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Introducing Fusion Revenue Management Cloud Service

Introducing Fusion Revenue Management Cloud Service. Julie Peacock Tapomoy Dey.

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Introducing Fusion Revenue Management Cloud Service

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  1. Introducing Fusion Revenue Management Cloud Service Julie Peacock Tapomoy Dey

  2. 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 • Business Challenges • Solution Footprint • Solution Deep Dive • The New Revenue Standard • Timelines • Q&A

  4. Business Challenges Compliance, Integration, and Automation • Pressure to comply • US GAAP Current Guidance ASC/ASU (SOP 97-2, EITF-08, etc.) • Auditable Transactions • Many sources of truth • Spreadsheets • 3rd Party Bolt-On’s • Demand for automation • Manual processes for key revenue recognition activities slow down the period close

  5. Business Scenario Software License Support Revenue Schedule Customer Bill Revenue Reallocation TPE VSOE ESP Period I Period II Period III Software License Support Consulting Software License Support Consulting Software License Support Consulting 100 20 80 98 26 76 0.00 8.67 20.00 0.00 8.66 40.00 98.00 8.67 16.00 Consulting TOTAL 200 TOTAL 28.67 48.66 122.67 200 TOTAL

  6. Program Agenda • Business Challenges • Solution Footprint • Solution Deep Dive • The New Revenue Standard • Timelines • Q&A

  7. Coexistence – Automated Revenue Management Centralized, Automated Revenue Management Revenue Sources Automated Compliance Actionable Analytics and Reporting Centralized workarea Spreadsheet Integration Reference data FUSION REVENUE MANAGEMENT Revenue accounting

  8. Fusion Revenue Management Revenue Compliance and Accounting EBS Order Management EBS Projects EBS Service Contracts EBS Accounts Receivable 3rd Party Revenue Events via Delivered Source Views c Revenue Data Repository Create Schedules Manage Compliance Audit & Analyze Create Accounting • Separate Revenue from Billing • Create ratable, immediate and deferred revenue schedules • Generate revenue and deferred revenue entries • Automatically create compliance adjustment entries • Support for Multiple Element Arrangements • Calculate and manage Fair Market Value • Seeded revenue reports for compliance reviews and audit • Ad hoc reporting layer Customer Acceptance Payment Revenue Accounting EBS Order Management EBS Accounts Receivable EBS Costing General Ledger

  9. Program Agenda • Business Challenges • Solution Footprint • Solution Deep Dive • The New Revenue Standard • Timelines • Q&A

  10. Oracle Fusion Revenue ManagementAddressing Key Challenges for Revenue Managers Pressure to Comply Demand for Automation Many Sources of Truth Automation of contract identification, fair market value and compliance adjustments Centralized repository for reporting and accounting Audit trails and approvals ensure accurate revenue processing

  11. Oracle Fusion Revenue ManagementAddressing Key Challenges for Revenue Managers • Calculate and Manage Fair Market Value • Automatically groups stand alone sales based on user defined pricing dimensions • Supports multiple representations of fair market value Demand for Automation • Identify Contracts • Automatically identifies elements as part of a Multiple Element Arrangement (MEA) • Supports cross application and cross document MEA’s Automation of contract identification, fair market value and compliance adjustments • Allocate Revenue • Automatic validation of compliance with fair market value • Creates adjustments based on residual, relative or two-step method

  12. Calculate & Manage Fair Market Value Support VSOE, TPE, ESP Establish VSOE Value

  13. Calculate & Manage Fair Market ValueReview & Establish VSOE Values • Access to Bell Curve & Trend Graph and Underlying Standalone Sales

  14. Identify ContractsAutomate identification of Multiple Element Arrangements Identification Rules 3 Sources Line 1: Service Contracts Line 3: Order Management

  15. Allocate RevenueEnsure Appropriate Allocation Treatment FMV Ranges Adjusted Revenue Carved Amounts

  16. Oracle Fusion Revenue ManagementAddressing Key Challenges for Revenue Managers Many Sources of Truth • Separate Revenue from Billing • Revenue document consists of line(s) from a source document and encompasses the revenue timing and amount • Automatically assign contingencies to defer and recognize when appropriate • Generate accounting entries Centralized repository for reporting and accounting • Adjust Revenue • Revenue allocations automatically calculated, accounted and visible on the Revenue Document • Schedule, unschedule, add and expire contingencies when necessary • Manage Revenue • Workarea provides centralized view of revenue tasks and status • Central reporting platform for all revenue processing

  17. Separate Revenue from BillingRevenue Document Captures Key Revenue Processing New Internal Document Source Info Revenue Scheduling

  18. Adjust RevenueEnsure Accurate Revenue Accounting Document Amounts Associated MEA Selling Price vs. Revenue Price

  19. Adjust RevenueProcess Revenue Adjustments in Mass Robust Search Multiple Actions Full History

  20. Manage RevenueImmediate and Actionable Access to Revenue Transactions Take Immediate Action Immediate Notification

  21. Oracle Fusion Revenue ManagementAddressing Key Challenges for Revenue Managers Pressure to Comply • Audit Revenue Transactions • Understand all actions performed both by the system as well as the user • Full audit trail provided when user overrides system derived calculations Audit trails and approvals ensure accurate revenue processing • Approve Revenue Transactions • Require approvals and research to ensure appropriate compliance handling • Process exceptions and adjustments with full audit trail capability • Comply with Accounting Guidance • Supports complex US GAAP revenue requirements

  22. Audit Revenue TransactionsAdjustment History Tracks all Actions Performed (MEA) Link to Revenue Doc Each Adjustment Tracked Separately

  23. Audit Revenue TransactionsAdjustment History Tracks all Actions Performed (Revenue Doc) All Actions on the Revenue Document are Displayed

  24. Approve Revenue TransactionsProactively Manage Compliance Approvals Fair Value Approvals MEA Approvals

  25. Comply with Accounting GuidanceMeet Strict Revenue Accounting Requirements Displays how Adjustment Amounts were Calculated Compliance Details

  26. Program Agenda • Business Challenges • Solution Footprint • Solution Deep Dive • The New Revenue Standard • Timelines • Q&A

  27. Why they are doing Revenue Recognition • Issue in both IFRS and US GAAP: • Although reported as a current liability, “deferred revenue” is not actually a liability, it is deferred income. It is not a debt to anybody, it something that will hit the P&L in the future • Solution: replace it with what truly represents a liability: something you owe the customer • a service or good you owe them, valued at a reasonable revenue related valuation • Difference between US GAAP and IFRS • US GAAP has too many industry models whose detailed specificity makes the revenue notion very remote from a GAA Principle; IAS 18 doesn’t have enough • Solution: Short statement of principle, with many examples

  28. Applicability Concept Applies to Everyone • Industries • All, except Insurance and Lease vendors • GAAPs • Changes to both US GAAP and IFRS • Replaces • US GAAP (Codification): Topics 340-20, 360-20, 430, 605-15, -20, -25, -28, -30, -35, -50, 908-605, 910-605, 912-210, 912-235, 912-605, 915-605, 920-310, 920-605, 920-845, 922-430, 926-430, 926-605, 926-845, 928-430, 928-305, 932-605, 940-605, 942-605, 948-605, 952-340, 952-720, 954-340, 970-605, 976-605, 978-605 and 985-605 • Amends many others. • IFRS: IAS 16

  29. Immediate Impact • The new Revenue standard will become US GAAP and will become IFRS: Currently CY 2014 (potentially as late as June) • Effective date is January 1, 2017 (based on delay – may push out) • Options on Retroactive Reporting

  30. AVAILABILITY Whatever we do will be ready on Current Releases for actual Customer Response and implementation on effective date of the Standard Preparing for Unresolved Proposed RegulationSuch as the “Convergence” projects • Oracle monitors the status of the development of the regulation • Full time domain staff • Membership in professional organizations, et cetera • Draft Designs, Design Discussions, Strategy Level • Currently: Leases, Revenue Recognition, Reporting, Banking IBU • Discuss with Partners and Customers • Get the Requirements right • Understand customer responses to the proposals • Customer Advisory Boards, Strategic Councils • More concrete when Final standards issued • Final Design when General Acceptance is reached

  31. Program Agenda • Business Challenges • Solution Footprint • Solution Deep Dive • The New Revenue Standard • Timelines • Q&A

  32. Timelines • Just wrapped up Customer Hands On Validation • 6 Customers • 15 participants • Generally Available – CY2014 • Early Adopter Recruiting

  33. Fusion Revenue ManagementHands On Quotes “Ability to drill from high level Fair Value information to the details with one click adds tremendous value for us.” “The workarea is great. Having all the information pushed to the users for action is terrific.” “We really liked the flexibility for Multiple Element arrangement identification.” “We love the spreadsheet integration, this is key for us.”

  34. Questions?

  35. Graphic Section Divider

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