Oracle Rollout Project (Mexico)

Inv. Organization Vs Legal Entity

Feb 4th, 2014
Agenda
 Background
 Options
 Pros and Cons
 Q&A
 Next Steps

CONFIDENTIAL 2
Background
• NGP/AI 2-Yr Contract in place.
• NGP must incorporate in Mexico after 4 years.
• AI Dependencies and Flexibility.

CONFIDENTIAL 3
Option A – Inventory Org Setup
• Create a new Inventory Org. under US Operating Unit.

• Described internally as “Monterrey, WI” which means MTY plant

would be just another organization under the US structure.

• Create a new value in the DIVISION segment in the COA.

• Back Office functions to work pretty much the same as they do to day.

• Relatively simple to setup as most Operating-Unit related setups are

already in place.

• Light increase on maintenance (Accounting Combinations, Alias,

Security Rules, etc.)

CONFIDENTIAL 4
Option A – Inventory Org Setup

Nelson Global
Products BG

US Operations PL

US Operating Unit

US WI-Black River MTY WI-

US WI-Arcadia US WI-Baraboo US WI-Viroqua
Falls Monterrey

CONFIDENTIAL 5
Option B – New Legal Entity Setup
• Create a new Legal Entity and one Inv. Organzation underneath.

• New Ledger currency to be MXP with a Subledger in USD for

consolidation purposes.

• Back Office functions to work pretty much the same as they do to day.

• More maintenance (Consolidation Mapping, Close Periods in another

Calendar, Tax Rates, Local Taxes, etc.)

• More Flexibility to operate completely independent (India example).

• Better prepared to comply with Mexican Regulations and future

changes (Payroll, Tax Law, etc.)

CONFIDENTIAL 6
Option B – New Legal Entity Setup

Nelson Global
Products BG
US Operations
MX Operations
PL
PL

MX Operations SL
US Operating Unit
USD MX Operating Unit

US WI-Black River
US WI-Arcadia US WI-Baraboo US WI-Viroqua MX MTY-Monterrey
Falls

CONFIDENTIAL 7
Option A
Pros Cons
• Easier/Faster to setup initially • Not appropriate if MTY becomes a legal
entity down the road.
• USD currency • Need for redoing setups and transferring
setups and data to a new Legal Entity later.

• Back office functions to remain the • US based regulations, no flexibility if

same different from Mexican regulations
• Procurement

CONFIDENTIAL 8
Option B
Pros Cons
• Would have a solid setup, if MTY Configuration time increases.
becomes a Legal Entity.
• Back office functions to remain the More ledgers must be closed and consolidated.
same
• Maintain Data Security by
Operating Unit

• Satisfy Regulatory Mexican

requirements

CONFIDENTIAL 9
Octane Recommendation

CONFIDENTIAL 10
Q&A

CONFIDENTIAL 11
Next Steps

CONFIDENTIAL 12