Prepare your Oracle Applications Landscape for potential Business Transformation in the VUCA World
Corporate America is going to witness substantial mergers and acquisitions activity in the next couple of years driven by COVID-19 situation and overall financial performance. Typical business transformation scenarios are:
The uptick in M&A activity, divestitures, restructurings, and reorganizations may be a boon for shareholders but a nightmare for Oracle Business Applications Managers. Oracle E-Business is a collection of enterprise resource planning (ERP), customer relationship management (CRM), and supply-chain- management (SCM) data that are shared or exchanged across business applications, business processes, and different business lines. The enterprise information, vital to the operation of the business, includes data about customers and prospective clients, employees, inventory, suppliers, financial data, analytics, and more, typically shared by multiple users and groups across an organization.
All the organizational business changes triggered by the M&A activity need to be mirrored and reflected in the new structure of the entities, their business processes, data generated in, used by, and stored in Oracle Business Applications. This mandates Landscape Transformation, which in a nutshell needs to ensure
- Minimized impact on business users
- Availability of historical data, customizations, master data and transaction data (open items)
- Reporting integrity
- No dependency on financial reporting periods
How to prepare for the transformatiion?
This requires new infrastructure and applications set up, configurations and customizations, data migrations and process training. This approach may be long and tardy requiring significant resources while testing the patience of the key users. Better response will be to leverage in-flight transformation approaches.
In-flight transformation approaches
These approaches require prior preparation as the leadership team is involved in the corporate action and there is reasonable certainty of the action.
Divestiture/ Company Split
Possible in-flight transformation approaches are:
Clone and Delete Approach
In the clone and delete approach, the complete Oracle Business Applications system is copied, and undesired data is deleted. For the carve out of complete legal entity/ business unit/ operating unit from an existing, productive Oracle Applications landscape the clone and delete approach is the fastest and easiest way.
Data Migration Approach
In this approach an empty copy of an existing Oracle Applications system is created, Empty means that only customizations, custom developed programs, and Oracle users are included in the new system. Data is then selectively migrated into this empty system copy to bring in the data for the carved-out business unit.
Object based migration approach
When the carve outs are complex, consisting of co-mingled data across the carved-out units, E.g. Master Data shared across business units/ operating units/ inventory units, Object based migrations are needed. In this case master data needs to be replicated into all target instances with carved out entity codes and references from transaction data are mapped accordingly.
Company Integration / M&A
Mergers and Acquisitions happen for the following reasons: Horizontal Integration / Scale, Vertical Integration, Complementary Capability, etc. Following scenarios are possible with respect to the applications landscape in the constituents of the combined entity.
- Homogenous Applications (Oracle) and Versions (12.1)
- Homogenous Applications (Oracle) and different versions12.1.x, 12.1.y, 11.p.q, etc.
- Heterogenous Applications (Oracle, SAP, etc.) and different versions
While greenfield approach may appeal to achieve target solutions landscape in an ideal manner, dominant organization within the combined entity mostly will dictate the applications unification approach and roadmap.
Possible in-flight transformation approaches are:
Data Integration Approach
If the constituent entities are operating as independent lines of business, the master data is standardized, homogenized, and consolidated into the master instance and copied to slave instance. Transactions are recoded in the LoB specific applications databases as they are executed. Transaction data integrations are accomplished through data level integration with trigger-based mechanism (separate transactions) or cascading updates (single transaction).
Applications Consolidation Approach
If the constituent entities are consolidating into a single entity, unification of Infrastructure, Data and Applications is the best way forward. This approach standardizes, homogenizes, and consolidates the following:
- Applications Database Schema
- Applications Master Data (coding, conventions, chart of accounts, types, categories, reasons, rates, codes, etc.)
- Applications Customizations (custom behaviors in different instances are combined using case-based behaviors or standardized where possible)
- Applications Transaction Data
This approach calls for:
- Conversion utilities and scripts for data
- Porting of customizations into target instance with a blend of automated (component merge using pattern matching) and manual processes (review of comments and execution behavior)
- Parity testing (manual or automated) of application behavior
Business scenarios in reorganization can be addressed through a combination of the above approaches as they would either fall into a split or merger.
- In case of split, we can use clone and delete and/or data migration and/or object-based migration approaches.
- In case of a merger, we can use data integration and/or application consolidation approaches.
Technology Upgrade / Cloud Transformation
Quest for hyperscale, hyperconnected and hyper speed business applications mandates cloud-based business capabilities. Modern cloud solutions offer composable packaged business capabilities in terms of business processes. It however requires planned data migration from the source versions to the target versions. Adoption of new business capabilities requires extensive user training and usage monitoring. Successful Cloud Transformation upgrade also requires scripts and automation for data and customizations.
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