Supply, skills and sustainability: futureproofing procurement for the UK

Overseeing spending across a large organization can be time-consuming and burdensome, particularly when dealing with large number of buyers and transactions. That’s why Amazon Business has launched Spend Anomaly Monitoring, a new spend tracking tool exclusive to Business Prime Enterprise members that sifts through an account’s transactions and evaluates spending patterns to alert administrators of unusual purchases on their account. 

How does Spend Anomaly Monitoring work?

Spend Anomaly Monitoring analyzes your organization’s purchasing and detects any irregular spend, based on industry standards and your organization’s purchasing patterns. These anomalies are populated within a dashboard that administrators can review and then confirm if they are in fact irregular, or if they are normal within the course of business. This dashboard updates daily, so administrators will see purchases that have been flagged within the previous 24 hours. As administrators mark purchases as “Unusual” or “Normal”, Spend Anomaly Monitoring becomes more acclimated with your organization’s patterns and this feedback helps to improve the future accuracy of the tool. 

What does Spend Anomaly Monitoring consider “unusual spending”?

This tool evaluates spending through 4 main categories, including:

• Unusual category purchases: Unusual category purchases are flagged when items are purchased from categories that your organization rarely buys from based on purchase history, or would be considered atypical for your industry. The system also considers your business profile to exclude commonly purchased categories specific to your industry.
• Split purchases: Split purchase detection looks at multiple purchases made by the same user to the same address within 48 hours that exceed your organization’s existing spending thresholds.
• Abnormal Repurchases: Repurchase detection shows repurchases that are outside of regular purchasing patterns and it considers consumables versus non-consumables. Normal repurchases, like office supplies, are excluded from this list.
• Excessive Daily Spend: Identifies when a buyer's daily purchasing activity significantly exceeds their typical spending patterns based on their historical purchase behavior. It helps to detect unusual spikes in the buyer's purchasing that may require review.

How do I use Spend Anomaly Monitoring?

You must be a Business Prime Enterprise member to access this tool. Speak with our sales team to learn more and sign up.

Review your dashboard and click on individual anomalies to see additional details and why the system considers that order or set of orders as irregular spending. You can view additional details, including the buyer, order numbers, purchase date and time, and order amount.

Once you review these orders you can either mark the purchase as “Normal” or “Unusual” and add in comments to help other administrators understand your decision-making process. Administrators can then use this information to contact buyers around non-compliant purchasing or adjust account controls like spend limits and buying policies to avoid future rogue spend. 

How do I get started?

Spend Anomaly Monitoring is automatically available to Business Prime Enterprise customers through the Amazon Business Analytics Insights dashboard. Simply log in to your Amazon Business account, navigate to Business Analytics, and click on Spend Anomaly under the Insights tab.

Responsible buying

As procurement organisations look to the future, they’re also increasingly tasked with ensuring the business operates in a responsible manner throughout the supply chain. This means factoring in issues such as sustainability or responsible sourcing when making decisions, and being able to assess the credential of suppliers.

Almost all (99%) now say their organisation has specific ESG goals, and in the UK 66% say overarching ESG goals have increased in the past year.

Most of these relate to sustainable practices but some also have mandates around using local businesses, small firms, diversity-owned enterprises or socially or economically disadvantaged businesses.

Platforms such as Amazon Business can help with this, enabling organisations to specify the use of certified or approved suppliers in line with wider company policies. Nottingham Trent University is one organisation that has made use of this, as part of its plan to become net-zero by 2040.

“We’ve selected products from East Midlands region suppliers to come up first in the product search results,” says Claire Davies, sustainable procurement manager. “That enables us to support our local economy and allows us to reduce our carbon emissions by reducing the
amount of mileage travelled.

“By turning on the sustainability certificates against the products we’re going to see a lot more sustainable purchasing taking place.”

The quest for visibility

Staying on top of the various challenges, while also tackling longer-term goals such as ESG, means it’s essential procurement teams have the visibility they need into what is spent and with which suppliers.

But 41% of procurement leaders see a lack of data to demonstrate the impact procurement has as a significant hurdle while 34% see “improving reporting and analysis” as a top area where they want to see procurement spending more time or energy in the next year.

Technology will have a vital role to play in helping to address this, and there is more that can be done in this space. Analytics and spend management tools can help organisations better understand what they are buying, providing them with the information they need to review
policies and make better decisions.

AI also has the potential to help automate this, providing information in an easily digestible format, and can even be used to forecast demand based on previous buying habits. This is likely to be a growing focus over the coming years as those in procurement search for more efficient ways to analyse spend and identify opportunities for cost reduction.

Originally published on City AM.