Project Partners Blog


Archive for the ‘Oracle Cloud’ Category

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 Project Partners Blog Author: Donna Dignam | Principal Functional Consultant 
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In April 2015, FASB (Financial Accounting Standards Board) issued ASU (Accounting Standards Update) 2015-05 to assist entities to determine when a customer in a cloud computing arrangement “CCA” (i.e. hosting arrangement) included a software license.

If a CCA includes a license to internal use software, the software license is accounted for by the customer as an intangible asset.  Basically, the intangible asset is recognized for the software license, and the payments or said license made over time are recognized as a liability.  If no software license is included in the contract, the company should account for the arrangement as a service contract, and the fees associated with the hosting service of the arrangement are expensed as incurred.

The Update did not give any guidance regarding the implementation costs for activities performed in a cloud computing arrangement as a service contract.  Since the FASB guidance in this area was not explicit, the Board decided to issue an Update to specifically address the resulting diversity in practice.

Who Is Affected by ASU 2018-154?

These Amendments on the accounting for implementation, setup and other upfront costs (commonly referred to as implementation costs) apply to entities that are a customer in a hosting arrangement that is a service contract.  Oracle Cloud computing arrangements where a license is sold to the customer along with a hosting arrangement with Oracle Cloud would be one such customer.

Main Provisions of ASU 20184

The Update’s intent is to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal use software and hosting arrangements that include an internal-use software license.  The current accounting for the service element of a hosting arrangement is not affected.

It is up to the company to determine which implementation costs to capitalize as an asset related to the service contract and which to expense.  Costs to develop or obtain internal use software that could not be capitalized under Subtopic 350-40, such as training costs and certain data conversion cost, also cannot be capitalized for a hosting arrangement that is a service contract.  The company in a hosting arrangement that is a service contract determines which project stage an implementation activity relates to.  Project stages include preliminary project stage, application development stage or post implementation stage.  Costs incurred for the application development stage are capitalized, while those costs related to the preliminary project stage or the post implementation stage are expensed as the activities are performed.

In addition, the company is required to amortize the capitalized implementation costs over the terms of the hosting arrangement.  The term of the hosting arrangement includes the noncancellable period of the arrangement plus periods covered by:

  1. Option to Extend – customer must be reasonable expected to exercise this option
  2. Option to Terminate the Arrangement – where the customer is reasonably expected NOT to exercise this option
  3. Option to Extend or Not to Terminate – where the vendor has control of exercising the option.

Impairment guidance, as if the costs were long-lived assets, and abandonment are to be applied based upon the existing guidance in SubTopics 350-40 and 360-10, respectively.

Income Statement presentation by the entity should be the same line item as the fees associated with the hosting service of the arrangement.  Similarly, classification of payments for capitalized implementation costs in the Statement of Cash Flows are done in the same manner as payments made for fees associated with the hosting arrangement.  In the Statement of Financial Position, capitalized implementation costs are presented in the same line item that a prepayment for fees associated to the hosting arrangement would be presented.

How is This Different and Why is it an Improvement?

Currently, GAAP does not specifically address accounting for implementation costs associated with a HASC.  Therefore, the Update improves current GAAP as it clarifies accounting and aligns the accounting for implementation costs for hosting arrangements, regardless of whether a license is conveyed.

For consulting firms, the new standards present an improved selling point as costs that were previously required to be expensed can now be capitalized.  For capital intensive industries, where cloud applications are being considered and dismissed due to financial considerations around increased expenses (and resulting decreased profitability metrics) due to cloud implementation, the new standard allows a way to capitalize the costs associated to both the license and the implementation and development costs around getting that application stood up.

When Does This New Update Take Affect?

For public entities, the amendments are effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. For all other entities, annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021 are required.  Early adoption is permitted at any time.

The amendments in this Update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption.

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Through this three (3) part educational web-series, Project Partners will arm you with critical steps and insight into a Project Financials cost-effective solution. This unique solution offering will assist administratively burdened organizations like yours to effectively manage Project Financials around Capital spend through all phases of the Capital Lifecycle (Concept Definition, Funding Approvals, Execution, Reporting, and Managing Project Costs).

WHY CAPITAL PROJECTS? – WEBINAR REGISTRATION

CLICK TO REGISTER HERE for the three (3) part series as we explore the WHY and HOW to leverage EBS Project Financials for Capital Projects. We’ll walk you through the solution focused around project costing to your specific business requirements, robust functionality, and use of authorizations for expenditures to further efficiency gains and extensive return on investments.

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Our prebuilt, configurable Microsoft® Excel workbook to submit, control and monitor all
scheduled processes and reports for Oracle ERP Cloud.

Helping hundreds of customers just like “Franny” to efficiently manage scheduled processes and reports in Oracle Cloud. The Cloud Process Scheduler is a unique process and report scheduler workbook available to the enterprise from Operations and Finance to HR and Sales, empowering these teams and enabling any user to:

  • Define scheduled processes and reports that need to be run periodically
  • Setup fixed and variable parameters for each process and update variable parameter dates quickly.
  • No need to remember parameters or the order in which processes need to run thereafter, it does it automatically
  • Setup process dependencies to enable efficient workflows.
  • Do not need to wait for system response time navigating the Oracle Cloud screens / fields.
  • Easier data entry when processing multiple Operating Units.
  • Start the entire set of processes with 1-click. Reducing the number of keystroke by 100%.
  • Organize work into a group of activities and then process it as a unit.
  • Monitor the status of each process in the set as it completes, while you are easily completing other work.

To learn more about the FEATURES & BENEFITS and get a glimpse into how the Cloud Process Scheduler really works, take a few minutes and view a brief Cloud Project Financials DEMO HERE. We believe that this product will significantly change how you manage your processes and reports in the Cloud and enable you to increase your user productivity.

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MORE ON CLOUD PROCESS SCHEDULER

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Providing Our Customers With Better Project Delivery Through Full-Service…
PROJECT APPLICATION & PROCESS ASSESSMENTS

Whether helping you uncover hidden project challenges stemming from your current functional and operational applications/processes to understanding the why and how to migrate to the cloud, our PROJECT APPLICATION/BACKGROUND PROCESSES ASSESSMENT services give you the rigorous framework you need to achieve success quickly.

Will Partner With You to Assess Your Project Applications and Processes Inside and Out.

Projects is the link that can penetrate your entire organization and requires careful analysis to maximize efficient operations. If you are experiencing what appears to be a pain in your organization’s business process and applications, then now is the time to LOOK UNDER THE HOOD.

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Get started with SIMPLE next steps to obtain Project Partners holistic approach to a full assessment and associated discount offer.

End-to-End Integration of Enterprise Resource Planning Applications for Project Organizations

How to Unlock the Value of your Project-Based Business Systems

Visibility & Control for Project-Driven Organizations

With the maturity of Cloud-based business applications, organizations can attain real-time visibility into the performance of their business with a single source of truth for business operations and finances. This modern technology can enable enterprise organizations to become more competitive and profitable on a single, inter-connected Enterprise Resource Planning (ERP) platform for tracking and managing the entire services business lifecycle.

Successful services organizations require modern systems that provide seamless integration between their ERP and Project Portfolio Management applications and processes. An integrated application infrastructure can be configured to lead your project-driven organization forward to greater efficiency from the moment a new sales opportunity is identified through to project sourcing, project delivery, and financial accounting.

In this blog, we will discuss the functionality and execution discipline of an integration business application solution for project-based organizations. This is the first blog in a series by Project Partners LLC, in which we will delve deeper into “How to Unlock and Maximize the Value” of each functional area of the services business lifecycle. 

Watch this video for an overview of our blog series Enterprise Resource Planning Applications for Project Organizations 

Modern Project Portfolio Management addresses all of the external inputs to and outputs from the business operations of the Enterprise. An integrated methodology is necessary to tie all functional areas into a cohesive system including ERP, Human Capital Management (HCM), Supply Chain Management (SCM), Customer Relationship Management (CRM), Enterprise Performance Management (EPM), as well as Project Management. etc.

Companies set to benefit from this approach include organizations in industries such as: Professional Services (incl. Architecture & Engineering Services), Construction (Contractor and Sub-contractor), ETO/ATO, Utilities, Government (Federal) Contracting, State and Local Government, Financial Services, IT, Owner-Side Construction, Aerospace & Defense, Product Development, Capital Projects and other indirect projects organizations. These organizations may represent entire companies or embedded sub-divisions or service lines within broader global enterprises.

Foundational Applications

Business applications for enterprise organizations begin with the core financial applications, which include GL, AP, AR, Assets and Cash Management, in order to record and manage their financial transactions.  Although managing Project financials can be accomplished directly with these applications via a project/task identifier in the GL chart of accounts, this is a very inefficient mechanism as it places a large burden on the GL to hold and report large volumes of project transactions. Further, this approach makes the operational groups totally reliant on the finance organization to provide them with the reporting they need to efficiently execute and manage projects.

Project Financial Management Applications
By providing an efficient bridge between finance and operational needs, Project Financial Management applications enable operations with a single source of truth for all project information. These applications provide visibility into the project structures, plans, and an aggregation of all project costs, revenue, and invoice information while seamlessly interfacing with various financial applications needed to record, process and report financial information. Further, these applications serve as a true sub-ledger by holding detailed project transactions for reporting and audit while providing finance with summarized entries that result in an uncluttered GL.

Enterprise Resource Planning (ERP) Applications
ERP for Project Organizations can be defined to include Financial Applications (including GL, AP, AR, FA, and Cash Management), HR Applications (HCM), and Supply Chain Management (SCM) Applications (including Sourcing, Self-Service Requisitioning, Procurement, Contracts and Receiving), in addition to Project Financial and Execution applications.

Human Capital Management (HCM) Applications
As people resources are a critical element to executing projects, HCM applications are also critical for project-driven organizations. These applications provide a single source of truth for people, organizations, jobs/roles, and cost rates for human resources. Project Partners’ core competencies derive from integrating Financial and Project accounting applications seamlessly with HCM to leverage these core entities.

http://www.projectp.com/ppblog/wp-content/uploads/2017/09/Human-Capital-Management-HCM-Applications.png

For these foundation applications, our Team has helped our clients structure financial processes based on industry standards and best-practices, and then further align these to the unique operational needs of the specific organization. This includes helping define project structures and classifications, resource types and sources, and cost types that best meet the organization’s. Project Partners also assists with mapping project transactions to financial structures to enable the automated flow of data across applications and accounting.

Labor Costing for projects is our specialty, be it standard costing based on person, role, location and job levels, actual costing based on salary rates from HCM, or payroll costing based on periodic paid amounts. We bring a deep understanding of this complex function across industries and provide solutions that fulfill your project and financial needs while meeting all labor cost security requirements.

Project Sourcing Applications

Customer Relationship Management (CRM) Applications
Projects and new delivery orders for production are typically sourced from Sales using CRM applications for execution of external contract work or from an approved budgeted portfolio of projects for indirect or capital work.

Sales opportunities in CRM applications are the initiation point for proposals that result in closed transactions and downstream execution.  An integrated application work-flow from CRM to Project Delivery and Execution applications allow sales and delivery organizations to work together on the best possible proposals (using estimates from past projects, products, or templates), then quickly plan and execute on the contract to close sales. Contract and Grant Management applications can optionally be included to manage complex contracts or execute work funded by grants.

Enterprise Performance Management (EPM) Applications
Budgeting and execution of proposed capital and indirect is reviewed, incorporated into organizational budgets, and approved for execution on a periodic (annual) basis using EPM applications.

When EPM applications are integrated in project financials, they enable a top-down and bottom-up planning and review process to arrive at the best possible mix of budgeted and approved projects. This integration also provides a means to optimize internal resources (demand and supply) and project prioritization and selection. Niche portfolio management applications, such as the Primavera application suite and Oracle Instantis, also provide good functionality in this space according to specific scenarios and requirements.

Enterprise Performance-Management (EPM) Applications

In addition to using best practice approaches to associate project sources to project execution applications, Project Partners provides software integration solutions that optimize and automate the entire project initiation and delivery process.

Project Delivery and Execution Applications

Successful project planning and execution across multiple functional areas requires a project execution management and work-flow application, such as Primavera Unifier, to compliment project financial management applications, such as Oracle E-Business Suite (EBS) and Oracle ERP Cloud (Oracle Fusion Applications).  In addition, Primavera P6 and other project management applications are used for more sophisticated project scheduling. These applications provide functionality to manage the core elements of project delivery including schedule, materials, and resources, while Primavera Unifier runs the work-flow, approvals, contract management and cost-control cycles, with touch-points across all applications.

Supply Chain Management (SCM) Applications
SCM applications, such as sourcing, procurement, procurement contracts, inventory, etc., become critical for business operations that rely on procured items as a large percentage of project costs – typically construction and manufacturing project-driven organizations. These applications source their demand as driven from project plans and subsequently provide purchase commitment transactions back to the project financials system for an accurate Management view of project cost (and liability).

In addition to the project delivery and execution applications discussed, Project Partners can implement and support the leading industry specific business process optimization applications to provide functionality tailored to your industry requirements. Project Partners provides expert services in all of the following environments:

  • Professional Services Firms: Oracle ERP Cloud configured for Services Resource Planning (SRP)
    • In our following blog-posts we will explore this packaged Oracle Cloud solution from Project Partners – (See it demonstrated Live at Oracle Open World in October in San Francisco!)
  • Project-driven Industries: Oracle ERP Cloud integrated with Primavera Unifier/P6/Analytics
  • Capital Construction for General and Sub-Contractors: Primavera Prime
  • Construction for Owners, for system-wide Project Controls and Execution: Primavera Unifier
  • IT/Ideation/Product Development: Oracle Instantis and Oracle Product Lifecycle Management (PLM) Applications
  • Assemble/Engineer to Order: Shop-floor/Manufacturing Automation Applications
  • Utilities/Capital Intensive Industries: Oracle Asset Management Applications
  • Service Providers: Field Service Applications

 

Enterprise Resource Planning Applications for Project Organizations

 

With process and software solutions to integrate back-office financial applications to front-office delivery and execution systems, Project Partners brings significant industry and business process experience. We deliver solutions to project-driven organizations that optimize and integrate all business systems and operations. Today’s organizations require this cohesive end-to-end technology platform to operate more efficiently and competitively and to drive more value and ROI out of their IT investments.

Our implementation and integration solutions are designed to automate, streamline, and control project financial and project execution management processes end-to-end and, as a result, enable you to

  • Improve sales and service profitability with standardized offerings, costing, and pricing
  • Improve cash flow and customer satisfaction with accurate and timely invoices
  • Enhance worker productivity, competency/skill, and engagement
  • Work load balance across initiatives, projects, and cross organizational management
  • Automate manual operational/financial processes and reduce redundant administration
  • Facilitate cross organization interaction through workflows and social collaboration
  • Streamline your financial consolidation and monthly close cycle
  • Have a real time, trusted, single source of truth for your business data and supporting transactions
  • Use role based dashboards and Key Performance Indicators that provide insight into people, customer, project, and financial performance

 

Contact us to unlock the value of your Project business applications

Stay tuned for additional blog-posts on modernizing your enterprise business systems on a single ERP platform to maximize your business application investments.

Learn More:

Video: Business Applications for Project-Driven Organizations
Video: Oracle ERP Cloud Video Series
Solution Overview: Project Partners Services Resource Planning

Increase Cash Flow With Efficient and Accurate Project Billing Using Oracle Project Portfolio Management Cloud

Project billing can be cumbersome for your Finance organization. It can often be very manually intensive, resulting in inefficient project billing practices.

Oracle’s ERP Project Portfolio Management (PPM) Cloud provides simplified, modern tools for comprehensive project financial management. Oracle PPM Cloud allows Finance Teams to monitor time and expense entry and invoice automation using a single dashboard. Oracle PPM Cloud empowers Project Teams to quickly create, adjust, finalize, and submit invoices for approval. Project Managers can easily review invoice accuracy before approving.

Oracle PPM Cloud ensures rapid and accurate project billing and revenue management by allowing project teams to

  • capture all applicable time and expense data for invoicing
  • monitor all processed time and expense in one dashboard
  • ensure clients receive the correct invoices on time
  • implement efficient billing practices with invoice automation

Oracle Project Portfolio Management Cloud can help your organization increase profits, improve cash flow, and achieve greater client satisfaction. Watch the video to learn more:

 Improving Project Billing and Cash Flow in Oracle ERP Cloud

 

Project Partners Oracle ERP Cloud Video Series – highlighting how Oracle ERP Cloud and Project Partners’ Services Resource Planning™ provides your business with the visibility, controls, and tools to attain greater operational and financial performance.

Simple and Accurate Expense Entry in Oracle ERP Cloud
Simple and Accurate Time Entry in Oracle ERP Cloud

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Project Partners Achieves Oracle PartnerNetwork Cloud Standard Partner Designation

Oracle Cloud Standard Partner

The Oracle PartnerNetwork (OPN) Cloud Program has recognized Project Partners for exemplifying expertise, skills, and investment in Oracle Cloud solutions.  As a member of the OPN Cloud Program, our Team has strengthened our innovative portfolio of solutions on the Oracle ERP Cloud, HCM Cloud, and EPM Cloud.

Project Partners commits each day to optimizing business processes and IT investments for global customers using Oracle E-Business Suite and Primavera (P6, Unifier, and Instantis EnterpriseTrack).  Now with our new Cloud Standard Designation, our Team delivers completely integrated ERP Cloud solutions on Oracle’s world-class Cloud platform.

Let our Team help Your Team with your Cloud transformation strategy, planning, and implementation optimization today.  Contact Chris Stone (cstone@projectp.com) now and drive your Oracle investment to greater business value with Project Partners today!


Learn more

Oracle Cloud Resources – white papers, datasheets, webinars, and videos

Accelerated Path to the Oracle Cloud 

Oracle ERP Cloud Video Series

Managing Project Budgets Using Oracle Project Financials Cloud

Do you get frustrated with not having a central view to the revenue and margin of sold projects?
Do you find your Project Managers and financial reporting teams manually tracking budgets with spreadsheets?

Oracle Cloud Project Financials empowers Project Managers, Finance, and Management with visibility and controls to easily manage contract profitability and project budgeting.

Managing Project Budgets in Oracle Financials provides insight to:

  • Portfolio planned profitability
  • Sold bill rates and margin by project role
  • Planned resources
  • Actual and forecast revenue, cost, and margin performance

Watch our video to learn more:

As an integral component for any professional services organization, we will walk through the basic structure of Project Budgeting and how it can be easily used to baseline the financial revenues, cost, and margin associated with a client project. As part of Project Financial Management, it serves as the benchmark for Key Performance Indicators such as project margin percentage, financial overruns, and non-billable cost percentage.

Project Partners’ Oracle ERP Cloud Video Series – highlighting how Oracle Cloud and Project Partners’ Services Resource Planning (SRP) solution provides your business with the visibility, controls, and tools to attain greater operational and financial performance.

Learn More: Oracle Cloud Solutions

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Project Time Entry and Reporting Using Oracle Project Portfolio Management Cloud

Do your consultants struggle to know which project, task, and type of time to enter?

Do your Project Managers often state their data is inaccurate and not reliable?

Do your Project Managers, Finance, and Billing teams expend wasted overhead administration adjusting data errors?

This video shows you how these issues can be mitigated.

  1. Simplifies and minimizes guesswork for time entry users
  2. Avoids wasted cycles and reduce overhead to adjust mis-classed time and expense
  3. Ensures reliable project KPI’s – project margin, overruns, non-billable costs

Empowering all key roles within your organization to utilize basic time controls and approvals within projects.

Project Partners’ Oracle ERP Cloud Video Series – highlighting how Oracle ERP Cloud and Project Partners’ Services Resource Planning™ provides your business with the visibility, controls, and tools to attain greater operational and financial performance.

Learn More: Oracle Cloud Solutions

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Project Partners Services Resource Planning (SRP) for Professional Services Organizations is a fixed price, rapid implementation solution for Oracle Cloud that provides proven business processes and embedded analytics to Professional Services Organizations and High Tech firms.

We use this solution to run our own business!

This template based industry solution provides PSO’s and High Tech firms the tools and unified platform required to empower them to improve their maturity, performance and profitability. Because it is a turnkey solution, customers will be up and live in only a few months.

Watch our SRP for Oracle ERP Cloud Overview video to learn how Project Partners Services Resource Planning for Professional Services Organizations delivers the following.

  • Reduced administration through seamless, project based operations, financial management, and automated accounting
  • Reduced project overruns and increased utilization through more accurate project planning, costing, budgeting and forecasting
  • Improved cash flow with higher quality data and accurate invoicing
  • Real-time visibility and collaboration across organizations to empower stakeholders

Learn more: Services Resource Planning for Oracle ERP Cloud video Series