP in phase 1 (own Operating Unit).
an ies
mp
Co
Legal Entity SCMO LNV, LNO, LDA , LIN, SY, ME LVS / LBP LCP
Operating Unit SCMO LNV, LNO, LDA , LIN, SY, ME LVS / LBP LCP
Subinventory LNV LNO NEL BOS LVS LVS-C LVS-I LBP LCP
The remaining part of this report will only cover the implications of phase 1.
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3.3 Accounting
Sub Sub
Sub
Inventory Inventory
Inventory 1
2 3
Accounts: Accounts:
* Cost of Goods Sold * Cost of Goods Sold
* Encumbrance * Encumbrance
* Expense * Expense
* Sales * Sales
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The Material Account on the subinventory is the inventory balance account. This
account is set for the full Accounting Flexfield, including company segment.
The following tables explain the journals made per process step (purchasing,
inventory transactions and sales). Also it indicates which accounts are used and
where they are retrieved.
3.3.1 Purchasing
Receipt in inventory:
Material account #receipt * VVP1 Subinventory
(A/) PPV #receipt * (VVP-order price) Inventory Org.
#receipt * order price
A/ Receiving Accrual Inventory Org.
1
Vaste Verreken Prijs: fixed cost price per item at which the inventory of this item is valued
during a certain period.
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3.3.3 Sales
For example a purchase transaction of 100 items for NLG 240,= by SCMO
(company 2).
The item is ordered for LVS (Company 3), which owns the inventory.
The VVP of the item is NLG 250,= and the invoice price is NLG 260,=
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Receipt in inventory:
Material account 3.30401 25.000 (D)
(A/) PPV 2.30140 1.000 (Cr)
A/ Receiving Accrual 2.30410 24.000 (Cr)
Reverse encumbrance:
Reserved for Encumbrance 2.27010 24.000 (D)
A/ Encumbrance Account 2.30600 24.000 (Cr)
Invoice Inventory AP Accrual 2.25380 24.000 (D)
BTW 2.12000 4.550 (D)
(A/) IPV 2.30411 2.000 (D)
A/ Creditors 2.16000 30.550 (Cr)
Note that the intercompany journals are created on the same account for all
companies (14510). Also the intercompany amount is based on the VVP of the
item purchased. Any price or invoice variances will be assigned to SCMO.
Special transfer pricing (other than VVP) can only be implemented when the
transactions are based on an internal requisition and sales order (refer to the
described intercompany flow 3 in paragraph 2.2).
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The following parameters on the Customer Header need to drop down to the bill
to site (bill-to business purpose detail) since the Multi Org functionality will
separate customer sites per Operating Unit.
Order type;
Transactions types;
Sales reps;
Tax exemptions;
Batch sources;
VAT taxes;
Tax codes and rates.
3.4.3 The following parameters on the Supplier Header need to drop down to the
Supplier Site since the Multi Org functionality will separate Supplier Sites per
Operating Unit.
Purchasing
Control functions/groups;
System parameters;
Position controls;
Account distributions.
Payables
Distribution sets;
Bank accounts;
Tax names and groups;
Expense report types;
System options.
Bank Accounts
Bank Account for SCMO;
Link SCMO Supplier Sites to separate paygroup or payment method.
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Item set-up
To maximise the benefit of Multi Org, orders for iZi products should be entered
at the Operation Unit who owns the sales order. For example: Free Record Shop
will order its iZi products at LVS; so the sales orders for LVS exists in the
Operating unit LVS. This means that address details of Free Record Shop will
also reside in the LVS operating unit. Currently the address details reside with
LNO operating unit. The existing Web application, currently used by LVS to
place orders at LNO, can be used for LVS customers for order entry (Corporate
clients).
All existing customisations need to be verified before the actual Multi Org
conversion. For each customisation the following points should be addressed as
a minimum:
Generic compatibility with Multi Org;
Compatibility with intercompany flows as described in this document;
Ability to use system without customisation.
The rationale of Oracle Applications Multi Org is that access (to data) is
restricted to the data belonging to the Organisation you are assigned to when
you log into Oracle Applications. For example, if two organisations (Operation
Units) have been set up owning data as in the example below:
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Organisation 1 Organisation 2
Invoice No 123 Invoice No 456
Invoice No 678 Invoice No 901
Invoice No Org_Id
123 111
456 222
678 111
901 222
When a user logs into Oracle Applications Multi Org their responsibility links
them to a particular organisation. Thus a particular Org_Id value - in our
example a user whose responsibility links them to Organisation 1 would have an
Org_id of 111 associated with them, while a user whose responsibility links
them to Organisation 2 would have an Org_id of 222 associated with them.
Thus, if the user linked to Organisation 1 created a new invoice, the Org_Id of
that invoice would be 111, and if the user linked to Organisation 2 created a new
invoice, the Org_Id of that invoice would be 222. It is this association with an
Org_Id value that enables Oracle to create database views that restrict data
access. The Org_Id associated with a user is returned by a built in function -
USERENV(CLIENT_INFO). For example calling this function as the user
linked to Organisation 1 would return a value of 111, calling this function as the
user linked to Organisation 2 would return a value of 222. A database view can
therefore be created as follows (continuing with our example) :
-CREATE
VIEW AP_INVOICES AS
SELECT Invoice_No,
Org_Id
FROM AP_INVOICES_ALL
WHERE Org_Id = USERENV(CLIENT_INFO)
The view name is AP_INVOICES for example the underlying table name
without the _ALL extension. Due to the WHERE clause restricting the selection
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of data to that where the Org_Id on the AP_INVOICES_ALL table matches that
returned by the USERENV(CLIENT_INFO) function, selecting data from this
view as the user linked to Organisation 1 will only retrieve details of invoices No
123 and No 678, while selecting data from this view as the user linked to
Organisation 2 will retrieve details of invoices No 456 and No901.
Application control will keep record of all customisations are taking place.
Customisations can only be applied in production environment when the
customisation has been approved by and (initial) documentation has been handed
to application support.
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For each master data element that is controlled by the operating unit, the current
LNO procedure can be used as a start. Existing procedures were also used as a
starting point for data which is shared across operating units. For both types of
data we propose to use a template for each data element before it is entered in
the system.
Within one instance customer and suppliers are shared on header level. The sites
can be defined per Operating unit, including the parameters (for example
payment terms). This functionality provides:
Libertel Group overview of activities per customer and supplier;
Flexibility for the Operating Units to define their own sites and manage the
parameters.
Manage sites
Parameters Parameters Parameters per Operting
Unit
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4.1.1 Procedures
4.2 Items
All items handled by SCMO will be centrally maintained by the SCMO item co-
ordinator. For the following areas a procedure needs to be established.
Financial attributes including cost control and accounts;
Logistic attributes including planning, inventory, purchasing and production
attributes;
Item coding (legacy system dependencies, customisation dependencies);
Status control;
Item costing.
Sales pricing and discounting will be done separately by the pricing co-ordinator
for each operation unit.
For all items a general item maintenance procedure and template will be
developed.
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Accounting Flexfield
Segment Length LNO Others
Bedrijf 1 X X
Reknr 5 X X
Afdeling 5 X X
Project 4 X X
Abonneeh. 3 X -
Tarief 3 X -
Bestemming 1 - -
SP/Land/RP 3 - -
Piek/Dal 1 X -
Reserve 1 4 - -
Reserve 2 4 - -
Figure 5: Use of Accounting Flexfield Libertel
All companies (except for LNO) will only use the first four segments of the
Accounting Flexfield.
All currencies and daily rates are maintained centrally by LNO Finance and can
be used by all other companies
4.5 Employees
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The documentation will be stored in a protected area on the network with write
access for Application Support and read-only access for others. The
documentation will be managed with version-control.
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The current structure does not provide an exact copy of the production database
for testing. Also the APPA database is not a recent copy from production. This
causes two problems:
Development in APPA can not be applied to Production without checking if
the set-up in both systems (APPA is an old copy of production which is used
for development);
There is no test database which is completely identical to production. This is
a requirement for patch testing and training new users.
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5 Security
Security rules are linked to responsibilities and determine which segment values
can be used by the users within the responsibility. This needs to be done for all
existing responsibilities (LNO) and new responsibilities (LVS, LCP, SCMO).
Security rules can also be used for the account segment. For instance the
Intercompany account used by the system (14510) should not be used for
manual transactions.
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3
F
AR LNV
4
G
5
H
6
Users LNO GL LNO
I
7
Users LVS GL LVS
8
9
Users LCP GL LCP
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The following slide indicates (in general) how to organise the Application
Support procedures. An action has been set out to develop a more specific
Libertel support model.
Application Support
Functional Oracle
Issue
Oracle Users Manager Customer
(Key User) Support
Request
Log, Update Issues TAR
Issue
Log, Update
Support Issue
Technical
Application
Functional
Management
Log
Request DBA
Support
Log, Update
Issue
Technical
Management
(DBA)
The Key Users per functional area (Logistics, Finance) are responsible for
addressing issues within their area either by solving those issues themselves or
requesting assistance from Application Support. In both cases the Key User
will update the Support Log.
Application Support will try to solve the issue and (if necessary) request help
from Oracle Customer Support (TAR) or the DBA. In both cases the Support
Log is updated by Application Support.
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6.2 Patching
A specific support issue might require a patch. This patch will be sent by Oracle
Customer Support to the DBA. The patch-requestor (Application Support or
Key User) will inform the DBA that a patch is on its way and on which database
this patch needs to be applied to. If the Key User requested the patch, the Key
User will also inform Application Support. The Patch-requestor will update the
Support log.
Patch Management
Technical / Technical /
Functional Functional
Key user DBA Support Key user DBA Support
Application Application
Support Support
Execute testplan by
Patch requested requestor
Document
Develop Patch Testresults
request and test
plan
Update applied
patches document
for patch env.
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7 Action points
Based on the underlying document the following action points can be identified.
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Enclosure I 1
Appendix to:
Enclosure
I Environments Libertel
Enclosure I 1
I Environments Libertel
7 JAN 14 JAN 21 JAN 28 JAN 21 FEB 28 FEB 24 MRT 31 MRT 23APR 30APR
LNO LNO LNO LNO LNO LNO Li bertel Libertel Libertel Libertel Libertel
hqdb08/09
Produc- Produc- Produc- Produc- Produc- Produc- Produc- Produc- Produc- Produc- Produc-
tio n ti on tio n tion tion ti o n tion ti on ti o n tio n ti o n
Copy
Copy Copy Setup LNO Copy Setup LVS/LCP Copy
Setup WEB1 Setup Kol ibri Copy
Multi Org Financi als
Test environment for Test envi ronment for Test envi ronment for Test environment for
Traini ng Setup &Test Test envi ronment for
Funct.Acc.Ts t WEB1 Training WEB 1 Project Training WEB1 Producti on Production Production Production
WEB 1 Proje ct LNO Multi Org Production
Setup Kol ibri & Add Cust & Interf. CRPKoli bri & Development Koli bri Development Koli bri Acc.Ts t Kolibri
Financials (m ulti org) Koli bri Fi nancial s
Enclosure I 1