Advanced Visualization: How to Spot a Rule Breaker

Compliance Visualization Image

With all the buzz around “Big Data” and “Advanced Visualization”, what often gets lost are the real life examples of how to apply this technology. With visualization in particular, explaining a complex topic to clients often boils down to showing a simple picture.

Consider this real-life dilemma: the average company only realizes 60% of identified savings due to non-compliance within the organizations procurement process. That’s a lot of lost profit that should be easily recoverable, right? Unfortunately, companies face the proverbial “find the needle in the haystack”. The volume and variety of non-compliance is overwhelming. Do invoices have a matching purchase order? Does the generation of a purchase order sometimes occur after receiving an invoice? Are we procuring services from our most favorable suppliers? Does spend exist with a non-preferred supplier? Do cases exist where the contract price is different from the PO price? There are just so many situations across vast amounts of data to search for non-compliance.

Fortunately, compliance analytics provide a mechanism for grouping similar sets of non-compliant spend into understandable buckets allowing businesses to identify the profit leakage and drive bottom line results. The problem, however, is that it is a conceptually difficult process to explain end-to-end. When we would present to clients, they would watch intently as we walked through seven distinct steps. At the end, they understood that we went from A to B and that was a good thing – they just weren’t sure exactly what happened in between.

What was our solution? We created the advanced visualization below to use as a “conversation starter” to explain the overall framework of the system.

Compliance Visualization ImageIn this visualization, the size of the bubble represents the amount of spend. The color of the bubble represents the non-compliant percentage. When clients looked at this chart, their initial response became “So, blue is good and red is bad? Right?” “And big orange or red bubbles are really bad? Right?” At that point we knew that the general audience immediately grasped the concept of the diagram.

In this example, we identified over 600,000 spend transactions. The large bubble on the left hand side of the diagram represents the total amount of spend across all transactions. The analytical algorithms then optimally “grouped” each of the spend records into logical buckets. This occurs automatically, thus eliminating the need of “finding the needle in the haystack”. In our example above, each record was grouped into one of the seven sub-category buckets in the middle of the chart. The bubbles to the far right represent a further sub-categorization of each spend category automatically defined by the analytical algorithms.

As you can quickly see, the larger orange and yellow bubbles on the lower right represent the two largest groups of non-compliant spend. The orange bubble happens to be any Marketing transaction over $50,000. Thus, the company can quickly improve its percentage of non-compliant spend by instituting a single approval process for any Marketing transactions above this amount to ensure a preferred vendor is utilized.

Although the visualization may appear quite simple, the underlying analytics are highly sophisticated. It leverages several patented algorithms specifically designed to most efficiently categorize spend into logical compliance buckets. Users are also able to drill down into detailed reports to obtain greater information.

From a senior executive perspective, however, the key message remains the same: larger bubbles that are closer to a blue color are good, larger bubbles closer to a red color are bad. Over time, you would expect your teams to drive increasingly larger amounts of spend from the non-compliant to compliant buckets and measure the corresponding impact on the overall business.

Compliance analytics represents just one example that CFO’s and Finance executives can initiate within their own business. By setting up a process that is simple to comprehend visually, and letting the underlying advanced analytics evaluate the compliance spend monthly across the organization, companies can find greater and greater savings that drive their bottom line.

To learn more visit

Special thanks to Alan Keahey who worked with our team to develop the compliance advanced visualization.

Categories: Uncategorized

About the Author,

Steve Harvey is the Worldwide Leader for Technology and Analytics across IBM's Business Process Outsourcing unit.


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