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Oracle® Fusion Applications Project Management Implementation Guide
11g Release 1 (11.1.2)
Part Number E20384-02
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6 Common Applications Configuration: Define Project Organizations

This chapter contains the following:

Define Project Units and Organizations

Define Project Business Units

Define Project Units and Organizations

Setting Up Organizations for Oracle Fusion Projects: Worked Example

This example describes the creation of three organizations for use in Oracle Fusion Projects. One organization is the project unit, the second organization can own projects and tasks, and the third organization can incur project expenditures. This example also describes the selection of the organization hierarchy type that controls the hierarchies that can be assigned to business units, and the association of project units and organizations to business units.

The following table summarizes key decisions for this scenario.


Decisions to Consider

In This Example

What organizations do I want to classify as project units?

Project Operations

What organization hierarchy type is set up in Oracle Fusion Human Capital Management for Oracle Fusion applications?

HCM Organization Hierarchy Tree Structure

What organizations will own projects or tasks?

Fusion Operations

What organizations will incur project expenses?

Fusion Corporation

What project units will be associated with business units?

Project Operations

Project Manufacturing

Project Services

To set up organizations for projects, complete the following tasks:

Prerequisites

Verify that the implementation team completed the following prerequisite steps in Oracle Fusion Human Capital Management.

  1. Set up organization hierarchies, organization classifications, and organizations.
  2. Enable the Project Accounting business unit function for all project business units.

Classifying Organizations as Project Units

To create a project unit organization, either enable an existing organization as a project unit or create a new organization as a project unit in Oracle Fusion Human Capital Management. After the project unit is enabled for an organization, the project unit appears in searches on the Manage Project Units page.

  1. Click Create on the Manage Project Unit Organizations page.
  2. On the Manage Project Unit Organizations page, complete the fields, as shown in this table.

    Field

    Value

    Create new

    Selected

    Code

    PROJECT_OPS

    Name

    Project Operations


  3. Click Save and Close.

Classifying Organizations to Own Projects and Tasks or Incur Costs on a Project

In Oracle Fusion Human Capital Management, specify which organizations can own projects and tasks, and incur project expenses. If an organization can be a project and task owning organization, you also specify whether the organization allows indirect, capital, and contract projects, and associate the organization with a default project unit that is used during the project definition flow to control the list of organizations that can own the project.

  1. In the Search: Organization region of the Manage Project Organization Classifications page, enter the name Fusion Operations and click Search.
  2. In the Search Results: Organization region, select the Fusion Operations row and click Edit.
  3. In the Change All Selected region of the Edit Project Organization Classifications page, complete the fields, as shown in this table.

    Field

    Value

    Classify as Project Task Owning Organization

    Selected

    Allow indirect projects

    Note

    The Allow indirect projects option allows the organization to own projects that are used to collect and track costs for overhead activities.

    Selected

    Allow projects enabled for capitalization

    Selected

    Allow projects enabled for billing

    Selected

    Project Unit

    Project Operations


    For organizations that can own capital contract projects, select the options to allow projects enabled for capitalization and enabled for billing options.

  4. Select Save and Close, then proceed to the next step to specify a project expenditure organization.
  5. In the Search: Organization region of the Manage Project Organization Classifications page, enter the name Fusion Corporation and click Search.
  6. In the Search Results: Organization region, select the Fusion Corporation row and click Edit.
  7. In the Change All Selected region of the Edit Project Organization Classifications page, complete the field, as shown in this table.

    Field

    Value

    Classify as Project Expenditure Organization

    Selected


  8. Select Save and Close.

Selecting the Organization Hierarchy Type for Oracle Fusion Projects

Select the organization hierarchy type for use in Oracle Fusion Projects, which enables you to assign organization hierarchies, such as the project and task owning organization hierarchy and project expenditure organization hierarchy, to project business units.

  1. In Oracle Fusion Projects on the Manage Organization Hierarchies and Classifications page, go to the Organization Hierarchy Types region.
  2. Select HCM Organization Hierarchy Tree Structure as the organization hierarchy type for Oracle Fusion Projects.

    Important

    The organization hierarchy type that you select for Oracle Fusion Projects in this step must be the same organization hierarchy type that is set up in Oracle Fusion Human Capital Management for Oracle Fusion applications.

Selecting Organization Classifications that are Relevant to Projects

Oracle Fusion applications support many organization classifications, although some of the organization classifications may not be relevant to a project. Only organizations with the classifications that you select in this task are available in choice lists in areas of the application where a specific organization classification is not required, such as during set up of capitalized interest rate schedules.

  1. In Oracle Fusion Projects on the Manage Organization Hierarchies and Classifications page, go to the Organization Classifications region.
  2. In the Available column, select the organizations that are relevant to projects, as shown in this table.

    Field

    Value

    Available

    Asset Organization

    Business Unit

    Partner Organization

    Project Expenditure Organization

    Project Manufacturing Organization

    Project Task Owning Organization

    Project Unit Classification


  3. Click the right arrow to move the selected items to the Selected column.

    To select multiple organizations, hold down the control key as you select the desired organizations, then click the right arrow.

Selecting Organization Hierarchies for the Business Unit

Associate project and task owning organizations to the business unit to restrict the project owning organizations in the project creation flow. Associate project expenditure organizations to the business unit to restrict which organizations can incur costs on the project. Specify an entire organization hierarchy to associate with the business unit by selecting the top node on the tree, rather than individually associating organizations with the business unit. Specify part of an organization hierarchy by selecting an organization at any level of the hierarchy as the starting node on the tree. Oracle Fusion Projects associates all organizations in the hierarchy from the starting node down with the business unit.

Note

The following conditions are required for an organization to be eligible to be a project and task owning organization:

The following conditions are required for an organization to be eligible to be a project expenditure organization:

  1. In Oracle Fusion Projects on the BU Implementation Options page, select the Vision Corporation Enterprise business unit and click Go.
  2. On the Configure Project Accounting Business Function page, Project Setup tab, Project Task Owning Organization region, complete the fields, as shown in this table.

    Field

    Value

    Tree Name

    Corporate Tree Structure

    Tree Version Name

    Corporate Tree Structure Version 1

    Organization

    Project Operations


  3. Select the Expenditures tab.
  4. In the Project Expenditure Organization region, complete the fields, as shown in this table.

    Field

    Value

    Tree Name

    Corporate Tree Structure

    Tree Version Name

    Corporate Tree Structure Version 1

    Organization

    Corporate Operations


  5. Click Save and Close.

Associating Project Units with Business Units

  1. In Oracle Fusion Projects on the BU Implementation Options page, select the Vision Corporation Enterprise business unit and click Go.
  2. On the Configure Project Accounting Business Function page, select the Project Units tab.
  3. In the Available Project Units column, select the project units to associate with this business unit, as shown in this table.

    Field

    Value

    Available Project Units

    Project Services

    Project Manufacturing

    Project Operations


  4. Click the right arrow to move the selected items to the Selected Project Units column.
  5. Click Save and Close.

Project Unit Components: How They Work Together

Project units are operational subsets of an enterprise that conduct business operations using projects and need to enforce consistent project planning, management, analysis, and reporting. Project units often represent lines of business, such as Consulting Services, Sales, and Research and Development. You must set up at least one project unit to use in Oracle Fusion Projects.

You can maintain independent setup data for each project unit while sharing a single approach to financial management across all project units. The following diagram shows two project units that share a common approach to financial management and data. Each project unit maintains separate reference data for managing projects.

This diagram illustrates project units
that share a business unit.

General Properties

General property options include the default reference data set to be used for any new reference data object associated with the project unit. You can override the default set for each reference data object. The method of project number creation, either manual or automatic, and daily or weekly full time equivalent hours for reporting purposes, are also included in general properties.

Set Assignments

You assign sets to project units to determine how reference data is shared across different lines of business in a company. A project unit is a set determinant for the following objects.

Set assignment configuration includes the following options for each project unit.

Related Business Units

You associate business units with a project unit to identify the business units that are accountable for financial transactions of projects in each project unit. You can change the project unit and business unit association if the combination has not been used on a project or project template. If a business unit is not associated with any project unit, then the business unit is valid for all project units.

Reporting Setup

Project performance reporting configuration includes the following options for each project unit.

Associating Sets with Financial Plan Types: Example

You associate sets with financial or project plan types so that project managers can use them to create financial plans (budget or forecast versions) or project plans for projects or project templates. Financial or project plan types are available for selection only when projects or project templates are created for project units linked to selected sets.

The following example illustrates the relationship between financial plan types, sets, and project units. Project plan types share an identical relationship with sets and project units.

Scenario

An organization has two designated project units for project creation: Project Unit 1 and Project Unit 2. Project Unit 1 is associated with Set 1 and Project Unit 2 is associated with Set 2.

During implementation, two financial plan types were created: Financial Plan Type A and Financial Plan Type B. Financial Plan Type A is associated with Set 1. However, Financial Plan Type B is associated with both Set 1 and Set 2.

In such a case, project managers working on projects for Project Unit 1 can use only Financial Plan Type A to create financial plan versions. Project managers working on projects for Project Unit 2 can use both Financial Plan Type A and Financial Plan Type B.

The following diagram further illustrates the relationship between financial plan types, sets, and projects. Project plan types share the same relationship with sets.

This image describes how associating
sets with financial plan types enables project managers to use the
financial plan type for creating budget or forecast version on projects.

Using Multiple Project and Business Units: Examples

A project unit defines a set of rules and options for creating and managing the nonfinancial aspects of projects, such as project definition, scheduling, and reporting. You can define one or more project units based on how granular you want to separate processing options, reference data, security, and other controls. The list of project units can be different and independent from the list of business units that perform your enterprise financials functions, such as payables and receivables.

Following are two examples of associating project units and business units.

Single Project Unit with Multiple Business Units

A consulting company has offices in the US, Canada, and Mexico. Each location uses local purchasing and payables practices. The company uses projects to track time and expenses for billing through contracts.

This diagram illustrates an example
of single project unit that is associated with multiple business units.

Multiple Project Units with Multiple Business Units

A products and services company has main offices in the US and a warehouse and sales office in Canada. Due to operations in two different countries, the company partitions financial data by using two business units. The research processes are the same in both countries, so a single project unit facilitates common project management practices. The company has an information technology (IT) services project unit that is associated with US business unit, and a sales and consulting project unit that is associated with both the US and Canadian business units. The consulting line of business uses projects to manage consulting engagements and provide billing details to contracts. The internal real estate line of business uses projects to manage the US and Canada facilities, including new construction and repairs.

This diagram illustrates an example
of multiple project units that are associated with multiple business
units.

Performance Data Summarization: How It Is Calculated

Summarization is a systematic organization of information for purposes of project analysis and tracking. You use summarized data to analyze the health of projects and drill down to the causes of any deviation from set thresholds. You can complete the following tasks using summarized data:

After you run summarization, the KPI related information is rendered out of date with respect to the latest summarized information. Therefore, it is important that you generate KPI values once the summarization process is completed. You can avoid generating KPI values manually, by enabling automatic generation of KPI values in the summarization options.

Settings That Affect Performance Data Summarization

You summarize data for a project unit or a business unit. You can also summarize performance data for a range of projects or projects owned by a project manager. Besides this, you must specify the following parameters each time you want to run the summarization process manually:

How Performance Data Summarization Is Calculated

Performance data summarization collects data from various sources and assigns amounts to relevant tasks and resources in the project. After data is summarized, you can view how much is being spent on, incurred by, or received by a task or resource. Also, data is grouped according to periods so that it can be tracked across different time lines.

You can run the summarization process for different situations, such as:

After you select the parameters for summarization and submit a request, the application performs the following steps to generate the data that you view in the application:

You can track the progress of summarization on the process monitor. If the process fails to complete, it continues from the point of failure when you resubmit it.

FAQs for Define Project Units and Organizations

What happens if I change the organization hierarchy type that is available for project applications?

Changing the organization hierarchy type impacts existing transactions that use the hierarchy. Hierarchies that are specified for the business unit are invalidated, which invalidates the values selected for the project and task owning organization and project expenditure organization for the business unit.

The action also affects cross-charge transactions and capitalization transactions because the available hierarchies in these areas are based on the hierarchies specified for the business unit.

Important

The organization hierarchy type used in Oracle Fusion Projects must be the same organization hierarchy type that is set up in Oracle Fusion Global Human Resources for Oracle Fusion applications.

What happens if I remove organization classifications from the list of selected classifications that are available for project applications?

The organization classifications no longer appear in the list of organization values that are available for selection in the application.

Selected organization classifications on the Manage Organization Hierarchies and Classifications page are available for selection in areas of the application where a specific organization classification is not required, such as setting up capitalized interest rate schedules, burden schedules, and transfer price schedules.

What happens to project and task owning organizations and project expenditure organizations if human resource organizations are reorganized?

The business unit implementation options for project and task owning organizations and project expenditure organizations may become invalid. A project and task owning organization must belong to the organization hierarchy that is assigned to the business unit, be classified as a project and task owning organization, and be active on the system date. Similar criteria apply to project expenditure organizations.

If any of these conditions change as a result of the reorganization, then you may need to modify the organization hierarchy used for Oracle Fusion Projects, project organization classifications, and project business unit options. Depending on the new structure, you may also need to run the Change Project and Task Organizations process and Denormalize Organization Hierarchies process.

What's a project expenditure organization?

A project expenditure organization is one that can incur expenditures and hold financial plans for projects. For an organization to be eligible to be a project expenditure organization you must assign the organization the Project Expenditure Organization classification, and the organization must be assigned to the hierarchy that you specify in the project implementation options for the business unit.

What's a project and task owning organization?

Every project is owned by an organization that is used for reporting, security, and accounting. An organization can own specific types of projects, such as indirect projects, capital projects, billable projects, and capital contract projects. On a contract project, the project owning organization can also be used in the accounting rules to determine which general ledger cost center will receive credit for the revenue. Assign project and task owning organizations to project units to specify which organizations are available to own the project.

What's the difference between organizations and organization hierarchies?

Organizations are departments, sections, divisions, companies, or other organizational units in your enterprise. You can gather collections of organizations into organization hierarchies.

Organization hierarchies help you manage expenditure and reporting data, and coordinate the project-owning organizations in your enterprise.

During implementation, you select the organization hierarchy type for use in Oracle Fusion Projects, either the department hierarchy tree structure or the generic organization hierarchy tree structure. Then you assign hierarchies to the project implementation options for each business unit used in Oracle Fusion Projects.

Important

The organization hierarchy type used in Oracle Fusion Projects must be the same organization hierarchy type that is set up in Oracle Fusion Global Human Resources for Oracle Fusion applications.

What's the difference between manual and automatic methods of numbering projects?

The manual method of project numbering requires you to enter a unique alphanumeric project number each time you create a project.

The automatic method of project numbering requires that you set up the first project number during project unit configuration, and then the application automatically assigns an incremental project number at project creation.

What's the difference between the project unit organization code and name?

Typically the project unit name is logical, descriptive, and easily recognizable.

The code is a unique short name that is used internally.

Both the project unit organization code and name are used to identify the project unit.

Can I specify the budgets and forecasts to include in summarization?

Certain financial plan types are included in summarization by default, while you must manually select others. Approved forecast and baseline budget versions of the following financial plan types are automatically included in summarization of project performance data:

Apart from the default financial plan types, you can include up to four others in summarization of project performance data.

What happens when I select a planning amount allocation basis for the project unit?

The Period Start Date option allocates amounts based on the period start date. The Period End Date option allocates amounts based on the period end date. The Daily Proration option spreads plan amounts evenly across the plan duration.

Define Project Business Units

Business Units: Explained

A business unit is a unit of an enterprise that performs one or many business functions that can be rolled up in a management hierarchy. A business unit can process transactions on behalf of many legal entities. Normally, it will have a manager, strategic objectives, a level of autonomy, and responsibility for its profit and loss. Roll business units up into divisions if you structure your chart of accounts with this type of hierarchy. In Oracle Fusion Applications, you assign your business units to one primary ledger. For example, if a business unit is processing payables invoices they will need to post to a particular ledger. This assignment is mandatory for your business units with business functions that produce financial transactions.

In Oracle Fusion Applications, use business unit as a securing mechanism for transactions. For example, if you run your export business separately from your domestic sales business, secure the export business data to prevent access by the domestic sales employees. To accomplish this security, set up the export business and domestic sales business as two separate business units.

The Oracle Fusion Applications business unit model:

Business units process transactions using reference data sets that reflect your business rules and policies and can differ from country to country. With Oracle Fusion Application functionality, you can choose to share reference data, such as payment terms and transaction types, across business units, or you can choose to have each business unit manage its own set depending on the level at which you wish to enforce common policies.

In countries where gapless and chronological sequencing of documents is required for subledger transactions, define your business units in alignment with your ledger definition, because the uniqueness of sequencing is only ensured within a ledger. In these cases, define a single ledger and assign one legal entity and business unit.

In summary, use business units in the following ways:

Brief Overview of Business Unit Security

Business units are used by a number of Oracle Fusion Applications to implement data security. You assign data roles to your users to give them access to data in business units and permit them to perform specific functions on this data. When a business function is enabled for a business unit, the application can trigger the creation of data roles for this business unit base on the business function's related job roles.

For example, if a payables invoicing business function is enabled, then it is clear that there are employees in this business unit that perform the function of payables invoicing, and need access to the payables invoicing functionality. Therefore, based on the correspondence between the business function and the job roles, appropriate data roles are generated automatically. Use Human Capital Management (HCM) security profiles to administer security for employees in business units.

Business Units: How They Work with Projects

Business units are subsets of an enterprise that perform one or more business functions and can be consolidated in both a managerial and legal hierarchy. Project accounting is an example of a business function that is set up by business unit. Other examples are billing and revenue management, customer contract management, and payables invoicing.

Business units are defined centrally. During implementation, you must enable the Project Accounting business unit for use with Oracle Fusion Projects.

You can partition financial data using business units while sharing a single approach to project management across all business units. The following diagram shows two business units, one from the United Kingdom (UK) and one from the United States (US). These business units have the same research and development processes, so a single project unit is used by both business units to facilitate common project management practices.

This diagram illustrates business units
that are associated with the same project unit.

Project Setup

Following are project setup options for each business unit that you enable for use with Oracle Fusion Projects.

Project Expenditure

Following are business unit project expenditure implementation options.

Project Costing

Following are business unit project costing implementation options.

Project Units

Project units are associated with business units to restrict the business units that can handle project transactions. When a project unit is not associated with a business unit, any business unit in your enterprise can process project transactions.

Cross-Charge Transactions

Following are business unit cross-charge transaction implementation options.

Customer Contract Management

You can configure customer contract management business function properties, such as currency conversion, cross-charge transaction, and billing options, for each contract business unit.

Reference Data Sharing

Assign sets to business units to determine how reference data is shared across applications. A business unit is a set determinant for the following objects:

Maintaining Accounting Periods and Project Accounting Periods: Critical Choices

During business unit implementation you determine whether to maintain common accounting and project accounting periods, or define project accounting periods that have a different frequency than the accounting periods.

Accounting periods are used by Oracle Fusion Projects to assign accounting periods and dates to transactions. Accounting periods are maintained by ledger and use the same calendar as the general ledger periods. Project accounting periods are used by Oracle Fusion Projects for project planning, costing, billing, budgeting, forecasting, and performance reporting. Project accounting periods are maintained by business unit and typically do not use the same calendar as the accounting and general ledger periods.

Maintaining Common Accounting and Project Accounting Periods

If you want to report project information with the same frequency as the accounting periods, you can use the accounting period as both the accounting and project accounting period.

When you maintain common accounting and project accounting periods, period maintenance is simplified, calendar periods are not copied to Oracle Fusion Projects, and period information is maintained in one physical location. Use Oracle Fusion General Ledger to maintain accounting period statuses and run the processes to open and close accounting periods.

Defining Project Accounting Periods that are Different from Accounting Periods

If you want to account for project transactions and report project information more frequently than the accounting periods allow, you can define project accounting periods that are shorter than the accounting periods. For example, you can define weekly project accounting periods and monthly accounting periods, as shown in the following diagram.

Diagram showing project accounting
periods that are different than accounting periods

Use Oracle Fusion General Ledger to maintain accounting period statuses and run the processes to open and close accounting periods, and Oracle Fusion Projects to maintain project accounting period statuses and run the processes to open and close project accounting periods.

FAQs for Define Project Business Units

How can I set up common accounting and project accounting periods?

Complete these tasks to set up common accounting periods and project accounting periods.

How can I set up project accounting periods that are different from accounting periods?

Complete these tasks to set up project accounting periods that are different from accounting periods.

What's the difference between a project accounting period, an accounting period, and a general ledger period?

Project accounting periods are used to track budgets and forecasts, summarize project amounts for reporting, and track project status. Project accounting periods are maintained by business unit. You can set up project accounting periods to track project periods on a more frequent basis than accounting periods. For example, you can define weekly project accounting periods and monthly accounting periods. If you use the same calendar as your accounting periods, the project accounting periods and accounting periods will be the same, although the statuses are maintained independently.

Accounting periods, which are used to derive accounting dates, are maintained by ledger and use the same calendar as the general ledger periods. Period statuses for the accounting period and general ledger period are maintained independently.

Note

You can select an option on the business unit definition to maintain common accounting and project accounting periods. This option allows the accounting period to be used as the project accounting period so you need to maintain only one period status.

What happens if I close an accounting or project accounting period permanently?

You cannot enter any transactions in the period you have closed and you can adjust transactions in subsequent periods.