While the area of supply risk management is attracting growing interest and investment from procurement organizations, organizations typically deal with risk on a piece-part basis. That is exactly the wrong strategy, argue Spend Matters analysts Jason Busch, Pierre Mitchell and Michael Lamoureux in their latest report, Spend Matters Landscape Definition and Overview: Supply Risk Management and Compliance. One of their core aims in publishing this analysis, they write, is “to change this perspective and help organizations integrate these supply risk management initiatives more effectively.”
The Risk Performance and Compliance Category
It’s been a difficult few years for Nutella, that delicious chocolate hazelnut spread made by Ferrero. First, it was linked to the loss of critical natural habitat for orangutans, due to one controversial ingredient: palm oil. Then, more recently, dramatic headlines claimed Nutella consumption have bigger health implications than ingesting all that sugar. “Could Nutella give you CANCER?” screamed the Daily Mail. And that was also due to one controversial ingredient: palm oil.
We here at Spend Matters like to go above and beyond, which is why a simple Top 10 list just won't cut it. Join Jason Busch (founder and head of strategy at Spend Matters) and Pierre Mitchell (chief research officer) on Tuesday, January 17 at 12 p.m. Central for The Supply Chain Devil's Dozen: Top 12 Supplier Risks for 2017. They'll cover how procurement organizations can shift their investments and strategies to account for the world's major changes, and how to "map" these risks to their underlying causes (and causes to different types of risk). Sign up here!
This post is part of our 2016 Year-End Procurement Tech Review, in which we offer procurement practitioners a bird’s-eye view of some key vendors and their solutions in select categories. This is the last week of this series, and today we’re highlighting a company in the supplier risk management field.
Avetta, which recently rebranded from its original name, PICS Auditing, has grown considerably since its founding over a decade ago. But while now the company can enable organizations to tackle broader supplier management and risk management initiatives, at its core it still solves a problem that many companies in industries relying heavily on contractors have: proper contractor vetting, credentialing and enablement.
Procurement fraud comes in many forms and types. Recent front-page news stories can involve multi-million dollar frauds managed at the P&L level by suppliers, such as Pfizer’s recent complex overbilling scheme with the NHS. But procurement and payables fraud most often takes place on a smaller level, with varying degrees of sophistication. Oversight Systems provides an analytics managed service (and front-end software) capability for procurement and finance organizations to fight procurement fraud, whether perpetrated by suppliers, internal participants or both. It also provides similar capabilities to monitor for regulatory compliance (e.g., FCPA violations) as well as detect overpayment errors. Its solution is a complement to procure-to-pay (P2P), travel and expense (T&E) and various audit recovery solutions and approaches in the market today.
This third and final installment of this Spend Matters Vendor Snapshot covering Oversight Systems provides an objective SWOT analysis of the provider and offers a competitive segmentation analysis and comparison. It also includes recommended shortlist candidates as alternative vendors to Oversight Systems and provider selection guidance. Finally, it provides summary analysis and recommendations for companies that can best take advantage of Oversight Systems’ capabilities. Part 1 of this series provided an in-depth look at Oversight as a firm and its specific solutions, and Part 2 gave a detailed analysis of solution strengths and weaknesses and a review of the solution’s user experience.
What do you get if you cross P2P payment compliance, procurement and payables fraud detection and management, and a big data solution together? You get Oversight Systems. Unlike other overpayment prevention and recovery audit providers, Oversight decided to pursue what we might best describe as “data science as a service,” hiring data scientists who are experts –– or have become experts –– in spend areas including travel and expense (T&E) and procure-to-pay (P2P), as well as regulations affecting supplier management and payables such as the Foreign Corrupt Practices Act (FCPA). This team continually works to develop new algorithms to confront the types of continuously evolving over-billing and procurement and T&E fraud scenarios that employees, procurement staff and suppliers engage in, either intentionally or as a result of complacency.
This Spend Matters PRO Vendor Snapshot explores Oversight System’s product strengths and weaknesses, providing facts and expert analysis to help procurement organizations decide whether they should consider this class of solution alongside other P2P, T&E, payables/card and related investments. It also offers a critique (pros/cons) of the user interface. Part 1 of our analysis provided a company and detailed solution overview and a recommend fit list of criteria for firms considering it. The third part of this series will offer a SWOT analysis, user selection guide, competitive alternatives, and additional evaluation and selection considerations.
As we have seen in Part 1 and Part 2 of this series, e-invoicing has produced great benefits for governments in terms of tax collection and streamlining its own control processes, for which they have implemented mechanisms that companies must comply with, ranging from the simple to the complex. For both buyers and suppliers, this represents a new technological challenge — especially for companies with operations in multiple Latin American countries.
E-invoicing in Latin American countries differs significantly from other parts of the world. Invoicing and tax compliance regulations are also completely different from country to country in this region. In this second installment of our series covering e-invoicing in Latin America, we compare Latin American e-invoicing practices with other parts of the world, discuss the importance of compliance for global organization with operations in Latin America and detail some country specifics about e-invoicing documents and regulations.
Procurement fraud typically gets everyone’s attention after it happens. Granted, in certain geographies and industries, regulations such as the Foreign Corrupt Practices Act (FCPA) have magnified the potential risk that procurement fraud can bring to expand beyond profitability impact through high fines and negative media coverage. Yet procurement and finance organizations generally are loath to invest in additional fraud controls and measures such as procure-to-pay (P2P), travel and expense (T&E) and payment solution (including p-cards) rollouts or upgrades at the same time. Oversight Systems, an Atlanta-based organization that focuses on fraud and overpayment controls and prevention and has raised almost $40 million in funding to date, is hoping to change this.
Existing P2P (SAP Ariba, Concur, Basware, etc.) and T&E (e.g., Concur) solutions can put in preventative steps to help reduce the risk of fraud and overpayment occurrences. But the controls they provide are insufficient to prevent fraud alone (as Best Buy discovered when procurement and a supplier colluded to steal millions of dollars from the company). Fraud and overpayment can occur in both expected and unexpected places, and Oversight has designed its solution to find and detect and find it through an advanced analytics platform, regardless of whether an employee, procurement, accounts payable or a supplier is the responsible party (or a combination of actors).
This Spend Matters PRO vendor snapshot provides facts and expert analysis to help buying organizations make informed decisions about Oversight Systems’ procurement and accounts payable fraud and overpayment solutions. Part 1 of our analysis provides a company background and detailed solution overview, as well as a summary recommended fit suggestion for when organizations should consider Oversight Systems as a complement to existing P2P, T&E and card investments. The rest of this multi-part research brief covers product strengths and weaknesses; competitor and SWOT analysis; user selection guides; and insider evaluation and selection considerations.
Spend Matters welcomes this guest post from Jeannie Pumphrey, senior director at Alvarez & Marsal.
Third-party risk management (3PRM) continues to be one of the top three risk-related topics discussed in the boardrooms and amongst executive management teams in the financial services industry. As corporations tackle the task of segmenting their provider base and identifying and managing the risk inherent to the use of third parties, lack of clarity regarding appropriate program ownership, accountability and responsibility forms a common challenge.
The worlds of supplier networks, supplier management and services procurement compliance are converging — and Avetta is one of the providers at the forefront of this convergence. Avetta’s initial releases and managed service offering addressed independent contractor verification, validation and management. In some industries, accidents or errors from unqualified third-party contractors, either due to lack of training or lack of certification, can result in million-dollar lawsuits and threats to public safety, so ensuring proper qualifications and training is key.
Today, Avetta has evolved its offering to deliver an enhanced supplier management platform customized for credentialing, certification and contractor capability tracking with respect to health and safety, sustainability and other specific needs. However, unlike some niche supplier information management solutions, the solution allows the questions and profiles to be configured for each supplier based upon service(s) provided, risk profile or industry — and takes this capability down to the individual contractor level.
This final installment of our multipart Spend Matters PRO Vendor Snapshot series covering Avetta offers a competitive analysis and comparison with other procurement technology providers. It also includes a user selection guide, user interface and user experience (UI/UX) analysis and summary evaluation and selection considerations. Part 1 and Part 2 of this PRO research series provide a company and deep dive solution overview, a SWOT analysis, product strengths and weaknesses and a recommended fit analysis for what types of organizations should consider Avetta.
What would you get if you combined elements of supplier management, supplier risk management, vendor management system, talent marketplace and contractor compliance systems together, all with a specific design around skilled, often trades-based third-party and contractor management, especially in field intensive industries? We can make the case at Spend Matters that this mash up of capabilities would look something like Avetta, formerly known as PICS Auditing. Avetta solves a key problem that many companies in industries that rely heavily on contractors have: proper contractor vetting. Most supplier management providers vet the supplier, but it is not the supplier or contingent workforce provider alone that matters — it is the employee, or in some cases, the contractor, and if that employee or contractor is doing trade work, he or she has to be trained, certified and reliable.
While lacking some of the nuanced capabilities of many individual solution areas such as a VMS, Avetta makes up for any shortcomings with a purpose-built solution that is a particular fit in industries such as chemicals, construction, facilities management, oil and gas, telecommunications and related sectors. In many ways, Avetta extends the contractor credentialing paradigm of what Vendormate — which GHX acquired after as it scaled a highly successful supplier-paid business model in the healthcare matter — could have become had it remained independent, targeted multiple industries and adopted a supplier model.
This Spend Matters PRO Vendor Snapshot explores Avetta’s strengths and weaknesses across its procurement technology suite, providing facts and expert analysis to help procurement organizations decide if they should shortlist the vendor as a potential procure-to-pay solution. Part 1 of our analysis comprised a company and detailed solution overview and a SWOT analysis, as well as a summary recommended fit suggestion for what types of organizations should consider Avetta. The remaining parts of this multipart series will offer a user selection guide, user interface (UI/UX) analysis, competitive alternatives and evaluation and selection considerations.