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How Big Data Can Keep Employees Honest

Typically defined as data from different sources that can be analysed to reveal patterns, trends, and associations, especially relating to human behaviour and interactions, Big Data is changing how organisations operate.

Through proper interpretation and analysis, Big Data has the ability to inform business marketing and sales strategies as well as financial decisions and help businesses gain a competitive advantage. It can also help organisations avoid unwanted losses by better dealing with fraudulent internal transactions and keeping employees honest.

The Unfortunate Truth about Employee Lies

Recent studies clearly indicate that internal fraud by members of a business’ own workforce is a major issue for organisations. A 2015 KPMG report found that the most common abusers include an organisation’s “insiders” and its employees. This translates to millions of lost dollars, with fraud by management averaging $3.3 million per case for a period of five months—double the average of fraud done by non-management employees.

In addition to outright financial fraud, there are many other ways employees can be less than truthful. These can include discrepancies around attendance, timekeeping, or productivity. Failing to document and deal with these items can result in companies paying their employees for work they haven’t actually done or completed. In terms of productivity, these omissions or exaggerations could skew statistics on production and efficiency.

Another example is employers not achieving quota numbers regarding sales attributes such as cold calling. When employees fudge the numbers, it can disrupt sales forecasts and data related to leads and conversions. This can also be illegal, as seen in one of the world’s largest financial institutions, Wells Fargo. It was discovered that many sales employees and managers had outright lied about new account openings, which had never been requested by customers. This resulted in Wells Fargo incurring substantial regulatory fines and lawsuits.

Because of internal fraud and employee dishonesty and the significant financial losses they can result in, businesses have increasingly been turning to data analytics in an effort to deal with the problem.

Data Monitoring Revealing Discrepancies

If an employee is attempting to defraud their company, it is likely that technology will play a role. This means that a digital paper trail which can be used for investigative purposes will be left behind. Through continuous data monitoring and the analysis of historical data and patterns, managers can be alerted about internal irregularities. They can then investigate further into the data to better understand the root cause and determine if action is required.

Being able to look at data to uncover fraudulent transactions is one thing: but how can it uncover other lies especially since, according to recent studies, at least one-third of employees lie to their bosses?

By looking at data from different sources within the company, it can be determined if an employee has indeed misled the management one way or another. For example, data from biometrics and computer log-ins as well as internal communications and even CCTV footage can be analysed to see if an employee has been lying about his or her rendered hours, attendance, and activity.

The same type of monitoring can be used to ensure salespeople are meeting their quotas. Through software that tracks outbound calls, the management will know if the sales team is reporting the right call numbers and not bloating statistics to their advantage. Taking this data and comparing it to the employees’ other actions such as notes and changes made in CRM tools will help paint a more accurate picture of how well the sales and customer relationship teams are doing, minus inconsistencies.

In terms of company inventory and cash flow—two more areas that attract internal fraud—attributes such as transaction patterns, sources of company income and expenditure, and the analysis of the movement of company assets can uncover discrepancies previously hidden in the absence of data analytics.

Aside from delivering key information to properly assess and act on possible cases of internal fraud, Big Data also reveals key insights that help companies proactively deal with potential employee dishonesty. By gathering, monitoring, and analysing data, an accurate historical view of a department’s operations can be developed with accompanying benchmarks and deterministic patterns.

Real-time or recent data can then be analysed and compared to these benchmarks to spot internal inaccuracies even before they progress and result in huge financial losses. On a broader view, this enables a company to identify at-risk areas and focus on them to help manage or even discourage and prevent employee dishonesty.

Through Big Data, companies are given the ability to detect, manage, and even prevent issues caused by employees being dishonest. As long as they are able to effectively and consistently do so, they’ll send a strong message that honesty is highly valued and must be followed within the organisation at all times, discouraging employees to even think about engaging in dishonest or fraudulent transactions.

Analysing Data is Key

There are plenty of sources around us which can be used to gather the needed data to deal with employee dishonesty and the resultant impact. However, your efforts will be futile if you don’t have the means to properly extract and analyse data and data relationships to uncover discrepancies and insights within your business.

Here’s where intelligent data management platforms such as Latize Ulysses come in. Through Ulysses, you’ll be able to integrate and harmonise internal and external data from different sources. This enables you to reveal data relationships that will produce actionable insights you can use to enhance company operations and initiatives, from dealing with employee dishonesty to finding opportunities to take your business to the next level.

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