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

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December 25, 2016

Centralized planning: From cloud to reality

 

Introduction

The recently published point of view (POV) on 'Oracle Planning Central Cloud' takes a new look at the deterministic planning approach and schedules for a centralized planning architecture. The document, which can be accessed here, states that Oracle planning system - Material Requirements Planning (MRP) - started with a decentralized planning method. Gradually, Oracle shifted toward a centralized approach with Advanced Supply Chain Planning. Thanks to the Internet and cloud, Oracle has moved towards that paradigm shift and can now perform centralized planning and control operations on cloud using planning central cloud. The latest release (Rel 11) of Planning Central Cloud is a powerful tool ready to unleash the potential of cloud to supply planning, bring a long term aspiration - into reality.The cloud is a place where all relevant data, information and applications are stored and made available for all -- locally and centrally -- while individual local facilities have their own configuration and policies that provide the required flexibility. 

Oracle Planning Central Cloud

Oracle released its first, cloud-based, planning system in Oracle Supply Chain Cloud Release 11 that offered the capability to create one plan that can execute demand, inventory, and manufacturing / supply plans at one go. This improves the deterministic approach of the supply planning system. The idea is to host the Supply and Demand planning solutions in cloud servers with Software as a Service offereing. This SaaS planning system will collect data from other Oracle cloud systems like Order Management Cloud, Manufacturing Cloud, Procurement Cloud etc driving a centralized standard ownership and processes. In a globally spread setup (manufacturing or distribution) having geographically spread locations (many facilities), the cloud based planning system enables to define a central plan available to all facilities. This system also enables the individual local facilities to have its own arrangements, constitution, and composition of material policies bringing in the required flexibilities with seamless access to data and security.  

Today, Oracle Planning Central Cloud is getting established in the market, and we take a brief look at how it is enabling deterministic and centralized planning.

Demand planning

Planning Central's demand solution automatically determines the best forecasting model according to data and has built-in features to incorporate seasonality and outliers. It generates forecasts based on shipment or booking and selects the most suited statistical engine to reduce forecast errors. Forecast can be managed at different hierarchies like product family and it has new product forecasting functionality also. It also provides the ability to load forecasts from an external system like sales or customer forecasts. This enables a capable deterministic planning system.

Inventory planning

From an inventory perspective, Oracle Planning Central Cloud automatically calculates buffer stock (safety stock) while minimizing inventory in order to increase service levels. Planning Central considers demand variability along with metrics such as mean absolute devices (MAD) and mean and absolute percentage error (MAPE -- which is a forecast error), when it calculates safety stock levels. It can also use the 'days of cover' paradigm to calculate a safety stock level that varies according to time. Safety stock can also be imported from external system if required so.

Supply planning

Planning Central offers an in-memory, unconstrained planning capability. It balances demand with supply to reduce inventory and prevent stock-outs. It uses the functionality of sourcing rules and forecast consumption. It recommends new supplies and reschedules or cancels existing supplies. It also applies business rules like effectivity dates on components, expiration dates on inventory lots, and reservations of on-hand inventory. Planning Central's supply plans can model outsourced manufacturing and delivery scenarios, including drop shipments and back-to-back orders. Hub and spoke configurations are supported as well.

Response and Analytics

Planning Central has built-in integrations with other Oracle Supply Chain Management (SCM) cloud applications to auto-release, release orders manually, and synchronize updates. It provides a configurable planner workbench allowing planners to view multiple plans and plan inputs simultaneously. Planners can create user-defined page layouts.

This planning solution also has a unified data model and data analysis hierarchies that are shared across demand and supply planning functions. It enables planners to analyze planning results at arbitrary aggregate levels (for example, at a category such as business unit level), and to view demands and supplies across products (having different base units of measure) by using a single consistent reporting unit of measure such as a currency unit of measure.

Data collection

The collection process gathers all master and transaction data. These sources give a complete picture of the supplies that are being held, moved, built, or bought.

Benefits of Oracle Planning Central Cloud

The benefits of Planning Central Cloud are more than obvious. It helps organizations gain compliance in standards, better forecasting, optimized cost, reduced hiring and training costs, higher customer satisfaction, and lower recovery costs through better quality control and more appropriate and timely responses to irregularities and disruptions. Here are five primary benefits:

  1. On-demand capacity augmentation: Planning systems traditionally require a lot of infrastructure that have to be structured and allocated in advance based on the type of plan, the volume of data, and number of users. Planning Central Cloud allows us to increase or decrease capacity in real-time; this helps customers start with a baseline configuration of resources and then increase the capacity as per the demand. This way we can avoid huge CAPEX investment at the start of the project.

  2. Enhanced security: Oracle cloud provides security best practices and measures integrated into the architecture at all levels. It is much more enhanced and precise compared to traditional infrastructure.

  3. Enhanced planner productivity: Through configurable Planner's Workbench, productivity is bound to improve by planning inputs simultaneously, viewing multiple plans, using user-defined multi-pane page layouts, and switching layouts

  4. Advanced analytics and spreadsheet integration: Oracle Planning Central Cloud provides advanced analytics feature along with excel integration through ADF desktop integrator. 

Conclusion

Planning Central Cloud release 11 is Oracle's first step towards a centralized cloud-based planning system. There are more planning features like constrained based plan, demand sensing and shaping, and sales and operations planning which are yet to be added, but the beginning looks promising and the future is full of opportunities. Oracle Planning Central Cloud is pre-configured and ready to use from the moment the account is provisioned by Oracle. Instead of spending time procuring hardware, integrating applications, and configuring the software, the system can be live in weeks. There is a lot of potential of Planning Central cloud which is definitely going to enhance user experience and improve supply planning in companies.

December 17, 2016

Contract manufacturing and subcontracting practices: A propellant for tomorrow's world-class organizations

The dynamics in retail and consumer packed goods (CPG) industries has touched many aspects of the supply chain, and contract manufacturing is no exception to the rule. Industry players world over have leveraged this arena to its full potential, as each player focuses on its core competencies. 
Contract manufacturing can be defined as 'outsourcing of a requirement to manufacture a particular product or component to a third party.' It enables organizations to reduce the investments in their own manufacturing capabilities, helps them focus on their core competencies while retaining a high-quality product with a reasonable price, and delivered on a flexible schedule.

Introduction  

Contract manufacturing capabilities include activities that comprise blending, sifting, spraying, and turnkey processing. The success of this very vital supply chain link depends on the business know-how as well as the technology deployed to manufacture the best of breed solutions. Wherever contract manufacturing and packaging production lines are modular, the retail players can reap rich dividends by exploring the wealth of contract manufacturing. This modularity enables the manufactures meet a variety of specifications for contract manufacturing and packaging. Contract manufacturing goes hand in hand with packaging capabilities. Its abilities include activities that comprise vertical and horizontal forms, fill and seal, labeling, multiwall bagging, poly bagging, and labelling.

Information technology (IT) follows business; therefore the success of any contract manufacturing engagement also depends on the capability of both the primary retail / CPG player as well as on the contract manufacturer. The sophistication of the IT landscape at both ends will drive the richness of such engagements and the inculcation of industry best practices.

World-class organizations have the question of establishing the clarity of what capabilities and competencies are core today for an enterprise, and what should be in the future.

Organizations begin this journey by gauging and developing a clear understanding of the manufacturing capacity and capability requirements for their likely future portfolio, by looking at a time window. This would eventually provide the enterprise an adequate time to think through and evaluate what to invest in developing internally and what to outsource.

 

Reasons for outsourcing and associated costs

The most common reason for any organization to prefer outsourcing is the cost saving that would be realized at the end of the engagement. There are three main drivers - access to capacity, technology, and market - for this cost differential, which can be regarded as the underlying reasons for outsourcing.

Unlike any business opportunity, there is some cost associated with outsourcing or contract manufacturing. These are:

  • Direct cost
  • Indirect cost

The direct costs of contract manufacturing are fairly comprehensible. They are:

  1.    Conversion cost
  2.    Cost of materials
  3.    Value for maintaining the contract manufacturing relationship

However, direct costs are only the tip of the iceberg. The depth of the iceberg can be gauged by the extent of the indirect cost which could be broadly classified into the following:

  • Uncertainty cost
  • Risk

Uncertainty costs are built into the supply chain like the one associated with maintaining appropriate inventory levels. There is an additional working capital tied up in the supply chain due to the fear of supply interruptions caused by lack of visibility and systems integration. Hence, there are the risks which are inherent to the entire market or market segment. They are also known as the systemic risk. Reputational cost associated with choosing an incorrect contract manufacturer that compromises on quality, also forms a critical element.

Lifeblood of a contract manufacturing engagement

Retail organizations aim to become world class organizations, evolving for better each day.  Utilizing specialized skills in the supplier manufacturing process can help achieve this vision.  Suppliers can provide value added services to lower packaging, manufacturing costs, and increase production quality. They also aim at using supplier capacity to increase the overall production capacity. They envision enhancing their stature to 'world class organization' by utilizing a successful contract manufacturing organization (CMO) relationship with its vendors.

A successful CMO engagement delivers several benefits. They are as follows:

  • Reduced investments in capital assets
  • Shift from fixed to variable cost model
  • Leveraging specialized knowledge and skills
  • Improved asset utilization
  • Retain and continued focus on core competencies
  • Spread risk and reduce costs
  • Faster time and access to market

CMO engagements are accompanied with many challenges. Some of them are as follows:

  • Critical dependence on supplier / vendor
  • Increased financial commitments -- expense and capital
  • Lack of shared vision and goals
  • Problems associated with supplier evaluation
  • Cultural difference between an organization and its CMO

The effectiveness of a CMO engagement could be determined by certain key performance indicators (KPIs) like:

  1.    Percentage of reduced manufacturing costs
  2.    Percentage of lowered packaging costs
  3.    Percentage of process and product quality improvement
  4.    An overall percentage increase in entire production capacity

For a successful CMO, it is pivotal to establish a centroid of triangle, which is balanced by:

  1.    Strategic fulcrum (long term vision)
  2.    Tactical fulcrum (short term mission)
  3.    Operational / executional fulcrum (implementation methodology)

Process standardization is indeed a best practice. Having a single point of contact at the retail organization will ensure a successful multi-vendor CMO engagement. Once the triangle's fulcrums are firmed up, an efficient CMO engagement will be established.

Alignment of system and business imperatives

Contract manufacturing is gaining importance in the retail industry rapidly as each industry player is focusing more on core competencies. As a result, there is increasing need for system capabilities to meet the business imperatives. An organization could base its business operations on a number of operating models for contract manufacturing but more often, hybrid models occur in which the inventory ownership lies with the parent organization, and it is recorded in the inventory book of records. With most of the industries moving towards contract manufacturing, enterprise resource planning (ERP) systems should have the capabilities that align with business.

Oracle's outside processing (OSP) aligns well with business needs. Subcontracting is another module that has been gaining popularity. Not unusual are scenarios where a brand owner or an original equipment manufacturer outsources its entire manufacturing operation or sometimes a portion of it to an external manufacturing service provider. Brand owners or OEMs will need to engage into a contractual agreement with the service provides who are also known as manufacturing partner.

From a system standpoint, following is the sequence of events involved in a typical subcontracting cycle:

  1.    Creation of a subcontracting order and its communication to the CMO
  2.    Automatic creation of the following:
a.       Discrete job for assembly production in CMO premises
b.      Purchase orders for procuring the component / ingredient items from the retailer
c.       Sales order for the component items
  1.    Shipment against the Sales Order for the component orders to the CMO
  2.    Automatic receipt of the component items in CMO
  3.    Assembly manufacture in CMO against the discrete job
  4.    Shipment of assembly to the retailer
  5.    Receiving the final assembly in the retailer premises
  6.    Automatic completion and closure of the discrete job

It is to be noted that modeling of business cycles requires setting up retailer and CMO as inventory organizations. The module supports two modes of component types:

Synchronized modes: In this case, the components are transferred to CMO against the specific subcontracting order.

Prepositioned modes: In this case, the components are transferred to CMO without referencing any subcontracting order in advance of assembly requirements.

In the nature of subcontracting, if the retailer charges the CMO upfront for the components supplied and pays for the services received separately, then chargeable subcontracting can be taken into consideration. If the retailer nets off the payables and receivables invoices in the case above, it is termed as buy/sell subcontracting.

Today, systems are available with strong features that can suit ever increasing business needs. In certain cases, we might have to customize the vanilla application, but as they say IT always follows business.

Conclusion

Organizations are now utilizing subcontracting and contract manufacturing to focus on their primary business. Once the systems are put in place to align business imperatives, there are rich dividends to reap.

December 6, 2016

Oracle Fusion Opportunity to project integration


In most of the service organizations, internal resources are utilized while pursuing the proposal of customer (Opportunity) to get the new business from existing or new customer. However, the internal organization efforts are not tracked in detail level. If the organization tracks the indirect pre-sale effort / resources utilized for the opportunity, it can give more clarity on how to make use of these resources efficiently. It also helps to identify / track the indirect cost used for Opportunity. This could support organizations in budgeting and resource utilization.

Oracle Fusion Application provides integration between Oracle Sales Cloud (OSC) and Oracle Project Portfolio Management (PPM) to track and plan the indirect pursuit pre-sale cost for Opportunity also it will help to plan, budget, track and execute the delivery of opportunity once organization won the new business.

Following project types can be considered for Opportunity.

·         Pursuit project

It is an indirect project type, which tracks the pre-sale non billable pursuit cost of Opportunity, including staffing, travel, and other expense.

Project manager / opportunity owner creates corresponding pursuit project when the Opportunity gets created. He plans the budget according to the effort / resources / expenses required for the Opportunity. Opportunity owner raise the resource requirement for pursuit project which gets fulfilled by resource manager as per availability. Project team starts working on pre-sale work of Opportunity and charges the time sheet on corresponding pursuit project. All expenses are submitted on pursuit project. Every pre-sale opportunity pursuit costs like expense, procurement, and time card are collected on pursuit project. Opportunity owner / project manager executes the budget to actual cost analysis to review the project performance according to the budget and raises any change request if required.

Once the pre-sale activity of Opportunity get completed, corresponding pursuit project will get closed. So, no more cost will be charged on the project. Opportunity's pursuit budget to actual cost details provide better clarity on organization's indirect cost spending on multiple opportunities to plan it effectively for better outcome.

 

 

Pursuit Project.jpg
















 

·         Delivery project:

It is a contract project, which plans and tracks the delivery / execution of opportunity with planning, staffing, budgeting, billing, and revenue forecasting.

Once the Opportunity won, corresponding Delivery project get created. Project manager plan the project delivery with effort/resources/expenses required and prepare the budget for the Opportunity delivery. Project manager will raise the resource requirement for delivery of project which will get fulfilled by resource manager. Project team will start working on delivery and will charge the time sheet on corresponding delivery project. Any expenses occur will get submitted on project. All the delivery cost like expense, procurement, time card will get collected on delivery project and revenue will get generated accordingly with customer billing as per milestone achieved. Opportunity owner/Project Manager perform the budget to actual analysis to review the project performance as per budget and will raise any change request if any staffing or budget changes required.

Once the delivery of opportunity get completed, the corresponding delivery project will get closed, so no more cost/revenue/billing get charged/generated on project. Delivery projects budget to actual analysis provide better clarity on cost & revenue details of opportunity to track project performance to plan it effectively for better outcome.

 

Delivery Project.jpg
















 

The pursuit cost of all opportunities collected through pursuit project can be redistributed on multiple delivery projects at organization level.

Summary:

Opportunity to project integration provides more clarity on Opportunity's pursuit and delivery activity. Pursuit project helps to plan the pursuit of opportunity in a better way with available resources and cost budgets. It also provides clarity on actual cost-budget, resource availability, and other details for pursuit activity performance evaluation at organization level for better decision making.

Delivery project serves to execute the delivery of opportunity in better way with in details planning including staffing with cost and revenue budget. It helps to track the real-time progress, which helps to take key decision for opportunity delivery. The project also provides clarity on actual cost and revenue to budget for reviewing financial performance of delivery project.

Opportunity to project integration helps to track the pursuit and delivery activity of Opportunity at granular level with better control.

 

 

                                                

December 2, 2016

Simplifying the recruitment puzzle with Taleo

Taleo, a company acquired by Oracle, is considered to be one of the top vendors in recruitment and talent management.

Taleo is consistently ranked as the favourite applicant tracking system (ATS) for recruitment by recruiters and employers. It allows them to perform a wide array of functions -- measure important metrics, create candidate selection workflows, add privacy statements with the click of a button, choose from the several pre-defined and proven workflows, activate dynamic approvals, add appropriate notifications, create pre-screening and disqualification questions, manage security,  and more.

However, when candidates were asked to fill Taleo forms while applying for jobs, they appeared frustrated. They clearly did not share the same level of excitement as recruiters and employers. Their frustration cannot be attributed to mere lethargy to fill lengthy forms. In the past, job seekers were willing to go to any lengths to apply for jobs -- standing in long queues, dropping their resumes at offices, filling applications at employment boards, completing Taleo forms, and more. Today, times have changed and talent has become paramount. A skilled candidate has several options to choose from, and recruiters scramble for his / her attention. In such a scenario, it becomes imperative to sit back, think, and sensitise organizations for the needs of the candidate.

Although Taleo is a wonderful application with tons of features, an overenthusiastic requisition creator can ruin the experience for the candidates in the quest for more information. Organisations should exhibit restraint while adding questions to candidate forms, or must deploy an extremely accurate resume parsing option, which automatically fills in the fields that the employer seeks to review.

This option of resume parsing is available through several autonomous vendors, but a badly configured system continues to elude candidates the joy they seek of being able to apply for a job without redundant and relentless typing that goes on for pages. This is because not all resumes are in the same format, and not all parsing tools are intelligent enough to identify the fields and fill in the right information. Add to it the difficulty of having to update your profile constantly and the ineptness to showcase professional recommendations, certifications while making it flow into several unbearable pages.

There was a game changer, that was released by Taleo before being acquired by Oracle. It was called Universal Profile. This allowed candidates to create a single profile on Taleo with possibilities to edit or add new information whenever required, keeping the profile up to date. It allowed the candidate to use this universal profile while applying for jobs with every employer that used Taleo. Thus, this brilliant solution seemed to have solved the problem that most job seekers dreaded. However, in 2015, this feature was discontinued citing low usage and other issues, best known to Oracle. Since then, there has been a very discernible product gap. 

This concludes the story of Taleo, and why it could do with a bit of a push. The next post will explore LinkedIn announcements, and how it helps support the offerings of Taleo.


Trim your Financial Close Cycle with Oracle EPM Solutions










December 1, 2016

Valuable Passive candidates - Use of technology to find them before the competition does

While some organizations attract talent with no or less efforts, this is no longer the norm for most companies. Today, it's far more important for a recruiter to be proactive when finding candidates. Today's professionals expect employers to search for them and they take their online branding and positioning very seriously.

According to 2015 LinkedIn Talent Trends report, 75 percent of 18,000 employees surveyed considered themselves passive candidates. However, 85 percent of the surveyed employees were ready to talk to a recruiter and know about better opportunities.

The competitiveness of the market today can be judged from the fact that candidates have a number of job offers in their kitty and they evaluate each offer on the basis of individual standpoint such as work-life balance, company culture etc. The study mentions that laterals with good experience are in huge demand and the problem is compounded by the fact these are usually not active candidates.


Who exactly are Passive Candidates?

A passive candidate (passive job candidate) is someone who is well qualified and can be considered for a position open with the Organization but is not actively searching for a job.

Active candidates apply for jobs through job portals, Company websites or referrals. Passive candidates, however, are reached out to by recruiters. Passive Candidates are often skilled in niche areas/ technologies, top performers in their field and are difficult to reach.


Oracle corp. through a research in January, 2016 identified the inner motivation what truly drives passive candidate to take another job opportunity and the key motivation factors are as follows.

  • Professional development
  • Compensation 
  • Challenging Work

     

 Some commonalities amongst passive candidates are as follows:

·         Professionals in the age group of 22 to 40 years

·         Satisfied in his/her current job and not enthusiastically scouting for new opportunities

·         Such candidates are actively engaged on social networks such as LinkedIn, Xing or job-seeking portals

·         A high growth job is one that could convince such candidates to move to a better one

·     Candidates face a number of choices when they switch their jobs based on supply-demand dynamics (high demand for talent and smaller number of qualified professionals);

 

Key challenges in hiring a passive candidate:

Differentiation - There has to be a differentiating factor in the way an Organization approaches a passive candidate rather than the traditional   mode of recruiter phone call or emails.

 Channel - Passive candidates are generally interested in talking to managers or their future colleagues rather than the recruiters to get first  hand insight into their future role and culture of the Organization. Hence recruiting teams should find innovative ways to achieve this      interaction.

Speed - Competition in the market for talented passive candidates are high. They might be having multiple offers once they decide to leave   their current job. Hence the recruitment team should act fast.

Engagement - Passive candidates should be provided with a workplace approach which motivates them to be their best in the work they do  which in turn meets Organizational goals and objectives and make them feel enhanced and empowered.

 

HR technology plays a key role in finding the passive talent through various ways of creative and Salient features. (to be continued)

 

Are you availing the benefits of international trade agreements?

The total volume of international merchandise trade in the year 2015 across the world stood at US$32.2 trillion with US$15.9 trillion of exports and US$16.3 trillion of imports.The same figures for international trade in services stood at US$4.7 trillion and US$4.6 trillion, respectively. As per a recent McKinsey report, the total volume of international trade is expected to rise to US$70 trillion by the end of 2025.

We are in the times of rapid globalization, and almost all developed and developing economies of the world are promoting international trade for a host of economical and geopolitical reasons. As of today two of the world's largest proposed trade agreements -- The Trans-Pacific Partnership Agreement (TPP) and Transatlantic Trade and Investment Partnership Agreement (TTIP) are being negotiated.

Some robust trade agreements like The North American Free Trade Agreement (NAFTA), Association of Southeast Asian Nations (ASEAN), Gulf Cooperation Council (GCC), European Free Trade Association (EFTA), and such are already in place for a number of years. Still, a large number of exporters and importers across the world fail to avail the benefits of these treaties.

What is a trade agreement?

A trade agreement is a treaty between individual or groups of countries through which they aim to boost exchange of products and services. This is usually done by offering rebates in duties and/or simplifying business procedures for each other. For example, if a buyer, based in the US, imports an electric boiler made in China, it will attract a duty of 3.3 percent. However, if the same buyer imports the same product with its origin in Canada (made in Canada), it will be duty-free, since Canada and the USA are part of a trade agreement called NAFTA.

Another noteworthy point is, if the US buyer imports goods from China that have their origin in Canada, they will still be eligible for the duty rebate as per NAFTA since most trade agreements tie the duty benefits to the country of origin. Country of origin is usually the country where the goods have been manufactured or where a sizeable value addition has been done to the goods.

How does a trade agreement help?

If an enterprise gets insights into the applicable trade agreements while buying goods, then it can avail the duty benefits that its products are eligible for. A rebate or a removal of duty will directly cut down its overall expenditure and, hence, will enhance the overall competitiveness of the enterprise. To avail the benefits of a trade agreement, the business needs to provide certain documents like the country of origin certificate, etc.

Do exporters / importers avail the benefits of the trade agreements?

A recent study conducted by leading consulting company KPMG, revealed that only 41 percent of the enterprises in the US avail the benefits of all trade agreements that apply to them. The figure stands at 19 percent for India. The same study suggests that 79 percent of the enterprises in the US believe that a lack of awareness and the complexity in the regulatory documentation are the primary reasons due to which they miss out on the benefits from trade agreements.

How can Oracle GTM help avail the benefits and make organizations more competitive?

Oracle Global Trade Management (GTM) can easily identify the applicable trade agreements and generate the documents required to avail benefits. The following lists the key features of Oracle GTM:

Identifying the applicable trade agreement: Oracle GTM with its out-of-box (OOB) feature of Landed Cost Management can let any enterprise know about applicable trade agreements and their benefits. All it takes is entering the classification code of the product along with the source and destination country. With this much information, the enterprise will be made aware of the applicable trade agreement and the duty benefits tied to it.

Generating the documents required for availing the duty benefit: Once the applicable trade agreements are found, the required documents can be generated out of GTM using the feature of document generation. These documents can be further submitted to the customs authorities to avail the monetary benefits directly.

Please meet us at the Infosys Booth during the OTM SIG APAC 2016 Conference (Singapore) and we shall be delighted to showcase our GTM solutions. 

*Date Source - World Bank - https://www.wto.org/english/news_e/pres16_e/pr768_e.htm

Written by: Mohammad Haider Talat and Ravikiran Narayan Khobragade

Intrinsic trade compliance issues with SMEs

We often hear about the trade compliance issues with small and medium enterprises (SMEs) more frequently as compared to the larger organizations. Small companies are impounded with many challenges attributed to their limited trade management staff and tight budgets. In spite of their small size, there is no exemption from compliance requirement for these SMEs. The cost of non-compliance for these enterprises is very high since it may result in loss of privilege to export or import, financial loss, and disruption in the supply chain.

Challenges

Some basic challenges that these enterprises face are of the following nature:

·         Lack of know-how in trade compliance due to lack of experience

·         Failure to ramp up for the export compliance requirements of highly regulated products when they expand their product lines from products of low regulatory controls

·         Absence of senior trade compliance leadership

·         Not being aware of export / import procedures

·         Lack of trade compliance charter and in-house training program

·         Untimely fulfillment of trade documentation

·         Dependence on third-party vendors such as freight forwarders and customs brokers for trade compliance-related activities

Mitigation

To mitigate these teething or persistent trade compliance issues, these enterprises need a simple but comprehensive in-house program that ensures the following:

Hiring an experienced trade professional to design, plan, and implement a trade compliance program from a domestic or international trade perspective

1)      Concisely written trade compliance policies and periodic reviews that enable the staff to understand about the day-to-day compliance activities and take the best decision when faced with difficult situations

2)      Product classification and the applicable regulations knowledge, including duty deferment / subsidies and trade agreement benefits

3)      Government authorizations / permits requirement for export / import of products and their maintenance to reap the short / long term benefits

4)      Periodic audits and refresher training programs

5)      Informed pricing and investment decisions for sourcing the product considering regulatory requirement and free trade agreement benefits or duty reduction program evaluation

6)      Appropriate monitoring and enforcing of compliance program

7)       Preparation of systematic trade compliance mechanism to overcome trade challenges by implementing a global trade management system as per the available and allocated budget

How Oracle GTM can help SMEs to become trade compliant?

In the newer world of cloud-based compliance, systems may offer a solution that fits these SMEs needs, but the foremost and important thing is to get senior management to understand the importance of a trade compliance management program. The manageable fee structure of cloud software allows small and medium companies to make smaller upfront investments (such as license fee, annual maintenance fees, hardware procurement, etc.) and avail all the benefits of the software. These cloud implementations are usually faster than the on-premise ones. Oracle Global Trade Management (GTM) cloud-based software addresses almost all trade compliance related needs of an SME at an affordable cost.

Using Oracle GTM's cloud-based application will lead to a trade-compliant atmosphere within the company for less than a few hundred dollars a month. Cloud-deployed Oracle GTM is a multi-tenant version of the on-premise Oracle Transportation Management (OTM) where Oracle hosts the software and handles all the routine maintenance and upgrades of the system giving ample return on investment (ROI) against total cost of ownership (TCO) without any security concerns.

To know more on GTM Solutions, please meet us at the Infosys Booth during the OTM SIG APAC 2016 Conference (Singapore) and our experts shall be delighted to explain the details.

Written by: Ravikiran Narayan Khobragade and Mohammad Haider Talat

EU's proposal to modernize its dual-use regulation and its impact on various industries

The European Union (EU) controls the export, transit, and brokering of dual-use items within its territory and jurisdiction of its 28 member states*. It considers this control as an important instrument in contributing toward global peace and security.

What are dual-use items?

In simple words, a dual-use item is referred to as a good, software, or technology meant to be used by the civilian population for legitimate purposes; but can also be misused for terror attacks, international crimes, human rights violation, or the development of weapons of mass destruction.

For example, a substance that reacts chemically to release vast amounts of energy can be used in a regular college chemistry lab for educating students. At the same time, it can be possibly used in an explosive or a missile warhead. Here is another example: An electric motor that is used for generating electricity for domestic households can also be used in an armored military vehicle like a battle tank.  

According to the available statistics, export of controlled dual-use items from EU was around EUR59 billion, in 2014 alone, which is approximately 3.4 percent of the total EU exports.

How is the export in dual-use items controlled?

Through EU Regulation (EC) No 428/2009, a common EU list of dual-use items is in place and it is binding on all member countries of the EU to control the items in the list. The member countries usually place a license requirement on any enterprise involved in international trade of these items.

What is the proposal to modernize the existing dual-use regulation?

In September 2016, EU presented a proposal for a regulation to modernize EU dual-use control. The proposal aims at modifying or rather expanding the current list of items to adjust for the technological and scientific developments that the world has witnessed in the recent past.  

The main agenda of the proposal is to prevent human rights violations associated with certain cyber surveillance technologies. It is believed that if such technology is exported and falls into the wrong hands, then it could be used by repressive and authoritarian regimes to spy and intercept international communication which can pose a serious security risk to various nations and their citizens.

Which industries will be impacted and require a centralized trade management system to comply?

If this proposal is approved and enter into force, EU companies trading in cyber surveillance technologies will be required to obtain an export license and follow new procedural requirements.

Under such circumstances, it will be imperative for all those enterprises which export any of the following products to manage their trade through a robust centralized system.

  1.         Computer and network surveillance related products
  2.         Spyware manufacturing products
  3.         Information extraction software

The proposal also talks about a catch-all mechanism that allows member states to ask any exporter to apply for an export license because of human rights considerations.

This 'catch-all' clause is in contrast to the current provision according to which only the states are authorized to monitor the export. Hence, any exporter might be asked to procure a license before exporting the goods that are similar to any other goods existing in the dual-use list. Under such a circumstance, identifying and assigning the license and keeping a trail of the same manually will be an extremely challenging task for enterprises.

How can Oracle Global Trade Management help?

With its out-of-the-box (OOB) feature for license management, an enterprise can easily configure a number of licenses based on quantity or value. These licenses can be automatically assigned to the export orders involving the affected goods and makes the process hassle-free.

Further, once the quota or the value of any of the licenses reaches a critical level, the system can notify the business and the business can further apply for new / additional licenses with the relevant government authorities.

In addition, all scenarios that require any kind of export / import control measures can be modeled in the system and the entire process of screening, rescreening, and releasing sales orders can be made automatic using another OOB feature of trade compliance management.

Please meet us at the Infosys Booth during the OTM SIG APAC 2016 Conference (Singapore) and we shall be delighted to showcase our GTM solutions.  

*28 member states since no formal process of UK to exit from the EU has started as on today.

Written by: Mohammad Haider Talat and Ravikiran Narayan Khobragade

Reinforce performance reporting with a process-driven approach - ePRCS

In the digital age, the quality of a report depends on the understanding of business areas you are working in and how far you would go with this knowledge. Accurate and intuitive reporting is essential for multiple audiences -- internal stakeholders looking for area of growth or concern, external stakeholders deciding to invest in your business, or regulatory bodies monitoring any data discrepancies.

 

Reporting challenges and requirements

 

Before an organization can decide and design a reporting solution for management and statutory reporting, it needs to finalize the following:

  1. Kinds of report
  2. Level of detail
  3. Level of personal involvement
  4. Hardware and software requirements
  5. Security and performance of report
  6. Ease of distribution

The reporting solution should be able to handle all user required External and internal reporting requirements with minimal cost and effort. Each report must answer the following questions:


Purpose of using ePRCS Solution

Oracle Enterprise Performance Reporting Cloud (ePRCS) solution fits the bill perfectly for customers.

The solution is the latest addition to the Oracle enterprise performance management (EPM) cloud suite of applications, and helps organizations streamline their internal and external reporting. It provides a secure and process-driven approach for creating, publishing, and distributing report packages. User can access reports via the web or Microsoft Office.

 

 Benefits of ePRCS

Oracle ePRCS has multiple benefits that fulfills the needs of performance reporting. These include:

  • One solution for multiple reporting processes like management, compliance, statutory, and financial reporting

  • Faster deployment with minimal hardware cost. Backup and patch upgrades available with licenses

  • Reduced time frame for designing, creating, and distributing reports

  • Multiple levels of collaborative development and reviews. Continued visibility into progress and status of reports

  • Document lifecycle management: Controlled document check in / out with access permissions and multiple version controls

  • Role-based access so that data confidentiality is maintained and access is provided to authorized users only

  • Notifications on tasks that are due

  • Creation of report books and other books on management and financial reporting

  • Data integration with Oracle EPM, business intelligence (BI) and enterprise resource planning (ERP) data sources which provide 'one version of the truth' on a single reporting platform

  • Complete data traceability to validate that the numbers are accurate

  • Deliver faster, more accurate insights to all stakeholders, anytime, anywhere

  • Secured interface using Microsoft Office. User can create grids, charts, and reports using Microsoft Office tools


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