Thursday, January 29, 2015

Multi Organization – An Overview

Well when we say multi organization we just take a step back and spend couple minutes to understand an organization. With respect to oracle application an organization is an entity of the business that performs a certain task. It could be a Business Group, Legal Entity, Operating Unit or Inventory Organization. Each has its own function with the business. Let me briefly describe each one of them, hope not taking too much of your time :)
Lets have a look at the hierarchy of Multi Organization structure. We will discuss each briefly.

Business Group - OAF

Business Group – Business Group is an organization which represents the top level entity of an business enterprise. The Business Group generally represent the overall/top level of company and secure employee (Human Resource) information. At this level manage the Job, Grade and Position structure. Any setup of Oracle Application must have atleast one Business Group. Depending on the business needs we may end up having multiple Business Groups, one of the major deciding factor is how the work structure is defined for each company. If its different we have to have multiple Business Groups.
Ledgers – Ledgers are the financial reporting entity within organization. It is a combination of 4 components (Chart of Account, Currency, Calendar and Sub Ledger Accounting). All the accounting entries are captured in Ledgers. In 11i its called Set of Books having 3 components (Chart of Account, Currency and Calendar).

Legal Entity – Legal entities are tax reporting entities of an organization. They are the body of the company which complies with legal norms and tax reporting for government agencies. If you have business in multiple regions where legal obligations and tax rules are different, then you need to have multiple legal entities.

Operating Unit – An Operating Unit is the transnational entity of the company where we do sales or purchase transactions. Operating Units are associated with Legal Entity. We can have multiple Operating Unit based on the business model. This also data security level with company. If there is a need to secure the transaction data two entities we should have multiple Operating Units.

Inventory Organization – Inventory organizations are physical or logical entity in the organization hierarchy which tracks the inventory transactions and transaction accounting. These is the place you manages your inventory and perform planning on it. A typical example is a plant or a distribution location.

Sub Inventories – Sub inventories are locations inside with an Inventory organization where we maintain and manage the items. This for segregation and better management. Typically we have staging / shipping sub inventory.

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