Oversight Systems Focuses on Saving Money and Preventing Fraud

I recently spoke with Oversight Systems, an operational intelligence analytics company that uses predictive analytics and optimization to help companies save money, reduce the risk of loss and fraud, and reinforce corporate governance and compliance efforts. Ventana Research views operational intelligence as an emerging technology with the potential for a high return on investment. By continuously monitoring activities in a company’s IT systems, Oversight’s Web-based software continuously, consistently and objectively monitors all business processes to identifies opportunities to save money, cut fraud, minimize risk and provide real-time controls to support governance.

Today, corporations generate large amounts of operational data that should be monitored as part of routine management oversight. These data sets provide foundational intelligence that can be used to automatically spot deviations that require management attention. The variations may be specific values that diverge from the mean, such as an overpayment for a purchased item or excessive discounting by sales people. Variations also may stem from item repetitions, such as duplicate invoices. The data streams may reveal anomalous patterns or events that can signal emerging issues with customers or may alert the company to ongoing fraud, such as in unusual returns or changes to customer master lists. Our recent research on governance, risk and compliance (GRC) found that the majority of companies have immature governance systems in place.

The challenge confronting organizations (and anyone trying to develop packaged applications for this preventive capability) is knowing what to look for and how best to find it. There’s a heavy dose of forensic accounting and IT systems domain expertise involved. While much of the data may be in transaction systems, such as ERP or supply chain management, the oversight process may also require monitoring of email or instant messaging to detect issues or confirm patterns in transactions or systems data. As important as detecting anomalies or suspicious patterns, the system has to be able to filter its assessments to achieve the right balance between avoiding false positives, dealing with too many trivial issues and missing real incidents.

Oversight Systems’ products take on various aspects of operational intelligence in this area. For example, to ensure that a company minimizes its outlays, Assured Best Price (part of its Spend Insights software) automatically compares the value of a purchase order (PO) against the optimal amount, taking into account prices paid for those same items elsewhere and at other times within the company, making allowances for quantities and other factors. A PO that significantly exceeds the optimal amount will be flagged for review before it is issued to a vendor. The system also can be used to alert purchasing to duplicate billing or unusual orders. It can provide internal auditors, controllers and CFOs with evidence of payment fraud.

Similarly, Oversight’s Revenue Insights can detect pricing trends that indicate discounting that exceeds guidelines, preventing unnecessary margin erosion. It also detects unusual revenue patterns that may be channel-stuffing, and return and warranty events that suggest fraud. The company’s Purchasing Card risk system can analyze patterns and specific items bought in order to recognize and stop suspicious purchases, excessive or fraudulent spending or shady merchants; this is especially useful for government entities. It can spot attempts to exceed authorization limits using split purchases. In all, these capabilities can save money, limit the incidence and impact of fraud and make governance and the audit function more efficient.

Oversight is a co-innovation partner for SAP’s HANA in-memory computing platform. Running Oversight’s Continuous Transaction Analysis on HANA enables companies to perform more of these functions in real time with very large data sets. It can, for example, provide individuals using predictive analytic models with more sophisticated guidance on how best to react to an emerging trend that requires their attention or to mitigate the impact of an event sooner.

Automated continuous monitoring is a smart way to avoid unnecessary costs and mitigate the risk or limit the impact of fraud, financial or operational. It is an efficient governance tool as well, providing a cost-effective control mechanism for lowering internal and external audit costs.

Big data is not necessarily a topic that interests finance department types, yet it is the ability to analyze very large data sets that makes continuous monitoring feasible. In my opinion, most companies with 1,000 or more employees and all companies with 5,000 or more employees should have continuous monitoring capabilities. I recommend that companies looking into deploying such systems put Oversight Systems on their list of vendors for evaluation.


Robert Kugel – SVP Research

Echopass Demonstrates Value of Contact Center in the Cloud

Our benchmark research into the contact center in the cloud shows that almost all companies now support multiple communication channels to engage with customers. Most of them also involve multiple business units in handling inbound and outbound interactions. More companies now support at-home agents, and contact centers are becoming more distributed. These scenarios are a good fit for cloud-based systems, and the research finds that the top three ways organizations said they can meet these challenges, and thus improve the way interactions are handled, are to improve training and coaching, adopt applications in the cloud and adopt communications in the cloud. It also shows that organizations have high expectations of cloud-based systems, expecting them to require less capital expenditure, facilitate innovation in interaction handling, lessen demand on in-house resources, including IT and better support home-based agents.

The research shows as well that organizations have reservations about adopting cloud-based systems, among them likely responses times, overall performance, security of access and scalability. Because cloud-based contact centers are relatively new, there aren’t many examples of success to help allay these fears.

In this context I was pleased to see an announcement from Echopass that one of its customers has reaped  multiple benefits by adopting a contact center in the cloud. Echopass was one of the first vendors to offer such a service, and it now offers services based on its Symmetry Architecture. As I recently wrote, Echopass has an interesting mix of third-party systems and in-house developments that it has combined to provide multimedia interaction handling in the cloud, and some elements of workforce optimization.

A number of business benefits cited by the customer in this case study concur with the primary benefits the research shows that companies expect by moving to the cloud, and the Echopass customer asserts that after using the services for five years it continues to realize these benefits. Closer examination of the case study indicates the company has achieved considerable cost savings and has seen its net promoter score rise dramatically. A part from pure savings in total cost of ownership in infrastructure and support costs, the company notes these:

  • Average speed of answering calls has decreased, saving money and improving customer satisfaction.
  • Average call-handling times have decreased. (Our research into contact center analytics shows this is the top priority for most contact center managers.)
  • Targeted service levels have been exceeded.
  • Agent productivity has improved, resulting in reduced head count.
  • Call abandonment rates have lessened, improving customer satisfaction.
  • Net promoter scores have improved because calls are being answered more quickly.
  • The new quality monitoring systems and dashboard enable the company to focus agent training better.

One of the less tangible benefits is shown in this quote: “The Echopass solution allows us to focus a lot more on our customers and not worry about the technology or have it get in the way.” Customers are what business is all about, and too often processes and systems get in the way of a true customer focus. This success story shows that a cloud-based system can take away many of the operational issues companies struggle with on a day-to-day basis and allow them to innovative with the customer as the focus. With that comes business success.

Our research shows that over the next few years more organizations will adopt cloud-based systems to meet pressing business and budget issues. They remain firmly on our research agenda. Keep following my blog and I will keep you abreast of new developments and similar success stories as they emerge.


Richard Snow – VP & Research Director