Shared Service Center Model in Oracle Cloud Payables

Shared Service Center Model in Oracle Cloud Payables

Jun 2020

Madhavi Godbole

Introduction of Shared Service Center in Cloud:

There are many functional areas where shared service center model can be implemented like procurement, disbursement, collections, order management, and human resources but we will restrict this discussion to Payables Cloud only. Usually business go for Shared Service Center model for couple of reasons-

• Control Costs and improve overall efficiency and redundancy
• Increase the Business Process Efficiency
• Centralized Payments
• One Business Unit servicing another Business Unit
• Establish the right balance of centralized and decentralized functions, improving decision making.
• Automate self-service processes, reducing administrative costs.
• Permit business units to concentrate on their core competencies, improving overall corporate profits.

            This diagram is taken from Oracle Cloud Guide explaining different scenarios

Overview of Shared Service Center in Cloud:

Oracle Fusion applications supports shared service centers in two ways. 

1. With business unit security-This option allows shared service centers personnel to process transactions for other business units called clients.
2. Second, the service provider model expands on this capability to allow a business unit and its personnel in a shared service center to work on transactions of the client business units. It is possible to view the clients of a service provider business unit, and to view service providers of a client business unit.

Earlier an invoice of one business unit cannot be paid by a payment from another business unit but now in shared service center environment, processes allows one business unit to perform services for others, such as paying an invoice, are allowed and completed with the appropriate intercompany accounting. 

Shared service centers help to view and process the data of different business units and can comply with different local requirements.

Implementation Considerations:

In order to achieve this functionality, you need to perform three steps mentioned below-

1. Identify and set up your Business Unit first and choose business function in that Business Unit you want to perform by enabling and disabling different functions.
2. Then you will go to configure manage service provider relationship to establish other business function for Business Unit like PO or invoicing function, basically here you identify your shared service center Business Unit.
3. Associate supplier to Business Unit since supplier record is global.

Overview of Service Provider Model

The service provider model centralizes the following business functions:

• Procurement

• Services business units that enable the Requisitioning business function.
• Processes requisitions and negotiates supplier terms for client business units.

• Payables Payments
  • Services business units that enable the Payables Invoicing business function.
  • Processes payments for client business units.
• Customer Payments
  • Services business units that enable the Billing and Revenue Management business function.
  • Processes payments for the transactions of client business units assigned the Billing and Revenue Management business function.