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Six Key Trends Across P2P
1) Growth in eInvoicing
2) Cloud technology
3) Collaboration across P2P
4) Mobile Capture For AP
5) Strategic Analysis of Data
http://www.p2pnetwork.org/events/1772-
slides.html
6) Robotic Processing Automation
Against a background of…
Top 3 Challenges:
• Keeping track of invoices
• Making payments on time
• Maintaining the Master Supplier File
• Dealing with Senior Staff (4th)
Agenda
Opening remarks Ellen Leith, Editor Purchase to Pay Network (PPN)
Keynote Speaker Ben Fogle, introduced by Andrew Parkes, Commercial Director Tradeshift
Networking Break 11:00 – 11:30
Tracks 1 & 2 Breakout rooms Adelphi 3 and Aldwych Suite (first floor)
Tracks 1 & 2 Breakout rooms Adelphi 3 and Aldwych Suite
Lunch served 13:00 – 14:00
Tracks 1 & 2 Breakout rooms Adelphi 3 and Aldwych Suite
Plenary session New Payments Legislation, CICM - Adelphi 3
Networking Break 15:25 – 15:45
Awards and Prizes AP Awards, Prize Giving, Champagne reception
Event ends 16.45pm
Say hello to our sponsors
KEYNOTE SPEAKER
BEN FOGLE
Sponsored by
NETWORKING BREAK
In the Palm Court - Sponsored by
THE RISE OF AUTOMATION
The Use of Robotic Process Automation and Artificial Intelligence in Business Today
Robotic Process Automation
Artificial Intelligence
Legal Services Transformation
Social Impact Sourcing
Robotic Process Automation
“The use of flexible software tools to automate manual activities for
the delivery of business processes or IT services”
ARTIFICIAL INTELLIGENCE
“The theory and development of
computer systems able to
perform tasks normally
requiring human intelligence”
Supplier Master
Maintenance
New supplier on-boarding
processes
Accounts Receivable;
Billing, Dispute, Order
Management – automation
of processing and reportingAccount reconciliations
Automated invoice processing
(data entry, three-way matching
and posting)
Compliance Reporting
automation: automated
preparation of reports for the FCA
Personal Loan
Application Opening -
Automation of process
for new loan applications Automated
Fraudulent Account
Closure Process -
Rapid closure of
compromised
accounts
Example automation scenarios
Types of Robotic Process Automation
UnassistedAssistedManual
Judgement basedCustomer focusedProblem solving
UnstructuredValue adding
RepetitiveSemi structured process
Customer facingManually triggered
RepetitiveRules drivenStructured
Schedule/event driven
IDENTIFYING RPA CANDIDATES
Compliance
Customer Management
Mortgage Processing
Clinical Trials
Human Resources
Finance and Accounting
Where poor quality results in high risk or
cost
Rely on multiple systems
High volume / scalable
Rules based / predictable / replicable
The number of FTEs saved by a major UK utility company
The number of days taken to close the month-end books of a
Primary Health Care Trust, from 12
The typical cost of a software agent compared to a
typical offshore BPO FTE
The typical cost of a software agent compared to a
typical onshore BPO FTE
The amount of hours that software robots require off for
food, sleep, sickness and holiday
Manual expenses process
Manual expenses process
Automated expenses process
Automating the Expense Process
Automating the Expense Process
Fedex
Purchase Request
Approval Purchase Order Goods ReceiptAcknowledge
OrderInvoiceCapture
Invoice Matching
Payment
Automation in P2P
Purchase Request
Approval Purchase Order Goods ReceiptAcknowledge
OrderInvoiceCapture
Invoice Matching
Payment
STP = RPA
Automation in P2P
Automation in P2P
Purchase Request
Approval Purchase Order Goods ReceiptAcknowledge
OrderInvoiceCapture
PaymentInvoice
Matching
ARTIFICIAL INTELLIGENCE
What the #%$@ is AI anyway?
Typ
e o
f P
roce
ss
Ju
dg
em
en
tR
ule
d B
ase
d
Type of Input Data
Structured Semi-structured Unstructured
Com
ple
x
CPU
AI CAPABILITIES
CAPTURE INFORMATION WHAT IS HAPPENING? WHY IS IT HAPPENING?
stru
ctu
red
dat
au
nst
ruct
ure
dd
ata
Image Recognition
Voice Recognition
Data Analysis / Clustering
Search Understanding
NARROW AI GENERAL AI
Natural Language Processing
Reasoning and Problem Solving
Prediction
Search
Search
Search
Clustering
Prediction
Natural Language Processing
Natural Language Processing
Problem Solving
CPU
Unstructured Data Input Structured Data
AI System
Structured Output
Automated Processes
RPA System
Hybrid Automation Solutions
ANDREW BURGESSandrew@ajburgess.com
@A_J_Burgess07770 211 121
Mary S. Schaeffer
AP Now
Is Purchase to Pay Fraud Impossible to Prevent?
Agenda
• Thesis• Invoice Fraud • Master Vendor File • The Newest Kind: Outsiders Taking
Advantage of Your Employees• Expense Reimbursement Fraud
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 56
The Question & The Answer
• Is Purchase to Pay Fraud Impossible to Prevent?
• Yes and No
• You can’t stop someone from targeting your organization
• But you can stop them from being successful
• Being a target ≠ A Victim
– That is your job!
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 57
Factors: New World
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 58
• Technology
–Gives with one hand and takes with the other
–Facilitates
–Connectivity• In another country
• In the next office– Remember, your employees know better than
anyone where the weaknesses are in your processes
The Fraudster on the Other Side of the World
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 59
• Today’s crooks– Are pretty smart– Often located in other countries– Do their research
• Today’s crooks understand and take advantage of– Internet– Social Media
• Be careful of what you put on Linkedin
– Banking
Policy of Zero Tolerance
• Ethics policy
• Code of conduct
• No tolerance for
– Fraud
– Abuse
– Corrupt payments (Bribery) or
– Ethical misconduct of any kind
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 60
INVOICE FRAUD
(c) 2017 CRYSTALLUS Inc., Mary S.
Schaeffer 61
Invoice Fraud: Techniques
• Phony invoices
• Invoices with excess charges
• Second invoices with different invoice number
• Bigger problem: Invoices submitted more than once
– And it is growing
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 62
Adding Insult to Injury: The New Headache
Source: AP Now 2016 Invoice Survey
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 63
Problems
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 64Source: AP Now 2016 Invoice Survey
Invoice Fraud: Prevention
• Checking during the approval process
• Identification of duplicate invoice early in the process
– Coding standards
– More focus on invoice number
• Vendors rarely return duplicate payments unless you remind them
– Credit memos often lost or not sent
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 65
MASTER VENDOR FILE
(c) 2017 CRYSTALLUS Inc., Mary S.
Schaeffer 66
Internal Vendor File Fraud
• Change of address/bank account
• Get check/payment
• Change address/bank account
• Prevention
– Regular reporting
– Review of report
– Dual authorizations
– Segregation of duties
© 2017 AP Now and Mary S. Schaeffer 67
How the Old Fraud Works
• Variation of the old “Please change my bank account or Remit to address
• Focus on AP
• Legitimate looking letterhead via the mail
– Mixing old-time techniques with a new fraud
• Intra-organizational e-mail
© 2017 AP Now and Mary S. Schaeffer 68
Old Fraud Approach Prevention
• Verify all changes using different method of communication
• Email requests verified by phone
• Phone requests verified by email
• All verification made using contact information already on hand
• One other method: Requirevendor provide old bank account number
© 2017 AP Now and Mary S. Schaeffer 69
Set Up Phony Vendor
• Where: Hamline University
• Who: AP Supervisor + two family friends
• What: Embezzle funds;
1. 70 checks totaling $160,000
2. Embezzled funds using friends and relatives totaling $73,000 and $34,000
• How Fraud Committed:
1. Create Fake vendor accounts
2. Cashing checks in personal account
© 2017 AP Now and Mary S. Schaeffer 26
Uncovering Phony Vendor Fraud
• How Fraud Uncovered: Wells Fargo notified CFO that several university checks being deposited into AP Supervisor’s personal bank account
• Prevention:
1. Documentation for new vendor accounts;
2. Dual authorization for new vendor accounts
© 2017 AP Now and Mary S. Schaeffer 26
What You Have to Do
• Verify, verify, verify
• Be careful what information you put on Internet
– Company website
– Facebook etc
© 2017 AP Now and Mary S. Schaeffer 26
Consider the Following
• When was the last time you cleansed your contact info?
• Dirty little secret: Most organizations never update it.
• How good do you think your contact information is???
© 2017 AP Now and Mary S. Schaeffer 73
NEWEST FRAUD: OUTSIDERS TAKING ADVANTAGE OF YOUR EMPLOYEES
(c) 2017 CRYSTALLUS Inc., Mary S.
Schaeffer 74
Definition: BEC Fraud
• Compromise of a C-Level executives email
– Usually the CEO – but not always
• To get lower level employee to do something
• Creates value for the crook
– Not always money
• Usually has a sense of urgency
– Time is not the crooks friend
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 75
How Accounts Are Compromised
• Account takeover
• Spoofing
• Use of Similar URLs
• Can you see the difference:
maryschaeffer@abccompanyinc.com
maryschaeffer@abecompanyinc.com
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 76
How Accounts Are Compromised
• Victims in every state in the USand 79 other countries
• Small not-for profits targeted in US as well as Fortune 500/FTSE 100 type companies
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 77
Advice from the FBI
• Be wary of e-mail-only wire transfer requests and requests involving urgency
• Pick up the phone and verify legitimate business partners.
• Be cautious of mimicked e-mail addresses
• Practice multi-level authentication.
• Education of everyone on staff is critical – from the lowest level processor to the CEO
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 78
New Fraud: BEC
• Where: Google + Facebook
• Who: Crook in Lithuania
• What: $100 million over two years; most recovered!
• How Fraud Committed: Email phishing and fake suppliers
– Crook forged email addresses, invoices, and corporate stamps to impersonate a large Asian-based manufacturer (Quanta) with whom the tech firms regularly did business.
© 2017 AP Now and Mary S. Schaeffer 79
New Fraud Prevention: BEC
• Prevention:
1. Verify anything out of the ordinary;
2. use forward key instead of reply button when replying to emails.
3. If you think you’ve been hit, contact your bank quickly
4. Be careful with informationposted in public
• Information from Fortune magazine
© 2017 AP Now and Mary S. Schaeffer 80
EXPENSE REIMBURSEMENT FRAUD
(c) 2017 CRYSTALLUS Inc., Mary S.
Schaeffer 81
Occasionally, Just Poor Judgement
• The plate of chicken wings
• Forgot to get the receipt
• Sent in a picture
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 82
The Actual Receipt
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 83
Out of the Mouths of Cheaters
• Chrome River survey of
– 1000+ business travelers
• 5.3% say they cheat on expense reports
– These were the folks willing to admit they stole!
• Avg. fraud: $2,500 per year
• Discovery
– Minimal – only 1 in 6 were caught
© 2017 AP Now and Mary S. Schaeffer 84
How They Did It
• Personal purchases claimed as business expenses 44.8%
• Adding mileage to journeys34.5%
• Tips recorded higher than what was actually given 29.3%
• Submitting more than allowed for an item 27.6%
• Receipts for canceled events or trips / returned items 10.3%
© 2017 AP Now and Mary S. Schaeffer 85
AP Now Perpetrators
© 2017 AP Now and Mary S. Schaeffer 86
Source: AP Now’s 2016 Travel & Entertainment Survey
The New & Growing Problem
• The receipt scanned with a smartphone and submitted multiple times.
• Difficult to catch without automation
• Sometimes the date is a clue
• Manager responsibility for reviewing before approving
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 87
Detailed Meal Receipt: Problems Uncovered
If liquor was ordered (important for those on grants)
How many people attended
( 2 or 4??)
Friday and Saturday night meals
Was the meal appropriate
12 beers and a plate of wings
The growing Gift Card problem
Restaurant gift cards added to meal
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 88
Best Practices
• Assume the worst
• Common sense severely lacking
• A detailed written policy
• Incorporate consequences
• Insist on use of corporate card
• Get detailed meal receipt
• Receipt for everything
• Enforce policy uniformly
• Regularly update policy
• Any time there is a change or snafu
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 89
Another Reality Check
© 2017 AP Now and Mary S. Schaeffer 90
Source: AP Now’s 2016 Travel & Entertainment Survey
CLOSING THOUGHTS
(c) 2017 CRYSTALLUS Inc., Mary S.
Schaeffer 91
Change in AP
• Business in general has changed a lot in the last 20 years
• AP is no exception
• Continued pressure to cut costs
• Technology means we need fewer people in AP
– Segregation of duties more difficult
• New frauds are continually evolving
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 92
The Bottom Line
• Education
• Be suspicious
• Pick up the phone
• You can’t stop someone from targeting your organization – but you can prevent them from being successful
• That is your job!
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 93
Thank You
Questions/Comments
Mary S. Schaeffer
AP Nowmarys@ap-now.com
(c) 2017 CRYSTALLUS Inc., Mary S. Schaeffer 94
LUNCH BREAK
In the Palm Court - Sponsored by
Jim Hemmington, Director of Procurement, BBC
Will Technology Kill the Procurement Star?
So, what are the technology threats for the Procurement function?
Many organisations are now plugged into the platform economy
New software is emerging almost daily
Robotics is rapidly increasing systemisation
Digital transformation continues at a pace
And it gets scarier - predictions for 2018?
20% of business activity will be automated and machine dependent
There will be in excess of 6 billion items of technology connected in some way
The hypo-adaptive customer will be the norm, eg: “iPad story” 80 million sold in two years vs “Colour TV story” 50,000 sold in two years
Man/machine interaction will become seamless, with machines taking on increasingly complex customer transactions (eg web-chat)
So imagine!!
Suppliers selected and changed automatically (by machine)
Automated inter-company trading: ordering linked to consumption with auto Goods Receipting (by machine)
Automated governance reviews and correction plans with daily reporting (by machine)
Supplier stability monitored automatically (by machine)
Suppliers benchmarked daily (by machine)
Could it go this far?
AN EXHIBITION
Procurement Function:Artefacts from a past
profession
Exhibits include rare and original :• Purchase orders• Balanced score cards• Negotiation videos• Purchasing Manuals
So, how does Procurement meet the technology challenge?
Become a trusted business partner (e.g. more proactive, closer to business and strategy planning , bringing innovation from the market
Strategic thinkers tells us we should consider three priorities for Procurement for the future:
Reducing & avoiding purchasing costs (stronger demand management, trend analysis and buying behaviours)
Improve procurement’s agility, respond quickly to changing business priorities
Moving this from Powerpoint into practical application is not always easy though
So here’s the hypothesis - Procurement has two secret weapons
BIG DATALITTLE DATA
Management Information
Commercial skillsIntegrated technical expertise
CreativityAdvanced interpersonal skillsRounded market knowledge
The ability to look way ahead and predict future business challenges
PEOPLE WITH
The business environmentLessons learned
The organisation’s culture and what works
KNOWLEDGE FOCUSING ON
First step – create the EXCITEMENT (it’s not always elementary)
We protect the BBC’s reputation
FOR THE BBC PROCUREMENT TEAM WE FOCUS ON THESE STRAP LINES
We show licence fee payers that the BBC spends wisely
We find the new suppliers to deliver the new vision for iPlayer
For every £1 the BBC spends on Procurement it gets back £13
Second step – create the business partner framework and reinforce it (things to consider)
Develop a strategy tailored to and for key business stakeholders
Where possible embed people with key stakeholders
Be seen as facilitators focusing on the whole lifecycle – planning to exit
Don’t focus on savings alone, capture all the benefits of great supply relationships
Use data to inform and drive business decisions with proactive support to stakeholders
Free resource to focus on the market (innovation/risk)
Maximise SRM to drive ongoing value
Continue to foster support from the top
Third step – identify and nurture the talent
What makes procurement people effective in your organisation?
Bring good people in and train them
Have clear reward and development programmes
Have you a strong diversity of competencies and skills?
Fourth step -Keeping re-inventing, be agile!!
Regularly reviewProcurement’s contribution
Keep looking for new ways to add value
Work the data don’t just “pie-chart” it
Keep an eye on your talent and how best to motivate your stars
Gather and tell the stories that evidence Procurement ‘s valued contribution
Positioning chart (strive for Happy procurement)
Bring options to the business
Staffed by a diverse mix of people
Seen as a strategic business enabler
Involved in longer term planning
Influencing the market
Focus on value add
It’s about every aspect of supplying the organisation (today and tomorrow)
Wait for instructions from the business
Reactive to changing business needs
Seen as a service
Following the market
It’s all about the best deal (today)
Only staffed by traditional procurement people
Focus on savings and compliance
The final (conclusions)
Technology will help effective Procurement functions
Procurement will help organisations thrive and remain competitive
PROVIDING THE FUNCTION:• keeps a strategic profile• attracts and retains good people• flexes with changing business
challenges
Questions
PPN AWARDS
Sponsored by
OUTSTANDING CONTRIBUTION TO
AP
Sponsored by
OUTSTANDING CONTRIBUTION TO
AP
2nd Place winner
OUTSTANDING CONTRIBUTION TO
AP
Overall Winner
INNOVATION IN SUPPORTING THE
BUSINESS
Sponsored by
INNOVATION IN SUPPORTING THE
BUSINESS
2nd Place winner
INNOVATION IN SUPPORTING THE
BUSINESS
Overall Winner
AP MANAGER OF THE YEAR
Sponsored by
AP MANAGER OF THE YEAR
2nd Place Winner:
Kerry Scott
AP MANAGER OF THE YEAR
Overall Winner:
Annette Watkis
AP TEAM OF THE YEAR
Sponsored by
AP TEAM OF THE YEAR
2nd place winner:
AP TEAM OF THE YEAR
Overall Winner
Prize Giving – sponsored by
SEE YOU NEXT YEAR
Tuesday 5th June 2018, The Waldorf
Finally…
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