CONFIGURATION CONTROLS GOVERNOR for

EBS R12 UpgradesMay 2009Oracle GRC Strategy – Barry Greenhut

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Costs and Risks

• Some EBS 11i setups change during the upgrade to R12; others are introduced in R12

• Unnoticed and unwanted setup values can cause:• Financial Loss

• Compliance Cost

• Audit Effort

• Key questions to ask:• Which setups change when we upgrade? Which are new?

• If unnoticed or unwanted setup values are used, what costs arise?

• How can we reduce those costs?

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Which setups change when we upgrade? Which are new?

• R12 introduces important changes to the accounting model:• Ledgers and Ledger Sets replace Sets of Books

• Subledger Accounting replaces Global Accounting Engine

• Taxes handled differently, by a new module: eBusiness Tax

• Closer relationship between tax setups and organization setups in another new module: Legal Entity Configurator

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Which setups change when we upgrade? Which are new?

• Some modules’ setups have undergone substantial change:• General Ledger• System Administration• Purchasing / iProcurement

• Most other modules’ setups have seen at least minor additions, including:• Alerts

Application Object Library Common Modules

• Payables Receivables / iReceivables

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What costs/risks do we face?

• Financial Loss• EXAMPLE: eBusiness Tax configuration leads to substantial

undercollection of taxes that goes undetected for months.Consequences: Pay taxes due on behalf of customers, plus penalties.

• Compliance Remediation Cost• EXAMPLE: Ledger Set configuration incorrectly allocates revenues

amongst divisions.Consequences: Restate and refile quarterly results.

• Audit Remediation Cost• EXAMPLE: Dozens of payment term mis-configurations are

identified during external audit. Consequences: Internal audit team performs substantial research to provide proof of no ill effect.

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How can we reduce those costs/risks?

• Catch unexpected setup changes before you go live:1. Compare Snapshots of your 11i production setups and

R12 test setups – see what’s changed in your R12 setups

2. Carefully review Snapshots of new R12 setups

3. Adjust your R12 setups as needed before going live

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How can we reduce those costs/risks?

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Continue reducing costs/risks after the upgrade is complete

• Use CCG to track changes to key setups• EXAMPLE: NYSE-traded energy sector corporation applied a

production patch that reset vendor tolerances, and didn’t notice the change for nine months.

Consequences: Internal audit team performed extensive work to prove there were no abuses, and external auditors performed substantial transaction examination.

• Use PCG to restrict changes to the riskiest setups• EXAMPLE: Clerk at NYSE-traded food sector corporation

changed bank account info without cross-check; $10MM transferred before fraud was discovered.

Consequences: Money frozen pending investigation; public confidence shaken due to notoriety.

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Rapid CCG implementation with shrink-wrap support for…

EBS R12 550+ setups

EBS 11i 3,000+ setups

PSFT HCM 8.8 400+ setups

BASE ENGINEAlertsApplication Object LibraryCommon ModulesSystem Administration

FINANCIALS General LedgerSubledger AccountingPayableseBusiness TaxLegal Entity ConfiguratorReceivables / iReceivables

PROCUREMENT iProcurementPurchasing

BASE ENGINE

CONTRACTS

CRM

DISTRIBUTION

FINANCIALS

HR/PAYROLL

MANUFACTURING

PLANNING

PROCUREMENT

PROJECTS

PUBLIC SECTOR

BASE ENGINE

HCM Benefits Compensation HR Payroll Pension Recruiting Stock Administration Workflow

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Alternatives to CCG

• Only CCG makes it easy compare 11i setups to R12 setups; no other product available today can do this

• Only CCG is quick to implement, thanks to its shrink-wrap support; no other product offers this today

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Summary

• When upgrading from EBS 11i to R12, unwanted setup changes can cause:• Financial Loss

• Compliance Cost

• Audit Effort

• During the upgrade, avoid costs by using CCG to identify setup changes

• After the upgrade, use CCG to track changes to key setups, and PCG to restrict changes to the riskiest setups