Plugging the gaps with Capital Projects Analytics

Cap Projects 2 infographic (2)With fraud, waste and abuse becoming common issues in capital projects, organizations are now re-examining and sequencing their plans to mitigate these threats. They are contemplating various methodic approaches to address risk areas individually through various combinations of advanced technologies.

Taking a step forward ahead from our last post on Capital Projects, another approach involving Capital Projects Analytics would be more pragmatic and can be customized through consultation and dialogue with the stakeholders. This ensures that proper understanding is obtained regarding the end-to-end capital project process in order to identify challenges and analyze the contracts from bidding till payment schedules.

Capital Project Analytics can bring together the power and the ability to look at both unstructured data such as contracts, invoices, email & other communications as well as structured data such as databases and ERP system data. It can also provide simple but informative reports to the top management, giving them an unparalleled overview of where any potential leakage is happening.

Capital Project Analytics uses powerful analytics engines, algorithms related to Text Analytics, technologies such as Big Data and transactional databases to review all kinds of transactions. This involves purchases to third party invoices, volume allocations for both long-term and spot market contracts, net volume losses, overpayments made by consumers. It also includes inventory injections and withdrawals, incentive rate program parameters, safety records and field inspections.

Any anomalies discovered can be further investigated through field interviews and other techniques to quickly detect fraud to prevent further leakage or potential non-compliance issues. It thus, becomes a first level measure against any fraud that may happen during the execution of large capital projects.

For example,

Cap Projects 2 infographic (1)

The speed of project execution often becomes critical and important. In such cases, it becomes difficult for the project management to ensure all round efficiencies of execution, which also includes the reasonable guarantees and controls to deter frauds.

The benefits offered by innovative techniques such as Capital Project Analytics makes excellent case for companies undertaking large capital expenditure projects, to consider them going forward to avoid fraud and wastage of capital. This not only protects the capital but also provides much needed comfort to all the stakeholders involved.

(The above post is part two of the series on capital projects in India and how companies can leverage analytics to mitigate risks related to fraud)

Follow @EY_India and track #EYForensic for regular updates

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