As a result of this year’s launch of BankON, Sierra Atlantic was recently named one of the Top 10 Technology Companies to watch by Bank Technology News.   Sierra Atlantic is among the top 10 companies featured on the cover page of the December 2010 issue of the magazine.

John Adams of Bank Technology News refers to Sierra Atlantic’s approach as “right on” when it comes to improving the linkage between corporate Enterprise Resourcing Planning (ERP) systems and bank treasury management operations.  In a recent interview with Sierra Atlantic CEO Raju Reddy, John and Raju discussed the complexities of payments processing and the need for a turnkey solution that benefits both the banks and their corporate customers. 

BankON offers a standardized integration that enables corporates to automate payables, receivables and account reconciliation activities in order to streamline operations and reduce costs.  Banks are able to reduce the time-to-connect with their corporate customers and reduce costs related to the development and ongoing support of one-off integrations.  Both banks and their corporate customers realize a very quick return on their investment. 

You can access the Bank Technology News article directly at: http://www.americanbanker.com/btn_issues/

Yes, I am back again this time keeping up my promise for a deep dive (shall I say neck deep!) into specific areas for IFRS transition. Just thought it would perhaps interest the readers (if any!) if some ‘hot’ topics laced with factors behind formulating  policies falling in ‘Accounting’ / ‘Information Systems’ (our narrow interest is Enterprise Applications!) are provided.

With the above background, let me get into ‘Segmental Reporting’ – a very common area (even without IFRS!). At the outset, it is good to note that IAS 14 deals with this subject and  AS17 – is the corresponding Indian Accounting Standard already  in force for certain companies.  Also, much to the relief of  ‘Accountants’ broadly there are no major variances between IAS14 and AS17 –  On the lighter side, feel – if one reads through the accounting standards – hardly 10% will be understood in the first few readings! (10 times taxing to first understand and xx??[God knows how many?] Times for implementation!!). However at the end, there is a larger intent to analyze financials to proactively assess if the health or intended moves of an enterprise are in the right direction adding investor value.

Now here is what IAS14 mandates – Looks pretty simple, till one has to implement!

• An entity reports information for ‘Business Segments’ and for ‘Geographical Segments’, indicating the types of products and services included in each reported business segment and the composition of each reported geographical segment. (One of these segments will be ‘Primary’ and the other ‘Secondary’)

• A set of reporting requirements – listed below for ‘Primary’ / ‘Secondary’ Segments so identified.

Already panting? Ok! Understand – here are a few breathers:

• Standard (mercifully!) applies only to entities whose shares are listed in Stock Exchange(s) or which are in the process of issuing the same for eventual listing:

• Don’t be overjoyed!! – Indian Accounting Standard is much more extensive in its coverage as it prescribes some additional class of companies or criteria for coverage (Ex. Banks and Insurance Companies, Entities having a Turnover of more than Rs. 50 Crores – (Approx. $10 Million). Borrowings in excess of Rs. 10 Crores (Approx. $2 Million), Holding / Subsidiary of any of the companies covered by AS17.

• Disclosure requirements arise only when the segment revenues earned from external customers are in excess of the prescribed threshold limit of 10% of the Total Revenue (Both internal and external).  – A minimum of 75% of the total revenue should be covered by segment reporting failing which additional segmental classification needs to be included until this limit is met!

I can already hear a few loud voices – how to identify ‘Business Segments’ or ‘Geographical Segment’ –

• IAS14 in my view lacks clarity [“The source and nature of the entity’s risks and rates of return determine whether the primary reporting format is business segments or geographical segments. This is usually identified by the entity’s internal organizational and management structure and its system of internal financial reporting to senior management.]

• AS17  provides some more guidelines for ‘Business’ classification based on Nature of Products and Services, Production Process, Type of Customers, Distribution Channels, Regulatory Environment  and for ‘Geography’ based on Similarity of Economic and Political Conditions, Relationship between Geographies, Proximity, Specific risks associated with a Region, Exchange control regulations etc.,

I am aware that this article has probably crossed reasonable limits. However, all the erudite readers will be quick to realize:

1. Aspects related to classification of ‘Business’ / ‘Geography’ segments (and possibly additional segments!), how to deal with financial elements that can’t be directly ascribed to specific segments (what kind of allocation rules etc., can be logically followed)   are all matters which are internal to any organization in which Professional Audit and Accounting Firms   are best positioned to assist in formulation of proper accounting framework for transition and then to ongoing compliance.
2. IT Service providers like Sierra Atlantic Inc., – on the other hand can consider the inputs for ongoing compliance arrived in Step 1 , evaluate gaps in the existing ‘Enterprise Applications’  configurations and come up with a sequence of steps for best possible fulfillment – i.e.:

• Upgrade to Release 12 Vs Re implement – Examine the flexible ‘Sub Ledger Accounting’ [SLA’ framework provided], other options [Ex. Multiple transaction types, Capturing mandatory additional information during transactions, organization structuring etc.]

Hopefully, readers now see the difference that I briefly dwelt upon in my first dialogue on the subject!  Before I conclude, here is another  compliance rider of IAS14  – Once a segment is reportable, in the next year even if it goes below the threshold limit it continues to be reported  and likewise if you have new reportable segment information that emerges in one year then you better provide previous year comparison as well !! – Accountants always on the receiving side! Icing on the cake, I suppose??

By for now, and hope to be back soon with insights into yet another topic.

Future generations will probably remember year 2009 for the social gaming revolution it brought about. The fact that “casual gaming on social platforms” entered the mainstream is more evident today than ever with more than 300 million people coming online everyday to play a casual game or a social gaming application. The virtual identity in “Facebook” or similar portals is some times predominant than the real “socially” life of this internet generation.

Every where around the world Facebook and its clones cater to niche audience and we see “gaming” as a mainstream medium of entertainment. In many developed nations gaming industry is already bigger than movies; for example in US the gaming industry is roughly twice the size of Hollywood. Social gaming now reduced the entry bar for the “new gamer” and every day thousands of people are joining the gaming network.

There were many significant milestones in the evolution of gaming as an entertainment medium, but “Farmville” by Zynga would probably be the defining game for its universal acceptance. With more than 55 million registered uses, out of which around 20 million users come online daily to grow their farms, this internet savvy generation which is too impatient to show off their achievements to their friends. Social games of today are an efficient mechanism to show off one’s abilities by broadcasting their wins/achievements on their social networks.

Social gaming empowered every online user to be a part of a single gaming network, and the gamer identity is now becoming an important extra curricular achievement. Hope this social gaming network would then flourish into the ideal

2010 is quickly becoming the year that this industry started to mature. Facebook is getting more involved in the monetization ecosystem, last year’s hit games are fighting for their lives, and new developers and games are climbing the leader boards. Large players are consolidating smaller studios and teams, and large media companies and traditional game developers continue to plot their social gaming strategies.

Keep watching this space for more…

After a long gap, I am once again continuing my earlier OPM upgrade blog series. Carrying on from where I left, OPM upgrade is definitely different unlike the other module upgrades in Release 12+. This is due to fact that Oracle has introduced much awaited inventory convergence in this version. Before we jump on to the inventory convergence, associated impact and some of the challenges which customer might face, I would like to share some details on the upgrade steps for an OPM customer. For OPM customers, there are some additional steps to be performed during the upgrades. Please refer oracle support website for details on OPM migration. Usually upgrades are performed through various iterations and each upgrade would have a few sub-phases, ‘pre-migration’, ‘inline migration’ and post migration’. To complete iteration these sub-phases are followed by additional functional configurations, unit and integration testing. While these iterations are in process, another team in parallel would work on re-certifying CEMLI’s to work in the new environment so that when the final system integration testing is being performed, all the pieces of an upgrade puzzle can be tied together.

Going little deeper into upgrade migration steps, there are a set of pre-determined activities which are performed, but the key lies in pre-migration steps which involve convergence migration setup and post migration steps where the transformation to new model happens. Convergence migration setup form facilitates customers to review their current setup related to companies, organizations, warehouses, items, batches and quality data. Especially in the first upgrade iteration, this phase is the most critical phase where a  high degree of collaboration happens from the customer and vendor team. Hence, we usually recommend a higher time allocation from the customer team during this phase of the project. The setups thus finalized, will determine the new model. Some of the validations which happen are inventory validations, process execution batch validations, quality validations, MAC to SLA model validations etc. Brief details on each of these validations are available in OPM migration guide.

Our experience in some of OPM upgrade cases indicates details provided in migration guide are not sufficient, for example, how the status control of OPM is handled in discrete with new on-hand material status control or how is ISO handled with upgrade, there are some challenges in handling non-inventory items with new model, dual UOM control and deviation issues affects transactions in new model, negative inventory issues in new model, why all the attributes are not migrated during upgrade. While these are some of the issues, there are many more that affect the overall upgrade activity and indirectly impact solution acceptance and user experience with new solution. In addition to this, especially in the case of OPM upgrades, the volume of data in specific functional areas affects the overall upgrade blackout time and needs detailed evaluation before any plan is finalized. This is where our deep-domain expertise in the process manufacturing vertical can help our customers.

I’ve just returned from Amsterdam, home of the Sibos 2010 conference. It was truly an exciting week: we debuted BankON™ in conjunction with a new partnership between Sierra Atlantic, Oracle, and Fundtech surrounding Seamless STP™ . This one-of-a-kind solution drew international interest from 40 banks; from South Africa to Australia – and nations in between – and emerged as one of the most successful products ever introduced at Sibos!

Stateside, we’re headed to San Antonio, Texas next for the AFP Annual Conference. Billed as ‘The Most Important Event for Treasury and Finance’, we are looking forward to exhibiting amongst the 200+ cutting-edge service providers in attendance.

Don’t forget that you can always check in on the latest BankON™ news at the Sierra Atlantic website!