Ebook

Modern Best Practice Explained

Nothing is more counterproductive than old processes in new technology.

Steve Cox
Group Vice President,
Cloud Business Group
[email protected]
 Introduction What was needed was a new definition of best
practice: a crayon-simple approach that used data
Third Edition on the previous generation of best practices as
historic input but factored in what could be done
After writing the sequel, I felt it was time to revisit my first book on digital
with new technologies:
business processes and include a few updates and insights after 5 years,
6,000 downloads, 200 pages on www.oracle.com and hundreds of
cloud, mobile, analytics, social, big data and the internet of things (aka
successful adoptions of our cloud suite of applications based on Oracle
the enablers). Myself and our small expert team deconstructed a number
Modern Best Practice.
of the most common and popular business processes and reassembled
them—leveraging the new enablers, removing redundancy, simplifying and
The story’s relatively simple, after attending an offsite, I had a flash of
automating wherever possible.
inspiration on an 11 hour plane journey: every definition of best practice in the
technology world was flawed. It seemed all the vendors made the same
So here we are at the end of 2019 where not only are cloud, mobile, analytics,
argument. A thousand customers did this in this way so “this way” is “best
social, big data and the internet of things commonplace, but they are joined
practice”. But at the same time, revolutionary new technologies were available
by 3 new technologies (“the accelerants”) machine learning, blockchain and
so how could processes that leveraged old technology be best?
AR/VR. The convergence of these 9 requires yet another new definition of
best practice and new *business processes.

Steve Cox, September 2019

*Surely all business processes are now digital?

Introduction Modern Best Practice Explained 2

 Foreword
Since the original publication of this eBook, and over a thousand of Our partner ecosystem has embraced Oracle Modern Best Practice extremely
downloads later, much has changed. Not the least, the creation of quickly and many of our partners have their own experts who can not only
www.oracle.com/modernbestpractice where you can find all of the articulate how modern best practice can help your organization achieve
latest definitions of Oracle Modern Best Practice to help your radically superior results but also demonstrate how quickly and affordably
business transformation. Oracle solutions based on modern best practice can be deployed.

At the time of writing, the modern best practice part of oracle.com is one of I am indebted to the team of luminaries inside Oracle that urged me to write
the fastest growing in terms of popularity with more web visits every month this book back at the end of 2013. Colleagues and ex-colleagues old and new
and one of the stickiest. without whose enthusiasm, support and insight, Oracle Modern Best Practice
would have remained just an idea.
Inside Oracle, we have developed a rich pool of expertise on Oracle Modern
Best Practice and digital transformation. Many of our team carry all of the Steve Cox, September 2019
modern best practices on their tablets along with demos and assets to show
what can be achieved with a concept that is remarkably easy to adopt.

Foreword Modern Best Practice Explained 3

 Table of contents
Chapter 1 Chapter 2 Chapter 3

What is best practice? Why adopt best practice? Oracle Modern Best Practice
page 5 page 8 page 11
A best practice is a method or technique At the time of writing, a Google search on Oracle Modern Best Practice is flexible,
that has consistently shown results superior “best practice” generates 65,700,000 results. evolves with you to support growth and
to those achieved with other means. innovation and enables new ways of
achieving radically improved performance.

Chapter 4 Chapter 5 Chapter 6

The enablers and Examples: modern best How Oracle can help your
the accelerants practice illustrated organization embrace
page 13 page 17 modern best practice
The purpose of this guide is to explain Though we could examine dashboards and page 22
in crayon-simple terms the impact these written procedures, let’s first look at Period Starting your journey to standardization is
enablers can have on your organization. Close To Financial Reports. easy, you don’t need to do everything at once.

Table of contents Modern Best Practice Explained 4

 Wikipedia: a best practice is a method or technique
that has consistently shown results superior to those
Chapter 1
achieved with other means.

Wikipedia goes on to say that best practice is used as a benchmark and, in

What is addition, it can evolve to become better as improvements are discovered.

It’s the evolution of best practice that we’re going to cover in this short

best practice? guide —Moving From Best Practice to Modern Best Practice.

Here’s where our (re)definition of best practice and Wikipedia’s diverge: in our
view best practice evolves as improvements are discovered but in addition best
practice evolves as the organization & its requirements change, and as new
technologies or enablers become available.

Best practice evolves as improvements

are discovered, as the organization
and requirements change and as new
technologies become available.”

Chapter 1: What is best practice? Modern Best Practice Explained 5

 Best Practice is frequently visualized as a business
process diagram. If you can’t describe what you are
But of course, it could be a dashboard with KPIs, an email template or a set of doing as a process, you don’t know
written standards.
what you’re doing.”
The important thing is to show how the best practice is better and why versus
the traditional approach. —W. Edwards Deming

Best practice needs to be simple to understand and easy to adopt.

Because the typical organization will have multiple business functions, our
best practice needs to cover the relevant ones. And because multiple people
are usually involved, we need to show who will be executing each component.

Having done this, our new best practice can be used to standardize our
operations i.e. the new way we do things around here … though we’ll
be careful to standardize on modern best practice that preserves both
competitive advantage and our unique identity and culture.

Chapter 1: What is best practice? Modern Best Practice Explained 6

 Let’s say we want the best way to manage requisitions
i.e. how people buy stuff.

Here’s our Requisition To Receipt process. Looks simple doesn’t it? But the
devil is in the detail and we’ll explore the detail later on.

1 Create
Sourcing Specification 2 Manage
Suppliers Responses 3 Raise
a Requisition 4 Approve
Requisition

5 Issue
a Purchase Order 6 Approve and Distribute
Purchase Order 7 Receive
Goods or Services 8 Approve
for Payment

Chapter 1: What is best practice? Modern Best Practice Explained 7

 Chapter 2 At the time of writing, a Google search on “best practice” generates
65,700,000 results spanning content from mobile phone networks, trade
association, newspapers, government agencies, consultancies, healthcare
bodies and many others. This tells us it’s a popular subject for research —but

Why adopt what’s in it for your organization?

Best practice in itself articulates how you execute to achieve consistently

best practice? superior results. Evidence abounds to show that standardizing on best
practices can deliver both top line benefits (to sales revenue) and bottom line
savings (to costs).

… it’s standardizing that matters.

Standardizing on a common set of best
practices across the organization helped
Oracle achieve $1 billion improvement in
its profit margins.1
1 Source: http://www.oracle.com/us/corporate/investor-relations/financials/q1fy01-079227.html

Chapter 2: Why adopt best practice? Modern Best Practice Explained 8

 Let’s hear how Oracle customers have benefited from
standardization on best practice.

Oracle Modern Best Practice allows us to When we brought our three companies
evaluate every business process that we together, we had three different processes.
have and be able to identify what’s the best For instance doing forecasting required three
way for us to do that to lay the foundation different tools. Having tools like ERP Cloud and
to be able to implement new and exciting EPM, have require us really to have a unified
technologies and make more informed and best practice, which helps us to gain that
data driven decisions.” 1 alignment. A huge benefit for us!”
—Kevin Jensen, CIO, Monrovia Nursery Company —Bill Roy, Senior Director, Western Digital

1 Source: Monrovia Grows with Oracle Modern Best Practice

Chapter 2: Why adopt best practice? Modern Best Practice Explained 9

 Organizations become winners
by spotting big opportunities and
inventing next practices.”
—CK Prahalad, HBR column Best Practices Get You Only So Far 1, April 2010

We agree. Though we prefer the term Modern Best Practice. Modern because
not only is it new but because it’s immediately achievable.

1 Source: http://hbr.org/2010/04/column-best-practices-get-you-only-so-far/ar/1

Chapter 2: Why adopt best practice? Modern Best Practice Explained 10

 Oracle Modern Best Practice is flexible, evolves with
you to support growth and innovation and enables
Chapter 3
new ways of achieving radically improved performance.

Originally designed to exploit new capabilities made possible by the cloud,

Oracle Modern mobile, analytics, social, the internet of things and big data, Oracle Modern
Best Practice has now updated to include new and improved processes made
possible by machine learning, blockchain and AR/VR.

Best Practice Oracle Modern Best Practice is a crayon-simple concept that enables any
organization to outpace change, to become future-ready and to achieve more,
faster and with less resources.

Oracle Modern Best Practice reflects customer needs and requirements rather
than product capabilities—however, all Oracle Modern Best Practices can be
executed with Oracle products.

Chapter 3: Oracle Modern Best Practice Modern Best Practice Explained 11

 Equally, modern best practice recognizes the need to The enablers we’ll use for our examples are:
maintain uniqueness and competitive advantage.
Cloud Computing (“The Cloud”)

Now a recognized Oracle brand, Oracle Modern Best Practice keeps pace &
Mobile
evolves with growth and changes in a fast moving market whatever the size
and complexity of your organization. It’s local and global, enabling you to
Analytics
deliver the best results across departments, borders, languages, fiscal and
physical domains.
Social

So how does your organization move from best The Internet of Things
practice to Oracle Modern Best Practice?
Big Data
Some examples of are included in the following section but the approach
is simple: AI/ML

First, we examine the existing business process, dashboard, method, policies, Blockchain
operating procedure or approach and optimize it: removing redundancies,
ensure it’s lean, checking the outcomes are as intended and that it’s relevant AR/VR
to today’s requirements.

Then we review the process against the 9 enabling technologies—‘the Examples of Oracle Modern Best Practice that include blockchain and AR/VR
enablers’ as we’ll refer to them from now on. will soon be available at oracle.com/modernbestpractice.

Chapter 3: Oracle Modern Best Practice Modern Best Practice Explained 12

 The cloud, a mobile first philosophy, intelligence
driven by analytics, the promise delivered by
pervasive social networking inside & outside the
whole organization, the benefits of the internet of
Chapter 4 things, big data, machine learning, blockchain and
augmented/virtual reality can’t be overlooked but …

The enablers and

the purpose of this brief guide isn’t to go into detail on these technologies but
to explain in crayon-simple terms the impact these enablers can have on your
organization and how they help you generate an increase in top line revenue,

the accelerants
better productivity, lowered costs and improved compliance.

On the next few pages we’ll explore each of the enablers and accelerants and
provide you with links to more information.

Key to our successful business transformation

has been to blend transformative business
process changes with next generation Oracle
cloud automation in order to stay ahead of the
ever-changing expectations of the customers
we serve.”
—Doug Kehring, Executive Vice President, Corporate Operations, Oracle

Chapter 4: The enablers and the accelerants Modern Best Practice Explained 13
 The enablers

The Cloud Mobile Analytics

The cloud enables you to purchase software A mobile-first strategy enables your How is your latest project performing? What
& IT resources as a service, shifting the organization to securely access powerful could you change to lower costs? To increase
burden of capital expenses to a flexible, pay- analytics and forecasting tools, customer & profitability? What are the latest market
as-you-go model. It resembles a utility that supplier insights, real time information on developments that could affect your business?
supplies water or power—users are able to sales opportunities, inventory, financial data, Analytics (also known as Business Intelligence)
access business applications at any time marketing campaigns and much more when & provides you with this information in the form
from multiple locations, track usage & scale where you need it. of dashboards showing your KPIs & Metrics in
capacity without large up-front costs. real time.

Chapter 4: The enablers and the accelerants Modern Best Practice Explained 14
 The enablers

Social The Internet of Things Big Data

A naturally collaborative social work The internet of things delivers significant Big data is a collection of data from
environment seamlessly connects users and opportunities to generate value from the traditional & digital sources that when
content, no matter where your people are data collected by devices & things. Examples harnessed, can transform your business. It
located or which devices they prefer to use. include smart meters to manage energy bills, includes data from your own systems plus
Social capabilities are embedded directly into remote patient monitoring to deliver high- data from devices, data streams, blogs,
modern cloud-based business processes so quality care and telemetry for car safety. social networks and more. It offers an
it’s easier to share information. opportunity to gain insight, quickly test new
ideas and change business operations.

Chapter 4: The enablers and the accelerants Modern Best Practice Explained 15
 Accelerants—the new enablers

AI/ML Blockchain Augmented and Virtual Reality

Machine learning focuses on building systems Blockchain builds a growing list of unalterable Though these two technologies are
that learn—or improve performance—based records (called blocks) that are linked together different, they are related. Augmented
on the data they consume. When we interact to form a chain that is securely distributed reality provides an interactive experience
with banks, shop online, or use social media, among participants. It allows organizations simulating the real-world which will prove
machine learning algorithms come into play that might not fully trust each other to agree particularly applicable to industries where
to make our experience efficient, smooth, and on a single, distributed source of truth. IT maintenance, repair and similar activities
secure. In this book we show the dramatic minimizes the cost and delays of using third- dominate. Virtual reality provides a
improvement machine learning can make party intermediaries for financial transactions. simulated experience that differs from the
with two aspects Recommendations and Next It also eliminates manual, error-prone real world and promises to revolutionize
Best Actions. processes, and information redundancy. training and education in particular.

Chapter 4: The enablers and the accelerants Modern Best Practice Explained 16
 Though we could examine dashboards and written procedures, for our
examples we’ll take two common business processes:

Period Close To Financial Reports

Requisition To Receipt
Chapter 5
You’ll recall Requisition To Receipt as we mentioned it in section 01 but let’s
first look at Period Close To Financial Reports. Two key metrics (or KPIs) to

Examples:
measure here are:
1. Time to close
2. FTE hours to close

modern best Close Subledgers

Monitor enterprise-wide
close status. Interact on &
Pro-Forma Close
Ledgers
Reconcile Accounts
Reconcile sub-ledgers to
general ledger,
Close Ledgers
Route close tasks to task
owners automatically.

practice illustrated
Prepare & review

> > > >

nalize outstanding preliminary nancial automatically matching Collaborate to streamline
sub-ledger transactions statements. Prioritize transactions to entries. the close for each entity.
& exceptions. outstanding transactions Monitor enterprise-wide
based on initial results. close status.

Consolidate Review and Con rm Publish and Update Financial

Subsidiaries Financial and Securely Share Forecasts
Transform each Management Financial Modify forecasts &
subsidiary’s results to the
corporate chart of
accounts. Revalue
> Reports
Review consolidated
results –using the same
> Statements
Distribute nancial
statements to all
> nancial plans in light of
the results from the
just-closed period.
non-monetary balances & reports as each subsidiary interested parties,
translate to the corporate where applicable – & enter leveraging collaboration
currency. Eliminate nal adjustments. to incorporate feedback.
intercompany activity &
minority interest.

Product Mix: ERP Cloud (Financials), EPM Cloud (Account Reconciliation,

Financial Consolidation and Close, Narrative Reporting).
Popular KPIs: time to close books, time to publish reports.
Cloud Mobile Analytics Social

Chapter 5: Examples: modern best practice illustrated Modern Best Practice Explained 17
 For our non-accounting audience, let’s illustrate this Let’s explore how this might look with Oracle Modern Best Practice:

with a story focusing on a journal entry adjustment. As each of your directs updates the system, the dashboards on your
tablet with inventory-related KPIs are flagged red. You know that’s
You’re a CFO. Your new CEO has asked for a review of all inventory on hand
an issue.
believing that much of the stock on hand will be obsolete by the end of
the financial period and ought to be revalued. You’ve sent a mails out to
You create a social conversation (or channel) for the inventory review
your team, VP for Manufacturing, the VP for Sales and the logistics team to
and add the relevant team members.
request the amount of inventory in each of your locations. After 20-30 mail
exchanges, you have a clear assessment and approve the necessary journals.
As each team member reports, they attach links to the current inventory
A year later you’re asked by the auditor to provide detail to support the journal
status with additional info.
entry adjustment.

You review the social conversation and update it with approval of the
All good. The books balance & you found the mails for the auditor.
journal entry adjustment required.

A year later, during a routine audit, you’re asked why the adjustment
was made so you add your auditor to the conversation or channel and
tag the relevant transactions.

Check out https://www.oracle.com/applications/modern-best-practice/finance/

close-to-reports.html

Chapter 5: Examples: modern best practice illustrated Modern Best Practice Explained 18
 By socially enabling Period Close To Financial Reports, executing it in the
cloud, making it accessible on mobile devices and incorporating analytics,
we achieved fast resolution with a an almost perfect audit trail. Almost all quality improvement
comes via simplification of design,
manufacturing, layout, processes,
and procedures.”
—Tom Peters

Chapter 5: Examples: modern best practice illustrated Modern Best Practice Explained 19
 For our second example, we’ll look at Requisition To
Receipt and the transformative potential of the internet
of things, analytics and mobile.

You’re again the CFO. Your purchasing process is good but you’re aware that
production is sometimes disrupted by late delivery from your suppliers.

Raise Requisitions Approve Requisitions Create Purchase

The supplier then delivers the goods or services.
> > >
Create purchase Route approval Orders
automatically or easily locate automatically based on Automate purchase order
intended goods & services de ned thresholds,
Requisitions are raised by the production team on the factory after from approved catalogs via approval hierarchies, &
creation for approved
supplier based on
consumer like UI. purchasing categories. negotiated pricing &
checking stock levels. contract terms.

Once the requisition is submitted, it’s reviewed and approved by

Approve Purchase Dispatch Purchase Receive Goods &
buyers and distributed to suppliers.

The receiver confirms the goods are as ordered.

Orders (Optional)
Route approval automatically
according to prede ned
> Orders
Automatically deliver
approved purchase orders via
> Services
Record goods received or
approve invoices for
business rules. secure electronic channels or services rendered to
supplier portal. trigger automated
The suppliers invoice is received, matched and a matching in Payables.

payment authorized.

Three key metrics (or KPIs) to measure here are:

1. Procurement operating expense as a % of total spend Product Mix: ERP Cloud (Procurement).
Popular KPIs: processing cost per purchase
2. % automated PO process order, procurement cycle time.
Cloud Mobile Analytics Social Internet
3. Average processing cost per PO of Things

Chapter 5: Examples: modern best practice illustrated Modern Best Practice Explained 20
 Our new modern best practice features sensors on each storage rack that In creating a modern best practice version of
indicate when priority items are close to the minimum safety stock levels
and leverage machine learning to deliver a set of recommendations to the
Requisition To Receipt.
team that are in line with the organizations policies and commitments to
We harnessed the internet of things, mobile, analytics and machine
customer experience.
learning to fundamentally speed up the process, remove delays caused by
manual intervention and deliver the information needed to the right people.

1 A requisition is triggered & an alert is sent to the production Opportunities exist to review every process, procedure, policy, dashboard,
supervisor’s smartphone with a visual set of recommendations report, campaign, sales approach and make improvements to leverage the
together with data on the financial implications and possible
enablers we’ve mentioned. In the next section, we’ll explore what to do next
impact(s) on customer satisfaction.
and how Oracle can help.
2 Due to the implications, the supervisor visually confirms stock
level & approves the requisition.

3 The dashboard on the supervisor’s phone now shows updated

data for stock on hand and ordered. Full value of ongoing Next-Gen-ERP
4 Workflow routes the requisition to the buyer’s tablet for approval
on his morning commute.
transformations can only be realized if the
5 A purchase order is sent via electronically to the supplier who transition is combined with re-engineering
responds immediately.
of processes/establishing the future
6 The goods are delivered, checked as usual and placed on the
storage rack which confirms that stock levels are now at the operating model.”
required level.
—“McKinsey perspective on ERP”, September 2018

Check out https://www.oracle.com/applications/modern-best-practice/

procurement/requisition-to-receipt.html.

Chapter 5: Examples: modern best practice illustrated Modern Best Practice Explained 21
 In this brief guide, we’ve explored best practice and its successor—modern
best practice.

Chapter 6 We’ve also covered in just a little detail, the enablers of Oracle Modern
Best Practice:

How Oracle
The Cloud

Mobile

can help your Analytics

organization
Social

The Internet of Things

embrace modern Big Data

best practice
AI/ML

Blockchain

AR/VR

Chapter 6: How Oracle can help your organization embrace modern best practice Modern Best Practice Explained 22
 Starting your journey to standardization is easy and the good news is, you don’t
need to do everything at once. You can take a modular approach. Addressing
your immediate business challenges with simple to adopt Oracle solutions.

We know you’ll want to know more and the Oracle sales team is ready and
waiting to assist you. Call us now Phone: +1.800.ORACLE or visit oracle.com.

Success is not just the destination;

it’s the entire journey, every bit of
it. It’s not just the outcome rather
it’s the entire process.”
—Mohsin Ali Shaukat

Chapter 6: How Oracle can help your organization embrace modern best practice Modern Best Practice Explained 23
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