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How Process Mining Can Help To Uncover Maverick Buying In The Procure-To-Pay Process

Process mining is a data driven approach to understanding and optimizing the processes within your organization. By analyzing the digital footprints in your system and application logs, process mining provides an easy way to visualize your processes, and discover bottlenecks, inefficiencies, risks and non-compliances for immediate remediation.

For the Finance procure-to-pay (P2P) process, a common procurement risk is that of maverick buying. Put simply, maverick buying refers to purchasing that happens outside your established standard operating procedures (SOPs), resulting in elevated risks including:

  • Increased costs when purchases are made on less favorable commercial terms

  • Inefficiencies and waste with unnecessary purchases

  • Reduced quality control when purchases are made with non-approved vendors

  • Legal or regulatory non-compliances

  • Lack of visibility and control by the procurement function, and erosion of the overall procurement strategy

To illustrate how process mining can help, take a look at the following dashboard:

It can be observed that there has been a general uptick in purchasing activities based on the various metrics: on a quarter-on-quarter (QoQ) basis, increase in number of purchase orders by 47, increase in number of items purchased by 129, and increase in total item value purchased by $13.5K.

Something of concern though is that the number of process variants have increased by a staggering 122, or 51.9% QoQ. In process mining, process variants essentially refers to the different ways in which a particular process can be executed. An abnormally high number of process variants may be an indication of non-compliances with established SOPs and warrants further investigation. Given that the period (Q2 2020) coincides with the return to office post-Covid, it is plausible that factors like maverick buying could be at play here.

Process mining allows us to check our hypotheses by delving into the data. In this case, we will focus in instances which bear the characteristics of maverick buying: good received without/before purchase order (PO) approval, invoice received without/before PO approval, unreasonable quick goods delivery, etc. Indeed, from the visual below, we can observe that maverick buying has increased by 7% QoQ to almost 30% of all purchases. Note that process mining has enabled us to eliminate guesswork and come to the correct conclusion in just a few clicks.

With our suspicions confirmed, we can then turn our attention towards addressing the most pressing issue first, in this example, good received without/before PO approval. By filtering on these 2 variants, we see that they have a maverick buying value of $172K, which is 88.8% of the total.

Identifying the existence of maverick buying is a helpful first step, but what we really want to identify are the behaviors that are driving this phenomena. Here is where root cause analysis comes in useful. When we look at the purchasing organizations, we observe that LSP Inc. contributes significantly to maverick buying (note: a large positive percentage indicates a strong contribution).

Going one step further, by drilling down into the PO creators within LSP Inc., it becomes clear that one employee (i.e. Anselmanna) in particular is contributing to maverick buying. With this insight on hand, we are now in a better position to nip this problem in the bud, be it to provide training on the company’s procurement SOPs to the identified employees, or better yet, automate the PO process so that only approved POs can be sent to suppliers.

Hopefully, this provides you with a sneak peak into how process mining can help to your finance teams to improve their P2P process. If you are interested to learn more about process mining and how it can be applied to your own processes, schedule a complimentary consultation with us now!


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