Multiple Time Zones in Single Global Instance - A Business Perspective
One of the most widely recommended and talked about strategy when global companies embark the Oracle applications implementation journey is to go for the Single Global Instance Strategy. While it makes complete sense from IT perspective without any doubts, Does it work well for all the business areas, mainly for Finance and Accounting teams?
Recently when we were in a meeting with a senior finance executive from Retail industry, he was sounding it very clear that he does not want to run his China business in Pacific Time zone. Does it sound like a very reasonable business expectation that any IT application has to fulfill? Does it sound like a very familiar requirement across our implementations? Let us dig in to the details of what business actually wants and why is it a challenge to address these requirements.
The key business requirements are,
1. Allow accounting fiscal period cut-off based on local time zone (Need of early close for China If PST is server time)
2. Need for a rolling close which allows closing periods in local dates across time zones.
3. Transactions need to go to the correct period based upon the local date/time
4. Local date / times need to be displayed on relevant Internal and external operational documents
5. Allow continued inventory update and visibility (24/7 transaction processing) regardless of time zone
6. Receipt accruals, pay on receipt invoicing, COGS and AR invoices to be aligned to right GL periods based on local time zone
The key expectations or business impact areas are timely inventory period closing, right transaction accounting, right accrual accounting and invoicing, all based on local time zones. The complexity of these requirements increases in retail industry with 24/7 global supply chain operations and high volume transactions processing. Also it becomes more challenging to address these requirements from both supply chain operations and accounting perspectives.
As we work through these requirements and solution, it seems like there is no perfect solution or common industry best practice addressed through Oracle implementations in Global companies. Even though Oracle offers an out of the box, but controlled feature 'Legal Entity Time Zone' (LETZ) along with 'User Preferred Time Zone', we could not come across (m)any customer success stories due to its limitations or addressing partial requirements.
Hoping many of you will disagree and come back with multiple solution options! Or you may wait till Part2 - Let's explore LETZ!