This week, George Osborne takes to the despatch box to present his combined Autumn Statement and Comprehensive Spending Review.
Bringing government spending into sharp focus, the Chancellor has pledged to get the economy in surplus by 2019/20, with some departments expected to face cuts averaging 24 per cent.
Spending waste has been a hot issue for the UK government this year, particularly in the NHS. A report by Lord Carter in June found that cutting the number of product lines from 500,000 to 10,000 and being better at procurement could save the NHS up to £1billion by 2020.
But it’s not just the public sector that can be better at spending its money. Businesses are wasting billions each year and many would be surprised to hear what passes through their accounts unnoticed.
Imagine how easy it would be to sign off on an order of stationary or computer equipment with a decimal point in the wrong place. A 10p biro could easily end up costing £100, or a £4.50 computer mouse £450.
Imagine the price difference when two divisions of a company are buying heavy machinery, one from a a supplier who makes 50 per cent margin and one from another who makes 20 per cent margin.
Those rogue invoices could be worth tens of thousands, or even more in a bad year, but spotting them is extremely time consuming and hard to do with the human eye. Enter artificial intelligence.
We increasingly rely on technology to ensure smooth, efficient financial processing systems, with electronic invoicing now mainstream. A PwC survey estimated the time saved per invoice with e-invoicing is as much as 10 minutes, with a minimum cost reduction of 60 per cent.
These computer-led systems open up a huge amount of data that can help improve future business, but this data is so vast it is impossible to analyse manually. Each entry simply cannot be checked with the naked eye, and therein lies the flaw.
Last year, Tungsten’s e-invoicing platform handled invoices worth $187 billion, which is a lot of data and why we have developed a spend analytics platform that allows businesses to analyse where and how they are paying their invoices.
This streamlining can go further with the help of artificial intelligence which can be used to cross-check every invoice. If something seems slightly amiss, such as a stationery item at 100 times its normal price, flags are raised and it can be checked by a real person, who can quickly rectify the mistake.
We believe artificial intelligence has a lot to offer and so far we have only scratched the surface. That is why we have launched a new research partnership with Goldsmiths University to delve into what can be done to help improve businesses everywhere.
The new Tungsten Centre for Intelligent Data Analytics will support three senior Professors and fund PhD and post-doctoral research programmes, with artificial intelligence applications expected for Tungsten Analytics and other commercial solutions within 18 months.
Of course, it’s going to take more than artificial intelligence to deliver the full savings resulting from this week’s Spending Review. Tough decisions will need to be made, but if it sharpens attention on eliminating waste and improving efficiencies, it can be no bad thing – indeed for businesses too.
Andrew Nichols is the Head of Analytics at Tungsten Network.