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The objective of this white paper is to outline some of the key considerations businesses should be aware of when thinking of upgrading or implementing Oracle R12 in regards to the E-Business Tax module.
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A Knowledge-Driven Consulting White Paper 2011 Hitachi Consulting Corporation
Contents
Introduction .................................................................................................. 1 Highlights of E-Business Tax ..................................................................... 3 Considering an Upgrade or New Implementation? .................................. 3 New Features and Benefits of E-Business Tax ........................................ 6 Hitachi Consulting Solutions ..................................................................... 7 Summary ...................................................................................................... 8 About Hitachi Consulting Corporation ...................................................... 8 About Hitachi ............................................................................................... 8
Option 1: Upgraded E-Business Tax Choosing to use the Oracle E-Business Tax upgrade configuration offers Oracle customers the ability to continue to use the current business tax calculation design and configuration methodology post upgrade. The concept of using tax codes assigned to customers, suppliers, or inventory items will remain the same post upgrade. Previously, tax configurations were housed in the Oracle Receivables or Oracle Payables modules. After upgrading to R12, all tax configurations are migrated to Oracle E-Business Tax in a central location. From an implementation perspective, this option involves the following: Assess impact to existing customizations and reporting Review master data and Oracle E-Business Tax configuration post upgrade Identify modifications or new setups in addition to the upgrade configuration Example of the Oracle E-Business Tax setup that results as a part of the R12 upgrade from 11i:
Option 2: New Implementation of E-Business Tax Configuring Oracle R12 E-Business Tax as a fresh installation offers the ability to utilize new functionality introduced as a part of R12. Where the automation of tax calculation was limited in prior Oracle versions, R12 offers the ability to create multiple tax rules and reduces the amount of ongoing setups required to calculate taxes. From an implementation perspective, this option involves the following: Gap analysis of E-Business Tax functionality to current and future business requirements Solution design and E-Business Tax module configuration Assess impact to existing customizations and reporting Considerations for Each Approach The decision to upgrade should be based upon the following key factors: Project implementation timeline Business and system needs to scale with tax law changes or expansions into new regions covered by different tax laws Need for automatic tax calculation
Pros
Option 1: Upgrade EBusiness Tax Configuration Faster implementation time Minimal work to maintain current tax calculation requirements Fewer changes to end user and low impact for training Restrictions on creating new tax rules and modifying existing tax rules Restrictions for tax partner integrations such as Vertex or Taxware
Option 2: Reconfigure EBusiness Tax Automation of tax decisions through creation of tax rules Flexibility to create conditional tax rules based upon party product, process, or place
Cons
Full implementation of Oracle TCA geography hierarchy and E-Business Tax Longer implementation time frame Required data clean up on master data
Hitachi Consulting helps guide clients through the upgrade process by assessing current and future business requirements and reviewing the state of pre-upgrade Oracle environment.
Product Allows for classification of existing inventory categories or non-inventory item classification codes In addition, defining specific intended usage Transaction (Process) Allows certain Transaction Business Categories to hold generic classification where tax can be very specific in its requirements Place This parameter is used in identifying the above focus on the shipper, receiver, from the order to cash/procure to pay process Tax Simulator E-Business Tax provides a way to test new rules out without impacting your production instance (Live Instance). Tax Jurisdiction This allows for the defining of specific geographies for tax and taxing authorities. Content and Services Subscriptions This permits third-party software and services to connect with EBusiness Tax. Events and Configuration Owner Options E-Business Tax helps control tax configure information, such as rounding and units. Multiple Tax Registrations This allows several parties to have several tax registrations.
Summary
Businesses that are considering an upgrade to Oracle R12 realize that their key enterprise applications must be upgraded regularly in order to benefit from the latest application and technical stack enhancements and to maintain basic supportability. Also, there are significant productivity benefits and improvements in functionality that can be realized from R12. As part of this upgrade many companies will need to consider their implementation approach for the E-Business Tax module. As this paper has described, there are multiple considerations for how EB-Tax is implemented during an upgrade and analysis should be done to consider the business and upgrade objectives and timeline. Changes to business critical applications like EB-Tax must be done carefully, in the interest of optimal performance and business continuity. By enlisting the help of an experienced IT services provider, enterprises can gain access to best practices for EB-Tax and make informed, forwardthinking decisions. As a Platinum Partner in the Oracle Partner Network (OPN), Hitachi Consulting has extensive experience performing successful Oracle EBS R12 upgrades for global companies. Currently, over 200 active customers address their business needs leveraging the companys methodology and global delivery capabilities for their Oracle EBS and other key enterprise business applications. To find out how Hitachi Consulting can help you leverage the many new capabilities and flexibility provided by upgrading to Oracle EBS R12, please visit www.hitachiconsulting.com or call 877.664.0010 for contact information and office locations.
About Hitachi Consulting Corporation Hitachi Consulting is the global business and IT consulting company of Hitachi Ltd. with operations throughout North America, Europe, the Middle East and Asia. The company is a recognized leader in delivering proven business and IT strategies and solutions to Global 2000 companies across many industries. With a balanced view of strategy, people, process and technology, we work with companies to understand their unique business needs, and to develop and implement practical business strategies and technology solutions. From business strategy development through application deployment and maintenance, our consultants are committed to helping clients quickly realize measurable business value and achieve sustainable ROI. Hitachi Consulting's client base includes 25 percent of the Global 100 as well as many leading mid-market companies. We offer a client-focused, collaborative approach and transfer knowledge throughout each engagement. For more information, call 1.877.664.0010 or visit www.hitachiconsulting.com. About Hitachi Hitachi, Ltd., (NYSE: HIT / TSE: 6501), headquartered in Tokyo, Japan, is a leading global electronics company with approximately 360,000 employees worldwide. Fiscal 2010 (ended March 31, 2011) consolidated revenues totaled 9,315 billion yen ($112.2 billion). Hitachi will focus more than ever on the Social Innovation Business, which includes information and telecommunication systems, power systems, environmental, industrial and transportation systems, and social and urban systems, as well as the sophisticated materials and key devices that support them. For more information on Hitachi, please visit the company's website at www.hitachi.com.