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An Advanced Analytics Solution to Prevent High-Risk Procurements
In today’s budget environment, federal procurement organizations need to avoid high-risk procurements for a multitude of reasons. Not only can high-risk procurements mean higher costs and potential for fraud, waste and abuse, but they can also result in unwanted scrutiny from oversight bodies, legislators and the media—and the general public too. Clearly, high-risk procurements are a high-stakes proposition, and the time has come for organizations to start thinking differently about them to drive reform.
Accenture’s experience reveals an exciting new solution. What if your procurement organization could identify high-risk procurements before they occur? You can. Advanced analytics techniques can proactively identify risks associated with procurements; build near real-time visibility into these risks; and provide actionable feedback in the procurement processes and systems before the contract award occurs. Discover the benefits of rethinking the approach to high-risk procurements and the new value that advanced analytics techniques can bring for procurement excellence in today’s environment.
Agencies have historically monitored procurements based on the dollar value of a contract. While this approach makes sense in an environment with a high volume of procurements, it can permit risky procurements to proceed undetected.
Our research has found that
However, even in cases where procurement actions are manually reviewed for appropriate due diligence, procurement officials find themselves constrained by time consuming and cumbersome research, most of which is performed outside of the agency’s procurement system. At best, this leads to a backlog in procurement workload and, at worse, a disregard for or limited mandatory reviews, thus increasing the likelihood of risky contract awards.
Accenture has found that a combination of advanced analytics techniques like data mining, predictive modeling and network analysis provide alternate approaches to identifying risk. These techniques can uncover the characteristics of high-risk procurements and develop models that capture the relative risk related to them.
This advanced analytic approach counters the problems found in a traditional “business rules only” approach to identifying high-risk procurements. By using multiple risk factors through this hybrid approach, agencies move beyond simple business rules related to individual procurement dollar value and consider other factors for better visibility, control and decisions.
Further, these analytic solutions can be integrated with the organization’s procurement system, thus eliminating the need for “swivel-seat” procurement research.
Accenture has developed an approach using advanced analytics and data mining techniques to identify likely high-risk procurements.
April 2, 2012
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