Creating a Vendor Heat Map using Data Analytics

Transcription

1 Creating a Vendor Heat Map using Data Analytics Amsterdam May 15th 2012 Martin Riedl dab:gmbh 1

2 dab: Group Company Profile specialists in auditing SAP systems and data extraction from SAP own software portfolio strong consulting team certified Trainers for ACL Helping big and medium sized organisations to implement data analytics within their audit departments dab was part of a project team implementing a Continuous Montioring Siemens AG after the big corruption scandal Martin Riedl dab:gmbh 2

3 Why you should audit/monitor your vendor activities Case Siemens Biggest corruption affair in german history illegal payments resulted in 1.3 billion bribe money Siemens in the end paid 2.9 billion Euros for lawyers, consultants and fines Heinrich von Pierer (former CEO) had to pay 5 millions Implementing a worldwide CCM solution for over 600 legal entities was one of the reasons why the SEC lowered the fine to 450 million US-$ (from potential 1.3 to 2.7 billion) Martin Riedl dab:gmbh 3

4 How to remove some money from the company Create shadow vendors that do not really exist or only exist as a post box. Get fake invoices into the system for those vendors Get the budget for Purchase Orders, Projects etc. and use the automatic approval of SAP Get it approved (or approve it yourself) if it has no Purchase Order Martin Riedl dab:gmbh 4

5 Identify risk indicators for your vendor process Martin Riedl dab:gmbh 5

6 Indicators for Vendor Risk Map Partner Partner Process Processes Critical Masterdata Changes (Bankaccount, Alternate Payee) Usage of critical countries in Masterdata Manual Payments One-time-vendorusage Payments to critical countries Missing payment information No procurement view for partner Manual Change of e.g. payment terms Round amounts Processcomplexity (statistical indicators like entropy) Reactivation after long period of silence Exceeding of turnover value of X shortly after master data creation Usage in customer ledger with high credit note volume Different partners in process Reactivation of old accounting objects Share bank account with different partners High One-Time-Sales Invoice before PO SoD Open items Martin Riedl dab:gmbh 6

7 Assess the risks and weight them Martin Riedl dab:gmbh 7

8 Indicators for Vendor Risk Map Partner Partner Process Processes Critical Masterdata Changes (Bankaccount, Alternate Payee) Usage of critical countries in Masterdata Manual Payments One-time-vendorusage Payments to critical countries Missing payment information No procurement view for partner Manual Change of e.g. payment terms Round amounts Processcomplexity (statistical indicators like entropy) Reactivation after long period of silence Exceeding of turnover value of X shortly after master data creation Usage in customer ledger with high credit note volume Different partners in process Reactivation of old accounting objects Share bank account with different partners High One-Time-Sales Invoice before PO SoD Open items Martin Riedl dab:gmbh 8

9 Weighting of vendors based on master data Rating of the vendor based on all master data indicators (e.g. bank account changes, Turnover volume etc. ) Martin Riedl dab:gmbh 9

10 Weighting of transactional indicators Risk points based on transactional volumes 0 % Invoices without PO 0 points > 0 % - 10 % 2 points > 10 % - 50 % 3 points > 50 % 4 points Martin Riedl dab:gmbh 10

11 Get all necessary data out of your ERP System Martin Riedl dab:gmbh 11

12 Data that you need Vendor master data Purchasing data (Purchase orders etc.) all vendor related transactions in financial ledger complete history of changes (transactions, master data) payment details additional master data like Accounts, Cost Centers etc. system configuration out of a standard SAP-System you need ~ 200 fields out of 25 tables get external lists like Transparency Internationals Country List (with CPI value) or UN-Embargo Lists. Martin Riedl dab:gmbh 12

13 How you DO NOT want to do it permanently Data Extraction with SAP -on- boardtechnology (e.g. SE16) Creation of flat file out of SAP Manual import into ACL Martin Riedl dab:gmbh 13

14 Manual Data extraction - Some problems and their solution - big datasets result in time-outs and have to be splitted manually in several parts + no time outs with professional tool -Several tables need several download processes + configure once ( 5 minutes) download all in one step! -Import procedure in Analysis software like ACL needs lot of time + data already imported in ACL and immediately available Martin Riedl dab:gmbh 14

15 Use well-known data analytic technology Martin Riedl dab:gmbh 15

16 Proven solution in the audit and assurance area Martin Riedl dab:gmbh 16

17 Regional Concept / Integration in Audit Plans Cluster the audits regional or functional (e.g. all entities in APAC, all sales entities in Europe). As vendors are used cross-entity you should not necessarily focus on single entities per Audit. REGIONAL FUNCTIONAL Region Sub-Region Country Corporate Chemical Sector Health Care Agricultural sector Production Sales Production Sales Production Sales Europe D-A-CH D RV-II-001 Europe D-A-CH A RV-II-003 RV-II-003 RV-II-003 Europe D-A-CH CH Europe Nordic DK Europe Nordic SE RV-II-004 Europe Nordic NO Europe Nordic FI : : : : : : APAC Ozeania AU APAC Ozeania NZ RV-II-002 APAC China CN : : : : : : America NAFTA US America NAFTA CA RV-II-005 America NAFTA MX : : : : : : Martin Riedl dab:gmbh 17

18 Different scenarios for a technical Setup Martin Riedl dab:gmbh 18

19 Manual Auditing Effort / Manpower / Ressources Evolution 100 % manually semi-standardized standardized managed managed, applied & automated One-time-implementation effort Martin Riedl dab:gmbh 19

20 Automation via WINDOWS- SERVICE or AX3 Scheduling Architecture of the solution Result presentation AX3 or Desktopedition Creation of a Data pool Data Extraction Several SAP- Systems Martin Riedl dab:gmbh 20

21 THANK YOU! FEEL FREE TO ASK QUESTIONS! Martin Riedl CEO Dab: GmbH Edlmairstr Deggendorf GERMANY Dab: Europe Interleuvenlaan Heverlee BELGIUM Martin Riedl dab:gmbh 21