Project to Cash Enterprise - need for Order Management

One of my clients was implementing Oracle Ebusiness Suite 12.1.3 and was in construction business. The proposed foot print was to implement the Project to Cash suite of applications. But they were confused whether to implement Oracle Order Management or not.

For Project to Cash enterprises the key design decisions which need to be considered are presented below:

EBS Order Management key features and benefits for Project to Cash enterprises:

• Order references one or more lines, and each line is for a specific Inventory Item. Ship To can be defined at the line level
• Each order line is associated with Pricing through Price List
• Out of the box integration with AR for billing and revenue
• Integrates with Revenue Management functions in AR for deferred revenue and earned revenue accounting based on revenue contingencies and events (for example revenue to be earned only when customer pays in full)
• Native integration with Inventory for shipping and Cost of Goods Sold
• Full integration with Bill of Material and Configurator whereby by selecting a Model (product group for example), system will configure its components and explode each item into the Order Line
• Integration with WIP Manufacturing application to create Work Order for the SO Line and capture Material & Labor costs to the Work Order (based on Bill of Material)
• Native integration with Project Manufacturing for cost collection from Manufacturing (Labor and Material) into Project costing
• Integration with Service Contracts, Installed Base for selling services
• Connects with Credit Management for credit profiling, credit limits, etc

EBS Order Management key constraints for Project to Cash enterprises:

• Doesn’t have the capability to do milestone/progressive billing
• Application assumes that the billing has to be for the full amount of the line value upon shipment. Hence cannot model install job billing requirements.
• Significant work done so far for developing POC revenue cannot be ported to revenue management model and need to be developed from scratch
• Cannot leverage POC revenue work done so far for building completed contracts based revenue in revenue management model
• Forces the use of Bill of Material (BOM) and Work in Process (WIP) applications for being able to associate Labor and Material costs to the Work Order and booking the Cost of Goods Sold upon shipment. Overkill and complex for Project to Cash Enterprise business needs
• Doesn’t integrate with Project Costing and billing
• Projects integration requires implementing Project Manufacturing. Project Manufacturing needs to be turned on and configured for associating the project and task with OM Line for Manufacturing cost collection.