Introducing fusion revenue management cloud service
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Introducing Fusion Revenue Management Cloud Service. Julie Peacock Tapomoy Dey.

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Introducing fusion revenue management cloud service

Introducing Fusion Revenue Management Cloud Service

Julie Peacock

Tapomoy Dey


Introducing fusion revenue management cloud service

The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a 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.


Program agenda

Program Agenda

  • Business Challenges

  • Solution Footprint

  • Solution Deep Dive

  • The New Revenue Standard

  • Timelines

  • Q&A


Business challenges

Business Challenges

Compliance, Integration, and Automation

  • Pressure to comply

    • US GAAP Current Guidance ASC/ASU (SOP 97-2, EITF-08, etc.)

    • Auditable Transactions

  • Many sources of truth

    • Spreadsheets

    • 3rd Party Bolt-On’s

  • Demand for automation

    • Manual processes for key revenue recognition activities slow down the period close


Business scenario

Business Scenario

Software License

Support

Revenue Schedule

Customer Bill

Revenue Reallocation

TPE

VSOE

ESP

Period I Period II Period III

Software License

Support

Consulting

Software License

Support

Consulting

Software License

Support

Consulting

100

20

80

98

26

76

0.00

8.67

20.00

0.00

8.66

40.00

98.00

8.67

16.00

Consulting

TOTAL

200

TOTAL

28.67

48.66

122.67

200

TOTAL


Program agenda1

Program Agenda

  • Business Challenges

  • Solution Footprint

  • Solution Deep Dive

  • The New Revenue Standard

  • Timelines

  • Q&A


Coexistence automated revenue management centralized automated revenue management

Coexistence – Automated Revenue Management Centralized, Automated Revenue Management

Revenue Sources

Automated Compliance

Actionable Analytics and Reporting

Centralized workarea

Spreadsheet Integration

Reference data

FUSION REVENUE MANAGEMENT

Revenue accounting


Fusion revenue management

Fusion Revenue Management

Revenue Compliance and Accounting

EBS Order Management

EBS Projects

EBS Service Contracts

EBS Accounts Receivable

3rd Party

Revenue Events via Delivered Source Views

c

Revenue Data Repository

Create Schedules

Manage Compliance

Audit & Analyze

Create Accounting

  • Separate Revenue from Billing

  • Create ratable, immediate and deferred revenue schedules

  • Generate revenue and deferred revenue entries

  • Automatically create compliance adjustment entries

  • Support for Multiple Element Arrangements

  • Calculate and manage Fair Market Value

  • Seeded revenue reports for compliance reviews and audit

  • Ad hoc reporting layer

Customer Acceptance

Payment

Revenue

Accounting

EBS Order Management

EBS Accounts Receivable

EBS Costing

General Ledger


Program agenda2

Program Agenda

  • Business Challenges

  • Solution Footprint

  • Solution Deep Dive

  • The New Revenue Standard

  • Timelines

  • Q&A


Introducing fusion revenue management cloud service

Oracle Fusion Revenue ManagementAddressing Key Challenges for Revenue Managers

Pressure to Comply

Demand for

Automation

Many

Sources of Truth

Automation of contract identification, fair market value and compliance adjustments

Centralized repository for reporting and accounting

Audit trails and approvals ensure accurate revenue processing


Introducing fusion revenue management cloud service

Oracle Fusion Revenue ManagementAddressing Key Challenges for Revenue Managers

  • Calculate and Manage Fair Market Value

  • Automatically groups stand alone sales based on user defined pricing dimensions

  • Supports multiple representations of fair market value

Demand for

Automation

  • Identify Contracts

  • Automatically identifies elements as part of a Multiple Element Arrangement (MEA)

  • Supports cross application and cross document MEA’s

Automation of contract identification, fair market value and compliance adjustments

  • Allocate Revenue

    • Automatic validation of compliance with fair market value

  • Creates adjustments based on residual, relative or two-step method


Introducing fusion revenue management cloud service

Calculate & Manage Fair Market Value

Support VSOE, TPE, ESP

Establish VSOE Value


Introducing fusion revenue management cloud service

Calculate & Manage Fair Market ValueReview & Establish VSOE Values

  • Access to Bell Curve & Trend Graph and Underlying Standalone Sales


Introducing fusion revenue management cloud service

Identify ContractsAutomate identification of Multiple Element Arrangements

Identification Rules

3 Sources

Line 1: Service Contracts

Line 3: Order Management


Introducing fusion revenue management cloud service

Allocate RevenueEnsure Appropriate Allocation Treatment

FMV Ranges

Adjusted Revenue

Carved Amounts


Introducing fusion revenue management cloud service

Oracle Fusion Revenue ManagementAddressing Key Challenges for Revenue Managers

Many

Sources of Truth

  • Separate Revenue from Billing

  • Revenue document consists of line(s) from a source document and encompasses the revenue timing and amount

  • Automatically assign contingencies to defer and recognize when appropriate

  • Generate accounting entries

Centralized repository for reporting and accounting

  • Adjust Revenue

  • Revenue allocations automatically calculated, accounted and visible on the Revenue Document

  • Schedule, unschedule, add and expire contingencies when necessary

  • Manage Revenue

    • Workarea provides centralized view of revenue tasks and status

    • Central reporting platform for all revenue processing


Introducing fusion revenue management cloud service

Separate Revenue from BillingRevenue Document Captures Key Revenue Processing

New Internal Document

Source Info

Revenue Scheduling


Introducing fusion revenue management cloud service

Adjust RevenueEnsure Accurate Revenue Accounting

Document Amounts

Associated MEA

Selling Price vs. Revenue Price


Introducing fusion revenue management cloud service

Adjust RevenueProcess Revenue Adjustments in Mass

Robust Search

Multiple Actions

Full History


Introducing fusion revenue management cloud service

Manage RevenueImmediate and Actionable Access to Revenue Transactions

Take Immediate Action

Immediate Notification


Introducing fusion revenue management cloud service

Oracle Fusion Revenue ManagementAddressing Key Challenges for Revenue Managers

Pressure to Comply

  • Audit Revenue Transactions

  • Understand all actions performed both by the system as well as the user

  • Full audit trail provided when user overrides system derived calculations

Audit trails and approvals ensure accurate revenue processing

  • Approve Revenue Transactions

  • Require approvals and research to ensure appropriate compliance handling

  • Process exceptions and adjustments with full audit trail capability

  • Comply with Accounting Guidance

    • Supports complex US GAAP revenue requirements


Introducing fusion revenue management cloud service

Audit Revenue TransactionsAdjustment History Tracks all Actions Performed (MEA)

Link to Revenue Doc

Each Adjustment Tracked Separately


Introducing fusion revenue management cloud service

Audit Revenue TransactionsAdjustment History Tracks all Actions Performed (Revenue Doc)

All Actions on the Revenue Document are Displayed


Introducing fusion revenue management cloud service

Approve Revenue TransactionsProactively Manage Compliance Approvals

Fair Value Approvals

MEA Approvals


Introducing fusion revenue management cloud service

Comply with Accounting GuidanceMeet Strict Revenue Accounting Requirements

Displays how Adjustment Amounts were Calculated

Compliance Details


Program agenda3

Program Agenda

  • Business Challenges

  • Solution Footprint

  • Solution Deep Dive

  • The New Revenue Standard

  • Timelines

  • Q&A


Why they are doing revenue recognition

Why they are doing Revenue Recognition

  • Issue in both IFRS and US GAAP:

    • Although reported as a current liability, “deferred revenue” is not actually a liability, it is deferred income. It is not a debt to anybody, it something that will hit the P&L in the future

    • Solution: replace it with what truly represents a liability: something you owe the customer

      • a service or good you owe them, valued at a reasonable revenue related valuation

  • Difference between US GAAP and IFRS

    • US GAAP has too many industry models whose detailed specificity makes the revenue notion very remote from a GAA Principle; IAS 18 doesn’t have enough

    • Solution: Short statement of principle, with many examples


Applicability

Applicability

Concept Applies to Everyone

  • Industries

    • All, except Insurance and Lease vendors

  • GAAPs

    • Changes to both US GAAP and IFRS

  • Replaces

    • US GAAP (Codification): Topics 340-20, 360-20, 430, 605-15, -20, -25, -28, -30, -35, -50, 908-605, 910-605, 912-210, 912-235, 912-605, 915-605, 920-310, 920-605, 920-845, 922-430, 926-430, 926-605, 926-845, 928-430, 928-305, 932-605, 940-605, 942-605, 948-605, 952-340, 952-720, 954-340, 970-605, 976-605, 978-605 and 985-605

    • Amends many others.

    • IFRS: IAS 16


Immediate impact

Immediate Impact

  • The new Revenue standard will become US GAAP and will become IFRS: Currently CY 2014 (potentially as late as June)

    • Effective date is January 1, 2017 (based on delay – may push out)

    • Options on Retroactive Reporting


Preparing for unresolved proposed regulation such as the convergence projects

AVAILABILITY

Whatever we do will be ready on Current Releases for actual Customer Response and implementation on effective date of the Standard

Preparing for Unresolved Proposed RegulationSuch as the “Convergence” projects

  • Oracle monitors the status of the development of the regulation

    • Full time domain staff

    • Membership in professional organizations, et cetera

  • Draft Designs, Design Discussions, Strategy Level

    • Currently: Leases, Revenue Recognition, Reporting, Banking IBU

  • Discuss with Partners and Customers

    • Get the Requirements right

    • Understand customer responses to the proposals

    • Customer Advisory Boards, Strategic Councils

  • More concrete when Final standards issued

  • Final Design when General Acceptance is reached


Program agenda4

Program Agenda

  • Business Challenges

  • Solution Footprint

  • Solution Deep Dive

  • The New Revenue Standard

  • Timelines

  • Q&A


Timelines

Timelines

  • Just wrapped up Customer Hands On Validation

    • 6 Customers

    • 15 participants

  • Generally Available – CY2014

    • Early Adopter Recruiting


Introducing fusion revenue management cloud service

Fusion Revenue ManagementHands On Quotes

“Ability to drill from high level Fair Value information to the details with one click adds tremendous value for us.”

“The workarea is great. Having all the information pushed to the users for action is terrific.”

“We really liked the flexibility for Multiple Element arrangement identification.”

“We love the spreadsheet integration, this is key for us.”


Introducing fusion revenue management cloud service

Questions?


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