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Procurement FraudA big problem that’s worse than most organizations think

TOP BARRIERS TO ARTIFICIAL INTELLIGENCE

WHY ARE ORGANIZATIONS FAILING TO SPOT PROCUREMENT FRAUD?

SUBSTANDARD PRACTICES

LACK OF CLEAR OWNERSHIP

A common approach is absent, and likely to have a negative

Manual controls bring human bias into the equation or may even cover up fraud.

33%

23% 19% 17%

13% 11% 10% 8% 5% 3%

Most organizations fail to hold more than one internal audit and supplier check a year

While some organizations fail at fraud detection by not looking for it, others fall short

7% ADMIT TO NOT AUDITING FOR PROCUREMENT FRAUD AT ALL

Companies often depend on manual controls and basic detection software to protect themselves.

Supplier due diligence is performed sporadically.

24% ONLY

USE ADVANCEDANALYTICS

17% AND

ARTIFICIALINTELLIGENCE

50% MAJORITY ARE OVER- RELIANT ON MANUAL

PROCESSES

38% USE RULE-BASED

DETECTION SOFTWARE

33%

Advanced analytics and AI candetect fraudulent activity and alert the business before anydamage is done.By taking up much of the analytics workload and cutting down on false positives, it frees up significant time for employees. This allows them to spend more time on higher priority alerts.

With the average company losing 5-7% of revenue to fraud each year, a suitable ROI should not take long to deliver.

To find out more download the full report atwww.sas.com/proc-fraud

PwC has listed procurement fraud as one of the world’s most commonly reported economic crimes, ranking above cybercrime and business misconduct.. 1

It lowers revenues, ruins reputations and distracts from the crucial work of businesses.

And it usually hides in plain sight. Often committed by known suppliers and those closest to the business, it's estimated that organizations lose 5% of their annual revenues to fraud.2 1 PwC. Pulling Fraud Out of the Shadows. Global Economic Crime and Fraud Survey 2018. 2 ACFE. Report to the Nations. 2018 Global Study on Occupational Fraud and Abuse.

RANGE OF LOSSES DUE TO PROCUREMENT FRAUD IS VAST

OUR RESEARCH SHOWS MOSTORGANIZATIONS SUFFER LOSSES OF

$10K - $150K PER YEAR

33%

ANNUAL CHECKS CHECK EACH NEWPROJECT/TRANSACTION

ARE BLIND TO DANGER AND ARE UNABLE TO SAY HOW MUCH THEY LOSE FROM IT

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ANOMALY DETECTION IS ALSO A

POPULAR OPTION

QUARTERLYCHECKS

24% 21% 9%

43% TOO EXPENSIVE

TO DEPLOY

39% LACK OF SKILLS TO RUN THE AI OR AUTOMATION

PLATFORM

28% PREFER TO USE MANUAL PROCESSES TO TRACK

PROCUREMENT TRANSACTIONS

27% NO CLEAR OWNERSHIP

TO RUN THE AI OR AUTOMATION PLATFORM

A third say CFO or Financeis most likely to lead anti-fraud efforts

Majority of companies give responsibilityto other, more diverse functions

A tenth claim responsibility is shared between departments

2 CHECKSA YEAR

21%

ABOUT THE RESEARCH

Between 2018 and 2019, SAS and 3Gem surveyed 2,025 global business leaders across 38 countries for their opinions and experiences of procurement fraud. SAS commissioned the research to understand the extent of the problem and assess how much organizations understand it and attempt to fight back. The goal was to analyze current anti-fraud strategies, while making the case for a more analytical, technology-enabled approach.

SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. ® indicates USA registration. Other brand and product names are trademarks of their respective companies. Copyright © 2020, SAS Institute Inc. All rights reserved. 111244_G123664.0220

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