Author: Richard Clayton, HE Practice Lead, Namos Solutions
Fair warning, this blog series was born from an email that became too long! I wanted to write up my advice, support and encouragement to those embarking on the journey to Oracle Cloud. Regardless of whether you are about to embark on that journey with Namos, other partners, or just looking for someone to allay concerns, I hope you find it useful.
Can Oracle Do…
Let’s start with the most important piece of advice. Oracle Cloud offers the most extensive, feature rich, extensible ERP platform out there. Every Gartner, Forrester and Industry Analysis piece substantiates this. So if your concern is ‘can Oracle do X’, the answer is almost certainly, yes. However, I urge you to consider two things, ‘should Oracle do X’, and ‘will Oracle do X on day one‘.
The should comes down to your appetite to systematise processes and the extent of configuration and customisation. A good consultant will wield the power of the platform to serve all common requirements. They will challenge you on why your processes are not common, and try to align you to modern best practice. Where your requirements are unique, they will know what can be done with configuration and extensibility. If they do a good job, your solutions will be ready for future upgrades, flexible and a lower cost to maintain.
The will on day one question is important. Oracle is constantly rolling out new features and enhancements. There is a strong Oracle HE user community and people with decades of HE sector experience holding influential jobs at Oracle. Try to avoid bespoke builds as you may find your custom effort sees no ROI once Oracle release it as standard (seeded).
I can cite numerous examples from the Ed sector where custom effort was abandoned in favour of out of the box functionality (Teacher’s Pensions, School Workforce Census, Project Performance Dashboards etc).
General Ledger
Too often people wait for a system answer to this business question, how do I structure my Chart of Accounts? It’s not surprising when legacy systems may have had limits on segments, value sets or hierarchical complexity. Oracle has no such limitations, if you can think it (and it’s halfway sensible!), Oracle can hold it. So read the below and start work now.
4Cs
Remember the 4Cs, Chart of Accounts, Calendar, Currency, and accounting Convention. Changing value sets, balancing segments, natural accounts etc. is all possible, however, get a C wrong in the beginning and there will be a new C… Compromise.
Segment Structure
I will make a leap and assume your Chart of Accounts could have a decade or so of HE Financial legacy and compromises! It therefore makes sense to take the migration to cloud as a chance to rationalise and structure for the future. A brilliant colleague once quoted Kipling (Rudyard rather than Mr) so I could understand CoA segments:
I keep six honest serving-men
(They taught me all I knew);
Their names are What and Why and When
And How and Where and Who.
Bear with me! Consider the following segments and you won’t go far wrong:
- Which companies are genuine legal entities (as recognised by Companies House).
- What analysis codes are going to be useful to describe the goods and or services that have been bought or sold.
- Where is this recognised or funded, i.e. the unit or business area responsible for the activity.
- Why is this activity taking place, i.e. what type of activity is being undertaken.
- How/Who is the source of funds (grouped for reporting purposes).
In the example of a Student invoice, this could be Which: provider/campus (e.g. Acme University), What: level (Part-time Postgrad), Where: taught department (e.g. Computer Science), Why: Module (e.g. Programming), Who: Student/Supervisor.
Then add a couple of spare segments defaulted to 0s just in case (See 4Cs section above).
You will note there is no segment dedicated to Projects… read on.
Map CoA at source or Migrate Legacy TBs?
Great so you have structured a new chart of accounts… one problem, your implementer is now asking for two years of historic trial balances and they don’t reflect the new Chart of Accounts. Even if you do not migrate history, you will still need to migrate balances for your opening period (hopefully period 1 if you go live in August).
You could set up the old chart of accounts in your new system or you could map the balances to the new chart of accounts. There are scenarios where each would present advantages or disadvantages. However, as a rule of thumb, if Finance teams can state the logic, tech teams can map effectively, and it is a fresh system, then map at source or during migration. It will make your build cleaner, your historical reporting simpler, and your period 1 (and 13) easier.
Segment Values & Rules – Parents/ Balancing / Control / Natural etc.
A good starting point to mapping out your CoA is the Oracle Rapid Implementation File. Within it you will see a tiered logical layout for structuring your accounts. Once you know your segments, there is nothing stopping you collating existing values and then scrutinising new. Concentrate on cross validation rules to ensure only sensible account code combinations can be entered, and note the system will provide drop down lists for you in most cases (since last year – 20D).
Do this work as early as possible… and before you are paying Oracle licences or consultants to be on site.
Segment Values – Cost Centres
Mapping and modelling your Cost Centres is crucial in HE. You need your CoA to reflect the most granular levels at which you will need to recognise funds/expenditure, however, you need to understand how those map to taught departments, staffed organisations, and potentially, HESA cost centres. You will need to instil an annual cycle of governance to ensure this mapping is maintained and updates are cascaded in a co-ordinated fashion.
For your implementers this could mean setting up cost centres then expenditure owning organisations, flex-fields for HESA, planning and budgeting mapping of modules etc. Finally, your IT departments will need to align dependent systems (especially Identity and Access Management Systems).
Given the amount of stakeholders this impacts in HE (Planning, Finance, HR, Registry, IT), it pays to consider people, processes and technology in that order. Draw up a RACI of people, decide on a governance process, have an Excel sheet prepared before you are paying for licences and consultants.
Project Subledger
You will note that the CoA segments above did not list a programme/project code segment. This isn’t an oversight, it is that there are much better ways to achieve this with Oracle Projects.
Oracle Projects acts as a true subledger, capable of mapping from Project level attributes, to Task level attributes, to Expenditure level attributes before value set mappings can derive where project expenditure or income should be posted to. What’s more, the powerful reporting options means you can satisfy internal Research Accounting needs and external Research Funder needs without muddying your CoA with redundant values.
If you think you need a dedicated segment due to burdening salary costs to projects (for defrayal reporting etc.), then there are still ways to achieve this without a segment. Please drop me a message if you would like me to explore this with you.
Alternate Hierarchies & Secondary Ledgers
As customers you should consider whether a ‘thick’ primary ledger with a breadth of segments and a depth of values is the best solution for you. In HE, the temptation would be to have your primary ledger at the most granular level possible. After all, chances are you already have a Chart of Accounts with hundreds of cost centres and thousands of project/programme codes. However, just because it is the way you have always done it, does not make it right (good consultants will state this mantra more diplomatically!). It will be you closing your accounting period every month and justifying the balances at year-end!
With Oracle you can model your data with Alternate Hierarchies that can give logical groupings, or you can even run a Secondary Ledger that automatically updates as you post to the primary. Furthermore, in Oracle Enterprise Performance Management, you can slice and dice your data based on most conceivable groupings.
Seek consultancy ahead of project commencement if you are unsure what is possible.
Close
In the next in this series I will look at Purchase to Pay in HE before going on to discuss Order to Cash. However, if you want to discuss anything raised in these blog pieces, or discuss what you might want me to cover next, feel free to get in touch!
About Namos Solutions
Namos Solutions are an award-winning Oracle OPN Modernised Partner specialising in the implementation and support of ERP, EPM and HCM business solutions, both in the Cloud and on-premise.
Although based in central London, we work wherever our clients need us to be. Many leading organisations located all over the world trust and rely on our expertise to deliver industry-leading business solutions. Namos customers can currently be found in the UK, Europe, Middle East, Asia Pacific, North America and Africa.
For more information, please visit www.namossolutions.com or email info@namossolutions.com.
