Basics of OFA

As the name suggests it’s a fusion application from oracle which encloses the best feaures of the following oracle products :
•Oracle EBS
•JD Edwards
•Sybel CRM
And many more

OAF is designed from the ground-up using the latest technology advances, Oracle Fusion Applications are 100 percent open-standards-based business applications .
Like Other oracle products (Oracle EBS R12), OFA is also modular and is coming up with below applications :

  • Supply Chain Management
  • Procurement
  • Financials
  • Project Portfolio Management
  • Human Capital Management
  • Customer Relationship Management
  • Governance, Risk, and Compliance

For customers using Oracle E-Business Suite and Oracle's PeopleSoft, JD Edwards, and Siebel CRM that are interested in better business performance, Oracle provides a complete choice in deployment options.

Enterprise Structures

The enterprise structure of Oracle Fusion Application is similar to the organization structure in Oracle EBS Release 12.

Every enterprise has three fundamental structures, legal, managerial, and functional, that are used to describe its operations and provide a basis for reporting. In Oracle Fusion, these structures are implemented using the chart of accounts and organizations. Although many alternative hierarchies can be implemented and used for reporting, you are likely to have one primary structure that organizes your business into divisions, business units, and departments aligned by your strategic objectives.

Legal Structure
The figure above shows a typical group of legal entities, operating various business and functional organizations. Your ability to buy and sell, own, and employ comes from your charter in the legal system.

A corporation is a distinct legal entity from its owners and managers. The corporation is owned by its shareholders, who may be individuals or other corporations. There are many other kinds of legal entities, such as sole proprietorships, partnerships, and government agencies.

A legally recognized entity can own and trade assets and employ people in the jurisdiction in which it is registered. When granted these privileges, legal entities are also assigned responsibilities to:
• Account for themselves to the public through statutory and external reporting
• Comply with legislation and regulations
• Pay income and transaction taxes
• Process value added tax (VAT) collection on behalf of the taxing authority

Many large enterprises isolate risk and optimize taxes by incorporating subsidiaries. They create legal entities to facilitate legal compliance, segregate operations, optimize taxes, complete contractual relationships, and isolate risk. Enterprises use legal entities to establish their enterprise's identity under the laws of each country in which their enterprise operates.

In the figure above, a separate card represents a series of registered companies. Each company, including the public holding company, InFusion America, must be registered in the countries where they do business. Each company consists of various divisions created for purposes of management reporting. These are shown as vertical columns on each card. For example, a group might have a separate company for each business in the United States (US), but have their United Kingdom (UK) legal entity represent all businesses in that country. The divisions are linked across the cards so that a business can appear on some or all of the cards. For example, the air quality monitoring systems business might be operated by the US, UK, and France companies. The list of business divisions is on the Business Axis. Each company's card is also horizontally striped by functional groups, such as the sales team and the finance team. This functional list is called the Functional Axis. The overall image suggests that information might, at a minimum, be tracked by company, business, division, and function in a group environment. In Oracle Fusion Applications, the legal structure is implemented using legal entities.

Example - ABC Corp. is a group of companies with products like Mobile Phone, TV and Refrigerator. The company operates in US, UK and India.

Legal Axis:
In US the legal entities are ABC Corp. MP, ABC Corp. TV and ABC Corp. Refrigerator.
But in India there is one legal entity ABC Inc.

Business Axis:
In India the business axis would be MP, TV and Refrigerator.
The managers/employees working in India in MP business area would co-ordinate with the ABC Corp. MP.
But in US this axis might not be of any significance

Management Structure
Successfully managing multiple businesses requires that you segregate them by their strategic objectives, and measure their results. Although related to your legal structure, the business organizational hierarchies do not need to be reflected directly in the legal structure of the enterprise. The management structure can include divisions, subdivisions, lines of business, strategic business units, and cost centers. In the figure above, the management structure is shown on the Business Axis. In Oracle Fusion Applications, the management structure is implemented using divisions and business units.

You can define a hierarchy of divisions, business units, and departments as a tree over HCM organization units to represent your enterprise structure. Note that the  hierarchy definition is not required in the setup of your applications, but is a recommended best practice.

Functional Structure
Straddling the legal and business organizations is a functional organization structured around people and their competencies. For example, sales, manufacturing, and service teams are functional organizations. This functional structure is represented by the Functional Axis in the figure above. You reflect the efforts and expenses of your functional organizations directly on the income statement. Organizations must manage and report revenues, cost of sales, and functional expenses such as research and development (R&D) and selling, general, and administrative (SG&A) expenses. In Oracle Fusion Applications, the functional structure is implemented using departments and organizations, including sales, marketing, project, cost, and inventory organizations.


Enterprise Structures Business Process Model


In Oracle Fusion Applications, the Enterprise Performance and Planning Business Process Model (BPM) illustrates the major implementation tasks that you perform to create your enterprise structures. This process model includes the Set Up Enterprise Structures detailed business process, which consist of implementation activities that span many product families.

Information Technology is a second BPM which contains the Set Up Information Technology Management detailed business process. Define Reference Data Sharing is one of the activities in this detailed business process and is important in the implementation of the enterprise structures. This activity creates the mechanism to share reference data sets across multiple ledgers, business units, and warehouses, reducing the administrative burden and decreasing the time needed to implement.The important activities of BPM are:

1.1 Define Enterprise
Define the enterprise to capture the name of the deploying enterprise and the location of the headquarters. There is normally a single enterprise organization in a production environment. Multiple enterprises are defined when the system is used to administer multiple customer companies, or when you choose to set up additional enterprises for testing or development.

1.2 Define Enterprise Structures
Define enterprise structures to represent an organization with one or more legal entities under common control. Define internal and external organizations to represent each area of business within the enterprise.

2.1 Define Legal Jurisdictions and Authorities 
Define information for governing bodies that operate within a jurisdiction.

2.2 Define Legal Entities 
Define legal entities and legal reporting units for business activities handled by the Oracle Fusion Applications.

3.1 Define Business Units 
Define business units of an enterprise to allow for flexible implementation, to provide a consistent entity for controlling and reporting on transactions, and to be an anchor for the sharing of sets of reference data across applications.

4.1 Define Financial Reporting Structures 
Define financial reporting structures, including organization structures, charts of accounts, organizational hierarchies, calendars, currencies and rates, ledgers, and document sequences which are used in organizing the financial data of a company.

4.2 Define Chart of Accounts
Define chart of accounts including hierarchies and values to enable tracking of financial transactions and reporting at legal entity, cost center, account, and other segment levels.
Define Ledgers Define the primary accounting ledger and any secondary ledgers that provide an alternative accounting representation of the financial data.

4.3 Define Accounting Configurations 
Define the accounting configuration that serves as a framework for how financial records are maintained for an organization.

5.1 Define Facilities 
Define inventory, item, and cost organizations. Inventory organizations represent facilities that manufacture or store items. The item master organization holds a single definition of items that can be shared across many inventory organizations. Cost organizations group inventory organizations within a legal entity to establish the cost accounting policies.

5.2 Define Reference Data Sharing 
Define how reference data in the applications is partitioned and shared.