Better a post mortem before the event

18 March 2009
“No, but maybe we should be thinking about it now!” was one buyer’s response to our SM100 question this week on measures organisations are taking to deal with procurement fraud. I’m not going to name names, but I do think he is right – maybe he should start thinking about taking steps to mitigate the risk. But he is not alone in not yet having acted. A total of 64 per cent of respondents aren’t doing anything to address this growing problem. I’m taking the “glass half-empty” approach to this – strictly speaking the glass is two-thirds empty, but you know what I mean. Many buyers will no doubt have foolproof procedures in place, and around a third of procurement teams are reassessing their methods of avoiding embezzlement. With the value of procurement fraud rising 347 per cent last year, some of those buying departments not taking action will be caught out and will lose money. When this happens the buyers, their bosses and all senior management will inevitably become involved in a highly uncomfortable and time-consuming post mortem of how it happened. Individuals will feel their job under threat, and their focus will shift to demonstrating how they are not personally to blame, and away from helping their organisation fight off the worst of the downturn. And that is on the assumption the fraud is actually detected. Those organisations with inadequate measures to prevent it probably won’t have the best structures for noticing it has happened in the first place. Better, surely, to have the post mortem before the event and stop it happening in the first place.
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