Guest Post On Benefits of Cloud Based ERP Solutions

Mr.Rashed Khan, a reader of this blog, has submitted this article below. I think that this will add a lot of value to our readers and cloud based ERP Solutions are the hot topic today (along with 'Green Manufacturing'). 

Thanks a lot Mr.Rashed for posting this article. I hope you will continue to add value to the topic of ERP in future by your regular contributions.....

Hi Ramaswamy,

I have added my article below in text format. Im happy that you would like to publish the article. Thank you.

Cloud Based ERP Solutions - The Benefits

Businesses (especially those that deal with CRM – Customer Relationship Management and HCM – Human Capital Management) have been using cloud based technology for years now. Many have, however, shied away from the use of ERP (Enterprise Resource Planning) as a cloud based system due to the fears surrounding security. However, as cloud based technology (also known as SaaS – Software as a Service) has developed, it is becoming clear that ERP can actually be more secure than the more traditional solutions within the business premises.

The momentum for cloud based ERP has been growing worldwide with an expected global spend to have risen by 21% by the end of 2015 as Forrester research has deduced.

What are the benefits of cloud-based ERP for your business? Can your company achieve the edge alongside competition from the use of SaaS?

Below lists 7 of the features of cloud based ERP:

1.       Predictability

SaaS solutions are provided to you on a subscription basis, this means that those companies with limited funds can sit comfortably knowing exactly how much this feature will cost. Becoming a monthly operational expense allows the business to spread the cost over a length of time. Additionally, most SaaS providers set assurances that there will be no large increases in cost once the solution has been installed due to capped fee increases.

2.       Speed = Time

Due to the management of SaaS solutions by the vendor, there are no setup or installations for the customer. The advanced SaaS systems arrive preconfigured based on their best practice methods to further simplify the implementation procedure. This results in a much faster setup time and far simpler implementation process. Customers can achieve a quick ROI due to the low initial costs and speedy setup times.

3.       Low Ownership Costs

Using SaaS technology, the customer only needs to pay for the staff members that will actually use the software. All of the peripheral resources and technology normally required to support in-house deployment are not needed. If the business needs expand over time, they simply need to add extra users to the cloud based SaaS service without having to worry about additional technology or resources to support it. With the use of a shared data centre, network and management service vendors can pass along savings due to the economies of scale philosophy.

4.       Reliability

Better investments can be made in skilled staff and technology that would be found in an individual company. These investments can ensure reliability, security and performance standards are high. Most SaaS vendors will also offer a typical 99.5% guarantee of service availability in their service level agreements.

5.       Support Improvements

Problems that can be commonly reported on in-house systems could relate to: hardware on-site, software interactions, network issues or other physical attributes that the remote support site has no control over; this can make troubleshooting quite arduous. In the SaaS arena however, the vendor has complete control over the entire system, giving them the edge to create a better service due to the benefit of their high visibility setup.

6.       IT Simplicity

The burden of upkeep and maintenance is transferred from customer to vendor with the use of cloud based SaaS. The entire infrastructure is controlled and maintained by the vendor. This includes: operating systems, storage, networks, application servers, databases, Web servers, backup services and disaster recovery. In addition to this excellent benefit, the SaaS service also eliminates the need for upgrades by the customer. The vendor will take responsibility for all necessary updates and upgrades ensuring that the company is always running on up-to-date hardware and the latest software.

7.       Focus Improvements

One of the major benefits of implementing SaaS is the freedom it gives the customer. With the maintenance and upkeep being managed for you, the business can focus their time and energy on maintaining a happy working environment, providing attention to their staff and concentrating on the resources needed to benefit the core business and future development.

***End of article***

Kind Regards

Rashed Khan

Guest Post in my blog....

One of the readers, Mr.Rashed Khan, wanted to post an article on Cloud and ERP in my blog. While I had read about Guest Post, this was the first time I was getting a request for guest post.
I think it is highly value adding feature and significantly adds the value that this blog provides to you all.
So I am requesting all of you to contribute to the blog by posting relevant articles.
Pl. go ahead and add value to the community.....
Thank you very much Mr. Rashed for your initiative. I hope that more readers will be enthused by your gesture.

Also, just to remind you all, we have a poll going on, on an interesting topic. Do participate and let the world hear you...

New Poll: Do Project Managers need to be Product / Business Experts?

This week's poll is on very interesting (and contentious) topic.

' Do project managers need to be Product / Business Experts?'.

We hear multiple opinions on this topic.

On the one hand are those people who feel that an effective PM need to know the product. How can you manage a project without having an understanding of the product? How can you resolve issues that come up in the project? How can he guide the junior members of his team when they are stuck up with issues?

What about Project Management activities? Shouldn't a PM do these tasks? Won't he lose focus on the PM activities if he focuses more on the project? Won't a project manager with product expertise lower himself to the role of the Consultant and thereby undercut the consultant?

The answer provided by this group is no. Project manager being a product expert doesn't mean that he should start doing the tasks of a consultants. He still have to focus on Project Management Activities. However, this group feel that product expertise will improve his / her project management capability.

I fall into this category.

One the other hand there are many PMI Certified Project Managers who believe that Project Management is a skill different from Product / Business knowledge and that a Project manager need to focus on Customer Co-ordination / management and the management aspects of project. In their opinion, Project Management is product agnostic. A good PM can seamlessly implement Oracle Financials on a Siebel CRM and a SAP Supply Chain environment. As per them, project management is a stress filled activity. If the PM is a product expert, there is a chance that during times of stress, the PM will regress to his comfortable role of being a Product expert and thereby damaging the overall project effectiveness.

What do you think? Should PM need to be a product expert?

Pour in your views, world....

ERP Blogs in India

I am doing an assessment of various Indian Blogs related to ERP. If you know any and are following any, pl. let us know by commenting on this post.

Appreciation that I received from an internal customer....

This was an appreciation mail that I received from an internal customer on how I helped resolve a key issue.....

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Just a quick note to sing the praises of Ramaswamy. This escalation was pretty out of the ordinary in the way it was managed outside of the process, and with many, many confusing emails and issues. As the manager involved, it was not until I received Ramaswamy's description and detail of the situation that I had a clear understanding of what had happened, and what were the real issues. Within a few hours, we had resolution to the single bugged issue. This was due to Development's ability to quickly assess and provide a fix, but also Ramaswamy's constant vigilance and project management to see the fix tested and applied at the customer site.

I am a certified Project Management Professional, and I can assure you that few people know how to manage projects like Ramaswamy did yesterday. As if that wasn't impressive enough, he did all of this with very little sleep, and such a big-hearted enthusiasm for the customer and Oracle, that he actually made this escalation fun to work on.

I hope that there is a gold star for Ramaswamy and the hard work he did on this project, and I hope that we have the opportunity to work together again in the future. Truly, thank you for the great work!

Managing from offshore - lessons

I am currently the PM of a project with the following profile.

• The customer is a state government of a State in Mexico in the Central - North of Mexico
• The Customer has given the contract to a Mexico Company. The Project Manager is working out of Mexico City which is to the Central - South of Mexico
• The DBA is working out of Chile
• I am working out of Bangalore, my SCM team is in Bangalore and the Fin and Development team is in Hyderabad.
• My team speak English, the customer speak Spanish
• True example of On-site - Off-site - Offshore model

While working on the project, we learnt some interesting lessons.

• Plan for more time. For example every communication should go through English - Spanish - English cycle making the communication to take more time than normal. So plan for more time in your project plan.
• Communicate as much as possible in English. Let the translator worry about communication.
• While reading mails from the customer, be aware that the original communication was in Spanish and that the translator could have made some errors while translating the same to English
• Ask for and deliver screenshot based communication always. More the pictures, less the confusion !!
• Stick very closely to process. For example, if you have decided that once a report moves to Production, any errors should be handled by customer, always stick to this. Do not compromise on this. In a normal project, you can take these things in a one-off manner. However, in a project of this nature, you will never know what is the kind of expectations that you are building into, once you move out of the process.
• Visit On-site at least once to understand and build rapport with the customer and the On-site PM. Budget this into your proposal.
• Since Latin America is 12 hours behind India, ensure to set in place a process for working at customer's timeline. You may have to give shift allowances to your team. Factor this in upfront in proposal.

I will add new lessons as and when I remember them. In the meantime, the floor is open as always. Any other relevant comments or experiences that you want to share?

'Partha System' of accounting

Many marvari companies in India follow what is known as 'Partha System' of accounting. This involves tight monitoring of costs, cost elements and their variations and ROI based on Cash Flow. I am looking for some documentation on this system. Anyone has any material on this?
Can you post the links if you have any?

The Bank Account Model in R12

I have been working recently on R12 financials and I came across an interesting insight.
The problem faced by customer was as follows.

1. The user created a bank account in Operating Unit 1 / Legal Entity 1.
2. They now navigated to Operating Unit 2 / Legal Entity 2
3. The Bank account created in OU1 / LE1 was visible and editable in OU2 / LE2

This was a major audit violation.

As you know, Oracle has come up with significant changes in the design of R12 which are aimed to handle the requirements of Shared Services. For example, a payable unit in India can handle the payments of multiple Legal Entities and Operating Units.

One of the design approaches in R12 (to handle Shared Services) is to use MOAC.

The other relates to Supplier Model

And another, most important change, is relating to Bank Account Model.

In 11i, Payables Owned the Bank Accounts, in R12, the bank accounts are owned by Cash Management

In 11i, the bank accounts were at the operating unit level, in R12, they are at the Legal Entity Level.

If Bank accounts were controlled at the Legal Entity Level, how come the user is able to see the bank accounts created in LE1 when working on LE2?

This question baffled us for some time. However, finally we found the answer.

The access control in R12 is not only at the Legal Entity Level, it is at the User - Legal Entity level.

The following attached diagram will help you understand this concept better.

As this diagram shows:

1. Bank Account 1 is created under LE1 / OU1

2. Bank Account 2 is created under LE2 / OU2

3. User 1 has access only to LE1 / OU1

4. User 2 has access to both LE1 / OU1 and LE2 / OU2

5. User 3 has access only to LE2 / OU2

6. User 1 can access / modify only Bank Account 1

7. User 2 can access / modify both Bank Accounts

8. User 3 can access / modify only Bank Account 2

Your feedback? Experience?

Loading Historical Data in ERP

Siva, a reader of this blog asks,

"What is the problem with loading historical data in Oracle ERP? Why is it discouraged?"

As I answered to Siva,

The reason dumping historical data into Oracle EBS is discouraged is due to the following reasons.


1. Historical data do not have any transactional significance. All the transactions related to this data is completed and closed. So there is no point in bringing this data into EBS.

2. Historical data do not have any reporting significance. All the reports related to this data has been taken, analysed, signed off and closed.

3. Historical data may have lot of errors. Especially if the historical data is taken from a non-ERP, non-integrated environment, there will be lot of errors. Bringing erroneous historical data may corrupt the current data

4. Historical data may consume huge amount of space in the EBS system and may impact the performance of the system.

The decision on historical data is similar to the one that you take when you move to a new house. You can either carry all the junk that you collected in the old house and fill the new house with old items or you can bring in only the important necessities to the new house. That is a decision that you take.

Invoice currency and payment currency different in AP

In Oracle Apps, can we make payments in a different currency from Invoice currency?

One of the readers of this blog, Sreenu Vasulu, points out that there is a way to make AR receipts in a currency different from Invoice currency. He thinks that there should be a way to do that in AP as well. 

This is a question that is regularly asked in implementations. As far as I know, there is no way to do this.

So the question of the day, Has anyone of you configured  a solution in AP in Oracle where invoice currency is different from payment currency? How did you configure it?