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Oracle Financials Concepts Guide
Release 12.1
Part Number E13424-03
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This chapter covers the following topics:


The Oracle E-Business Suite is a complete set of business applications that enables corporations to efficiently track detailed business transaction data and turn it into decision making information using a system built on a unified information architecture.

Oracle Financials applications are a subset of this suite and are a family of products designed to capture and analyze your financial data on a worldwide basis. Use Oracle Financials applications to better manage business to the targets that are announced to investors. Management can better report to investors and colleagues. Oracle Financials applications also help you to meet your obligations in key areas surrounding the numbers, such as:

The Oracle Financials Concepts Guide introduces you to the fundamental concepts involved in setting up and using Oracle Financials applications.


Oracle Financials Applications are part of Release 12, "The Global Business Release". We think of global both as relating to or involving the entire earth and facilitating your worldwide operations by being comprehensive and including everything you need.

Think Globally to make the right decisions

You can make more informed decisions with a global view of your customers, suppliers, partners, and financial data.

Make confident decisions based on a global view across heterogeneous systems and divisions. Many of the features discussed in this guide, for example Oracle Financial Consolidation Hub or Oracle Profitability Manager, facilitate analysis and reporting of profitability along any dimension including products, channels, segments, and individual customers.

Work Globally to be more competitive

Your business will be more competitive with better support for global work that crosses applications, companies, divisions, and regions.

Operate more efficiently with single global access. With multiple organizations access control you can process and report across multiple national operations. The new ledgers and ledger sets deliver both local compliance and a global corporate view aligned with your governance demands. Tools such as the tax engine facilitate operating centrally yet in complete compliance with local regulation.

Manage Globally to lower cost and increase performance

Release 12 makes it easier and less expensive for you to implement, manage, and scale global applications.

Reduce the cost and complexity of representing your business in the software. With tools such as the Accounting Setup Manager and Legal Entity Configurator, Oracle Financials, Release 12 easily adapts to your environment.

Key Attributes of Oracle E-Business Suite

Four key attributes characterize the Oracle E-Business Suite:

Common Data Model

In creating a suite that spans a large number of diverse modules, Oracle has taken care to ensure that the products share a "Common Data Model" in their architecture. This means that any system entity set up in one product (for example "an employee") is used, to the extent possible, by all other products that require a similar entity.

Consider customer reference data entered into an application and stored in the common data model. This customer data can subsequently be accessed by all applications and functions that use such customer data. Entry of important entities is minimized and revisions are entered only once. There is no need for any replication which is a source of inefficiency and inconsistency. With clean, complete customer data in one consolidated data model, you have a true 360 degree view of your customer for the best possible customer intelligence.

Reduced Number of Instances

Each time you consolidate databases, information increases and costs decrease.

Many customers are managing worldwide operations using our unified information architecture on a single instance of the Oracle E-Business Suite. You can consolidate and share information globally and faster. At the same time, you can eliminate duplicate data centers, hardware, and information technology costs requiring multiple databases and separate reporting infrastructures around the world. A global financial system at the lowest possible cost is now within your reach.

Integrated Applications

Oracle E-Business Suite is engineered to work together as an integrated system. You can pass information from one application to another without any incremental integration costs. While Oracle's applications are integrated, they are also modular. Based on your business needs, you can implement one module, several modules, or the entire suite.

Oracle Business Intelligence systems and the transactional systems use the same data and information. There is no passing of data, spinning the facts, or delay; your managers see the data on their personal machines as it emerges from the business front lines.

Database Integration

Oracle Database 10g Release 2 includes dimensionality support, next-generation features, and other features that are exploited by the financial applications.

The cumulative effect of having a common data model, all applications on a single instance, and the applications themselves fully integrated, is that all of your information is in one place. As a result, you receive powerful synergies such as:

Oracle Financials Applications Suite

The Oracle Financials suite of applications is comprised of the following subfamilies, organized by standard business flow, to support your firm's financial processes:

The applications support and closely match these native business flows. The key to exploiting the features implicit in the flows is, more than anything else, to understand the conceptual architecture of Oracle Financials applications.

The objective of this guide is to present those concepts to you. This guide discusses how you might:

Using this Guide

The Oracle E-Business Suite and Oracle Financials contain a great number of features. This guide discusses the conceptual architecture and therefore does not describe the features for each product. Refer to the product documentation for additional details about product features.

For existing users of Oracle Financials, we indicate where Release 12 has evolved from prior releases. Refer to the Oracle Applications Upgrade Guide: Release 11i to Release 12 and Oracle Financials and Oracle Procurement Functional Upgrade Guide: Release 11i to Release 12 for details on upgrading to Release 12. The upgrade is designed so that your earlier functionality will work as it was before the upgrade. You can take advantage of the new features at the pace that your business can accommodate.