How firms can overcome fraud and wastage in technology procurement


Kenya has come a long way in formulating procurement laws. PHOTO | SHUTTERSTOCK

The fast-paced adoption of technology has been met with both enthusiasm and apprehension. While it promises to enhance efficiency and innovation, the dark shadows of fraud and wastage loom over technology-related procurement.

Organisations are adopting technologies to, among others, enhance customer experience, reduce costs, bolster operational efficiency and productivity, and facilitate decision-making.

Among the prevalent technologies in our region are cybersecurity solutions, cloud computing services, data analytics and business intelligence tools, enterprise resource planning (ERP) systems, artificial intelligence, and machine learning.

Amid all this, fraud and wastage remain a big challenge that often goes unnoticed. Organisations allocate substantial budgets that provide fertile ground for funds to be siphoned through fraud.

The allure of cutting-edge technology often excites and blindsides decision-makers, leading to a lack of critical scrutiny of procurement procedures.

Manipulation of procurement processes encompasses practices such as bid rigging or collusion with service providers, kickbacks and bribery, false invoicing, misrepresenting specifications and capabilities of products and services, channelling payments through shell companies solely to facilitate bribery, conflict of interest, and disguising procurements to bypass processes.

The haste and pressure to swiftly adopt cutting-edge technologies often lead to ill-considered technology procurements. No one wants to be seen as standing in the way of technology. However, fraud and wastage hit opportunities for advancement.

To address this escalating concern, a change in basic assumptions in the approach to technology procurement is required. Organisations need to bridge the gap between technology evolution and accountability.

Adequate planning, centralisation of tech decisions, robust implementation of strategies and controls can curb fraud and wastage.

Again, it is critical to involve experts, preferably independent ones, to assist in defining the specifications, evaluating the proposals, providing quality assurance during the delivery process, and post-implementation evaluation of benefits.

The writer is a senior manager in forensics practice at PwC East Africa.

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