Supply chains have already transcended physical barriers and are now spreading across oceans and continents, with an ever-increasing number of partners and suppliers involved. As a result, the risk of fraud in the purchasing sector is also likely to increase, not least because it becomes more difficult to control the origin of products as new suppliers are incorporated into the purchasing process.
Obviously, one way to deal with the increased risk of fraud is to maintain greater and more organized control when capturing information about partners at all stages of the supply chain. But this becomes a huge challenge, as it also requires an understanding of the purchasing rules of all countries involved in the supply chain. In short, what is legal in one country may not be in another.
The result of these multiple overlapping rules and the lack of more accurate control is an increase in the number of companies that become victims of purchasing fraud each year, according to a report by PwC.
Identify and eliminate fraud
One of the problems in identifying fraud is how companies think about it. Not all fraud is criminal and necessarily requires legal proceedings. However, it can have negative impacts on business, both financially and in terms of the company's reputation. That is why it is necessary to know exactly what happens at each stage of the supply chain and invest in technology that helps track the product, from its origin to delivery. This is essential to identify problems at the exact place and time they occur.
While one of the goals of the procurement department is to protect the business, analyzing historical data to prevent risks can be time-consuming and resource-consuming. Constant monitoring is required to overcome these risks. This allows purchasing managers to see a complete picture of all processes and stages of the supply chain and make the best decisions.
How can data help?
Many companies of all sizes work with multiple suppliers, making it difficult to get a complete view of the supply chain or assess the risks of doing business with these suppliers.
As these chains grow in size and complexity, the need for deeper analysis becomes essential. And the ability to analyze data in real time can raise alerts in a timely manner so that the company can take action.
Data analytics allows procurement professionals to get a clear picture of where a supplier stands within the market, which is useful in understanding whether or not to continue contact. Understanding how these companies do business helps reduce the risk of future issues. Additionally, analyzing structured and unstructured data can also reduce issues with internal fraud.
To do this, in addition to having access to this information, it is necessary to have professionals with the skills to extract these insights and use them to combat fraud. Analytics alone may not answer questions such as: “Is the organizational structure vulnerable to scams?” or “What changes are needed to combat fraud?”, but it can point experts in the right direction to make the necessary changes.
Data analysis, combined with process automation, allows for faster identification of possible fraud. Talk to our experts and find out how we can help you.
