Your ERP system is your system of record and source of truth. You rely on it to control business processes and stop cash leakage. And, you’ve invested a lot of time and effort into your ERP controls. But is it enough?
ERP controls have gaps and a recovery audit approach that is focused solely on the supplier side misses the risk employee-side spending brings into the fold. At the root of the problem is data silos.
ERP systems are connected to many bolt-on applications that lock spend into silos. One holds PO data, while invoice data is in another. Another holds P-Card data and travel expense data is in yet another source system. It gets even more complicated when the company has multiple business units, countries and regions. All of these data sources make it nearly impossible to analyze spend and get a consolidated view of risk. Disparate records and controls in these standalone systems create data silos that hide weaknesses and create risk across the enterprise.
How bad is it? One oil & gas company came to us with 35 source systems housing spend data. This leads to un-diagnosed duplicate payments. For instance, an invoice submitted to AP also gets charged to a purchase card or p-card charges that are duplicated as travel expenses. But the problem goes beyond duplicates—procurement cannot provide meaningful insights to improve the business without a consolidated view.
A game changer
To get a complete view of spend risk, you need another layer of control that focuses on analyzing all of your data together.
Purpose-built AI technology can quickly scan large volumes of data from multiple source systems to identify and prioritize risks. By homogenizing spend data from disparate source systems so data silos are eliminated, you can correlate patterns across spend categories to mitigate otherwise undetectable risk.
For instance, consider when your company hosts a big customer event at a hotel. The PO system deals with the venue, catering, lighting and audio-visual equipment. Accommodations for employees working at the event go through a T&E card charged directly to their expense reports. Purchasing cards take care of signage and other last-minute items, while the videographer needs a check on the day of the event. The total spend for this one event is scattered across many systems and it’s impossible to stitch it together without asking IT to do custom reports or manually working through endless spreadsheets.
Contrast these separate silos with an AI-powered platform that can automatically collect all of that data in one place and has built-in analytics tools that can identify risks such as missed discounts due to using non-preferred vendors. With an enterprise-wide view, an AI-powered platform can transform the effectiveness of your financial control systems.
Download the Explore the Power of Prevention with Insights On Demand for Procure-to-Pay webinar to learn how to overcome data silos and get a consolidated view of risk.