Six Key Trends Across P2P - Purchase to Pay … Transformation... 6) Robotic Processing Automation...

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

Automated expenses process

Automating the Expense Process

Purchase Request

Approval Purchase Order Goods ReceiptAcknowledge

OrderInvoiceCapture

Invoice Matching

Payment

Automation in P2P

Purchase Request


OrderInvoiceCapture

Invoice Matching

Payment

STP = RPA

Automation in P2P

Automation in P2P

Purchase Request


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

Clustering

Prediction

Natural Language Processing

Problem Solving

Unstructured Data Input Structured Data

AI System

Structured Output

Automated Processes

RPA System

Hybrid Automation Solutions

ANDREW [email protected]

@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!


Factors: New World


• 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


• 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


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


Adding Insult to Injury: The New Headache

Source: AP Now 2016 Invoice Survey


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


MASTER VENDOR FILE


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

• Email

• Legitimate looking letterhead via the mail

– Mixing old-time techniques with a new fraud

• Intra-organizational e-mail


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


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


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


What You Have to Do

• Verify, verify, verify

• Be careful what information you put on Internet

– Company website

– Linkedin

– Facebook etc


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???


NEWEST FRAUD: OUTSIDERS TAKING ADVANTAGE OF YOUR EMPLOYEES


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


How Accounts Are Compromised

• Account takeover

• Spoofing

• Use of Similar URLs

• Can you see the difference:

[email protected]

[email protected]


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


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


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.


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


EXPENSE REIMBURSEMENT FRAUD


Schaeffer 81

Occasionally, Just Poor Judgement

• The plate of chicken wings

• Forgot to get the receipt

• Sent in a picture


The Actual Receipt


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


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%


AP Now Perpetrators


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


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


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


Another Reality Check


Source: AP Now’s 2016 Travel & Entertainment Survey

CLOSING THOUGHTS


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


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!


Thank You

Questions/Comments

Mary S. Schaeffer

AP [email protected]


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

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OUTSTANDING CONTRIBUTION TO

AP

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AP

2nd Place winner


AP

Overall Winner

INNOVATION IN SUPPORTING THE

BUSINESS

Sponsored by


BUSINESS

2nd Place winner


BUSINESS

Overall Winner

AP MANAGER OF THE YEAR

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2nd Place Winner:

Kerry Scott


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…

Six Key Trends Across P2P - Purchase to Pay … Transformation... 6) Robotic Processing Automation...

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