As part of Quest Experience Week (QXW) 2019, Manish Somani, Senior Director of Product Development at Oracle, and David Scott, Director of Product Strategy at Oracle, presented an overview of the plans for a solution to help companies manage their joint ventures in Oracle Cloud. The pair shared an overview of the Oracle Fusion Joint Venture Management Cloud and the planned features and benefits throughout the lifecycle of a joint venture.
Overview of Oracle Fusion Joint Venture Management Cloud
The newest solution for Joint Venture Management is in the works for Oracle Cloud. This solution will empower companies to effectively manage joint ventures. It offers automation and simplification for normal tasks and unlocks your company’s fullest potential by identifying possible business opportunities and strategic alliances. Oracle’s Joint Venture Management enables joint venture partners to manage costs, revenue, distributions, and risk. As risk is a highly significant aspect for managing and operating partners, the new solution helps your company get things right the first time—as with joint operating agreements and adherence to those agreements—and to mitigate the work it takes to fix mistakes.
One of the unique aspects of Oracle Fusion Joint Venture Management Cloud its ability to manage joint ventures across a wide array of industries. The industries being studied for implementation include Oil and Gas, Engineering and Construction, Agribusiness, and Real Estate. At the initial release, the solution will focus on Oil and Gas because it is the most complex. Once the solution is working effectively, it is expected to be released for the remaining industries and more.
In short, the new solution will give the managing partner the ability to pay expenses and receive revenue. It will also allow him or her to distribute expenses and revenue to partners. Finally, it will give the partner the overall management of the joint venture.
Oracle Fusion Joint Venture Management Cloud is a Cloud offering that will transform how you manage joint ventures. To date, managing joint ventures requires frustrating overhead expenses, but the new solution aims to transform joint venture overhead to unlock business opportunities and build strategic alliances. It will help you gain trust between all partners within joint ventures.
- Shortening the financial close with automated joint venture invoicing
- Improving cash flow with accurate and audit-able partner invoicing
- Minimizing dispute resolution costs with transaction audit trail
- Making contract compliance retroactive through automated billing adjustments
The graphic below shows the overall solution map for Oracle Fusion Joint Venture Management Cloud:
Planned Features for Oracle Fusion Joint Venture Management Cloud
A few of the features planned for delivery include:
- Setup of joint ventures and partnerships (including terms and conditions for the joint operating agreement)
- Configuration of ownership percentage rules
- Automated distribution of costs and revenues (based on the setup of joint ventures including which accounts in the financial system are really distributable or billable to partners)
- Visibility of unrecovered costs and traceability of invoicing for dispute resolution
- Role-based analytics and real-time collaboration across the ecosystem
The graphic below illustrates the automation of the joint venture management process:
Oracle Fusion Joint Venture Management Cloud Use Case
Consider this use case of a Joint Venture for Permian Basic Phase IV with one managing partner and three invoicing partners:
An oil and gas company called Cal Exploration is the managing partner based in the Permian Basin. Maria, the Joint Venture Accounting Manager, is responsible for the entire portfolio of joint ventures for the managing partner.
Acme Drilling, BBT Site Services, and BAR Energy are joint venture partners. Guillermo is the Joint Venture Accountant, representing BAR Energy, and interacts with the managing partner on joint venture accounting questions and clarifications.
Managing Partner: Maria
Each month, Maria is responsible for ensuring all costs designated as billable across her enterprise for all joint ventures. The joint venture amounts should be reconciled back to original transactions, and invoices must be issued to joint venture partners. Each of these tasks must be done within the month-end close accounting process.
Maria would like to manage by exception. In order to allow this, Oracle is creating a dashboard like the one pictured below.
Maria can focus on the things that demand her attention with this dashboard. The taskbar lets her know that four items need her attention. With thousands of joint ventures for some Oracle customers, the idea of sifting through each joint venture in order to identify items that need attention is impossible. Since the system has done this for Maria, she can make the best use of her time.
The system has identified that there is $4.3M in unrecovered costs. These transactions have been identified as billable, but there is an issue. Perhaps the partner split has not been specified, or the date range isn’t right, etc. Maria can drill down from the dashboard to identify the issue. She sees that the ownership percentage has not been allocated adequately. She can make the change, and the system will automate the remainder of the calculations.
Maria can also review all of the joint ventures that she is responsible for. In the future, Maria will have the ability to filter joint ventures based on alerts, as indicated by the circles to the left of those in the image. At this level, it lets her know that she should take a closer look.
Maria can also review the summary of tasks that the system has automatically completed. This system learns over time, and Maria learns to trust the system as she sees that the processes are working correctly.
Non-Operating Partner: Guillermo
Guillermo, who works for a non-operating partner, is responsible for reviewing invoices for the current period. He needs to interact in real-time with the managing partner to receive additional information. Guillermo can sign in to the partner portal for Cal Exploration on his tablet. From this portal, he can check invoices, look at policies, view his profile, and more.
In this scenario, Guillermo taps on Invoices, which brings up the latest invoice for his company. In viewing the current invoice, Guillermo is uncertain about the net amount. He starts a chat with the Cal Exploration chatbot and determines that there are details he would like to see.
The system automatically allows Guillermo to drill down for a more detailed statement. He can look at accounts, dates, gross amounts, and partner share. He validates the details and gains confidence in his partnership. Ideal for security, all of this occurs in the portal, not within Cal Exploration’s Cloud.
As the example proves, the Joint Venture Management Cloud will empower both managing partners and non-operating partners to effectively complete their own jobs and gain trust in their partners.
Oracle Fusion Joint Venture Management Cloud is an exciting soon-to-be product offering at Oracle. It empowers all partners in a joint venture agreement. Oracle Fusion Joint Venture Management Cloud is planned to be integrated with ERP Cloud and other parts of Oracle Cloud solutions. It is important to note that JD Edwards also has Joint Venture Management for on-premise customers, but they are two completely different solutions that do not integrate.
Automation identifies and pulls in transactions billable to the partners, calculates joint venture partner share, checks the total amounts to invoice to financial amounts, and creates invoices and AR transactions when all transactions have been accounted for. This system is a help to managing partners, operation partners, and non-operating partners. It builds efficiency and trust for everyone in your company’s joint ventures.
To learn more about joint venture management in the cloud, check out the QXW 2019 session attached below.
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