EXE CU TIVE E D G E
For example, in travel and expense
management, companies rely on categorization of expenses to help classify and
report for trending purposes, but also to
prepare tax filings, which may include different deduction rates depending on the expenditure category. Employees may either
inadvertently or purposefully misclassify expenses. Cloud-based analysis can analyze
T&E expenses for miscategorization, frequent offenders and merchants associated
with multiple misclassified expenses. With
this insight, the company can investigate to
determine if there is fraudulent activity taking place, if certain inappropriate merchants
(i.e., dating services expensed as “meals”)
should be blocked, or if a process or policy
change needs to be implemented to guard
against problems.
Cloud-based analysis puts available
data to work immediately, asking key
questions and delivering business-critical
insights on day one. Minimal ramp-up time
is required and enterprises can start seeing trends immediately. These new solutions enable companies to see immediate
benefit from analytics and also avoid the
lead-time and resources required to progress through the learning curve of which
questions to ask, which queries to configure and how to deliver meaningful reports. Companies should consider if there
are areas where cloud-based analysis
can deliver immediate operational value,
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allowing analytics gurus to focus on “deep
dive” strategic issues.
ACCOUNT FOR NUANCES OF THE
BUSINESS
While some expenses may be a red flag
for most any business (i.e., dating services)
beyond the most obvious examples, determining what kinds of transactions represent
a possible risk for a particular company is
a critical first step to ensuring the analytic
reports delivered are valuable.
For every industry and every business,
there are differences in what qualifies as
“typical” or “atypical.” For example, a large
invoice to a plumbing vendor may represent
a red flag to a pharmaceutical company, but
be quite typical for a construction company.
Likewise, a $500 dinner expense at the Ritz
in New York may not be uncommon for a
company with all East Coast clients, but the
same dinner expense in Robert’s Restaurant (part of the Scores strip club) may be
a red flag. The type of business, number
of daily transactions and specific situations
combine to make each company different.
Managers typically understand these exceptions and anomalies, but they may not
come to mind when initiating an analytics
program.
There are a couple of ways to capture
and integrate this information. One is to
start off with a questionnaire prior to implementing an analytics solution. A survey may
W W W . I N F O R M S . O R G