CONFIGURATION CONTROLS GOVERNOR for EBS R12 Upgrades

1. CONFIGURATION CONTROLS GOVERNOR forEBS R12 Upgrades May 2009 Oracle GRC Strategy – Barry Greenhut

2. Costs and Risks • Some EBS 11i setups change during the upgrade to R12; others are introduced in R12 • Unnoticed and unwanted setup values can cause: • Financial Loss • Compliance Cost • Audit Effort • Key questions to ask: • Which setups change when we upgrade? Which are new? • If unnoticed or unwanted setup values are used, what costs arise? • How can we reduce those costs?

3. Which setups change when we upgrade? Which are new? • R12 introduces important changes to the accounting model: • Ledgers and Ledger Sets replace Sets of Books • Subledger Accounting replaces Global Accounting Engine • Taxes handled differently, by a new module: eBusiness Tax • Closer relationship between tax setups and organization setups in another new module: Legal Entity Configurator

4. Which setups change when we upgrade? Which are new? • Some modules’ setups have undergone substantial change: • General Ledger • System Administration • Purchasing / iProcurement • Most other modules’ setups have seen at least minor additions, including: • Alerts Application Object Library Common Modules • Payables Receivables / iReceivables

5. What costs/risks do we face? • Financial Loss • EXAMPLE: eBusiness Tax configuration leads to substantial undercollection of taxes that goes undetected for months. Consequences: Pay taxes due on behalf of customers, plus penalties. • Compliance Remediation Cost • EXAMPLE: Ledger Set configuration incorrectly allocates revenues amongst divisions. Consequences: Restate and refile quarterly results. • Audit Remediation Cost • EXAMPLE: Dozens of payment term mis-configurations are identified during external audit. Consequences: Internal audit team performs substantial research to provide proof of no ill effect.

6. How can we reduce those costs/risks? • Catch unexpected setup changes before you go live: • Compare Snapshots of your 11i production setups and R12 test setups – see what’s changed in your R12 setups • Carefully review Snapshots of new R12 setups • Adjust your R12 setups as needed before going live

7. How can we reduce those costs/risks?

8. Continue reducing costs/risks after the upgrade is complete • Use CCG to track changes to key setups • EXAMPLE: NYSE-traded energy sector corporation applied a production patch that reset vendor tolerances, and didn’t notice the change for nine months. Consequences: Internal audit team performed extensive work to prove there were no abuses, and external auditors performed substantial transaction examination. • Use PCG to restrict changes to the riskiest setups • EXAMPLE: Clerk at NYSE-traded food sector corporation changed bank account info without cross-check; $10MM transferred before fraud was discovered. Consequences: Money frozen pending investigation; public confidence shaken due to notoriety.

9. Rapid CCG implementation with shrink-wrap support for…

10. Alternatives to CCG • Only CCG makes it easy compare 11i setups to R12 setups; no other product available today can do this • Only CCG is quick to implement, thanks to its shrink-wrap support; no other product offers this today

11. Summary • When upgrading from EBS 11i to R12, unwanted setup changes can cause: • Financial Loss • Compliance Cost • Audit Effort • During the upgrade, avoid costs by using CCG to identify setup changes • After the upgrade, use CCG to track changes to key setups, and PCG to restrict changes to the riskiest setups