UNDERSTANDING FUSION PPM FOR PEOPLESOFT CUSTOMERS

Transcription

1 UNDERSTANDING FUSION PPM FOR PEOPLESOFT CUSTOMERS MICHAEL CURTIN CARDINAL POINT SOLUTIONS The Fusion Applications open standards architecture allows for select modules and application pillars to co-exist with existing Oracle applications thereby enabling organizations to take advantage of these next generation products as needed with minimal implementation risk. Oracle Fusion Portfolio Management (PPM) changes the way that project based work is managed and provides each project based role with all that is needed to be efficient and effective. This paper is intended to provide an overview of the advantages of the Fusion and PeopleSoft PPM applications and the primary functionality mappings between the two product suite pillars. The main objective of this paper is to provide PeopleSoft ESA users with information that will enable them to better assess how the Fusion PPM applications will fit into a short or long-term systems roadmap. Fusion PPM Application Suite Overview The Fusion PPM application suite is comprised of applications that enable project driven organizations to plan projects, budget projects from a cost and/or revenue perspective, generate project revenue and bills and proactively and effectively measure project performance. The following diagram summarizes the applications within this suite of products. Performance Reporting Trend Analysis KPI Definition and Reporting Performance Reporting Costing Cost Collection Transaction Control s Burdening Billing Billing Revenue Planning Budgeting Resource Breakdown Structures Calculate Progress Control Fusion PPM Integration Gateway Contracts Contract Terms Bill Plans Revenue Plans Contract Amendments 2-Way Integration with Primavera P6 COLLABORATE 13 Copyright 2013 Cardinal Point Solutions, LLC. Page 1

2 Costing - Creation There are two ways to create projects and project tasks within Fusion Costing. Executable projects can be created either from a defined project template or from an existing project. Key attributes that can be copied from a project template or an existing project include: Resource Breakdown Structures Always Copied Currency Conversion Attributes Always Copied KPIs Always Copied Tasks and Task Assignments Optionally Copied Team Members Only if not overridden in new project Budgets and Forecasts Optionally Copied Transaction Controls Optionally Copied This project creation methodology closely parallels the project copy options that exist in PeopleSoft including the ability to copy Activities (Tasks) and budget and forecast information. Controls Budgeting and Forecasting The Fusion Controls application offers the similar functionality and benefits that are delivered in the PeopleSoft Program Management application. In Fusion Controls, budget and forecast plans can be established. These plans can be copied from either a project template or existing project, or they can be created from scratch. Financial plans can be defined as cost plans, revenue plans or both. For cost plans, raw and burdened cost can be manually entered or can be derived from cost and burden Rate Schedules associated with the project. Similarly, revenue financial plans can be manually entered or derived from billing rates associated with the project. Fusion Controls also supports the definition of multiple budget and forecast financial plan versions enabling the historical record of budget and forecast changes to be maintained in the system. Finally, Controls allows percentage of completion (POC) to be defined and calculated. POC can be calculated based on cost (Actual Cost/EAC * 100) or based on effort (Actual Effort/EAC Effort * 100). Percentage of completion figures can be used to support billing and revenue recognition in the Fusion Billings application. Integration Gateway Planning Tools The following diagram illustrates the integration between Fusion s and Primavera PPM P6. COLLABORATE 13 Copyright 2013 Cardinal Point Solutions, LLC. Page 2

3 Global Information Resources, Rates, and Financial Periods Information Fusion s s and Tasks Summarized and Actual Amounts Progress Primavera P6 PPM Billing Information Billing Events Event Completion As part of the integration strategy, Fusion Costing interfaces, Task, Resource, Planning Rate, Financial Period and Billing Event information to Primavera for the Manager to use in the development and maintenance of detailed project plans. Primavera can be configured to integrate Progress and billing Event completion back to Fusion to support billing and revenue recognition. Like PeopleSoft, Fusion s also supports 2-way integration to Microsoft. The key difference between the integration capabilities of MSP and Primavera PPM P6 is that Fusion s and Tasks can be generated from a Microsoft project plan. Costing Cost Collection and Processing Similar to PeopleSoft Costing, Fusion s collects costs from other Fusion sub-ledgers or third part cost collection systems. There is a single process in Fusion s that is run to pull cost from other Fusion applications including Expenses, Purchasing, Payables, and Fusion Inventory or other third party cost collection system. There are several distinct functions performed by this interface process. First, key transaction attributes such as HR assignment details, project dates, and other attributes used for cost calculation are derived from rule based flex fields and other expenditure item attributes. Second, Transaction Controls, defined at either the project or task level are used to validate chargeability. Transaction Controls are similar to PeopleSoft Status Types and Enforce Team functionality and can prevent or accept project charges within the source application based on the defined rules. Once a transaction has been validated, cost accounting events are optionally generated to allow for project cost integration into the General Ledger. The final step in the cost collection process updates the source application with a transaction load success or failure status. Cost information is optionally summarized to support performance reporting as part of this last step as well. Costing Burdening Burden Rate Schedules can be associated with the or Task and can be defined as either Additive or Precedence based burdens. Additive based burden rates apply individual load factors such as fringe, overhead, general and administrative, etc., separately to the base cost expenditure item. Each load COLLABORATE 13 Copyright 2013 Cardinal Point Solutions, LLC. Page 3

4 factor is added separately to generate the total burdened cost for each base cost. Precedence based burden rates are applied in a stacked fashion to compound the calculation of the total burdened cost for a base cost expenditure item much like the way Rate Sets are stacked in a Rate Plan in PeopleSoft. The net result is that the Precedence based burden method will generally yield a higher total burdened cost then the Additive method. Costing Expenditure Item Adjustments Fusion Costing allows for the online review and adjustment of processed expenditure items. If the is in a status that allows for costs to be adjusted and the Document Entry identifier stamped on the expenditure item allows for cost adjustments, then users can review processed cost and adjust this cost including recalculating base cost, burdened cost, and cross charges, transfer cost from one project to another, or split expenditure items between multiple projects. Then users can optionally submit these adjustments for approval. Once approved, all adjustments are processed through the normal cost derivation and validation process. Contracts Revenue Fusion Contracts delivers a wide array of revenue recognition methods to meet GAAP revenue requirements and are similar to the methods available in PeopleSoft Contracts. The following table lists the methods that can be defined for each contract. Revenue Classification Basis Timing Invoice-Revenue Relationship As Incurred As Billed Rate Based Labor, non-labor, burden, transfer pricing rate schedules shared between billing (Rate Based Billing) Labor, non-labor, burden, transfer pricing rate schedules shared between billing (Rate Based Billing) Revenue Specific Labor and non-labor rates, Burden, Transfer Pricing Rate Schedules As costs are Incurred Revenue is recognized when customer is billed As cost is incurred Amount Based Based on Fixed amount Billing extensions As billing events are completed Percent Spent Based on Percent Spent Billing Extension As project progress is Cost/Budget Cost) Percent Complete Based on Percent Complete Billing Extension As project progress is Cost/ECAC) Shared rates with billing Shared rates. Timing of billing and revenue recognition the same. Can use different rates for revenue Revenue Plans are established in Contracts to control the timing and amount of revenue that is recognized each period. Revenue plans can be configured to support revenue recognition that is based on billing rates or rates that are different than billing rates, based on fixed milestones, and based on percentage of completion derived from information in Costing. Contracts Billing COLLABORATE 13 Copyright 2013 Cardinal Point Solutions, LLC. Page 4

5 Fusion Contracts delivers robust billing methods that can be employed to bill for most T&M and Firm Fixed Price (FFP) scenarios. The following table lists the methods that can be defined for each contract. Bill Classification Basis Timing Invoice-Revenue Relationship Rate Based Amount Based Percent Spent Percent Complete Invoice specific labor and non-labor rate schedules, Burden, Transfer Pricing Rate Schedules Based on Fixed amount Billing extensions Based on Percent Spent billing Extension Based on Percent Complete billing extension As cost is incurred As billing events are completed As project progress is Cost/Budget Cost) As project progress is Cost/ECAC) or shared for revenue purposes Similar to PeopleSoft, Bill Plans are defined in Fusion Contracts to assist in the amount and timing of contract billing. In addition to specifying high level billing information such as Bill-to Customer, Contact, Payment Terms, etc., Bill Plans can be used to specify billing rate schedules and billing rate overrides including discount overrides at the Person level. Billing limits are maintained through a construct called the Billing Control. Billing Controls can be associated at the Contract Header and Line level and can be defined set limits as soft limits or hard limits. Soft limits allow amounts to be billed but issue a warning to the Biller. Hard limits prevent the amount that is in excess of the specified line or header limit to be billed at all. Billing Invoice Review and Adjustment The Billing application delivers robust invoice review and adjustment capabilities out of the box. Within this application, the user has the ability to review all charges that are eligible for billing and to adjust the eligible charges, set the eligible charges to a status of hold, set the transaction to unbillable. This review functionality also allows the user to mark an unbilled transaction as billable similar to the functionality delivered in the PeopleSoft Costing Manager Transaction Review Interactive Report. If a transaction had previously been retained, this feature allows the billable transaction to be released for billing. These advanced features significantly streamline the billing process and reduce the volume and frequency of credit/re-bills. Performance Reporting The Fusion Performance reporting application enables a robust pro-active management by exception approach by delivering the ability to track project performance, periodic trend analysis, and user-defined KPI creation. The key feature of this application is the ability to create KPI s to support Profitability analysis, Cost analysis, Financial analysis, and Schedule analysis. Combined, these analytic capabilities allow project and finance managers to identify various issues within a project and effectively address the issue in a timely manner. COLLABORATE 13 Copyright 2013 Cardinal Point Solutions, LLC. Page 5

6 Conclusion Fusion PPM is a state of the art suite of applications that includes robust features to support the program management and financial management functions during the project planning and project execution phase. Many features found in this product pillar are similar to the capabilities found in the PeopleSoft ESA Product suite. These many similarities will make it much easier for organizations currently running PeopleSoft ESA to adopt the Fusion PPM applications should the organization elect to do so in the future. It is important to note that Oracle plans to continue to invest in the PeopleSoft ESA product suite and other PeopleSoft FSCM, HCM, and CRM applications through the Applications Unlimited program. The Fusion PPM product suite simply gives users of other Oracle or third-party applications more choice in the systems and technology used to run their business. The Fusion Control application allows Program Managers to create the financial and resource plans and schedule for their projects and to adjust those plans throughout the project lifecycle. For those Program Managers that use Primavera PPM P6, Fusion delivers robust 2-way integration between Fusion Costing and Primavera using the Integration Gateway application. Two-way integration between Fusion Costing and Microsoft is also delivered. The Costing application allows project related costs to be captured and validated in various Fusion and third-party sub-ledgers and used as a source to support cost accounting, billing and revenue recognition. Contracts provides rich contract revenue and billing capabilities and delivers extremely flexible and configurable Contract to association structures. The Billing application delivers advanced review and adjustment functionality that significantly reduces the incidence of credit/rebills. Finally, the Performance Reporting application gives Program and Finance Managers the ability to define KPI s and reports to more proactively address financial or scheduling issues that may exist within the project. From an IT manager perspective the Fusion PPM applications are available in both the On-Premise and SaaS delivery model although there are some restrictions with availability of several of the applications when deployed via SaaS. This flexibility gives organizations greater options. The SaaS delivery model allows IT managers to better plan and budget for the implementation and maintenance of these applications. For organizations that already have or are planning to train or hire the talent in-house to support the Fusion middleware stack, the On-Premise model is an option that gives the company more flexibility in introducing custom extensions to better meet business requirements. From a user perspective, the Fusion PPM applications, like Fusion applications in other Fusion ERP pillars, offers a much improved user interface relative to legacy ERP applications. The UI effectively uses analytics obtained through OTBI that shows the operational user what action items are high priority, how to complete the action item, and with whom they may need to collaborate with to complete the action item. To satisfy the more strategic needs of the organizations managers and executives, the applications use information both from the transactional system and the data warehouse to present information to this class of users in more of a dashboard UI. In both cases, these applications are designed to allow users of any level within the organization to quickly obtain the relevant information that they need and to effectively manage by exception. For more information please contact us at: Info@CardinalPointSolutions.com. COLLABORATE 13 Copyright 2013 Cardinal Point Solutions, LLC. Page 6