How AI Brings Greater Efficiency to Risk Detection for Finance & Procurement Professionals
The procurement process is an integral part of successful business management. It is especially crucial when a business is moving into a new industry, market or territory. The ability of procurement professionals to properly screen vendors, partners or future investments and carry out processes like, conflict of interest checks and financial/business due diligence has profound implications for the overall compliance and competitiveness of the business.
In order to do their work effectively, finance & procurement teams require access to large amounts of internal and external data. There are numerous sources from which this data can be obtained, but capturing the most accurate, up-to-date, and relevant information is a difficult and time-consuming task, especially when the business operates across borders. Unless an organisation is able to process data quickly and efficiently, it will not be able to make procurement decisions in a timely manner.
What Does Due Diligence Mean for Procurement Professionals?
When an organisation is seeking to procure goods or services from an external vendor, it must carry out due diligence to ensure:
- that the vendor is reputable and trustworthy
- has the capacity to deliver the required goods or services in the required time
- and is not colluding with other suppliers to artificially inflate prices.
Procurement departments also perform due diligence to ensure that there are no conflicts of interest and that the vendor is not engaged in illegal or unethical practices, including practices that harm the environment or infringe on human rights.
Due diligence in procurement is key to effective risk management as it helps an organisation to ensure that the goods or services it is procuring are cost-effective, that its operations won’t be hampered by shortages, and that it is not exposed to the possibility of penalties or reputational damage.
The Challenges to Effective Risk Management in Procurement
Conducting due diligence and managing risk in procurement depends largely on the quality of data available to the organisation. However, there are several major challenges that procurement professionals face when it comes to collecting and analysing data. The main ones are as follows:
Data needs to be collected from a wide variety of internal and external sources
Researching and monitoring vendors involve gathering data from numerous internal and external sources such as corporate profiles, financials, transaction history, emails & documents. This is a laborious and time-consuming task when using traditional tools and methods. The task is even more difficult for large organisations that operate across multiple countries or industries.
Disparate data needs to be consolidated
Accumulated raw data must be consolidated and organised before it can be properly analysed. This means correcting input errors, removing duplicate data, resolving format disparities, and more. In some cases, data may need to be translated from one language to another. Again, traditional methods of data consolidation require a great deal of time and effort.
Finding the most relevant data can be difficult
Given the vast amount of data a procurement department needs to handle, it can be difficult to filter out the noise and zero in on the most relevant facts.
Analysis needs to be done speedily and accurately
Delays in procurement can have an adverse effect on business operations. This means that procurement teams need to be able to efficiently turn raw data into meaningful insights so that they can make well-informed decisions quickly.
If not adequately addressed, these challenges can seriously compromise an organisation’s procurement activities and overall competitiveness. Fortunately, recent advances in artificial intelligence (AI) technology have made it possible to streamline the process of collecting and managing data, thereby improving risk monitoring capabilities and facilitating quick decision making.
How AI Technology Makes a Difference
Artificial intelligence (AI) can address these common issues at almost every stage of gathering, organising and analysing data. It typically has advantages in some of such as:
- Automatically extract information from any text-based files
- Adding structure to accumulated data
- Integrating data points & platforms
- Analysing data and graphically present the results
ScoutAsia uses AI technology to extract corporate registry data & visualise the relationships between entities. Its premium feature Connections+ uses up-to-date data of all private and public companies registered in key Asian economies and presents the data in such a way that it is easy to derive actionable insights from it.
What’s in Connections+
- Reliable, up-to-date registry data for all public and private companies in Singapore, Malaysia, Vietnam and China
- Interactive map visualisation technology to draw past & present/direct & indirect relations between entities and persons
- The map features can visualise:
- Past & present directors & shareholders
- Multiple entity relations
- Legal beneficial ownership
- Investee companies
- Direct & indirect exposure to regulatory action
Connections+ allows you to instantly uncover direct and indirect, past and present connections between companies and individuals. It also provides entity profile reports which contain important information on particular companies and individuals, including information on whether or not the entity has been directly or indirectly exposed to regulatory actions.
With ScoutAsia’s Technology Solutions, you can combine it with additional data points such as the company’s own procurement/HR/vendor database and integrate the processing and visualisation technology into your workflow.
Conducting company background checks is easy with Connections+. The feature saves you the time and effort required to manually trawl through numerous sources of structured and unstructured data, thereby enabling you to minimise risk exposure and make sound procurement decisions quickly.
To learn more about the Connections+ feature, check out the risk detection solutions page or sign up for a Free Trial.
If you are interested to learn more about customisation or solutions, feel free to drop a message here to reach out to our tech consultants.