A Leader in Risk Based Enterprise Controls Management …norcaloaug.com/seminar_archive/2014_training_day_pres/6_6_Amato.pdf · us as the only partner with Accelerators for Oracle
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! FulcrumWay: is the #1 End-to-End Provider of Risk Based Enterprise Controls Management Solutions for Oracle EBS, PeopleSoft and JDE customers with over 200 Fortune-500 to Middle Market clients. Since 2003, we have successfully assisted companies across all major industry segments.
! Expertise: Risk Advisory Services. Advanced Controls Design for Enterprise Applications. Best Practices for Risk Mitigation and Internal Controls Automation. Audit, Compliance, Financial, Enterprise and Operational Risk Assessments. Risk Remediation Services.
! Packaged Solutions: FulcrumWay is the #1 choice of Oracle customers for Oracle GRC Advanced Controls, GRC Manager, and GRC Intelligence/OBIEE software implementation. Oracle has certified us as the only partner with Accelerators for Oracle GRC. We also provide Managed Services
! Software Services: Risk Assessment for ERP systems, Control Design and Management Tools, Controls Catalog, Enterprise Risk Manager, Financial Reporting Manager, Audit Manager
! USA Presence: Privately held Delaware Corporation with US offices in New York City, Dallas and San Francisco
! International Presence: in Auckland, Chennai, Johannesburg, London, Mexico City
Organizations are seeking new ways to transform their rapidly growing data into insight that mitigates risks and unlocks new opportunities. However, using the traditional reporting tools to look for unusual patterns in large data sets is like finding a needle in haystack. The problem is not the resources, or the personnel, or the data. It’s that many organizations simply don’t have the advanced analytics required to arrange the data, identify suspicious patterns and weaknesses, at least not fast enough. There’s too much data, and not enough analytics!
“By 2016, 70 Percent of the Most Profitable Companies Will Manage Their Business Processes Using Real-Time Predictive Analytics” – Gartner Hidden bottlenecks, repetitions, and loopbacks in business
processes can now be tracked, exposed, analyzed and addressed easily and efficiently, which leads to increased efficiency. Exposing these problematic business activities within the processes also allows for a more effective business process optimization, reduces costs, and improves the bottom line.
How does cash leak through your ERP system? Top 10 Issues Business Risk Bottom Line Impact Duplicate Invoices – 2 invoices Overpayment to Supplier Cash Leakage
Duplicate Invoices – 2 vehicle Overpayment to Supplier Cash Leakage
Erroneous Charges to Invoice Overpayment to Supplier Cash Leakage
ERP Control Detective: § Detect invoices with “Similar” invoice number, same amount to the one supplier § Detect invoices made to the same suppliers but in different business unit
§ Detect invoices made to different vendor with very similar names Preventive:
• Put duplicate invoices on hold until proper investigation is complete
• Discrepant Invoices • Late Payments • Honest mistake/ Fraud
ERP Control Detective: § Detect suppliers with multiple method of payment § Detect payment made by procurement card and checks Preventive: • Put duplicate invoices on hold until proper investigation is complete • Prevent Supplier from getting paid through paper invoice if he is setup for electronic payment
• 2 Vehicles like Invoices and P-Card • Paper Invoice and Electronic Process • Expense Report and Petty Cash • Multiple payment vehicle for a vendor
ERP Control Detective: § Detect invoices where freight was charged when in PO it was supposed to be pre-paid by the
vendor § Detect invoices where freight was charged and warehouse charged freight separately § Detect invoices billed for quantities than what was actually shipped
Preventive: • Put suspect invoices on hold until proper investigation is complete
Issue3: Erroneous Charges to Invoice
• Who pays freight, insurance? • Are invoices based on POs? • Special deals
ERP Control Detective: § Detect invoices that are approaching due date base on supplier/ PO payment term § Identify users who have consistently not paid vendors on time
§ Detect payments to vendors that are consistently late Preventive:
• Send alerts on upcoming payments that are approaching due dates
Issue4: Late Payments
• “Never pay late fees” • Open Vendor Credit • Can result in Duplicate Payment
ERP Control Detective: § Duplicate payment made to multiple entities of the same supplier § Identify purchases made from unapproved vendors
§ Identify suppliers with similar or different names but with same Tax ID Number or address § Identify suppliers who exists in the “Do not do business with” suppliers Preventive: § Ensure Segregation of duties between supplier creation and other conflicting functions
§ Detect suppliers with similar names at the time of supplier creation
ERP Control Detective: § Identifies special rebate from the PO contract that the invoice failed to mention § Track invoices that missed discount date by a little margin Preventive: • Send alerts on upcoming discounts available for payments above a threshold
Issue8: Missed Discounts
• Inefficient processing • Best financial return for any company • Track discount lost and why • Fix root causes whenever possible
ERP Control Detective: § Detect payments made earlier than supplier payment term § Alerts a user if payment term setup is changed
Preventive: • Set up an approval process if payment term is changed • Prevent payment term to be changed • Ensures segregation of duties between invoice creation and supplier creation
Issue9: Early Payment
• Negative cash flow • Fraud • Analyze early payments
! Layer of automated controls over ERP controls ! Continuously monitor key controls ! Detect and Report issues as they occur ! Prevent issues from occurring ! Quickly see high risk issues with exception based dashboards ! Address issues that affect the bottom line ! Reduces operational risk and process effectiveness
Ontology based Advanced Transaction (OAT) Analytics
User Roles
3-Way Match
Track Payments
Sentiment Analysis
Split Purchase
Orders Hide Displays of Sensitive
Data Duplicate Payments
Transaction Threshold Amounts
Duplicate Vendors
Fine-grained
User Access
Configuration Snapshots & Audit Trial
Transaction Pattern Analysis
Fuzzy Logic, ‘similar values’
Advanced Controls
Standard Controls
Approval Hierarchies
Track Discounts
Advanced Controls
FulcrumWay OAT Analytics™ discovers your data source and creates enterprise ontology catalog including business objects, attribute, era, frequency, patterns and model logic to deliver insight within just a few weeks
! Designs, develops, markets, and distributes footwear for men, women, and children, as well as performance footwear for men and women
! The company operates through four segments: Domestic Wholesale Sales, International Wholesale Sales, Retail Sales, and E-commerce Sales.
! As of February 15, 2014, the company operated 122 concept stores, 131 factory outlet stores, and 71 warehouse outlet stores in the United States; and 44 concept stores and 26 factory outlets internationally.
A global leader in the lifestyle footwear controls cost with OAT Analytics™
! Accounts Payable Audits: Track all your claims closely, and prevent future losses by catching them earlier. Improve vendor relationships by submitting only verified high-quality claims, all resulting in less work for you, and more accurate, more profitable results
! Merchandise Audits: Detect merchandising errors early by finding the facts as close to the transaction as possible. This helps your company reduce operating expenses through recoveries.
! Vendor Risk Assessment: Comprehensive vendor risk analysis to analyze all available data for optimal results. Research a wide variety of potential vendor risks – from fraud and conflicts of interest to lapsed business licenses and liability concerns.
! Freight Audits: Safeguard freight-related disbursements by identifying payment errors and analyzing whether vendors and carriers have complied with your shipping guidelines
! Media Audits: Agency and media invoices match up. Identify duplicates and overpayments, review contracts, media plans, insertion orders, print orders and billing statements, and accurately determine whether there have been mistakes and under-achieving performance.
! Contract Compliance: In-depth review of contract compliance combines automated techniques with focused strategic buyer discussions. Identify the causes behind overpayments, and developing customized prevention techniques for minimizing future exposure.
Implementation Approach for Reliable, Affordable, Rapid and Easy (RARE) Insight Case Study
Assess
• Iden/ty data-‐sources, business objects, aHribute era, frequency, paHerns and model logic • Create object catalog, condi/ons and paHerns and transac/on excep/ons using DataProbe™ • Confirm Findings and Gap.
Design
• Map data source objects catalog to OAT (Protégée) • Define transac/on model logic in terms of data-‐sources, business objects, aHribute era, frequency, and paHerns • Confirm Design. Iden/fy out of the box vs custom objects for install
Install / Configure
• Install Advanced Controls plaVorm • Configure data-‐source, objects, and models • Unit Test and Verify Results
Test / Train
• Train users, managers, and administrators • Conduct user acceptance tes/ng
Deploy
• Setup produc/on system • Support administrators as needed