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How to Apply the Assessment and Client Drivers - Enterprise Structure Design (2)
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The last Blog Post went through the questions we need to investigate as we prepare the enterprise structure design. Now, the next step: What do we do with the assessment we have made?
In my professional life, all too often assessment results and requirements have had no influence on the proposed structure design. Why not? Because It is easier to believe in a single "Best Practice" model. In the spirit of Henry Ford "the customer can choose any color he wants as long as it is black". With a single model I "know what to do" and I can use all my predefined processes and tools to implement. It is faster and I do not need to deal with uncertainties. The only problem - I am not dealing with the color of car, but the structure of my business communication systems. So the stakes are higher and the cost of failure are significant.
A common predefined model is called the "Silo Model". This design always is setup to be
a) one separate Operation Unit (R12) or Oracle Business Unit (Fusion) per legal entity and
b) one Oracle Ledger per Operating or Business Unit (for sequencing requirements), or one primary ledger per local currency (if no sequencing needed).
This model might be perfect for a some situations, but in many cases - especially with many smaller subsidiaries, or larger companies with dozens and hundreds of legal entities and regional or global shared service centers this is not an appropriate approach.
So, how do we evaluate our assessment?
Which direction should we go?
The outline below shows how the assessment answers will influence and direct the following design steps. The process does not lead to an immediate answer, but it will give a direction for further client conversations.
Here are three possible models for Operating Unit / Business Unit structure that can be used as a starting point for discussion.
Here are three models to design the integration within the wider ERP Eco System
We are now in the midst of the enterprise structure design discussion.
- We have identified the client's system facts, goals, and priorities.
- We have roughly determined the direction the assessment elements would drive us towards
- We have put up a strawman design outline for possible Ledger / Op. Unit configurations and another outline for how to fit into the wider system structure.
Now we can walk through the assessment elements, identify which of the models they would drive, and - after identifying priorities - move towards an initial design proposal. I will walk through that next step in the following blog post.
please let me know your thoughts.
Hans Kolbe
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