As complexity in global supply chain networks continues to increase, less than one-third (26 percent) of business executives are using data analytics tools and processes to help manage third party relationship risks, according to a new Deloitte survey.
Thirteen percent of those surveyed are still learning how to use analytics software and 22 percent use no data analytics at all.
Mark Pearson, principal, Deloitte Financial Advisory Services LLP, said: “Many market leading companies leverage advanced data analytics tools and forensic accounting to identify anomalies in their transactional data.”
“Using a forensic mind set when analysing big data can provide value to an organisation by adding context to suppliers and transactions, potentially adding to increasing profits and mitigating the risk of fraud, waste and abuse.”
Nearly one-third (31 percent) of business executives surveyed said their organisation has faced supply chain fraud, waste or abuse in the past 12 months.
Forty percent of these executives have a programme in place to detect and thwart supply chain abuse, while 28 percent of respondents indicated their organisations do not have a programme in place.
Additionally, 23 percent of respondents monitor their third party relationships less than once a year (13 percent) or not at all (10 percent).
“Globalisation, regulation and economic volatility are some of the top issues adding to the complexity of today’s supply chain,” said Larry Kivett, partner, Deloitte Financial Advisory Services LLP.
“Failure to adequately and actively monitor supply chain relationships can substantially increase a company's risk of significant financial losses, as well as exposure to legal and regulatory investigations, civil and criminal litigation, and reputational damage.”
Respondents said the biggest challenge to their organisations’ supply chain fraud detection capabilities was acquisition of a new entity (25 percent).