period close automation - home |...

1 © 2009 KBACE Technologies, Inc.

Daryl Geryol, GRC Practice Director

Period Close Automation

Consistency, efficiency and reliability

together to help you close faster

© 2009 KBACE Technologies, Inc.2

Compliance and Automation research

• ….thoroughly vet existing business processes, and 43 percent want to further automate manual controls,

especially for compliance-related reconciliation and security procedures. (IT Compliance Institute- Electric SOX:

Companies Turn to Automation)

• The closing process itself often poses barriers to timely completion. In many companies, closing the books is a

tacit process: “everyone knows” what he or she has to do…. (“A Fast, Clean, Close” Software Magazine January 2007)

• With new audit demands, requirements that the CFO and CEO sign off on the numbers, and additional

government reporting regulations, it is not surprising that a recent Business Process Management Initiative

survey of about 350 companies said that close times increased by at least a week in 2005, and as much as two

weeks last year. (“The benefits of a fast close “ InfoWorld February 2007)

• To reduce the risk of noncompliance and accrue the benefits of a faster close, Ventana Research advises

corporations to remediate the root causes of delay in their accounting close and adopt an explicit method of

process management that includes more automation, checklists, workflow and other aspects. (“A Fast, Clean,

Close” Software Magazine January 2007)


Is this your organization during period close?

Is This organization prepared to:

• Drive Strategy and Growth?

• Perform at World-Class Level?

• Enhance Investor Confidence?

Accounting Department

Accounts Payable

Accounts Receivable

Closing Team

Sales System

Procurement System

InventoryManagement

Senior Management

When exactly will we

have the period

closed and final

reports?

The west inventory org

ran the wrong reports!

We need IT to get us a

backup copy!

Where is

everyone at on

the checklist?

Have all reports

been run?Have all sub ledgers

posted?

Have we interfaced all

receivables?

Identify and Review Un-

invoiced Receipts

Has all receiving completed?Have all orders been

entered and shipped?

Have all posted items

been reviewed?


The reason to automate period close-Typical period close checklist(s)

• Efficiency

• Identify bottlenecks

• Enable parallel activities

• Simplify the process by automating what is

possible

• Eliminate errors and redundancy by

enabling the system to manage tasks

• Communication

• Increase and track communication

• Initiate tasks from approvals

• Manage interfaces directly instead of IT

• Audit ability

• Monitor each task

• Track all communication and comments

• Enable period close history and reporting


Period Close Automation (PCA)

• PCA is a framework of business rules created by

KBACE as a solution to automate period close

activities using workflow technologies

• PCA is flexible in supporting and scaling for multiorg

and many inventory orgs without adding complexity

• Embedded within the Oracle E-Business suite

• Utilizing the Oracle Workflow engine, Oracle reports

and programs and business rules defined in Oracle

GRC Controls

• Leverages the GRC controls suite to implement

controls to FIX issues that impact the period close


Oracle E-Business Suite

AP PO AR GL

GRC Controls: Application, Transaction, Preventative


Period Close Automation- KEY COMPONENTS

Configuring the Close process

•Global configuration of the close process

• Identifies organizations, applications and key personnel

Defining the Close process

•Match the KBACE “process” to your Period close process

•Take the KBACE process and alter sequence to happen in parallel

•Add, remove and sequence tasks

Initiating the Close Process

• Initiate the close for all entities in a process from a Period Close workbench

Managing and Monitoring the

Close

•Monitor the status of the close or view prior close history from a single workbench

• Identify - who approved, was notified, close report ids and how long it took for any task

•Document your close with standard reports

Eliminating the pain that

affects the Close

•Eliminate issues that affect the close by preventing them in real-time

•Automate activities that are executed manually during the month


Configuring the PCA Close Process

• KBACE adds a bolt-on form to centralize the configurations defining

• The process by Set of Books

• Included Operating units and inventory organizations by application

• Reporting Users and Responsibilities

• Notification recipients

• Approvers recipients

• Additional Data


Configuring the PCA Close Process

Communications• Communications are key to the process. Standard approval and notifications are sent out through the period

close process.

• Notification and Approval text can replaced simply with customer verbiage to communicate effectively

• Additional notifications and approvals can be added to keep teams in the know


Defining the PCA Close Process

• Customer can change the process sequences to control synchronous and

asynchronous workflow processing

• Additional tasks, approvals, notifications or reports can be added to the PCA

process to meet each customers business needs


Initiating the PCA Period Close Process

• KBACE adds a bolt-on Oracle form to provide a workbench initiate the

period close process

• Find the process or set of books that should be closed

• Select the available period that should be closed

• Press the Launch button


Key Features

Reporting• Oracle reports and processes are automatically run at the

correct time with the correct parameters dynamically. No user intervention is needed.

• Reports are run per each operating unit and inventory automatically without the need of complex request sets and scheduling.

• An organization with 30 Operating units will run the same financial reports 30 times. PCA will eliminate redundant tasks Notifications

• Instead of manual emails or paper checklist , system

generated notifications inform the teams and record the

communication

• Approvals and comments are recorded and allow tasks

such as Period open and close to proceed or to

acknowledge manual tasks like reconciliation are

completed

• Constraints check conditions in the system to be sure

activities are happening as planned such as periods closing

or records stuck in interfaces


Interfaces

• Interface tables are reviewed and records are sent for

review in simple table formatted notifications

• Resubmit non-errors through notifications to clean

interfaces faster

• Eliminate IT run sql scripts that report interface errors

allowing IT to tend to other business

Automation•Periods are opened and closed as approvals are received

•Oracle forms to manage periods are set inquiry only

•The complete process is an audit trail of the period close activities

Key Features


• Customers have a real time view of the

process

• By Process

• By Period

• By Operating unit

• By Organization

• Filter any field in the form!

• The begin and end times of each task are

recorded so bottlenecks can be studied or

compared to previous closes

Managing and Monitoring the Period Close


• KBACE’s GRC solution gathers workflow process data for tracked processes and calculates metrics

• Total time of the Period Close Process (by Operating Unit)- to help measure the close against a past close.



• KBACE’s GRC solution gathers workflow process data for tracked processes and calculates metrics

• Task detail (for audit purposes)- identify bottlenecks or use as an audit of the period close process.



• Day to day issues find their way into the close and cause lengthily reconciliation and issue review

• Issues account for a measurable percentage of cost for a company’s close

• How many issues dare found in an average month?

• How many man hours are required to revolve the issues?

• The GRC control suite provides the business rule engine to enforce transaction integrity and help

eliminate errors that then get into the period close.

• Typical issues may include:

• Incorrect accounts are used in Inventory

• Shipments have physically left yet the transactions were not completed

• Errors remain in interfaces

• New Job s are defined and not yet given standard rates in projects

• MORE AND MORE AND MORE….

SEE THE FOLLOWING SLIDE EXAMPLES

Eliminating the pain that effects the close!!


• Day to day issues find their way into the close and cause lengthily reconciliation and issue review

• Issues account for a measurable percentage of cost for a company’s close• How many issues dare found in an average month?

• How many man hours are required to revolve the issues?

• The GRC control suite provides the business rule engine to enforce transaction integrity and help

eliminate errors that then get into the period close.

• Typical issues may include:• Incorrect accounts are used in Inventory

• Shipments have physically left yet the transactions were not completed

• Errors remain in interfaces

• New Job s are defined and not yet given standard rates in projects

• MORE AND MORE AND MORE….

SEE THE FOLLOWING SLIDE EXAMPLES

Eliminating the pain that effects the close!!


Manage List of Values (LOV)Create NEW List of Values or Filter existing lists

• Filter LOVs to make them more context related

• Make global lists more localized

• How about adding language translation in Oracle Projects

Before

Transact to /from any subinventory


Manage List of Values (LOV)Create NEW List of Values or Filter existing lists

• Filter LOVs to make them more context related

• Make global lists more localized

• How about adding language translation in Oracle Projects

After

Dropship subinventories removed


Embedded SecurityApply security controls to enforce business policy

• Granular user interface restrictions (block, field, tab)

• Restrict access to data or actions

• Embedded controls that enforce security and business process

• Contextual control (by responsibility, profiles, data field, etc.)

Rate can be

implemented over

any time period

Before


After

Embedded SecurityApply security controls to enforce business policy

• Granular user interface restrictions (block, field, tab)

• Restrict access to data or actions

• Embedded controls that enforce security and business process

• Contextual control (by responsibility, profiles, data field, etc.)

Interest rate is

disabled due to

validation

Message enforcement,

lets users know what

they need to do


Embed Notification and Approval processesAutomate business processes, Fraud analysis, Reporting

• Implement processes for vendor or customer creation

• Replace email or paper routing approvals and do setup online

• Self document and automate business flows






Replace this manual email

with ….



An automated routing..

Workflow generated email

with context Security and

accountability on the process






Automatically

inactive and

disabled

Alternate name

used to track the

status. Also

disabled


IT Support

$4,140

Managing the

Close process

$5,760

Reporting &

Process

Execution

$4,140

System /

Process Issues

$12,214

Average Cost to Close

Category Application AreaEffort (avg

hrs) Cost ($$)

IT Support General Ledger 4 $180

Inventory 32 $1,440

Payables 16 $720

Projects 16 $720

Purchasing 8 $360

Receivables 16 $720

IT Support Total 92 $4,140

Managing the Close process General Ledger 2 $90

Inventory 66 $2,970

Payables 6 $270

Projects 12 $540

Purchasing 6 $270

Receivables 36 $1,620

Managing the Close process Total 128 $5,760

Reporting & Process Execution General Ledger 4 $180

Inventory 42 $1,890

Payables 15 $675

Projects 12 $540

Purchasing 6 $270

Receivables 13 $585

Reporting & Process Execution Total 92 $4,140

System / Process Issues General Ledger 4 $180

Inventory 10.42 $469

Payables 68 $3,060

Projects 126 $5,670

Purchasing 51 $2,295

Receivables 12 $540

System / Process Issues Total 271.42 $12,214

Grand Total 583.42 $26,254

Period Close Cost / Savings analysis (example customer)

** Cost does not include reconciliation


• Effort required to manage the close can reduced at least 75% with online tracking of tasks and

reports

• Managing the close can Managing the close process includes

• Tracking period close checklists

• Communicating through email

• Auditing tasks

• Ensuring the close is complete and consistent

• Most organizations

• Document their close process offline

• Communicate through email

• Have no way to audit the process

Period Close Cost / Savings analysis


• IT support time can be reduced nearly 40% by automating interfaces during and at the end of the

period so that users always see what may be in process or stuck.

• IT support activity can make up a large part of the cost to close the books.

• Issue found during the month at close can take both business users time and IT.

• Issues requiring normally requiring IT

• Root cause analysis

• Data Cleanup

• Report runs

• Support time from IT is increased by

• Transaction integrity issues

• Interface records in error

• Difficulty in getting transaction complete



• Reporting is a semi-manual non-value process that can at least 95% automated

• Reporting is not overly expensive but it is necessary in order to reconcile

• Reports may be run at the wrong time

• Parameters could be incorrect

• A company with 5 Operating Units and 30 Inventory organizations

• Run an average of 150 inventory reports (30 X 5)

• Run reports in AR, AP and PO at least 5 times

• Manual processes inside oracle add no-value yet account for valuable time

• Open and close of all periods

• Checking interfaces or verifying certain tasks are complete



• Many issues can be prevented 100% and can reduce the cost of issue to

the close more than 60%

• Most issues exist throughout the period and can be prevented with the

correct automated controls

• Some issues may actually stop the close process in it’s tracks and cost

the process 1 complete day

• Issues can be come unpredictable in cost if many resources get involved.

• Preventing the issues throughout the month will ultimately increase

productivity during the month and make the reconciliation easier where

the issues may not have actually impacted the close tasks.



IT SupportManaging the

Close process Reporting &

Process

Execution

System /

Process Issues

$4,140 $5,760

$4,140

$12,214$2,268

$1,440

$405

$1,988

38% 75%

95%

60%

Average Saving (%) Estimated Cost ($$) Cost ($$)

Average cost

savings of nearly

70% !!



Category Cost ($$)Estimated Annual ($$)

Estimated Cost ($$) Average Saving (%)

Estimated (Annual $$)

IT Support $4,140 $49,680 $2,268 38% $596,160

Managing the Close process $5,760 $69,120 $1,440 75% $829,440

Reporting & Process Execution $4,140 $49,680 $405 95% $596,160

System / Process Issues $12,214 $146,567 $1,988 60% $1,758,802

Grand Total $26,254 $6,101 67%

Annualized Cost $315,046.80 $68,355



Case Study- Period Close AutomationCompany Overview

• World leader in Wireless technology and Services

• Oracle E Business Suite with multiple operating units and growing

• “Top Closer” as cited by CIO Magazine 2007

The Challenges

• Executive direction to keep the close to 2 days

• As a growing organization the process had to be flexible to serve dozens of operating units

• A solution had to promote parallel processing and notification and approvals

Recommended Solution

• Automate the entire process to enable a single key to launch a simultaneous close process across all operating units.

• Secure forms from manual operating and eliminate manual report runs

• Convert offline checklists to a systemic process

The Results

• Implement a PCA solution using GRC Applications

• Reduce the overall close cycle through parallel processing

• Reduce the effort in running reports and potential mis-reporting by automating the reports and parameters

• Automate the action to close and open periods via workflow approvals

• Provide notification and tracking throughout the process


•Oracle workflow

•GRC Application Controls

•GRC IntelligenceBuilt on Oracle technology

Highly configurable and scalable

Eliminate manual tasks

Automate repetitive tasks and reporting

Auditable & Measurable

ROI

•Oracle workflow


•GRC Intelligence

•Sequence processes to meet your business

•Begin with a standard framework

•Support many operating units and organizations with ease

•Control Period status with Approvals

•Check interfaces and resubmit errors

•Eliminate IT run exception scripts

•Eliminate manual Oracle reporting

•Eliminate mis-reporting

•Run reports at the correct time

•Rid yourself of redundant report runs and complex reports scheduling

Feature Summary


•Oracle workflow



•Oracle E-Business suite

•Oracle workflow



•Oracle workflow




•Sequence processes to meet your business

•Begin with a standard framework

•Support many operating units and organizations with ease


•Oracle workflow





•Control Period status with Approvals

•Check interfaces and resubmit errors

•Eliminate IT run exception scripts

•Eliminate manual Oracle reporting


•Oracle workflow






•Eliminate mis-reporting

•Run reports at the correct time

•Rid yourself of redundant report runs and complex reports scheduling


•Oracle workflow







•Approval processes

•Reporting

•Tracking / Metrics


•Oracle workflow







ROI

•Ensures consistency and reliability, reducing errors

•Leverages resources more efficiently, allowing the focus to shift to new business

•Reduced the overall effort and cost of period close


Real world examples

Sales Order Workflows

Flexible WF holds to support

order approvals, credit checking

Form Security

Conditional inquiry only

Data masking, hiding , protecting

Supplier Mgmt

Automate the vendor

creation / change process

Payables Approvals

Approval processes

for invoices, batches

and payments

Configuration Monitoring

Monitor and document system

configuration and changes

Filter LOVs

Establishing security

for Customers /Suppliers

Filtering LOVs conditionally

Process Automation


Period close process reporting

Preventive Provisioning

Segregation of Duties

High risk or Super user access

Inventory Mgmt

Item creation automation

Item change process

Automate attributes or costs

User Access Controls

User Access Review (quarterly certification)

Employee setup exceptions

Employee de-provisioning

Data Migration

Migrate configurations, setups, security settings and

remediation work

Data Privacy

Secure and report when data has been accessed while not

being altered

De-Customize

Enhance the user experience

Replace custom.pll, form personalizations, workflows


Our GRC ServicesWe are the leading provider of Governance, Risk and Compliance solutions.

Operation Excellence

Sustainable Compliance

Risk / Control Reviews

Health checks

Risk Control matrix

GRC Manager

Help desk ticket review

Configuration Management

Change control

Auditing / Monitoring

Migration and documentation

Business Process optimization

Process review

Optimization and automation

Data Privacy and Security

Mask or Secure data

Audit viewed data

PCI, SSI, PII

Control Automation

Suspect transaction monitoring

Detection and prevention

Segregation of Duties

Analysis

Policy review

Remediation

Reporting

Preventive Provisioning


KBACE GRC AcceleratorsKBACE GRC Accelerators help customers to gain immediate value. Many of these must have, best

practice, time saving Accelerators can be implemented out-of-the box.

Period Close Automation (PCA)

• KBACE built period close automation process

• Includes process auditing

• Process metrics report

Item Creation Automation

• Automate the item creation process

• Assign items to orgs

• Automate org level costs or attributes

User Access Review

• Quarterly certification of user access

• Manager accountability


KBACE GRC Accelerators

GRC Controls- Change controls

• Change control on GRC Controls

• Monitor changes to GRC Controls for audit reporting

System Administration controls

• Best practice controls for security

• Change control and auditing key FND tables for system security

Employee De-provisioning

• Automatically end user access upon termination

• Reassign open notifications

• Report current roles assignments affecting WF approvals


KBACE GRC Accelerators

Data Masking

•Prebuilt rules for masking, hiding and protecting SSN data

•Field level controls

•List of values masking

General Ledger posting SOD rules

•GL security rules to allow JE creation and posting without Segregation of Duties

Payables payment approvals

•Prevent Payment of Invoices without approval

•Select from a list of approvers.

•See invoices waiting for approval


For more information / demonstration

Daryl Geryol

Practice Director - GRC Services, KBACE

O- 262.649.2916

[email protected]

www.kbace.com

Questions & Answers

period close automation - home |...

Documents