Hi,
Many people are interested in this topic, particularly people doing GL and first time implementors . And they have their doubts posted in various forms, but we have not got a good reply so far. So here is another try:
One of the first task for oracle apps implementation is the design of org structure. While the multi org document talks about the entities, there is a gap between the mock eg and the real world scenario.
Users wouldn't know the terms OU/LE etc and what implication it will have if we setup a Inv org as OU etc. It is the consultant who has to pose question in business terms to arrive at a conclusion if the entity should be setup as OU or LE or INV org etc.
Typically what questions should be asked to the user so that we can conclude the various entities in the company should be setup up as a BG/ LE/ OU/ Inventory org.
Folks who have done this org structure design task in implementation would be able to contribute well for this question. Kindly do not point to oracle document. [:)]
Your inputs much appreciated
Thanks
Questions to Design Org Structure in 11i
-
SIVAKUMAR_G
- Posts: 194
- Joined: Tue May 15, 2007 7:45 am
- Location: United Arab Emirates
Hi
I would suggest as admin mentioned draw the HR Organization structure first and then decide on the Financial system. The Reason being the concept in Finance is very simple.
As long as if any one of the three (Currency, Calendar and Chart of Account) varies you need a separate set of books, but still it can be under single Business Group.
I would say both the choices are possible
a. 3 business group , 3 books , 3 ou - If you use Oracle Payroll
b. 1 business group , 3 books, 3 ou - If you do not use Oracle Payroll
The reason being employees are for a Business Group and not for a Set of book and when you run the Payroll Process in Oracle, the system looks at the currency defined in the Business Group. So if your appointment order to employees are in three currencies, then you need to define three Business Groups.
There is a workaround in Payroll to change the currency in Payment method which will result in exchange rate gain or loss every month which is not a right solution.
<font color="red"><b>IMPORTANT NOTE:</b></font id="red"> If you carefully go through the Oracle Multiple Organization structure it would be very clear.
Think and analyze each of the above like Business Group, Set of Books, Legal Entity,Operating Unit and Inventory Org as a separate object and whether to define single or multiple depends on How clearly the Organization structure is defined and mode of operation is currently being done by the client and what is there future expansion plans.
You can have 'N' number of permutations and combinations
Multiple Business Group with Single SOB, Single OU
Single Business Group with Multiple SOB and Single OU
Single Business Group with Multiple SOB and Multiple OU
Hence treat each of the above as a Separate Object and understand the client Business better and determine which is best suitable for client Business taking into account their future expansion plans
Hope this helps
Regards
Sivakumar
I would suggest as admin mentioned draw the HR Organization structure first and then decide on the Financial system. The Reason being the concept in Finance is very simple.
As long as if any one of the three (Currency, Calendar and Chart of Account) varies you need a separate set of books, but still it can be under single Business Group.
I would say both the choices are possible
a. 3 business group , 3 books , 3 ou - If you use Oracle Payroll
b. 1 business group , 3 books, 3 ou - If you do not use Oracle Payroll
The reason being employees are for a Business Group and not for a Set of book and when you run the Payroll Process in Oracle, the system looks at the currency defined in the Business Group. So if your appointment order to employees are in three currencies, then you need to define three Business Groups.
There is a workaround in Payroll to change the currency in Payment method which will result in exchange rate gain or loss every month which is not a right solution.
<font color="red"><b>IMPORTANT NOTE:</b></font id="red"> If you carefully go through the Oracle Multiple Organization structure it would be very clear.
Think and analyze each of the above like Business Group, Set of Books, Legal Entity,Operating Unit and Inventory Org as a separate object and whether to define single or multiple depends on How clearly the Organization structure is defined and mode of operation is currently being done by the client and what is there future expansion plans.
You can have 'N' number of permutations and combinations
Multiple Business Group with Single SOB, Single OU
Single Business Group with Multiple SOB and Single OU
Single Business Group with Multiple SOB and Multiple OU
Hence treat each of the above as a Separate Object and understand the client Business better and determine which is best suitable for client Business taking into account their future expansion plans
Hope this helps
Regards
Sivakumar
Thanks Sivakumar for your inputs. I guess the reply to this thread was intended for another similar topic post.
In this context when you typically start the project what questions do you ask the clients to arrive at the org structure entities. It would be great if you could share some.
For eg :
To determine if we if the the entity is to be set as on inv org we can ask questions like :
1. does this entity store stock ?
2. do they manufacture items?
It will be great if you could list such questions to determine if the entity should be classified as ou/ inv org / le etc ..
Regards
In this context when you typically start the project what questions do you ask the clients to arrive at the org structure entities. It would be great if you could share some.
For eg :
To determine if we if the the entity is to be set as on inv org we can ask questions like :
1. does this entity store stock ?
2. do they manufacture items?
It will be great if you could list such questions to determine if the entity should be classified as ou/ inv org / le etc ..
Regards
Sivakumar
Infact you gave out one such point like
".. when you run the Payroll Process in Oracle, the system looks at the currency defined in the Business Group. So if your appointment order to employees are in three currencies, then you need to define three Business Groups..."
It is pointers like this which when put with a correct question to the users help us to analyse.
Aims unfortunately does not carry such a questionnaire for this. Kindly put down those that come to your mind and those that you have gone through in ur projects
Infact you gave out one such point like
".. when you run the Payroll Process in Oracle, the system looks at the currency defined in the Business Group. So if your appointment order to employees are in three currencies, then you need to define three Business Groups..."
It is pointers like this which when put with a correct question to the users help us to analyse.
Aims unfortunately does not carry such a questionnaire for this. Kindly put down those that come to your mind and those that you have gone through in ur projects
-
Dnyanesh_K
- Posts: 10
- Joined: Wed Dec 26, 2007 5:13 am
- Location: India
Thinktank,
Lets go ahead with this discussion...
I will present one scenario here, please decide the Org structure for the same.
Manufacturing ABC Company having head office in Mumbai. There are 5 regional offices in India E, W, N, S, C. Under these offices there are multiple manufacturing plants. Each plant is connected with one storage godown.
If this company now expands its operations in USA then how will one go about it w.r.t the Org Structure.
Please come up with your suggestions and we will discuss.
Regards,
Dnyanesh
Lets go ahead with this discussion...
I will present one scenario here, please decide the Org structure for the same.
Manufacturing ABC Company having head office in Mumbai. There are 5 regional offices in India E, W, N, S, C. Under these offices there are multiple manufacturing plants. Each plant is connected with one storage godown.
If this company now expands its operations in USA then how will one go about it w.r.t the Org Structure.
Please come up with your suggestions and we will discuss.
Regards,
Dnyanesh
Hi Dynesh,
Appreciate your interest. Ok here we go
BG ABC
|
Book India SOB
------------------
| | | | |
LE N S E W C
------------------
| | | | |
OU N S E W C
------------------
| | | | |
Inv Org 1 2 3 4 5
Now when the US operations opens up
BG ABC
---------------------------
| |
Book India SOB US Book
------------------ -------------
| | | | | |
LE N S E W C US Entity
------------------ ----------
| | | | | |
OU N S E W C US OU
------------------
| | | | |
Inv Org 1 2 3 4 5
Appreciate your interest. Ok here we go
BG ABC
|
Book India SOB
------------------
| | | | |
LE N S E W C
------------------
| | | | |
OU N S E W C
------------------
| | | | |
Inv Org 1 2 3 4 5
Now when the US operations opens up
BG ABC
---------------------------
| |
Book India SOB US Book
------------------ -------------
| | | | | |
LE N S E W C US Entity
------------------ ----------
| | | | | |
OU N S E W C US OU
------------------
| | | | |
Inv Org 1 2 3 4 5
Realized all the tree formatting which I made turned yuck So will tryto put in normal text form
BG : ABC
Book : India SOB (functional curr INR)
LE : LE-N , LE-S, LE-E, LE-W, LE-C
OU : OU-N , OU-S, OU-E, OU-W , OU-C
Inv Org : IO-N, IO-S, IO-E, IO-W, IO-C
------------------------------------------------
Now when the US operations opens up
BG : ABC
Book : India SOB
LE : LE-N , LE-S, LE-E, LE-W, LE-C
OU : OU-N , OU-S, OU-E, OU-W , OU-C
Inv Org : IO-N, IO-S, IO-E, IO-W, IO-C
Book 2 : US SOB
LE : LE-US
OU : OU- US
Assuming US would have a book function currency USD , reporting book in INR
BG : ABC
Book : India SOB (functional curr INR)
LE : LE-N , LE-S, LE-E, LE-W, LE-C
OU : OU-N , OU-S, OU-E, OU-W , OU-C
Inv Org : IO-N, IO-S, IO-E, IO-W, IO-C
------------------------------------------------
Now when the US operations opens up
BG : ABC
Book : India SOB
LE : LE-N , LE-S, LE-E, LE-W, LE-C
OU : OU-N , OU-S, OU-E, OU-W , OU-C
Inv Org : IO-N, IO-S, IO-E, IO-W, IO-C
Book 2 : US SOB
LE : LE-US
OU : OU- US
Assuming US would have a book function currency USD , reporting book in INR
-
Dnyanesh_K
- Posts: 10
- Joined: Wed Dec 26, 2007 5:13 am
- Location: India
Thinktank,
Consider any country, US or India and ask the following questions to your self.
What you have given is correct, but what was the thought process behind this? Was all this necessary? Why couldnt I have a single Legal Entity under Indian SOB? Why did we have so many OUs? Couldnt one single OU suffice? I dont say that the above tree was wrong. But then what drove you to go for this tree chart? What all requirements Business had given so that you went for above chart?
many questions
Regards,
Dnyanesh
Consider any country, US or India and ask the following questions to your self.
What you have given is correct, but what was the thought process behind this? Was all this necessary? Why couldnt I have a single Legal Entity under Indian SOB? Why did we have so many OUs? Couldnt one single OU suffice? I dont say that the above tree was wrong. But then what drove you to go for this tree chart? What all requirements Business had given so that you went for above chart?
many questions
Regards,
Dnyanesh
Hi Dyanesh,
It is my assumption that each company in N,S,E,W,C might be a registered tax payer and hence tourned out to have 5 LE.
For instance I would have thought to have only 1 LE but 5 OU if the company has a single registrations and all statutory reports are filed by one company in 'C'
But I am not quite sure of all the right questions to raise to derive the structure.
That is why I am looking out for more info on the questions which will help us to frame an org structure. If not questions atleast share some more thoughts on this subject. I really apprectiate your interest . Could you help out more.
It is my assumption that each company in N,S,E,W,C might be a registered tax payer and hence tourned out to have 5 LE.
For instance I would have thought to have only 1 LE but 5 OU if the company has a single registrations and all statutory reports are filed by one company in 'C'
But I am not quite sure of all the right questions to raise to derive the structure.
That is why I am looking out for more info on the questions which will help us to frame an org structure. If not questions atleast share some more thoughts on this subject. I really apprectiate your interest . Could you help out more.
-
Dnyanesh_K
- Posts: 10
- Joined: Wed Dec 26, 2007 5:13 am
- Location: India
Hi Thinktank,
What you said is correct. What you assumed can and cannot be the business requirement. It all depends on the business requirements. I am not aware of any specific material for this which wil give solid rules for designing the Org structure. Only working in an Implementation project will one gain such a knowledge. We will continue our discussion next week as I am very busy till this weekend.
Regards,
Dnyanesh
What you said is correct. What you assumed can and cannot be the business requirement. It all depends on the business requirements. I am not aware of any specific material for this which wil give solid rules for designing the Org structure. Only working in an Implementation project will one gain such a knowledge. We will continue our discussion next week as I am very busy till this weekend.
Regards,
Dnyanesh
-
ramu.parepalli
- Posts: 31
- Joined: Sat Mar 17, 2007 1:16 am
- Location: India
-
Dnyanesh_K
- Posts: 10
- Joined: Wed Dec 26, 2007 5:13 am
- Location: India
Hi,
Thinktank, the reply you gave on Jan 05 2008 : 01:19:58 AM, I will add something to it....
You said that:
=== =========
It is my assumption that each company in N,S,E,W,C might be a registered tax payer and hence tourned out to have 5 LE.
=== =========
Basically, in a given country and given basic business you will have only one registered body (LE). So only one of the companies can be a LE.
Because, why will you have more than one LE when you have a common business in a given country and you report to only one Government. Yes, if you have different business then this can happen..Like for e.g your company ABC Inc manufactures Hardware as well as software. In this case you can do that. Also in this case it CAN have a different COA. So your SOB will also change.
But again, Oracle wont stop you from making all your companies as different LEs. It all depends on requirements.....thats the bottomline.
Please feel free to tell your views on this.
Regards,
Dnyanesh
Thinktank, the reply you gave on Jan 05 2008 : 01:19:58 AM, I will add something to it....
You said that:
=== =========
It is my assumption that each company in N,S,E,W,C might be a registered tax payer and hence tourned out to have 5 LE.
=== =========
Basically, in a given country and given basic business you will have only one registered body (LE). So only one of the companies can be a LE.
Because, why will you have more than one LE when you have a common business in a given country and you report to only one Government. Yes, if you have different business then this can happen..Like for e.g your company ABC Inc manufactures Hardware as well as software. In this case you can do that. Also in this case it CAN have a different COA. So your SOB will also change.
But again, Oracle wont stop you from making all your companies as different LEs. It all depends on requirements.....thats the bottomline.
Please feel free to tell your views on this.
Regards,
Dnyanesh
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