Multi-Org Setup

Multi-Org Structure in Oracle EBS Application:
 
If an enterprise or a business wants to implement multiple organizations such as multiple Ledgers (Sets of Books), or Legal Entities, or Business Groups within a single installation of the data of Human Resource, Financials, Sales, Purchasing, and material etc… Multi-Org provides secure access to the different organizations throughout the enterprise.  

Designing the Organization Structure – Implementation Considerations:
A blueprint of the multi org structure that we intend to create, would reflect the organization structure that the business maintains, in executing its day-to-day operations. Questions to be asked are
• Is there a Business Group? If yes, is there one or more of these, how many?
• How many countries does the enterprise structure cover? Typically, as many countries, so many government regulations and currencies. There will need to be that many Legal Entities and Primary Ledgers.
• How many operating units? Where do the Purchase Orders and Sales Orders originate, in the business process? There may be more than one such point, under each Legal Entity and Primary Ledger.
• Inventory organizations or warehouses, sub-Inventories and stock locators are the last building blocks, which can be accommodated with relative ease, once the other entities are put in place. Each operating unit would have one or more inventory organizations under it. An inventory organization is either a manufacturing facility or an independent warehouse. Therefore, inventory organizations need to have an address or location.
• Sub-Inventories are storage areas within an inventory organization. For example, an inventory organization, which is a manufacturing facility may have a section on the shop floor designated as raw materials, another section is designated as work in process (this area would typically store sub assemblies), and an area called QA inspection.

So, we have performed a top-down analysis that should help us draw our organization structure with the clarity that is required for a successful implementation.
1). Business Group: Is a highest level in the Organization structure. At this level we secure Work structure and Remuneration policies.
2). Ledgers: Is use to secure Journals and Ledger balances of a company. A ledger is a collection of 1) Currency 2) Calendar 3) Charted of accounts 4) Sub-ledger Accounting Method.
3). Legal Entity: It is a legal Business purpose at this level we are going to prepare income tax reports., We need pan(permanent account number) for taxation, other use for internal banking task.
4). Operating Unit: Is a strategic Business Unit. At this level we secure and partition sales and purchase transaction data.
5). Inventory Organizations: It is use to control/secure inventory transactions for a particular Operating Unit. Like Oracle Inventory, BOM, WIP and Master Scheduling etc…

Based on a top-down analysis of MCR Industries Pvt Ltd, we define the organization structure for MCR Industries, as shown below.

The above is the organization structure for MCR Industries Pvt. Ltd, which is a major comany, headquartered in India. The organization operates in the same country with different operations like Motors, Software and Finance. MCR Industries has an organization structure with the following:

·         1 Business Groups – one in in India.

·         1 Primary Ledgers –one in India.

·         3 Legal Entities – three in India.

·         6 Operating Units – all are in India.

·         2 Inventory organizations – two in India for MCR Cars OU.

·         Sub-inventories and locators exist beneath the inventory organizations.

Setup Manager is a feature introduced in R12 that acts as a centralized setup tool for defining 3 critical entities in the multi org setup. These are the Legal Entity, the Primary Ledger ( Set of Books in 11i) and the Operating Unit.

Note: In 11i, the Legal Entity, the Set of Books and the Operating Unit… all of these were defined using the Organizations form typically through the HRMS or Inventory responsibilities.

To define complete Multi-Org setup we need to create separate HRMS and GL responsibilities and add those to user.

Define a HRMS responsibility:

Navigation: System Administrator > Responsibility > Define

Define Locations:

Navigation: MCR HRMS > Work Structures > Locations > Define

Enter the values like below and save the changes.

Define Business Group:

Navigation: MCR HRMS > Work Structures > Organization > Description > New

Save the changes and click on Others button and select Business Group Info enter the below values and click OK and save the changes.

Note: When we define business group, system internally generate a default security profile with the same name as our business group. The default security profile is going to give access to the data of all the organizations defined under business group. The organizations which comes under business groups are Operating Units, Inventory Organizations, HR Organizations etc.

To Check the Security Profile Option

Navigation: MCR HRMS > Security > Profile query for Business Group MCR BG

To do the transactions in SCM Modules (PO, INV and OM etc…) we need to define Ledger (Primary Ledger and Secondary Ledger) setups in General Ledger with the help of Accounting Setup Manager.

Define General Ledger:

Navigation: System Administrator > Security > Responsibility > Define

Enter the values as per the below and save the changes and add to our user.

Define Ledgers:

Ledger is used to secure the journals and journal balances of a company. A Ledger is collection of Currency, Calendar, Chart Of Account, and Conversion of Methods (Sub-Ledger Accounting Method).

In order to define Ledger, first we need to define ledger components like Currency, Calendar, Chart Of Account, and Sub-Ledger Accounting Method.

Define Currency:

We can also call it as functional currency. By default system has define currencies for major countries else we can also define.

Navigation: MCR GL > Setup > Currencies > Define

Query for INR (INR is an India Rupee defined by the system)

Define Calendar: 

Calendar is used to determine the periods for an financial year, which are used to secure and control the financial transactions at ledger.

In GL we have two types of calendars

·         Accounting Calendar

·         Transaction Calendar

Accounting Calendar: Accounting calendars are used to determine periods and financial years which are used to secure and control financial transactions across all the financial operations.

Transaction Calendar: Transaction calendars are used to determine the list of holidays which are used to calculate average balances.

Define Perid Type: Period type is used to determine the number of periods are required for a financial year.

Navigation: MCR GL > Financials > Calendars > Types
 
Here Year Type is used to define suffix to our period name by using Calendar and Fiscal.

If the year type is Fiscal, period names are suffix with last two digits of the year.

If the year type is Calendar, period names are suffix with last two digits of the from date. 

Define Accounting Calendar:

Navigation: MCR GL > Financials > Calendars > Accounting

Enter the the values as per the below screen and save the changes and close the form.
 
When we close the form we will get below message and click on current tab to validate the current defined calendar. System will submit a program called Other-Calendar Validation Report to validate. The report status should be Complete and Normal then only the calendar is validated. We have to validate the calendar for every modification/change.
 
Chart Of Account:

The Structure created by using Accounting Flex Fields are called as a Chart Of Account.

Chart of Accounts is a key flexfield having one or more data segments as defined by the user. Chart of accounts is the accounting structure used to record financial and accounting transactions of an organization to help maintain accounting balances.

An Oracle Chart of Accounts can have up to 30 segments in a flexfield. Of these, 2 of the segments are mandatory viz. Balancing segments and natural account. This means that there must be at the minimum 2 segments defined which can go up to 30.

Flex Fields are two types.

·         Key Flex Fields: Used to capture the mandatory and key business information of the organization.

·         Descriptive Flex Fields: Used to capture the additional and extra business information of the organization.

Note: There are almost 39 Key Flex Fields which are going to come with the package, which will be used in different functional areas.

A Key Flex Field is a collection of structure,  each structure is a collection of segments, each segment is associates a Value Set and  each Value Set is  a collection of values.

Multi Org Setup Continuation...