ADNOC – Building an Audit Intelligence Framework For Insights-driven Risk and Performance Analytics

Team members:
Ahmed Abujarad (SVP – Audit and Assurance)
Darsan Krishnan (Manager – Quality Assurance and Excellence, A&A)
Malav Patel (VP, Internal Audit)
Niladri Das (Sr. Auditor, Internal Audit Analytics)
Shiju Nair (Sr. Auditor, Internal Audit Analytics)
Aneeth Menon (Sr. Auditor, Quality Assurance and Excellence)
Mohammed K Al Mansoori (Manager – Business and Commercial Solutions)
Antonio Rivas (Sr. Architect, IT Business Solutions) 

Country:
United Arab Emirates

Organization:
Abu Dhabi National Oil Company (ADNOC)

Description:
We are a leading Oil and Gas Company in UAE. Established in 1971, Abu Dhabi National Oil Company (ADNOC) is a diversified group of energy and petrochemical companies that employs more than 50,000 people and is a major contributor to the GDP of the United Arab Emirates (UAE). ADNOC's Group companies operate in the fields of exploration and production; oil refining and gas processing; chemicals and petrochemicals; refined products and distribution; maritime transportation; and support services including sales and marketing, human capital, legal, finance and IT. ADNOC has been named the UAE’s most valuable brand for a second consecutive year starting from 2019, 28.6% increase over the previous year and 145% increase since the launch of its transformation strategy in 2017, making it the fastest-growing brand in the Middle East and the first UAE brand to surpass $10 billion in value.

Awards Categories:

  • Organizational Transformation
  • AI Democratization & Inclusivity
  • Value at Scale


Challenge:


At ADNOC, the Internal Audit team works on a wide domain of Auditing services across ADNOC Head Quarters and 14+ Group Companies. Below are the key challenges that Internal Audit was facing:

1. Necessity of having a centralized monitoring solution for Internal Audit governance, planning, execution, and quality assurance & improvement programs

Audit Management System hosted in ADNOC HQ was rolled out to ADNOC Group Companies in 2019. The primary challenge was to figure out an Audit Intelligence framework to drive multiple data-driven analytical solutions that would connect group companies on a near real-time basis and support Internal Audit management in deriving key insights on performance, audit completion, time tracking, efficiency, and cost optimization. The audit management was not having a suitable digital platform to continuously measure, monitor, and improve performance.

2. Necessity for an automated process for Internal Audit action tracking and performance analysis across the Group

With 180+ auditors across 14+ Group Companies, there were more than 30,000 Internal Audit findings issued at various levels within the organization. There was a pressing need to thoroughly analyze the nature of audit findings and provide insights to the ADNOC Group Management, Audit Committees, or Boards on general vulnerabilities and effectiveness of policies to drive improvements & value generation.

Some of the key challenges faced by the Internal Audit team were:

  • Labor-intensive manual consolidation and report generation of the findings, and corresponding computation of action statistics which was prone to human error.
  • Highly time-consuming consolidation of all the Group Companies data to gain insights.
  • Interacting with the business focal points & auditee management was manual, and efficiency of the action follow up process needed improvement.
  • Monitoring and reporting status of audit actions to the Audit Committee and respective Company Management was a time-consuming process due to lack of centralized repository of audit information.
  • Data exploration and performance analysis across various Group companies was nearly impossible, as the information was scattered and not systemically controlled with proper standardization.
  • Long-standing overdue findings were impacting Companies ability to improve internal controls and realize value benefits timely.

ADNOC Group Audit Excellence objective was to consolidate all the findings and perform insights-driven risk and performance analytics across the Group. A need for an appropriate Audit Intelligence platform was eminent to drive Internal Audit performance and value.

3. Other challenges demanding a data science and analytics tool were as below:

  • Information retrieval from Audit Management system and Share-Point/One-Drive flat files via APIs and automate scheduled analytical jobs.
  • Live connection to a central Audit Analytics Data Mart to perform all analytical trends and risks predictions from findings across the Group.
  • Have one central data science and analytics platform as an enterprise tool to connect all group company’s data and perform analytics.
  • Complex organization structures and business hierarchy across the Group.
  • New competency requirements and ability to quickly cross train auditors to perform Extraction, Transformation & Load (ETL) and analytics with minimal help and guidance the central analytics team.
  • Access control & confidentiality of information.
  • Establishing governance & process.
  • To have a daily refresh and scheduling process.


Solution:


Audit Intelligence Framework

As part of the Audit Intelligence framework, two digital solutions were established:

  1. Group Internal Audit Performance Analytics
  2. Group Central Audit Action Follow-up Analytics

An end-to-end architectural design was established from data ingestion to visualization prior to the development:

ADNOC.jpg

In 2019, ADNOC Group Audit Excellence team took pilot steps in standardizing the audit process, classifying audit findings based on risk rating and the management action plans. Committed action closure target dates were added, so that the most critical and high value actions were taken up by business on priority basis to minimize the risk and optimize value realization. In view of this, the Group Central Follow-up Analytics Solution was established and rolled out in 2019 – 2020 across the Group.

In 2020, Group Internal Audit Performance analytics tool was implemented to measure and monitor core Internal Audit KPIs on audit governance, execution, and performance against set benchmarks and approved audit plans. The analytics were provided to Internal Audit Leaders, Managers and Audit Committee across the ADNOC Group to monitor audit execution rate, timelines, and findings to take proactive measures for driving productivity and efficiency. This has resulted in considerable value generation and cost savings by increasing in-house productivity and reducing outsourcing costs.

With its user-friendly interface, visual debugging capabilities and workflow segregations along with the power of data engineering, ETL, and analytics, Dataiku helped establish the Audit Performance Analytics application in quick time with minimal training efforts.

Dataiku extensively supported the following areas to deliver the solution:

1. Data Acquisition & Profiling

Data Source connections were setup across the source system, especially the Audit Management System API and SharePoint for the Enterprise. We were able to integrate structured and unstructured data and flat files across group companies. Data prepare recipe of Dataiku helped in profiling the data to determine the accuracy, completeness, and uniqueness.

2. Data Standardization and Enrichment

With Dataiku’s Prepare recipe, data fields were standardized to a common format to help prepare complex joining of datasets for further analytical processing.

3. Data Processing & Transformation

Various transformations to the data were applied to prepare intermediary logic encompassing multiple calculations. Dataiku’s data visualization and Artificial Intelligence (AI) driven feature supported a great extent in understanding the calculation outputs - even before performing the recipe execution. Visual recipes (incl. stacking, window function, join operations) provide great features in Dataiku and extensively helped in processing datasets effectively without writing complex SQL scripts. We have over 300+ datasets and a number of visual recipes for transformation, rolling aggregations, and various data handling processes shared across projects.

4. Forecast Analytics

Models were developed to understand and predict the potential spillover of Internal Audit plan based on execution rate for each Group Company. These were continuously measured by Internal Audit users and operation plans adjusted accordingly.

5. Processed Data Output

Through Dataiku, we were able to push the processed output to a central analytics environment for generating further Business Intelligence (BI) visualizations and reporting. The ‘In-Database’ engine supported in performing complex calculations at database level to generate results in short span of time.

6. Automated Workflows

Dataiku automation and scheduling capabilities helped to read data from multiple sources and provided job process-level insights that made the entire projects to remove all manual interventions and execute the process at set frequencies. Email notification feature of Dataiku supported to alert users in any issues encountered during data ingestion and processing.


Impact:


Driving efficiency and performance with highest productivity was one of the key leadership messages last year, and Internal Audit through digital projects has significantly contributed in all areas of ADNOC Strategic pillars through well-defined KPIs across 14+ Group Companies.

ADNOC Group Internal audit was able to improve the Measurable Value of Audit (in AED Billions) actions and follow them effectively till the completion using analytics dashboards provided to the audit and business management.

More notable benefits of data analytics solution powered by Dataiku include:

  • Centralized data repository using a single version of truth, by connecting Internal Audit information across ADNOC HQ and 14+ Group Companies.
  • Gain better insights on the Group Internal Audit spectrum.
  • Improved and informed decision making with up-to-date information.
  • Cost optimization by reducing outsourcing demand, thanks to increased in-house Internal Audit productivity.
  • Improved operational efficiency through KPIs & SLAs.
  • Better focus on identifying trends and Internal Audit performance across Group Companies.
  • Quick turnaround of performance with accurate reporting of KPIs to management.
  • Leveraging Dataiku to augment Internal Audit activities.
  • Reduction of Internal Audit action overdue and overall improvement in Risk Assurance & Internal Controls.

One year into our Dataiku journey, ADNOC is running 6 large projects in Internal Audit execution and performance, actioning insights across 180+ auditors and 1,500+ business clients in 14+ group companies. These projects are all automated and running on enterprise server with data stored in SQL schemas and providing end-to-end visualizations in corporate BI tool.

With the help of Dataiku, we are also able to plan and design a central framework of Continuous Control Assurance analytics, which will provide analytics, augmented audits, and advanced analytics with predictive risks and detections - which will help reduce the leakages and establish the right level of governance and controls.

In 2021, ADNOC Group Audit Excellence vision is to successfully roll out continuous control assurance projects running on top of SAP ERP platform for procurement across all Group Companies, provide near real-time detections of high-risk activities, as well as proactive insights to the ADNOC senior management & deeper assurance to the Audit Committee & Board. The predictive and Machine Learning capabilities in the tool is already being explored and under development which will be interesting to share in the next Awards submission.

Comments
Ilyasck
Level 1

Excellent work

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