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How to approach implementation of Oracle Financial Accounting Hub (FAH)

Guest post by
Pravin Sekhani, Lead Consultant, Infosys

 

FAH allows organizations to centralize their accounting function through a scalable and user-configurable solution. The accounting engine in FAH uses transaction data and configuration in FAH as input and generates accounting entries as output. Though the concept of an accounting hub is not very new, many organizations have never embarked in a journey to implement this concept. We have implemented FAH for multiple organizations in different industries.  We have seen that the project stakeholders usually do not have much idea about the key decisions which they would need to make.   This blog will provide, such organizations and stakeholders, a perspective on some of the decision points in an implementation of FAH.

An organization may process transactions for same line of business or product/service through more than one transaction processing system. One of the first design decisions which an organization needs to make is whether to implement a common configuration of FAH for a line of business, irrespective of multiple source systems. The other option is to implement separate configuration for each transaction processing source system.

A common configuration means consistent accounting treatment irrespective of differences between transaction processing systems. It also means that a single configuration will need to be changed, in case of change in accounting policy for that line of business or product/service. However common configuration need common transaction data model. Therefore transactions generated in multiple systems for that line of business needs to be transformed into a common data model. Such transformation can be performed either in an upstream data warehouse or via a custom solution in Oracle database.

Separate configuration for each source system allows organization to integrate one system at a time with FAH. Such projects are relatively smaller and less complex. That said, the down side is having multiple configuration for a single line of business which may translate into higher long term maintenance cost.

Another decision point is related to configuration of Applications. Registration of application in one of the first steps in FAH configuration. Accounting rules are configured under an application. Accounting entries are also segregated by application. Hence, one of the key decision point is whether to configure a single application for all FAH configuration or to configure more application - one per line of business or source system. The benefit of single application is that accounting rules can be shared and reused within an application. The downside is that if the FAH is implemented in phases then regression testing will be required for solutions which are already live.

Similarly there are other decision points. However, there is no single right answer for each decision point. The decision depends on the organizations business and technology landscape, implementation approach - big bang or staggered, future growth plans etc. That said, it is recommended that the key SMEs from the project team are given basic training of how FAH works at the very start of the project. This will ensure that SMEs and the implementation partners collectively take knowledgeable decision for a successful FAH implementation.

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Comments

why it is more popular in Financial Institutions like Banks ?

It can work in any industry , isn't ?

Hi, I have read your blog. You did really great job. I gathered lots of new information related to oracle from your blog. Thanks for sharing this informative blog.

Thanks Praveen for sharing your experience and learning about FAH implementation approach in summarised way.

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