Infosys’ blog on industry solutions, trends, business process transformation and global implementation in Oracle.

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April 28, 2012

Product Maintenance In A Strict Regime

One time success comes to many but sustained excellence is not everybody's cup of tea. World class organizations maintain their growth momentum year after year, operating in strict regime. This is true for leaders in retail as well as printing and digital solution industry. Players under the Food and Beverage industry, operate under a strict legal and compliance regime. International Agencies like FDA, FCC, and USDA mandate the tacking of lot attributes like the product expiration date throughout the supply chain. Also, corporate governance norms like Supplier Social Responsibility mandate the tracking of the products' country of origin. This is important to ensure that organizations do not indulge in any kind of malpractices like sweat shopping.

As each day passes by, every country pan globe is making its operating laws more stringent than ever before. This leads to maintaining items or products in specific labels formats and colors, holograms, compositions etc. This would imply associating items with certain critical attributes that need to be tracked with them. For instance it is important to associate a Country of Origin and Manufacturer's Identifier with each item for a Food Retailer. These are mandated by international agencies for compliance and regulation. Issue is more challenging if item life span is short and old items are getting replaced by new ones.

Similarly, in the printing and digital solution industry brand information needs to be associated with the generic product code to arrive at the final item specification. There are multiple brands of peripherals available in the market which when linked to the Generic product code result in a final assembly or end machine product.

For a responsive supply chain to operate at its optimum levels, organizations with central procurement/manufacturing and global distributions need to manage these requirements. Is there really an optimum solution that exists? Sometimes a new item creation might be the way forward, whereas sometimes items revision might be the best bet. This is the Glocal approach. When organizations creating different item numbers it is helpful in catering to each unique requirement separately. But it brings along with it immense data management issues together with forecasting and planning. Creating different item revisions helps in effective planning and forecasting but poses challenge in effective execution of required revision usage in desired destination countries.

We might not have a panacea here and organizations need to strive for a balancing act. The act could depend on the system landscape as well as infrastructure.  Is there a recommended approach that organizations could adopt to remain world class and also comply with legal and agency mandates? Master Data Maintenance is the backbone of successful and robust systems, it is the plinth of a strong architecture.

April 26, 2012

Basel III - Leading the way to herald a paradigm shift in Risk Management

Guest post by
Sukruti Suresh, Senior Associate Consultant, Infosys

 

The financial crisis of 2008-09 paved way for a regulatory reform that was revolutionary. The impact of this crisis was so severe that the losses it caused led to a near collapse of the financial system and crippled the economy to a large extent. Considering market sentiments, the need for a new set of reforms was at an all time high. This led to an intervention by the Regulators on a global scale. Slowly and steadily, the economy regained a semblance of stability. The next obvious step in the process of recovering and stabilizing was a detailed analysis of the cause of the unparalleled failure of the financial system the world witnessed. There seemed to be a collective failure of Banking, regulation as well as supervision. With massive amounts of the tax payers' money being pumped towards reviving or "bailing out" crumbling financial markets and institutions, finding the cause and solution for the problem was the need of the hour. This eventually resulted in a complete rework of existing regulations which included changes in capital management, liquidity, Governance etc. The events that transpired in 2008-09, led to the revamping of the Basel 2 regulations and paved way for the Basel 3 regulations.

Post the financial debacle of 2008-09, the Basel Committee for Banking Supervision took upon itself the responsibility of coming out with a set of regulations, which were essentially a revamped version of the capital adequacy requirements as per the Basel II guidelines. The result of this revision came to be known as the Basel III Framework.

The structure of implementation of the proposed changes is such that each area of change or revision has its own timeline and manner of planning, deliberation and actual implementation. The entire purpose of Basel III is to provide a level playing field for all banks stand to be threatened as national regulators of countries around the world are not able to come to a common conclusion over several key issues. The primary reason for this being the varied starting points with regards to the impact of the financial instability and crisis on different countries.

The primary objectives of Basel III are:

  • Fortify global capital and liquidity regulations to ensure a more sound & buoyant banking sector.
  • Enable the bank's ability to absorb stress and shocks resulting from financial and macro economic scenarios.

In order to ensure this, a 5 pronged approach has been suggested. The areas to be covered under this approach are as follows:

  • Intensifying/Consolidating the capital components (Tier1, Tier 2 & Tier 3)
  • Intensifying/Consolidating Risk Management practices
  • Introduction & monitoring of an Overall Leverage Ratio
  • Dealing with Pro-cyclical nature of the previous versions of the Basel accords
  • Management of Liquidity Risk

Intensifying/Consolidating the capital components (Tier1, Tier 2 & Tier 3)

Basel 3 proposes that the Tier 1 capital should consist of going concern capital in the nature of common Equity and some equity-like debt instruments which are subordinated in nature as well as instruments where dividend payments are optional. Similarly, components of Tier 2 capital also stand to be scrutinized. Basel 3 proposes to eliminate all Tier 3 all together. Basel 3 repeatedly propounds the theory that equity is the best form of capital as it most successfully writes off losses faced by banks. Several deductions that have been recommended to be removed while computing Tier 1 capital are goodwill, minority interest pertaining to 3rd parties involved in subsidiary take over, banks investments- either in its own shares or in shares of other banks and financial institutions etc.

The primary goal of this proposed change seems to be a sense of quality and transparency in terms of the capital base of the Bank. There also needs to be a clear demarcation regarding the extent or ratio in which a particular tier of capital would bear the brunt of a loss. Capital composition must be detailed to the most granular level, thus avoiding any misuse or lack of clarity of capital formation.

For more on the changes proposed in the Basel 3 regulations, watch out this space...

April 13, 2012

Oracle Hyperion Upgrade- Opportunities and Possibilities

Guest post by
Hari Ram, Technology Analyst, Infosys

 

The rapid progress in technology makes today's-latest seem like tomorrow's-outdated. The change may not always mean 'mere increase in the version number' or 'change in look and feel'. The newer version of a platform or product more often than not brings a bag of advanced features that will simplify the process, increase usability, fix earlier defects and most importantly provide more value for the buck spent.

Oracle Hyperion products have seen multiple releases (major, maintenance, patchset...etc..,). Oracle Hyperion 11.x Suite introduces new products that may be a merged flavor of few of the existing products into one with additional features or are entirely new products catering to a distinct purpose or few products waiting for sunset soon. For example, Hyperion Essbase Studio brings with it the features of Essbase Administration Services (EAS) and Essbase Integration Services (EIS), while Hyperion Disclosure Management (HDM) is a fresh product to create the instance documents (10K, 10Q) to be submitted to the Financial Regulatory agencies like SEC. Products like Hyperion Enterprise and Enterprise Reporting are in their terminal versions.

With advent of the version 11 and EPMA, the need to upgrade to version 11 has increased. Indentifying the need, opportunities and possibilities to upgrade is the first step towards the bigger vision.

Why Upgrade to Version 11.1.2.x?

Most Hyperion users have migrated to newer version of the products or to newer tools because of the following,

  • Sunset time for the products. Oracle's Premier and Extended Support for pre-11 systems coming to end by Jan 2012 and for 11.1.1.x products ending by Jul 2013.
    • As per Oracle's Product direction, Hyperion Enterprise and Hyperion Enterprise Reporting would be placed on controlled availability from Dec 2012 with v6.5.1.1 being the terminal release for these two products. Hence most of the applications presently on Hyperion Enterprise need to be migrated to Hyperion Financial Management.
  • Newer & better tools combining the features of multiple tools into one
    • The Essbase Studio brings the features of Essbase Administration Services data prep editor and Essbase Integration Services into single place, giving a better XOLAP - Hybrid analysis.
  • Advanced features to handle the pain points from earlier releases.
    • Close integration with other Hyperion Products
    • Lighter Architecture with central security management using Hyperion Shared Services
    • Easier and streamlined application migration using Life Cycle Management
    • Better backup/recovery and transaction logging mechanism
  • Upgrading the infrastructure
    • When an organization decides to improve the infrastructure including the server machines, user machines, Microsoft office...etc.., the Hyperion tools must also compliment this change.

For the Hyperion EPM System Products, Oracle recommends that one must first upgrade the products to the highest available level release that directly supports upgrade from the current version one has.  Hyperion1.jpg

Most developers and consultants have their own way of upgrading the Hyperion products to the newer versions. Though this may not be in synch with the Oracle recommended upgrade path, but the experts still vouch for these manual methods.

In the next part of the blog series, I will be discussing on benefits and available approaches for upgrading Hyperion Essbase.

April 10, 2012

Payroll Interface in Multi Geography Environment: Key Focus points

Guest post by
Neha Barnawal, Senior Associate Consultant, Infosys

 

In organizations operating out of multiple geographies; country/region specific Payroll Vendors are increasingly preferred over the centralized HR Operations systems. While the importance and complexity of Payroll Processing is unquestionable in any HR system; different Payroll systems for different countries make it all the more complicated.

By definition, Payroll Interface is utilized to exchange data between the HR system of the organization and the third party Payroll systems. It's generally the responsibility of the local payroll departments to prepare data in the format suitable for the payroll system, tool or vendor specific to the country.  At the same time, Payroll interface has to cater to the comprehensiveness of the information.

During the implementation of any HRMS enterprise package, Payroll Interface also has to be implemented. Some of the key sets of data to be focused on while designing the specifications of the Interface are Employee Personal and Job information, Payment and deduction data and Format of the data and the files.

Apart from general employee information like Legal Name, Cost center details, Compensation data and Primary Address, the Interface should contain country specific Local Name, Local Addresses, Bank, Tax, Visa, Dependent and National ID information also. This enhances the fitness for use of the Interface towards the departments where local details of the employees are required for payroll processing (countries like; Japan, China have Local employee details in its specific language and format).

The other important sets of data to be included are Additional Payments and Deductions. Any type of Additional earnings can be included using Earning Codes.  Award Data, Compensation Plans, Benefit Plans and Pension Plans data should be catering to all the country specific regulatory requirements.

One very essential aspect of the Interface is its format. The data and file formats should be compatible with the downstream payroll systems. Date format, precision for the numeric fields, default/Null values for the numeric and character fields are central focus points of data format.

Header, file type, file name and field delimiter are crucial elements of file formatting. File encoding also should be carefully chosen while dealing with non-English characters.

Last but not the least extremely essential point to be focused on is training of the Payroll team. The people handling the Payroll systems should be trained to run the Interface correctly. The initial set ups and data should be proper. The teams should be able to identify and isolate data issues and program issues. 

Payroll.jpg

Thus, a careful specification and design for the Payroll Interface enhances its fitment towards the dissimilar requirements of the various payroll systems and proper training for the Payroll teams can make the implementation and usage of the Interface a lot easier.

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