Subject: Unify AR -- SAP Plans
From: [email-masked]
To: [email-masked], [email-masked]
Cc: [email-masked]
Date: Tue, 29 Feb 2000 09:29:00 -0800 (PST)

For your information, our business SAP group and IT members persuaded our 
Unify users to use SAP AR rather than continuing to use Unify AR.  This is a 
change of the decision that was made two year ago.  However, since all other 
Enron companies will be using SAP AR, there is a definite benefit in using 
the same system across Enron entities to simplify intercompany reconciliation 
and related SAP interfaces (i.e. cash application, netting, deposit load).   
Even though many Unify users did not want to give up Unify AR functionalities 
(since Unify has more flexibility),  we felt that it will be to everyone's 
benefit to have the entire company's AR in the same system.   Please see 
attached table for details.  Thank you.

   
	Enron North America Corp.
	
	From:  Stephen P Schwarz                           02/29/2000 03:13 PM

To: Sally Beck/HOU/ECT@ECT, Inja Chun/HOU/ECT@ECT, Pamela 
Lebrane/Corp/Enron@ENRON, Melissa White/HOU/ECT@ECT, Leslie 
Reeves/HOU/ECT@ECT, Susan Harrison/HOU/ECT@ECT, Brenda F Herod/HOU/ECT@ECT, 
Bryce Baxter/HOU/ECT@ECT, Lisa Csikos/HOU/ECT@ECT, Rita Wynne/HOU/ECT@ECT, 
Bob Klein/HOU/ECT@ECT, Evelyn Aucoin/HOU/ECT@ECT, Cynthia 
Morrow/Corp/Enron@ENRON, Regan M Smith/HOU/ECT@ECT, Kenneth M 
Harmon/HOU/ECT@ECT, Brent A Price/HOU/ECT@ECT
cc:  
Subject: Unify AR -- SAP Plans

The attached memo details our proposal of a week ago to use SAP AR rather 
than Unify AR.  As of this morning, we finalized our decision to use the SAP 
AR system and to turn off Unify AR when SAP is implemented.  Please direct 
any questions to myself at X33179 or Melissa White at X35704.

Please feel free to forward this memo to anyone I may have forgotten who is 
interested.

Stephen
---------------------- Forwarded by Stephen P Schwarz/HOU/ECT on 02/29/2000 
01:15 PM ---------------------------
   
	Enron North America Corp.
	
	From:  Stephen P Schwarz                           02/18/2000 04:17 PM

To: Bryce Baxter/HOU/ECT@ECT, Lisa Csikos/HOU/ECT@ECT, Rita 
Wynne/HOU/ECT@ECT, Mechelle Stevens/HOU/ECT@ECT, Susan Harrison/HOU/ECT@ECT, 
Brenda F Herod/HOU/ECT@ECT, Brent A Price/HOU/ECT@ECT, Melissa K 
Ratnala/HOU/ECT@ECT, Leslie Reeves@CCMAIL, Evelyn Aucoin/HOU/ECT@ECT, Laura E 
Scott/CAL/ECT@ECT, Cheryl Dawes/CAL/ECT@ECT
cc: Melissa White/HOU/ECT@ECT, Dorothy Ricketts/HOU/ECT@ECT, Kimberly 
Perkins/HOU/ECT@ECT, Trang Le/HOU/ECT@ECT, Christy Sweeney/HOU/ECT@ECT 
Subject: Unify AR -- SAP Plans

	

Two years ago Enron North America made a decision to use Unify AR for cash 
application rather than SAP AR.  We decided at the time that SAP AR would be 
kept in sync with Unify AR by the Unify/SAP interface.  We believe that the 
business logic for that decision has changed, and are now recommending that 
Unify AR be permanently turned off and all AR functions be performed in SAP.  
I have briefly summarized the change in business situation below.

Two Years Ago	Today
Netting allowed by legal and credit ONLY if netting contract was already in 
place.	Netting encouraged by legal and credit wherever possible, regardless of 
existence of signed agreement.
Netting limited to one counterparty and legal entity at a time.	Canada nets across 
counterparties.
Netting performed in physical only, financial settlements to maintain 
separate net statement process.	ENA considering netting physical and financial 
together.
All account coordinators were to apply their own cash.	Cash applied centrally in 
Power, Financial and Canada  Individual coordinators apply cash only in 
physical Gas.
Cash was to be applied at the line item level to track variances and to 
facilitate calculation of cost of funds by commercial team.	Although gas 
settlements is applying cash for some invoices at the line item level, this 
functionality is not being used by power settlements and will not be used by 
financial settlements.  The company has not made any move towards calculating 
cost of funds by commercial team.
The Account Inquiry functionality in Unify was thought to be a key on-line 
tool.	Old habits die hard...most users appear to be printing reports and reviewing 
data, rather than using the on-line functionality.
Overapplication of cash was not to be allowed.  Overpayments would be 
classified as "on account", with issues tracked in a case management system.	Case 
management system does not exist.  Allowing overapplication helps the account 
coordinators track overpayments easier than leaving cash on account.
The counterparty/legal entity combination on the deposit needed to match the 
counterparty/legal entity combination on the Enron invoice.	Given the number of legal 
entities Enron has, along with the number of entities our counterparties 
have, this seems like a hopeless battle.  Allowing cross-application of cash 
seems easier.
Corp required that intercompany settlements had to be "settled" with cash 
movement.	Corp no longer requires intercompany settlements to be "settled" with cash 
movement.

Converting to SAP AR simplifies the Unify/SAP interface in the following ways:
Bank deposits into SAP do not have to be split off into Unify
Cash entries in Unify do not have to be interfaced back to SAP
Unify netting entries do not have to be interfaced to SAP
Payables information does not have to be interfaced from SAP to Unify

Given the change in attitudes towards our netting business process we face 
two problems in Unify.  
Controls built into Unify are already obsolete.
Unify does not maintain all products in one database, making efforts to net 
across products in the future (physical with financial, for instance) 
impossible.

Our understanding of the netting process in SAP indicates that there are no 
controls (which sounds good at this point) and that we would retain the 
automatic netting entries when the payable is netted with the receivable 
within SAP.  However, we emphasize that netting would be done in SAP, not at 
the time of finaling a payment in Unify.

To repeat, we are recommending that Unify AR be turned off and we convert to 
SAP AR.  We will schedule a meeting the week of February 22 to discuss.  
Please call me at X33179 with any questions or comments.  We WILL make this 
decision by February 28 because the SAP timeline does not allow any 
additional time for consideration.

Stephen