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Oracle Projects and Labor costing

Guest post by Somnath Pansare, Principal Consultant, Infosys Limited

Compared to Oracle E-Business suite financial family of Oracle applications, Oracle projects family modules are not that extensively used. Recently many customers realized the potential of Oracle Projects suit and started using for their business. Now, lot of unused functionality is being explored and additional requirement or tuning of functionality is coming from these areas, labor costing is one of the areas.

Many industries, especially service industries, such as hospitality, manufacturing, and computer services use extensive amounts of manual labor. So the employee labor costs are usually the major expense for businesses in these sectors. Loading correct cost to the project is very critical though it may not be straight forward since there are many factors involved in addition to the global and complex nature of the projects.
Straight time cost, row cost is calculated by Oracle project by multiplying working hours of employee by the employee's labor cost rate.

Burdon cost can be calculated from the row cost as per the business needs. Costing rate schedules can be defined at employee or job level but that is not enough for many organizations where they would be looking to setup rate using more employee attributes like job, job level, position, location, any other attributes or combinations of any attributes.

I would like to discuss this vital business need and recommend an approach for defining and maintaining employee cost rate schedules using HRMS employee attributes, and modifying client extension to use the new rate schedules for labor cost calculations while loading cost to projects. This would make sure the correct employee cost is added to the projects.

Proposed Solution
Following diagram would depict the proposed solution. Oracle Release 12.2 also tried to address some of the requirement through HR Rate by Criteria matrices but the solution proposed here is secure, independent and easy to access and maintain.

 

Blog_Somnath.jpg


I am sure this solution would be a very good value add to customers and easy to implement. I would like to hear your thoughts on the same and any comment you might have.

Comments

The most resourceful blogs are ones that give away a ton of information, so thanks for putting up your site.

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