How Gaining Greater Procurement Transparency Protects Your Company Against Fraud
When companies reach a certain size, it becomes more and more challenging to detect nefarious activities such as small-scale fraud (relatively speaking) or bribery. Procurement in medium and large companies, in particular, tends to be murky and difficult to monitor.
A recent example of fraud and corruption within a prominent company (which shall remain nameless) demonstrated just how challenging it can be for management to ascertain information regarding their own procurement processes.
Fraud and Bribery: A Case Study in Opaque Internal Procurement Operations
The details of the following case study shall remain sparse to protect the identity of the company.
Recently, a well-known retail company that was making healthy profits was anonymously tipped off about potential fraud and corruption within their company. Within this company, the management team and board members were remunerated with sizable salaries and generous bonuses, however the rumors persisted about bribery and corruption.
After little to no internal progress, the foregin owners ordered a forensic audit to be carried out to get to the bottom of the issues. After several months of investigation, it was revealed that one board member and a few friends of his agreed on a procurement deal for overpriced IT services and construction contracts.
Not only was this procurement fraud taking place, but the board member was receiving payment for arranging these deals. It continued for several years before the forensic audit was carried out and the fraud was uncovered. By the end of the operation, over $500,000 had been stolen.
Achieve Greater Transparency and Reduce the Likelihood of Fraud with Collaboration Room
While medium to large-sized companies will always have to contend with the threat of fraud and corruption, there are solutions out there that can provide your company with more transparency regarding procurement.
For instance, with our B2B platform Collaboration Room, there is a precise digital record of supplier offers, communication between the parties, and prices quoted. Using the above case study as an example, the fraud would have been much more challenging to carry out.
Frauds of this nature are often very complex, and no tools are bulletproof. However, by using a solution such as Collaboration Room, you can avoid contracts being stored on employee C drives or buried somewhere deep in your Document Management System (DMS) (e.g., Sharepoint). In these instances, even authorized staff wouldn’t know where to find them.
With our custom B2B platform, everyone from the owners right down to management personnel can effortlessly locate and evaluate contracts, communications, and prices, providing much greater transparency from the outset.
It’s a browser-based application that can be accessed from anywhere with an internet connection, meaning anyone with the correct authorization can log in to check figures, review supplier offers, and communicate demands to other companies.
It also logs unsuccessful offers so that you can contact suppliers with unsuccessful bids in the future, should demand increase for the services they offer.
Try Collaboration Room Today to Gain Total Procurement Transparency
One of the most significant challenges at larger companies is discerning useful, meaningful information while ensuring nothing untoward is taking place. The larger the company becomes, the more difficult it is to unearth deals done under the radar.
However, you can resolve this issue by implementing and enforcing the use of a transparent procurement platform such as Collaboration Room. Whether management wants to gain a bird’s-eye view of procurement to ensure nothing is amiss, or they want to dig down into the granular detail of contracts awarded to suppliers, this all-encompassing solution helps deliver unrivaled transparency.
Better still, total transparency between your company and other suppliers is merely one feature of this exciting new application. It can also solve internal supply and demand problems by matching internal offers with requests.
Whether it’s reallocating employees, machinery, equipment, or services, you can use Collaboration Room to maximize efficiency and realize substantial operational cost savings – often as much as 5%, if not more.
If you want to learn more about how this platform can dramatically increase your organization’s transparency, efficiency, and productivity, then make sure to contact us today to discuss your specific requirements.