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Multi-org Security model

The organization models in Oracle Applications define organizations, their relationships, and the transactional flow among organizational structures. With the multi-org security model, you can customize Oracle Applications according to your business needs. In this topic, you learn about features of multi-org security model.

In the multi-org security model, each user within the organization is assigned responsibilities. These responsibilities are in turn attached to operating units (OUs) or inventory organizations. In this security model, the responsibility is the key because different responsibilities have distinct ways of securing the data contained in them.
For example, within general ledger (GL), data security is provided by the GL set of books (SOB). Additionally, each asset can be secured by setting up a hierarchy of asset books within an asset. Similarly, within manufacturing  applications and INV,  security is provided by inventory organizations (IOs) and for Fixed Assets (FA), security is provided by Corp Book.
The security for data Human Resource (HR) is implemented by the Business Group (BG). Similarly, data security for order management (OM), Accounts Receivable (AR), Account Payable (AP), Purchase Order (PO), Cash Management (CE), Project Accounting (PA), and Sales Compensation (SC) is provided by OU.

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Inter Company

More and more companies are doing business globally, and taking advantage of the operations and tax benefits that can be achieved by running operations throughout the world. These companies have multiple operating units and organizations around the world. When goods are shipped or received, the financial ownership through these organizations does not necessarily follow the physical movement of goods. Oracle Applications support three main logistics needs of global organizations – Central Distribution, Central Procurement and Drop Ship.
  • Central Procurement (P2P)
  • Central Distribution (IR ISO)
  • Drop Ship
    1.  External (O2C)
     2. Internal (O2C)
A corporation manages its global operations in various countries through a network of subsidiaries, separate legal entities, licensees and several associated label franchisee. This complex network of operations is necessitated to take care of local legal and fiscal environment, which prevail in each of those countries.
Consider the below example:
Vision Operations (V1) is based in USA. It has a 100 % owned subsidiary company called Vision Asia (VA). VA in turn has two subsidiaries – Vision Japan (VJ) and Vision China (VC). VJ has manufacturing facilities in Osaka (O1) and distribution center at Tokyo (T1). Due to tax advantages, V1 sources all the goods from china through VJ. Though the financial transactions between V1 and VC are routed through VJ, logistic movement of goods takes place directly between V1 and VC.
Continuing the above example, Vision Operations (V1) has another subsidiary company called Vision Singapore (VS), 100 % that it owns. Individual plants procure components from their own suppliers. VS centralizes all the commodity (like steel, Aluminum etc.,) procurement needs of Vision Operations across Overview of Intercompany Invoicing 1 world and procures the material on behalf of all VJ and its subsidiary plants and places purchase orders on its suppliers. However, material is directly shipped from the suppliers to all the manufacturing plants.

Fig1
A key requirement for the global implementation of Oracle applications in such a complex business environment is the ability to process “intercompany transactions,” where one business unit (across OUs)invoices another for transfer of goods and services. Often these intercompany transactions involve transactions related to general expenses, funds transfer, salary transfers, asset transfers, royalty payments and product transfers.
For example, the organization structure depicted in figure 1 can be modeled in Oracle applications as depicted in Figure 2.

Following are the key implementation points you need to look into:
  • Understand the corporation business entities and the relationship between them. Identify selling-shipping relationships and procuring-receiving relationships.
  • Understand Oracle multi org structure and the building blocks in data structure.
  • Breakup the business relationships into manageable process flow and map it to various entities in Oracle applications.
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HRMS with Oracle Financials R12

The organization information used in HR is as follows
1. Business Group
2. HR Organization
The HR organization classification used in oracle financials applications are as follows
1. GRE/Legal Entity
2. Operating unit
3. Company Cost Center(Used in financials DBI)
4. Auditable Unit(Used in ICM module)
5. Assets Organization (Used in Financial Payables : Assets)
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Define Set of books in R12

To define Business group, LE, OU, Organization, HR Organization etc check out below link
http://oracleerpappsguide.blogspot.com/2012/01/organization-in-r12.html
SOB is a sepcial organization in multi-org model. Its a financial entity that shares a particular hart of account, finctional currency and finncial accounting calendar. A General Ledger (GL) secures transaction information bu SOB.
An SOB is the highest level that affects the accounting aspects of business. One BG can be associated with multiple SOBs, but one SOB can be associated with only one BG. Each SOB has 3Cs.
 

 
When you use GL, you need to choose a responsibility that specifies a particular SOB(with the profile – GL SET OF BOOKS NAME). This allows you to get information fo that SOB only. In Oracle applications, you can create an SOB using the set of books window in GL. In the set of books window, you can define all other types of organization using the organization window.
With the multi-Org enhancements, multiple SOBs can use the same global item master organization. This is because the item master organization is used for item definition and not for item accounting information. All accouting-related attributes in the item master are controlled at the item level or organization level.
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Balancing Entity in R12

A balancing entity is one for which you prepare a balance sheet as a balancing segment value in the Accounting Flexfield structure. In any OU, you can have multiple balancing entities and each of these must balance within itself.
In oracle applications, all intercompany entries are automatically created within the SOB to ensure that companies are never out of balance. A legal entity can have one or more than one balancing segments. For example, you may have multiple companies defined in your COA reporting to a single legal entity.
How to decide Legal Entities and OUs
There two things one should consider while creating legal entities
1. The number of fisical and tax report the organization has to produces – for each distinct values we should create one legal entity.
2. The number of entities for which the company produce balance sheet – for each distinct values we should create one legal entity.
An operating unit a is a fincial entity in a business group that engages in transactions with outsiders and for which you want to track the finalcial transactions.
OU deals with 5 subledgers – OM, AR, PO, AP and GL
Security and Subledgers decides how many operating units one should create in a business group.
Each company defined in your COA may have multiple divisions which you produc balance sheets. In that case, it is likely that each company in the COA is setup as a legal entity and each division is setup as an OU.
 
Securing values
Oracle Applications does not automatically secure balancing segment values within your COA with specific legal entities or OU. You can create security rules to ensure this security requirement. For example, you can ensure that the payables team may access invoices of a specific division. If security rules are not defiend, access to all divisions will be available.
 
To explain different balancing entities, assume that there is one GL SOB, balancing segment value is the company segment, and that there are three companies 10, 20 and 30. You should ensure that OUs are associated with responsibilities, and each responsibility is associated with one and only one OU. In the case the company 10 is a legal entity in which two divisions Div1 and Div2 are defined as OUs. You can create a security rule to ensure that when users log in with a particular responsibility, they should only be able to enter transactions with compnay 10, and the users from company 20 and copnmany 30 should not be allowed.
 
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