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

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November 9, 2018

Importance of CPQ for Industrial Manufacturing

 

Most Industrial Manufacturing organizations are dealing with constantly changing market dynamics & variables that make configuring accurate sales quotes a complex process. Existing pricing and quoting tools & processes across industries are disparate, stand-alone custom applications with repeated manual data entry in sheets and formula-based price estimates resulting in data duplication, inconsistent BOMs, inaccurate estimates with no historical insights, reporting & analytics. This repetitive, manual and tedious work for Sales to capture product requirements, price it right and present to their customers and often takes weeks & months before converting to order which results in lost opportunities and impacts sales efficiency.

A robust Configure-Price-Quote(CPQ) system is thus essential in today's dynamic and competitive markets in order to provide faster and consistently accurate estimates to your customers and improve Sales efficiency by automating the quoting process to capture and process all product configurations and pricing details in a single system.

The most important cog wheels to achieve a unified and harmonized CPQ process are:


  • Configurator: Industries today want to cater to specific business needs of their customers and thus need to provide their Sales with highly configurable products to generate unique sales BOM that can serve the purpose effectively. The configurator must be able to support complex catalog hierarchies and product selections in a guided flow bound by various rules to ensure accurate sales BOM is generated automatically. The configurator must also support logical bundling of products & associated components & services to allow different selling models to be readily adopted by Sales, distributors, resellers and partners.
  • Price Engine: A competitive and dynamic pricing strategy with pre-defined rules based on product attributes, service plans, price contracts or agreements etc. will improve the win probability and provide edge over market competition. It also ensures that discounts & margins are in control and go through systematic reviews and approvals to create accurate and winning quotes to end customers.
  • Quote Life-cycle management: A complete opportunity-quote-order (Quote to Cash) process to manage and track quotes or contracts all the way to order creation and fulfillment through ERP systems and is fully integrated end-to-end with an upstream CRM system for opportunity management. The system must be able to automatically generate quotes from pre-defined dynamic templates that can be tailored to present the quote information according to the currencies & languages preferences across different regions of the world.


Benefits of CPQ for Industrial Manufacturers

  • Improved Time To Market: Product catalogs and bundles are constantly changing keep with customer demands. CPQ enables you to logically organize, expand and update product catalogs, complex configuration & pricing rules ensuring your sales teams are always building accurate proposals and closing deals in time.
  • Multiple Sales Channels: CPQ creates more valuable customer experience through guided selling and dynamic pricing and also brings internal sales teams, partners, distributors and resellers onto a common selling platform improving margins by identifying more upsell and cross-sell opportunities.
  • Improved Sales Efficiency: CPQ equips and enables Sales teams with product knowledge and engineering expertise thus eliminate reworks and other costs associated with an inability to deliver as promised and also eliminates the need to manually enter data into multiple systems frees sales reps, allowing them to concentrate more on selling products and services to customers.
  • Maximize revenues with Improved margins : CPQ ensures optimal pricing and allows you to better manage promotions and discounts achieving maximum revenues and margins on every deal. It also provides easy and faster buying experience for your customers with less turn-around times and improved sales velocity.


In digital era, where customer experience (CX) is top-notch priority for industrial manufacturing organizations, CPQ technology is a must-have to drive sales productivity and customer engagement, while reducing costs to edge ahead of competition in the disruptive markets.

 

Other useful links:

http://www.infosysblogs.com/oracle/2017/03/cpq_for_industrial_manufacturi.html

Continue reading " Importance of CPQ for Industrial Manufacturing " »

October 22, 2018

Supply Chain Planning on Oracle Cloud for Industrial Manufacturers

 

Digitalization is changing our world in profound ways. Product development cycles are decreasing and delivery models are dramatically evolving. Software-enabled innovations are creating new service-based business models that are replacing existing products and re-ordering industry dynamics seemingly overnight. All kinds of industrial manufacturers have a common characteristic of globally distributed supply networks which is very complex. Process manufacturers these days are facing problems related to high fixed costs and a relatively inflexible manufacturing footprint. Discrete manufacturers also face challenges typically of high demand volatility and short product lifecycles. Therefore, all types of industrial manufacturers are feeling the heat and its imperative that they undergo a transformation to meet the requirements of the digital age.

Existing supply chain planning process of large industrial manufacturers is characterized by rudimentary applications that involve lot of manual data entry and number crunching is an even more tedious task. There is lack of transparency which leads to inconsistencies in data analysis and reporting. As a result, planners and users waste a lot of their time in trying to organize data in the format that's readable and actionable. This leads to increasing costs.

 

From the earlier disjointed planning systems which had Demand Planning, Supply Planning, Inventory Planning and Sales & Operation Planning operating separately, the need of the hour is to have all the planning systems on a single platform. The day in the life of a planner currently involves analyzing loads of data, modeling multiple scenarios and then acting on recommendations based on their analysis. This is a time consuming process and needs to be run on a single engine so as to assist the planner and make him more responsive. He should be able to simulate and run analytical models with a single click so that decisions can be made efficiently and faster.

 



Infosys over the years has worked with several Industrial manufacturers and currently many projects are still under way. Infosys consultants have years of experience across multiple client engagements. Infosys has the foundation in place and is ready to help clients navigate to their next. For industrial manufacturers the next step is to have an integrated suite of products with smart dashboards, Intuitive UI's so as to help the planner perform their day to day job efficiently and with minimum hassle of navigating across multiple ERP screens and applications.


 

                 Modern Best Practice

 



     Outsourced, In-House Manufacturing, Make-To-Order, Configure-To-Order and Make-To-Stock




The Infosys Industrial Manufacturing Solution is the first of its kind, fully integrated and configurable on Cloud which optimizes the day to day tasks and processes for a planner. It assists the planner to accurately do Demand forecasting and schedule the production plans effectively. The Demand & Supply Planning solution is fully configurable for Make-To-Stock, Configure-To-Order, Make-To-Order and OSP related workflows. This solution allows planners to quickly adapt and modify their production plans, sourcing details according to changing demand patterns. The In-built smart dashboards and analytical models help the planner to identify process-related bottlenecks, eliminate waste and optimize production. It operates on the lean principle of supply chain planning of minimizing waste. The Supply Chain planning on Cloud enables the planner to efficiently plan, simulate multiple scenarios with a single click and make decisions at a much much faster pace. Constraint based, capacity based planning can be easily modeled with the help of this solution thereby making other rudimentary applications redundant. For an Industrial manufacturer, the complex one to many bill of materials that is currently being configured across multiple warehouses can be easily modeled in Supply Chain Planning Cloud in the form of a Supply Network wherein multiple 'Make At', 'Buy From' and 'Transfer from' sourcing rules can be configured and assigned to the supply plan with the help of an Assignment set. Thus the configuration of the supply network and supply plan is also an easy task with the step-by-step task pane available. Demand Fulfillment dashboards, Demands-At-Risk and other custom exception messages can be easily configured in this Cloud solution, based on which planner will be able to make decisions faster and more efficiently. Supply Planning can help you simulate multiple business scenarios, be it capacity constraints or demand volatility or even shorter product lifecycles by making the plan flexible and agile..


The Kanban Planning, Min-Max based planning, Service parts planning are already planned to be rolled out in future releases of Oracle Cloud which will further enhance the flexibility of planning central cloud to other process and discrete manufacturers.




February 19, 2018

Chatting with Bots - More necessity than a science fiction

In the age where there are multiple applications involved in supply chain process, the knowledge about the customer orders is distributed. It has become a walk on the tight rope to keep the customer updated about the process of their order Vs cost to provide the information to the customer via customer service team or a complex BI solution. This blog opens a possibility of cost effective and light weight solution by introducing the 'Chatbot'.

The IT landscape involve multiple applications to fulfil every single order due to the nature of business, way the organization have evolved, number of business entities involved or due to the speciality of the applications. Below is the example of a manufacturing and retail organization

Pic 1 - Typical IT landscape

In this complex matrix, the traditional methods to keep the customer updated about the progress of their orders are as follows

  • Send text message or email about the status
  • Set up a customer service team to handle customer requests via call, text, email or chat

But the drawback of these conventional methods are that there is no single system which holds the moment of truth about every order. In order to avoid the customer service team juggling between applications, a complex BI reports are installed to oversee all applications resulting in even more complex IT landscape.

Alternative solution is that 'Chatbot'. According to Wikipedia, a chatbot is a computer program which conducts a conversation via auditory or textual methods. Customers can chat with Chatbot to get the information about their orders. Let's see why the Chatbot solution is cool.

Implementing the Chatbot:

PIC2.png

There are 2 main functionalities of Chatbots:

  • Receive and understand what the customer is saying, and
  • Retrieve the Customer information required

 In order to receive and understanding what customer is saying via chat, Chatbot uses Natural Language processing systems. Via artificial intelligence and machine learning, Chatbot is trained to understand the customer's request better. There are numerous cloud based chatbot development platforms can be leveraged to design, build and train the Chatbots. Oracle Cloud Platform or IBM Watson are examples of such Platform as a Service (PAAS)  solutions available.         


Text Box:  
Pic 3 - Example of a chat conversation in mobile
For retrieving the information required, the Chatbot uses web services to connect with each application. For example Order management Cloud has an Order Import Web service which can be involved by using the retail order number. Similar order information web service can be created. The Chatbot will have to invoke the web service and find out the best status of all the application and publish it to the customer.

Via these NLP and web services, implementing a Chatbot solution is easier than ever.

These Chatbots are not too bulky and intrusive like traditional BI solutions. They occupy less space in server or can be easily placed in Cloud as well.

Customer Experience:

Customer Experience, in short CX, is a major focus area for the organizations. With referral customers giving more business than new customers, the organization want the customer to be handled with care. The Chatbot will give the customers an unparalleled experience just like chatting with a human.

The Chatbot can chat in different language as preferred by the customer. In addition, Chatbot can be trained to reply on text or voice commends as well.

The Chatbot can be used on computer, tab or even mobile to give customer an excellent convenience.

Capex, What Capex?

 Setting up a multi-language enabled customer service team 24 x 7 or implementing a complex BI solution is far more costly for the organization. The cost and time to implement a Chatbot is far less when compared to the traditional methods. Readymade Chatbots are available which are already designed and built to a general extend. The implementation will be limited to involve the order information web services from various application and to train the Chatbots.

capex.png

The Chatbots can also be used for expediting an order if customer requires. Chatbot can send mails to the Production team in manufacturing facility with the chat history to ensure that the order is expedited.

With the technical advancements, Chatbots are even helping patients who suffer from Alzheimer's disease and insomnia.

To summarize, Chatbots are easy, simple and light weight applications that solve the major problem of keeping the customer engaged. So if you are chatting on a web site to know the status of your order, you may be chatting with a robot already!!!

January 22, 2018

Vroom Vroom... with the Infosys Automotive Solution

Automotive Industry has been largely ahead of the innovation curve bringing in more technology to the vehicle towards the needs of the market. But all this while, they were challenged working with their own archaic systems. Good customer experience does not just mean good client facing applications but also the entire supply chain has to be customer oriented. Each of the supply chain elements need to be integrated to the get the part/vehicle at the right place at the right time.

Writing in fear of being cliché, an Automotive supply chain has its own complexities which sometimes are not as intuitive to anyone who does not live and breathe this industry. This is where Infosys Automotive Solution has been crafted and perfected over the years, to cater to such specific supply chain challenges.

1.       Supersessions: This is where the rubber hits the road. Almost every leading ERP product in the market has functionality to define supersessions but is it integrated to the entire process?? The answer will be "No".  The complexity does not end with ensuring we are selling always the oldest part of the supply chain but we are also buying the latest part in the chain. Ensuring the End of life and forecasting processes for the product chain are tied together. Even from a pricing perspective, how is the solution going to align the prices along the chain or create incentives for driving buying behavior from dealers?

2.       Referrals: Referral is a concept beyond Promising. How does one ensure we refer to the next nearest warehouse to meet the demand to ensure customer experience does not take a hit? While doing this, how do we keep the logistics cost minimal? How do we ensure we follow the milk run routes or do rate shopping real time? How do we ensure routes are combined together? While traditionally these problems are solved through transport integrations but many have solved this problem too much downstream.

3.       Fair share: When we are in a back order situation in the entire network and there are continuing supply constraints, how do we ensure that the incoming supplies are transferred and is fair shared across all distribution centers. Should it be based on FIFO, or customer priority etc.? These are problems that applications have continued to ignore putting these as execution problems.

4.       Slotting: Warehouse space is real state, how do we ensure that the fastest goods are always picked fastest. Also will the fastest always remain fastest? Or will there be seasonality, trends which we have to cater to. Slotting is ensuring that a continuous proactive process.

5.       Dealer incentives: This is an important part of the supply chain, often ignored. Supply chains are like humans, unless we build in incentives, we won't be able to drive the required behavior from the supply chain constituents.  The big question would be what should we stock at dealer inventories which are client facing and what we stock at middle level warehouses vs central warehouses. At the end of the day, inventory budget and customer service levels will drive the decisions but a dealer would only be concerned about their own profitability.

While we covered some of the nuances of the automotive spare part supply chain, there are many more such niche challenges which are unique and have been built in Infosys Automotive Supply Chain Solution. The solution not only covers the spare part supply chain but also caters to vehicle business as well. Additionally, we have solution flavor catering to Tier1 suppliers as well. To know more, reach out to us at Oracle Modern Supply Chain event at San Jose.@ OracleMSCE @Infy from 29-31st January 2018.

January 17, 2018

Untangle spaghetti Model via Order Management Cloud

There are lot of manufacturing facilities, multiple retail, different finance and procurement centres in different countries, each of these units using myriad custom applications for Supply Chain and each application talks to every application. This is the (in)famous Spaghetti model where the logic on which applications must communicate is hard coded with in each application and this is logic is not configurable. If this sounds familiar, then please read on.

During inception, the organizations chose for one or few application that suite most of their need. But as the organization expands and with mergers and acquisitions, each organization brings its own home grown application. By the time the organization is mature in expansion into a conglomerate, the IT landscape is often a spaghetti of applications.Text Box:  
Picture 1 - Current IT landscape - Spaghetti model with point to point interfaces

The resolution to this situation comes in the form of Order Management Cloud (OMC). The functionality called 'Distributed Order Orchestration' in Order management cloud helps in end to end integration between order entry and fulfilment applications. Below are few key features of OMC.

Interfacing the sales orders: The orders are captured via multiple retain channels like in-store, call centre, ecommerce web site, by engineer during after sales service, mobile application, internal ordering between different entities of the business etc. But these orders can be routed to OMC and created as a Sales order by invoking the seeded order creation web service. The incoming order payload can have different fields populated by order entry system. But as long as mandatory values are present, a sales order can be easily created.

Enriching the sales orders: The SO, so created, may need to have different warehouses where the SO is fulfilled, different booking Business unit based on the geography of the customer, different product needs to be added to the SO based on incoming attributes, can have different shipment method or priority etc. Any transformation on the SO is possible via the pre, product and post transformation rules. To the delight of the IT team, these rules can be built on a visual builder making maintainability of these rules easy

Fulfilment activities made easy: These enriched sales orders are now ready for fulfilment via OMC itself or can be interfaced to different legacy applications for different tasks. For example, manufacturing activity can be fulfilled and interfaced to MES application while a pick and ship can be routed to a WMS application. The invoicing can happen a completely different finance application. All this is possible by configuring the external routing rules and web service connectors for these application. OMC will create a payload of the SO and publish it to these connectors, record the acknowledgement and also the fulfilment of the tasks in legacy applications

Provide complete visibility to customer: As a customer may be curious to know the details of his / her order, OMC can be configured to send a status back at specific intervals. For example, when SO is created in OMC, manufacturing is complete, SO is picked, SO is shipped etc. From IT point of view, this is (again, as you guessed) configurable. The web service connector can be configured for each of the order entry application and OMC will fire the status message to these connectors

Below diagram explains the order orchestration process flow

 

Picture 2 - How Order Orchestration works in Order Management Cloud

Varied business process: The business process may include progressing the sales order via a series of automated and manual steps. For example the SO will have to be automatically reserved, while the customer service team needs to check and update the SO with the customer before the item can be shipped out. Such different processes can be configured via order orchestration in OMC. The SO will be automatically reserved while it will wait for user inputs once the call to customer is made outside the system.

Changing customer needs: In this competitive world, being flexible to changing customer needs is paramount. But at the same time be cost effective. Order management cloud provides functionalities to control the customer change, cost each change and react to each of these changes in a different way suited for the business. The change order functionality can be easily leveraged

Picture 3 - Order orchestration via Order management Cloud

Gone are those days where IT application is just as transaction recording system. IT application is one of the main enabler and enhancer for each business. Order Management, being the revenue making and customer facing module, is truly more flexible to ensure that sales team can be more agile and proactive. So untangle the spaghetti model and route all orders to OMC and dive the fulfilment via simple transformation rules.

Order Management Cloud is implemented as the order routing application in an optical retail chain, operating globally, offering optician services, along with eyeglasses, contact lenses and hearing aids. There are 8000+ stores ordering items via 15+ retail applications and these orders are fulfilled via 10+ different specialised custom applications. With volumes of order line crossing 1 million a month, there is no room for error. While the implementation is still underway, benefits are reaped already by bringing all the routing logic centrally to Order Management cloud.

 

Sathya Narayanan.S

Lead Consultant

Infosys Limited

September 28, 2017

OBIEE: An effective tool for quality control in Credit Bureau Reporting by Auto-Finance Companies

Auto-finance Organizations in US have to report the credit data of their customers every month to Credit Reporting Agencies (CRAs) i.e. Experian, Equifax, Transunion and Innovis to comply with FCRA (Federal Credit Reporting Act) of US law. For this they have automated software programs in place which extract the account and consumer data from their source systems and transform/ load the data as per defined business logic into data warehousing tables before it is finally sent to CRAs in the format of Metro 2 files. This process is called 'Credit Bureau Reporting'.

Continue reading " OBIEE: An effective tool for quality control in Credit Bureau Reporting by Auto-Finance Companies " »

September 11, 2017

Get IFRS15, ASC606 Ready - The Easy and Quick Way

 

The accounting standard for recognizing revenue is changing.  For the new comers let me briefly describe the change.

What's the Change?

For countries using the IFRS standards, it means they now need to account revenue as per "IFRS 15- Revenue from Contracts with Customers" instead of "IAS- 18 - Revenue" standard to recognize the revenue.

For the US based companies needing to report under US GAAP, they now have to account revenue as per new "ASC 606 - Revenue from Contracts with Customers" instead of the old "ASC605 - revenue Recognition".

The old IAS 18 standards (issued by "International Accounting Standards Board (IASB)") and the ASC 605 (issued by "Financial Accounting Standards Board (FASB)" for the US companies) where having substantial differences. The new standards issued by the IASB, ASC i.e. IFRS15, ASC606 are now synched up.

The new standard outlines the below five logical steps for revenue recognition -

What's the big deal?

So - what the big deal? The accountants will take care - should the rest of you be worried? Accounting changes always keep happening, so what new now?

This is a big because it impacts the most important numbers on your P&L - the top-lines and the bottom lines and many other critical aspects like the taxes to be paid, the annual plans, probably the commissions, bonuses to be paid as well.

This is also big because the change is complex especially if you have bundled deals (like the telecom and hi-tech industry). Not all accounting software can do accounting as per the new standards. Apart from the accounting systems, business processes and maybe business contracts also might need modifications.

So, it is not just the finance guys / accountants - the board, CXO's, auditors, the Information technology folks, the planners, the analysts, sales teams, HR compensation teams - needs to understand the change and plan for the impacts.

Getting this wrong, has a direct impact on all key stake holders - shareholder value, employees (bonuses, commissions), government (taxes).

By when do you need to ready?

That depends on whether you are applying IFRS or US GAAP. For most of the companies the standard has to be adopted from the financial year starting in 2018.

  • For "IFRS15" applying companies
    • The financial year starting "on or after January 1, 2018"

  • For "Public business entities" and "not-for-profit entities that are conduit bond obligators applying US GAAP" -
    • The financial year starting "on or after December 16, 2017"

  • For the other "US GAAP" companies
    • The financial year starting "on or after December 16, 2018"


Are you late in the game? Probably yes, but....

This is where Oracle - Infosys can help you.

The Oracle Revenue Management Cloud Service (RMCS) is tailor made to meet the IFRS15 / ASC606 requirements including the transition requirements. The product has been successfully implemented across industries and is a proven solution for IFRS15 / ASC606 needs.

The "IFRS15 / ASC 606 solution" of Infosys is a complete solution to get IFRS15 / ASC 606 ready - quickly and perfectly. The Infosys solution encompasses program/project management, change management, implementation of RMCS, implementation of Financial Accounting Hub Reporting Cloud, building integration with various middleware. The Infosys solution  creates a robust process with tight integration ensuring automated reconciliation and no revenue leakage / discrepancies.

Considering the need to ready on time, the solution will prioritize requirements, so the MUST-HAVE requirements are developed, tested and ready on time.

Below is the overview of the Infosys Solution

How do we make a difference? How quickly can you be ready?

Infosys has been working on numerous IFRS15 / ASC 606 implementations using Oracle RMCS. While a typical IFRS implementation is done in 6-12 months implementation time depending on the number of integrations, use cases, we are able to cut the implementation time by at least 25% by levering the accelerators repository comprising of

  • Pre-built Use Cases

  • Key Decision Documents

  • Pre-Configured Instances

  • Data conversion templates

  • Configuration templates

  • Key learnings from other project

Apart from the normal implementation, we also offer a rapid implementation which can be completed in 3 month time-frame. A typically rapid implementation assumes not more than 2 integrations, conversions using FBDI templates, 30-40 use cases and 5 custom reports developments. The typical rapid implementation plan would be as below

Sample List of use cases for telecom:

S.No.

Description of the Use Case

1

Billing & Satisfaction: Single Handsets plus Plan

2

Billing & Satisfaction: Contract Termination

3

Billing & Satisfaction: Multiple Handsets Plus Plan

4

Billing & Satisfaction: Multiple Products and Plan

5

Billing & Satisfaction: Contract Modification

6

Billing & Satisfaction: Contract Add on

7

Downward Modification

8

Loyalty points - Termination

9

Family share - Multiple Lines

10

Loyalty points - Redemption

 

Sample List of Issues:

Below is the sample list of problem areas

  1. How to determine the SSP (standalone selling prices)

  2. Significant financing components on the contracts

  3. Managing impacts on cost - both direct and indirect

  4. Managing Discounts

  5. Managing Variable considerations


Get Started now, this is your last chance...

If you have still not started on the IFRS15 / ASC606 journey - you need to start now. With Oracle RMCS and Infosys experience in implementing the same, you now have the chance to be ready on time.

 

Meet our experts at @ Booth 1602, Oracle Open World 2017, to see a demo of the solution.

 

 


Continue reading " Get IFRS15, ASC606 Ready - The Easy and Quick Way " »

March 22, 2017

***Chart of Account (COA) Design Considerations***

Chart of Account (COA) structure is the heart of an ERP implementation enabling business to exercise its day to day operations. This has very influence on how an organization wants to record monetary, contingent and statistical impact of different transactions taking place across the line of businesses, report it out to external entities to fulfil regulatory and statutory requirements, leverage it internally to gain insight on performance of different departments on both top and bottom lines. In order to be able to embark efficiently on these essentially require a modern chart of account mapped to different business modalities and dimensions that does not only takes care regular requirements as said but helps facilitate automation, rein in need of creating duplicate segment value pool, one segment does not override others i.e. maintains uniqueness of purpose mapped to each segment etc. Investing enough to lay down the foundation of COA structure would be the first step to lock down a successful ERP implementation and to drive innovation for businesses throughout the life of application. Note: Combination of segments (e.g. Company, Department/Cost Centre, Account etc.) forms a Chart of Account.

There are numerous essential characteristics including, but not limited to, below 5 that must be considered while designing COA structure:

Selection of business modalities/dimensions as segments of COA:

The selection of modalities as segments is not an objective matter but a very subjective in nature. While some are mandatory one irrespective of everything and anything but some are invariably vary based on types of industries, organizations and products or services offered, geographies where businesses have its operations, internal and external reporting needs, future considerations and volume of inter or intra company transactions etc. Each one of these are key drivers to design an idealistic, futuristic and holistic chart of account. For an example, manufacturing organizations may want to consider cost type as a segment to represent say fixed and variable cost in order to better assess contribution margin at the product level. They may look at a segment exposing sales destination location of a product to clearly articulate the strategy for multi-fold growth in determined geographies. In banking industry, companies may choose to introduce reference to a relationship manager/cost centre in order to measure performance at product portfolio level. In retail industry, looking at product categories instead of individual product can be the favourable option.

One segment should not override or make other ones redundant:

This is one of the vital discussion points while designing a COA structure in any ERP systems. While a thought leadership on this can offer long term benefits to organizations in account of easier maintenance, minimal master value pool for each segment, no duplication etc. On the other hand immature decisions, however, may erode the benefits eventually. A COA structure and value set for each segment should intelligently be designed in such a way that one segment does not make other one redundant, does not enforce introduction of similar type of values for a segment and most importantly they must be structured "relative" to each other. To understand it better, let's take an example of a COA structure that has 4 segments called Company, Cost Centre/Department, Natural account and Sub-Account. There are 3 companies COMP1, COMP2 and COMP3 and each company operates with its 4 own departments as Sales, IT, Purchase and Inventory. As a strategic and sustainable approach, a) one would recommend only 4 different cost centre value sets representing each of the 4 departments. These 4 can be associated with either of the 3 companies while actual transactions are taking place. On the other side as a poor design, b) organization can undoubtedly be enforced to introduce 12 different cost centre codes representing 4 departments working for 3 different companies. It is self-evident that option "a" firstly cascades the behaviour of relativity where Cost Centre is relative to a company and thereby does not lead to a redundancy and secondly avoids creation of duplicate codes for similar type of departments. This can further be well understood with postal code numbering system where it navigates through State, District and finally City. Here City is relative to a District and a District itself relative to a State for a given country. In regards to option "b", shortcomings are clearly countable as creation of duplicate codes while departments are of similar nature for each company, can't share segment values, certain to experience huge volume of cost centre values over the period of time etc.

Automation for Intra/Inter Company Transactions:

Organizations like GE who has leading business presence almost all over the world deal with huge volume of transactions b/t two or more internal business units. Transactions taking place b/t 2 business units ideally lead to inter/intra company transactions and that is where it is essential to consider a placeholder for inter/intra company segment in the COA in order to efficiently track referencing inter/intra company and enable opportunities for automation. ERPs like Oracle Application R12/Fusion Cloud offers an automation to create inter/intra company accounting entries by introducing pre-configured rules. For example, Oracle Fusion Financials automatically creates Intercompany Payable accounting entry corresponding to the Intercompany Receivable inter/intra company accounting entry by looking at the rules. Such entries have a counterparty reference in the COA code combination as in company (balancing segment) and designated inter/intra company segment.

Give meaning to each digit/character within a segment rather than just treat as code:

While a business meaning is tagged to each segment, a COA design can further be advanced by injecting an appropriate meaning to digits or characters within a segment. For example instead of just coding a company as COMP1 with no meaning to individual or set of characters, one can strongly advocate for "013060" where first 2 digits represents Country, next 2 region and last 2 State. Such logical combination may take away the need of an individual segment in a COA to signify location. This is additionally very helpful for easy reference.

Business Rules With Valid COA Code Combinations:

In regular business practice while creating different transactions, allowing only valid COA code combinations is usually the core business requirements. For example, although a COA code combination with Cash Account does not require any specific product code however the same would be needed while booking revenue. Thus, identification of such scenarios and implementing rules accordingly in the system is the key to rein in undesired code combination values.

Oracle Financial Accounting Hub (FAH) - A True Value Enabler

For any business organizations, recording accountings for its different transactions taking place with internal or external entities is an obvious objective. It is essential to measure the overall performance of the organization, gain insight to penetrate the new markets and to control cost expenses, fulfil the statutory and regulatory reporting requirements and so on. To efficiently support all these any modern organizations need a reliable, scalable, centralized fulfilling global and local accounting requirements, quick enough to implement a change and importantly economical solution. The answer is Financial Account Hub (FAH) and embarking on it is a first step to plant a foundation for innovation. FAH is an intuitive accounting engine that consumes business transactions' attributes interfaced from legacy systems, apply the accounting rules and mapping to eventually create accounting entries. For a better reference and understanding, it is similar to Sub-Ledger Accounting (SLA). While SLA is an accounting processor for business transactions originated from different sub-ledgers like AR, FA and AP etc within Oracle ERP, FAH is to deal with transactions originated from legacy systems and interfaced to Oracle ERP. Here are the 5 key value enablers that innately help drive organizations to inject FAH in their accounting solution footprint:

 

Centralized Accounting Solution:

In a traditional approach, consider a scenario where accounting entries are created for 10 different types of business transactions in 10 different front-office systems and finally interface it to Oracle where general ledger operation is supervised. This apparently counts some of the inefficiencies like:

a) Maintaining business accounting rules in 10 different systems

b) Requiring multiple resources with different product specific skills to implement accounting solution, change and support.

c) Lack of governance and control over accounting

d) Lost opportunity of reusing different components e.g. mappings and common accounting rules.

e) Have to invest on front-office applications for something which they don't primarily mean to do.

To overcome all these, FAH is one of the best options that offers centralized accounting engine empowers organizations cultivating a strategic roadmap to consolidate the accounting solutions lying at different places to just one at enterprise level.

 

Quicker and easier implementation:

Unlike Oracle EBS 11i and prior lower versions, both Oracle EBS and Oracle ERP Cloud offer front-end configurable capabilities to mimic business accounting rules on FAH setup components to eventually derive accounting entries for interfaced business transactions. Configurations are simply divided into logical groups likes Accounting Derivation rules, Journal Line Type rules (Dr and Cr) and optionally line/header descriptions rolling up starting from transaction, application, accounting method and finally to ledger. All these are configured corresponding to its relevant entity, event type and class model. An accounting solution for an interface can be ready in one month or so. 

 

Minimize dependencies on IT teams for maintenance:

Unlike custom accounting solution, most ongoing maintenance requests like capturing additional details to the journal line description can easily be achieved without even involving developer and a code change. Consider another scenario where there is a regulatory requirement to book asset expenditure to expense account instead of asset account for certain asset categories. Unlike in traditional back-end accounting engines where a medium size IT project may require, FAH can deliver it to business as part of the BAU processes without involving IT teams and notably in a quicker, easier and cheaper manner. In this particular case, accounting derivation rule will require a change to accommodate expense account for certain asset categories.

 

Capability to handle exceptions and complex mapping/rules:

While FAH is capable of handling most of accounting requirements with out-of-the-box configurable features, it also provides a powerful custom source concept where you can code your own accounting logic and link it to a custom source available for use in FAH. Consider a scenario where you want to derive BSV (balancing segment value) of COA based on the complex mapping and exceptions, a custom source can be defined for the same linked to a custom s/w code. FAH invokes the custom source at run time while interface processing to derive the BSV based on the logic coded in the custom s/w program.

 

Cost avoidance:

With FAH is in place for interface processing, organizations can avoid multiple licensing cost by eliminating the need of licenses for all front-office applications having its own accounting engine. It naturally avoids the salary costs needing for product SMEs with different skills set related to core legacy systems.

 Thus, FAH is categorically a strategic accounting hub be it Oracle EBS or Oracle ERP Cloud that offers agility extensively enabling modern organizations gain radical benefits of faster responsiveness to the regulatory and statutory accounting requirements, cost effectiveness, and importantly consolidation of accounting solution on a single platform.

February 16, 2017

Oracle Service Cloud - One Product for Multiple Service Needs in Multiple Industries

'The world is becoming smaller' is the catch phrase which I get to hear nowadays pretty often. What does it mean? Of course, the world has not shrunk but the communication channels have expanded in their mode and reach thereby bringing people together and closer to give them a feel that no matter where you are, smart channels of communication will keep you connected to your family, work and needed SERVICES. In line with this boom in communication channels the expectations from the Customer Service industry has increased manifolds with the connected customer demanding service ANYWHERE and on ANY CHANNEL.

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February 10, 2017

Centralized Vs Decentralized VCP Architecture

 

One of the critical decisions that businesses considering VCP implementation have to make is to choose between the centralized and decentralized architecture of VCP. This decision is very crucial not just from the operational perspective once they have implemented, but also due to the fact that the cost of the overall project is dependent on this. For a decentralized environment, business have to invest in new infrastructure and hardware required for the new VCP instance. For smaller businesses, these costs could be higher than the overall implementation cost itself.  Through this article, I would like to discuss the pros and cons of each of those approaches and throw light on the aspects which businesses need to consider for making an informed decision.

A centralized architecture is where both the EBS and the VCP reside on the same server. In a decentralized architecture EBS and VCP reside in two different servers connected through the database links for exchange of data.

Before talking about the pros and cons of these architectures, let us understand the need for a decentralized architecture when by default we have the centralized architecture enabled.

Unlike most of the transactional systems, where the transactions are done at database level, the planning in the VCP modules happen in the application server memory. The planning engine processes are highly memory intensive and the plans require great amount of memory while the planning engines are running.

One of the most common issues encountered in ASCP (one of the important module of VCP), are the plan failures related to the application memory where the plans fail after exhausting all the dedicated/available memory.  These errors could be caused by an inappropriate setup in EBS or even by manual errors as simple as creating an internal requisition with inappropriate source. These transactional errors takes a lot of process maturity and user knowledge\training to control but still very difficult to avoid. What this means is that in case the application sizing wasn't done scientifically or in the case of above errors, the planning engine run impacts the performance of all the applications that reside on that server.

Most of the businesses going with centralized architecture face challenges during the month end\period closure activities where the finance processes (which process a huge volume of data) overlap with the planning processes

Also the amount of memory consumed depends on multiple factors such as volume of finished goods, depth of BOM, volume of transactional data , type of plans being run, amount of constraints and the list continues. In our experience we have seen businesses where the plans have a peak application memory consumption of over 64 GB. What this means is that an unscientific application sizing would not just impact planning but the activities in transactional modules in a centralized environment.

For businesses which have operations spread geographically across globe and have multiple plans catering to different geographies, it is imperative that they run those plans at different times in a day meaning the server resources need to be made available at all points in time such that the plans complete smoothly.

Having said that below are the pros and cons of the available architectures:

Centralized

Decentralized

Pros:

·     Lesser investment in infrastructure and its maintenance.

·     Simple architecture.

Pros:

 

·     Issues related to planning engine will have least impact on the transactional systems.

·    Supports different versions of EBS and VCP. EBS can be at the same or lower version than VCP.

·     VCP can be easily upgraded without any changes to EBS. VCP can be patched with a minimal impact on the EBS.

·     Ideal for implementation of multiple VCP modules.

·     Ideal for businesses with multiple plans running at different times.

·     Scaling up solution (such as adding new organizations, businesses) to the existing VCP instance is easy.

·     Ideal for businesses with multiple EBS instances which can be connected to a single VCP instance.

·     Can maintain multiple but not so powerful servers.

 

Cons:

 

·    Risk of facing issues related to memory.

·    Does not support different versions for planning and EBS.

·    Difficult to patch and upgrade. Upgrading VCP would be possible only when the entire instance is upgraded.

·     Limitation in terms of scalability of the solution.

·     Not ideal when multiple VCP modules have to be implemented.

·     Need to maintain huge and powerful servers.

 

Cons:

 

·     Higher investment in infrastructure and maintenance.

 

 

To conclude, a decentralized architecture is the most preferred and recommended architecture. Small organizations which could not afford multiple servers and the businesses with very limited and minimal planning requirements can choose OR start with a centralized implementation and move over to de-centralized architecture slowly.

 

For any inputs, clarifications and feedback, please feel free to write to me at mohan.chimakurthy@infosys.com. Our specialist team of VCP consultants will assist you in taking the right decisions at the right time.

September 12, 2016

Customer Delivery in Semiconductor Industry

Introduction

Semiconductor products finds application in various industry verticals that requires digital technology embedded in their end products to enrich them with the ability to program, configure, connect to other devices, automate or provide extra features to delight the customers.  Analog semiconductor application are also diverse such as in the field of power electronics, servo control application and energy.  Some examples are machine control units in automobiles, smart mobile phones, and control units in industrial automations, robotics, solar energy etc. 
With a wide range of application, semiconductor industry commands a business little more than $330 billion worldwide.  Supply chain in the semiconductor industry is characterized by the price sensitivity, constant innovation, product complexity, collaboration with manufacturing partners and globalization of its value chain.  The semiconductor product is not an end product by itself and is usually used to build one and hence its supply has a significant impact to the business downstream.  Low margin in this business requires higher volume turnover for them to be in green.   Competition and the above challenges forces the industry to emphasize on the customer delivery performance and service levels to their clients, who are from diverse segments in the market. They have to add value not only to the technology through innovation but also to the supply chain process by reduced cost along with reduced reaction time to demand.


  Customer delivery function is identified as the priority one processes to sustain in the semiconductor business.  It involves order capturing, calculating demand, delivery promising, tracking logistics till ownership transfer to customer and keeping customer informed.  This is supported by the planning function to ensure service levels that reduces or prevent line down situations for their clients and maintain optimum inventory.  The key performance elements of the customer delivery that depends on the supply chain are -
a. Reaction time to the demand.  The ability to respond with promises or exceptions to the client.
b. Ability to meet the customer demand as per the schedule with negligible or no slippages
c. Real time status information availability.  This is the ease of accessing status of inventory in terms of location, reservation and quantity.





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September 8, 2016

Internet of Things (IoT) in field service management (FSM)

In today's competitive world, real-time data and innovative service methods are vital for field service enterprises to ensure customer delight, increase revenues, and expand profit margins.

The IoT explained

The Internet of Things (IoT) allows machines to communicate with each other (M2M communication). It is built using a combination of networks that comprise of data-gathering sensors, devices, big data, analytics, and cloud computing, which communicate via secured and encrypted channels. Connected devices enable efficient predictive maintenance by constantly providing information on a machine's performance, environmental conditions, and the possibility of failures. IoT can connect machines on the field in order to record incidents in real-time into a semi-intelligent 'Gen-X' FSM system.

Integrating IoT with FSM software applications

Field service organizations always strive to consistently provide the best service experience to their customers, by ensuring immediate repair and maintenance of their equipment and machinery. By collecting data about the machine's health and performance from IoT sensors, organizations can leverage predictive and preventive field service to minimize device downtime.


Three primary traditional FSM challenges

Here are three primary issues that challenge the current reactive scenarios:

    Field technicians execute the job and fix the equipment after the issue is reported. However, the delay can impact business continuity, which in turn affects the operating profit margins


    Adding more field technicians and service trucks to the field comes at a cost and sometimes the increased capacity remains under-used


    Assigning more work to existing field teams can have a negative impact on SLAs and first-time fix rates. Even worse, it can increase the cost of travel and overtime

Essentials of a new-age FSM solution

A field service management system that integrates device sensor data, technicians, customers, and technology is the key to address these issues. It should function in a predictive and preventive mode with the following features:

    The FSM process, which includes issue identification, communication, incident creation, scheduling, and assignment can be automated, thereby ensuring zero disruption in machinery operations and no or negligible downtime. This not only increases productivity, but also expands operating profit margins

 

    Most FSM products can also automate incident creation, scheduling, assignment, and invoicing processes. Using IoT, we can predict upcoming issues based on sensors data analysis and auto-creation of incidents based on preset threshold rules

The workflow of a FSM system with IoT integration

Here is an outline of the flow of incidents in a typical IoT-enabled FSM system:

1.   Data from the equipment's sensors is collected and transmitted, using secured and encrypted channels, to a big data storage


2.   Big data management and analytics is used to parse and analyze for refined sensors data


3.   The IoT command console is configured with predefined threshold rules to identify errors and monitor the device's health and performance


4.   Incidents are auto-created in the FSM system whenever errors are detected


5.   Auto-scheduling, routing, and dispatching of field service technicians against the incidents is done based on customer entitlements, location, product, skills required for the job, technician's availability, parts availability, etc. via the FSM system


6.   A field technician performs the job at the customer's site; records the effort, parts used, travel time, and any expenses incurred; and then bills the customer


Workflow of Field Service Management application using IoT.

Six Solution benefits



Wind turbines: A case in point of how IoT integrates with FS systems

Failures in wind turbines interrupt power generation leading to lower productivity and higher system downtime, which result in varying energy production and higher operating costs. To maintain profit margins, higher efficiency and uptime are required.

Near-real-time analytics provides data so that FS teams can react faster and address the issues before they become mission critical, thus reducing impact and avoiding downtime.

The wind turbine's sensors collect real-time data that is analyz