Procurement Cloud

Configuring the Procurement Common

Application Functions

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The preceding is intended to outline our general product direction. It is intended for
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commitment to deliver any material, code, or functionality, and should not be relied upon
in making purchasing decisions. The development, release, and timing of any features or
functionality described for Oracle’s products remains at the sole discretion of Oracle.

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Oracle Fusion Procurement Setup Flow
Common Applications Configuration
Users & Roles Currencies Enterprise Structures Security Approvals Reference Objects

Common Procurement Configuration

Supplier Transaction Account Payables and
Basic Catalogs Transaction Taxes Lookups
Configuration Rules Procurement

Purchasing Configuration
Document Requisition Receiving
Master Items Business Function Procurement Agents
Configuration Configuration Pararmeters

Self Service Procurement Configuration

Information Template Descriptive
Information Template Value Sets Profile Options Catalog Category Hierarchy
Flexfield

Procurement Suite Configuration

Supplier Portal Sourcing Procurement Contracts Supplier Qualification

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Enterprise Structures
Fundamental structures
1. Legal
2. Business (Managerial)
3. Functional

 Legal structure implemented using Legal Entities

 Business structure implemented using Divisions & Business Units

 Functional structure is implemented using Departments

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Enterprise Structures - Agenda
1 Enterprise
2 Division

3 Ledger
4 Legal Entity
5 Business Units
6 Departments
7 Inventory Organizations
8 Enterprise Structure Configurator

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Enterprise Structures
1 Enterprise
2 Division

3 Ledger
4 Legal Entity
5 Business Units
6 Departments
7 Inventory Organizations
8 Enterprise Structure Configurator

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Enterprise
Enterprise is Mandatory and serves as an umbrella
for the entire implementation and all
organizations are created within an enterprise

 Captures the name of the Enterprise

and the Location of the Headquarters

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Enterprise Structures
1 Enterprise
2 Division

3 Ledger
4 Legal Entity
5 Business Units
6 Departments
7 Inventory Organizations
8 Enterprise Structure Configurator

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Divisions

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Enterprise Structures
1 Enterprise
2 Division

3 Ledger
4 Legal Entity
5 Business Units
6 Departments
7 Inventory Organizations
8 Enterprise Structure Configurator

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Enterprise Structures
Ledger Overview

Ledgers

• Each accounting setup requires a primary ledger and optionally,

can include one or more secondary ledgers and reporting
currencies.
• The number of ledgers and subledgers is unlimited and
determined by your business structure and reporting
requirements.

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Ledgers

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Enterprise Structures
1 Enterprise
2 Division

3 Ledger
4 Legal Entity
5 Business Units
6 Departments
7 Inventory Organizations
8 Enterprise Structure Configurator

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Enterprise Structures
Legal Entity Overview

Legal Entities

• Legal entity is a recognized party with rights &

responsibilities given by legislation.

• Legal entities have -

– The right to own property
– The right to trade
– The responsibility to repay debt and
– The responsibility to account for themselves to regulators,
taxation authorities and owners according to rules specified in
relevant legislation

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Division, Ledger and Legal Entities

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Enterprise Structures
1 Enterprise
2 Division

3 Ledger
4 Legal Entity
5 Business Units
6 Departments
7 Inventory Organizations
8 Enterprise Structure Configurator

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Enterprise Structures – Business Axis
Business Unit
• Business Unit (BU): A unit of an enterprise that performs one or many business functions which
can be consolidated in both a managerial and legal hierarchy

• Business Functions

 Requisitioning

 Purchasing

 Receiving

 Invoicing

• A Business Unit can be configured for multiple business functions

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Business Unit Types
• Procurement Business Unit
– A business unit with the Procurement business function.
– Manages, owns, and is responsible for purchasing transactions.

• Requisitioning Business Unit

– A business unit with the Requisitioning business function.
– Manages and owns requisitioning transactions.

• Invoicing Business Unit (a.k.a. Sold-To BU)

– A business unit with the Payables Invoicing business function.
– Responsible for invoicing transactions.

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Business Unit Functions in the Procure to Pay Flow

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Business Units

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Business Unit Business Unit Business Unit
USA UK AUS
Requisition Requisition Requisition

Procurement Procurement Procurement

Payables Invoicing Payables Invoicing Payables Invoicing

Business Unit
IND
Requisition

Procurement
Payables Invoicing

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Service Provider Model
The following figure illustrates a scenario where business unit BU 1 provides Procurement
services for business unit BU 2.

BU 2 performs Requisitioning and Payables Invoicing business functions.

The service provider relationship is defined with BU 1 as a service provider for BU 2.

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Business Unit Business Unit Business Unit
USA UK AUS
Consumes Services
Consumes services
Requisition From
from
Requisition
Procurement Procurement
Payables Invoicing
Payables Invoicing

Consume Services
From

Business Unit Business Unit

GER IND

Requisition
Requisition
Payables Invoicing

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Copyright © 2014 Oracle and/or its affiliates. All rights reserved. | 26
Service Provider Model Example

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 Procurement Business Unit Models
Decentralized Centralized Sourcing, Local Execution

Request Source Buy Pay Request Source Buy Pay

BU 1 BU 1

BU 2 SSC

BU 2
BU 3

Complete Shared Services Transfer Procurement to Local BU

Request Source Buy Pay Request Source Buy Pay

BU 1 BU 1
Intra-co. Intra-co.
SSC SSC Invoicing
Invoicing

BU 2 BU 2

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Business Unit Scope in FSM Tasks

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Enterprise Structures
1 Enterprise
2 Division

3 Ledger
4 Legal Entity
5 Business Units
6 Departments
7 Inventory Organizations
8 Enterprise Structure Configurator

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Enterprise Structures – Functional Axis
Department

• Department is an organization with one or more operational objectives or

responsibilities that exist independently of its manager
• You assign one or more workers (Employees) to Departments
• Departments are mandatory because they track your employees

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Business Unit Hierarchy - Departments

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Enterprise Structures
1 Enterprise
2 Division

3 Ledger
4 Legal Entity
5 Business Units
6 Departments
7 Inventory Organizations
8 Enterprise Structure Configurator

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Facilities for Procurement
Manage Inventory Organizations

An inventory organization is a logical or physical entity in the enterprise

that is used to store definitions of items or store and transact items.

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Inventory Organization Usage
• You select the following usages in the inventory organization’s properties:
– Item management
– Item and inventory management

Setup and Maintenance > All Tasks > Manage Inventory Organizations

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Enterprise Structures - Example

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Enterprise Structures
1 Enterprise
2 Division

3 Ledger
4 Legal Entity
5 Business Units
6 Departments
7 Inventory Organizations
8 Enterprise Structure Configurator

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Enterprise Structures Configurator (ESC)

An interview-based tool that guides you through the process of setting up a basic
enterprise structure
• Create all the organizational structures at one time
• Create multiple configurations to test multiple scenarios
• Review the enterprise configuration prior to loading it
• Rollback an enterprise configuration after loading it.

Task: Establish Enterprise Structures

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Reference Data Sharing

• Reference data sharing facilitates sharing of configuration data such as

Payment Terms, Locations across business units
• Can be understood as buckets of reference data assigned to multiple
business units
• Use reference data sets to reduce duplication and maintenance by sharing
common data across business entities where appropriate
• Oracle Fusion Applications reference data sharing feature is also known as
SetID

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Sharing Setup Data: EBS Limitation
US
Setup Data NOT sharable across BUs Legal Entity
(formerly OUs).

Examples:

• AP Payment Terms OU East OU West

• AR Transaction Types
• Customer Account Sites
• Supplier Sites Payment Terms Payment Terms
• Locations • 2/10 Net 30 • 2/10 Net 30
• Net 15 • Net 15
• Net 30 • Net 30
• Net 45 • Net 45

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EBS

Cloud

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Reference Data Sharing
Reference Data Set Types
1. Common
2. Shared
3. BU specific

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Location Sets
• Create a location, you must associate it with a set
• The following figure shows how locations sets restrict access to users.

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Enterprise Structures
Compare*

Cloud E-Business Suite PeopleSoft

Enterprise Ultimate Legal Entity , Business Group Company
Division - -
Business Unit Operating Unit Business Unit
Department HR Organization Department
Legal Entity Legal Entity Company
Reference Data Set - SetID

*not an exact one-to-one mapping

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EBS versus Cloud
EBS Components Cloud Components
Product-Specific Setup Centralized Setup Across All Products Using Functional
Setup Manager
Responsibility Data Role (automatically generated when BUs and
Ledgers are defined)
Legal Entity Configurator Legal Entity Configurator accessed from Functional
Setup Manager
Establishment (Used for Tax Reporting) Term Change: Legal Reporting Unit

HCM Legal Entities defined in the HR Organizations HCM and Financial Legal Entities can be shared and are
page defined in the same page

Operating Unit Term Change: Business Unit , Additional Functionalities

No Spreadsheet to upload LEs, BUs, COA Values, Integrated Spreadsheets to upload all via Functional
COA Hierarchies, Ledgers, Banks and Bank Setup Manager
Accounts

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