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Enhanced Project Support for Global Operations

Enhanced Project Support for Global Operations. Mukul Mittal Adwait Marathe Director Director Product Mgmt Engineering. Safe Harbor.

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Enhanced Project Support for Global Operations

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  1. Enhanced Project Support for Global Operations Mukul Mittal Adwait Marathe Director DirectorProduct Mgmt Engineering

  2. Safe Harbor The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

  3. Program Agenda • Challenges of Global Operations • Solution • Value Proposition • Case Study • FAQ

  4. Challenges of Global Operations

  5. Challenges of Global Operations Business Issue • Project are being executed across the world • Specialists are hired locally • Standard or actual labor costs may be charged to the project • Resources may be shared across legal entities

  6. Challenges of Global Operations Key Concerns • Project Management & Controls • Quickly and accurately charging costs to projects • Accrue costs when actual costs are not available • Compliance • Automatically identify intercompany transactions • Generate documents and accounting for compliance • Apply and reconcile transfer price charged

  7. Solution

  8. Solution New Features in Oracle Projects • Enhanced Labor Costing • Associate Legal Entities to Projects • Enhanced Intercompany Processing

  9. Solution Enhanced Labor Costing Plan Project Labor Costs Generate Project Billing Invoices Accrue Labor Costs Enter Time Cards Process Labor Cost Adjustments Report Project Time Cards Account for Project Labor Costs Calculate Payroll Labor Costs Report Payroll Labor Costs

  10. Solution Enhanced Labor Costing • New project labor costing rules for • Labor payroll actual • Total time costing for exempt employees • Rate By Criteria • Additional project labor rate determinants for deriving standard rates • Improved usability for reviewing labor cost • Audit report for employee payroll distribution details across projects for a period

  11. Solution Enhanced Labor Costing • Processing • Estimate project labor cost using new accrual process • Adjust labor rates for uncompensated overtime • Interface payroll actual on projects timecards from Oracle eBusiness Suite or third party systems • Expenditure & Invoicing • Invoice customers from labor cost accruals on standard invoice • Reverse and reinstate cost accounted labor transactions

  12. Solution Associate Legal Entities to Projects Operating and Financial Structure

  13. Solution Associate Legal Entities to Oracle Projects • Associate Project and Expenditure Organizations to Legal Establishments • Enable Derivation of Legal Entity from Project / Expenditure Organizations • Generate expenditure and revenue accounting based on legal entity • Using Project Auto Accounting • Using SLA Rules • Generate customer invoices by legal entity

  14. Solution Enhanced Intercompany Processing Provider Controls Receiver Controls Legal Establishment Legal Establishment Operating Unit Legal Entity 1 Legal Entity 2 Incurs Owns Expense Project On behalf of ExpenditureOrganization ProjectOrganization Intercompany Accounting and Document Generation Transfer Price Extension to modify invoice grouping, customer site, supplier site … Invoice Grouping

  15. Solution Enhanced Intercompany Processing • Enable intercompany processing between legal entities • Transfer Price • Setup different mark ups for Inter-company and Intra-company transactions • Streamlined transfer price derivation based on legal structure • Generate Intercompany documents • Group invoices by provider or receiver project • User defined invoice grouping and overrides for advanced intercompany scenarios

  16. Value Proposition

  17. Align Plan Report Analyze Execute Monitor Value Proposition Strategic Alignment RESOURCE MANAGEMENT ENTERPRISE ENTERPRISE MANAGEMENT Collaborative Planning CAPITAL PERFORMANCE HUMAN Integrated Execution MANAGEMENT SUPPLY CHAIN MANAGEMENT

  18. Value Proposition Enhanced Intercompany Processing • Project Managers can: • Accurately track project costs and bill project customers • Improve project cash flow • Project Controllers can: • Use borrowed resources without risk of statutory non-compliance • Minimize cost of reconciling intercompany transactions

  19. Case Study

  20. Case Study • E&C Project in South Africa • Resources sourced globally • Local Workers & Supervisor • Project Manger from Germany • Engineering Manager from United States • Construction Manager from Australia

  21. Case Study E&C Project in South Africa APAC Business Unit Americas Business Unit EMEA Business Unit E&C Project Workers Project Manager Engineering Manager Construction Manager Supervisor Actual Labor Actual Labor Standard Labor Rate Standard Labor Rate 100% Markup USD 50 per hour AUD 50 per hour

  22. Case Study Organization and Financial Setup APAC Operating Unit EMEA Operating Unit Americas Operating Unit South Africa Project Org South Africa Expenditure Org Germany Expenditure Org United States Expenditure Org Australia Expenditure Org South Africa Balancing Segment Germany Balancing Segment United States Balancing Segment Australia Balancing Segment Americas Ledger APAC Ledger EMEA Ledger

  23. Case Study Labor Costing Setup

  24. Case Study Intercompany Setup

  25. Actual Costing Case Study Markup: N/A Worker Flow EMEA Operating Unit Run Payroll Timecard: 40 hours 5 workers Payroll:40 x 10 x 5 = 2,000 Actual Labor Charged to Project Expenditure: 2,000 X Project Expenditure Process Intercompany Project: E&C South Africa Not Eligible South Africa South Africa Provider Legal Entity Receiver Legal Entity

  26. Actual Costing Case Study Markup: N/A Supervisor Flow EMEA Operating Unit Run Payroll Timecard: 40 hours Payroll:40 x 20 = 800 Actual Labor Charged to Project Expenditure: 800 X Project Expenditure Process Intercompany Project: E&C South Africa Not Eligible South Africa South Africa Provider Legal Entity Receiver Legal Entity

  27. Actual Costing Case Study Markup: 100% Project Manager Flow EMEA Operating Unit Run Payroll Timecard: 40 hours Payroll:40 x 50 = 2,000 Transfer Price: 100% markup Provider Setup: Interco Project … Receiver Setup: Supplier… Actual Labor Charged to Project Expenditure: 2,000 Project Expenditure Process Intercompany Interco Rec: 4,000 (2,000 + 100% markup) Interco Pay: 4,000 (Currency EUR) Project: E&C South Africa Eligible Germany South Africa Provider Legal Entity Receiver Legal Entity

  28. Standard Costing Case Study Markup: N/A Engineering Manager Flow Americas Operating Unit EMEA Operating Unit Timecard: 40 hours Labor Rate:50 per hour Transfer Price: N/A Provider Setup: Interco Project … Receiver Setup: Supplier… Standard Labor Charged to Project Expenditure: 2,000 Project Expenditure Process Intercompany Interco Rec: 2,000 Interco Pay: 2,000 (Currency USD) Project: E&C South Africa Eligible United States South Africa Provider Legal Entity Receiver Legal Entity

  29. Standard Costing Case Study Markup: N/A Construction Manager Flow APAC Operating Unit EMEA Operating Unit Timecard: 40 hours Labor Rate:50 per hour Transfer Price: N/A Provider Setup: Interco Project … Receiver Setup: Supplier… Standard Labor Charged to Project Expenditure: 2,000 Project Expenditure Process Intercompany Interco Rec: 2,000 Interco Pay: 2,000 (Currency AUD) Project: E&C South Africa Eligible Australia South Africa Provider Legal Entity Receiver Legal Entity

  30. Case Study Value Proposition Integrated Execution helps you • Automate end to end flow • Improve cash flow by • Tracking project costs efficiently • Bill customers accurately • Minimize risk of non-compliance • Reduce effort on manual reconciliation

  31. Frequently Asked Questions

  32. Frequently Asked Questions Are non Oracle EBS Payroll systems supported for Actual Labor? Yes, the implementation steps are: • Define third party payroll • Define Pay Elements • Define the allocation rules for third party pay elements • Interface third party payroll amounts in new Interface table to interface payroll data • Follow the standard flow to cost timecards based on third party payroll

  33. Frequently Asked Questions Can I bill the customer for labor before payroll is run? For Actual Labor Scenario • Accrue cost before payroll is run • Enable billing of accrued labor cost • Bill adjustments after actual labor cost on standard invoice

  34. Frequently Asked Questions How can I comply with local labor rate rules? • Rate by Criteria, an existing feature of HRMS has been enhanced to accommodate Projects specific attributes • Project/Task • Job • Location • Work Type • Rate matrix or hierarchy defined in HRMS may be used in Projects in planning process.

  35. Frequently Asked Questions Which Legal Entities are derived on upgrade? • Default Legal Entity associated to Operating Unit is applied to • Provider & Receiver Controls • Revenue and Invoicing transactions • Expenditure Items • Switch to change Legal Entity derivation from Operating Unit to Organization

  36. Frequently Asked Questions Can a project be owned by multiple legal entities? • A project is owned by one legal entity only

  37. Frequently Asked Questions In our organization Division or LOB is treated like a legal entity? • You have the option of generating intercompany invoices at a level more granular than true Legal Entity by using additional grouping criteria Two intercompany invoices generated Six intercompany invoices generated

  38. Frequently Asked Questions Can I reconcile Intercompany Transactions using AGIS? • Generate reconciliation reports from AGIS by setting up same intercompany accounts in AGIS and Projects • In Projects query transactions by legal entity • Expenditure Items • Draft Revenue • Draft Invoices

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