Risk Analytics for Renewal of Purchase Orders

Abstract

The transactions of goods and services between large businesses are often driven by purchase order (PO). A PO is a document that which details the sale of products and services to be delivered. This is also true for the cloud service providers with added complexity of managing the dynamic billing for services, and invoicing against the purchase order. The demand driven usage of the cloud infrastructure and services can lead to unpredictable nature of cost which can lead to the invoices that may get into a dispute due to PO amount getting exhausted much ahead of the contract end date. One needs to keep tab on all such PO's so that cash flow does not get impacted due to such dispute. In large enterprise with large number of PO's, managing the billing against the PO becomes large undertaking along with increased cost. There is a need for a PO dispute management system that can proactively identify potential dispute in timely manner and provide guided service to the workers managing such PO. To address this challenge, we developed a risk analytics model along with a recommendation engine, enhanced with Human-in-the-Loop (HitL) to rank purchase orders for renewal. The risk analytics model uses historical billing patterns of clients, together with purchase orders and services usage details, and performs risk analysis on potential disputes. We demonstrate the efficacy of our method by showing implementation of the application. The results from our deployed application are encouraging that it can help reduce billing disputes by proactively examining high-risk cases and taking actions.