How Procurement And AI Are Transforming Spend, Risk, And Compliance

[00:00:01] Why is procurement still one of the most overlooked functions in business? Even though it touches spend, risk, compliance, supplier relationships, and increasingly AI. And why is it so often misunderstood? Well, my guest today, he's the founder of a company called Focal Point. And together, we will talk about why procurement has become so fragmented inside large enterprises.

[00:00:28] And why so many teams are still trying to manage complex processes with spreadsheets, emails, and disconnected systems. Come on, man. This is 2026. So my guest will bring decades of procurement leadership experience into the conversation. And a real world view of where that friction sits in organizations. But hey, I'm a solutions, not problems kind of guy.

[00:00:54] So we will also explore how orchestration can bring order to the chaos that we see around procurement. And also look at where AI is already making a practical difference. And why procurement deserves to be seen as a strategic business function, rather than just a back office bottleneck. We've got a lot to talk about today. So enough from me. Let me introduce you to my guest right now. So thank you for joining me on the show today.

[00:01:22] Can you tell everyone listening a little about who you are and what you do? My name is Anders Lulvik. And I'm the founder of a company called Focal Point. And we are in the procurement, let's call it AI automation space, where we basically take disparate procurement processes and systems and let people set up their own processes within our solution that can then piggyback and ping off of the different infrastructure that they have.

[00:01:49] Whether that's managing suppliers, setting up new suppliers, doing sourcing events, doing category management, contract management, all the stuff that procurement does that no one really cares about unless you're in procurement. But yeah, that's what we do. Love it. And you've spent, what, more than two decades leading procurement at organizations like Fannie Mae, QBE, insurance.

[00:02:11] But one of the things I try and do on this podcast is demystify areas that people don't think about much or find a little bit intimidating and equally how they're transformed by technology in ways that you don't always think about. So why is it that procurement still remains one of the most fragmented and possibly misunderstood functions inside large enterprises?

[00:02:34] Well, first of all, I think taking a step back, I think most folks don't realize how much procurement plays or third parties play within the larger context of an organization. So for example, at Fannie Mae, when I worked there, the company back then had some 3,000 employees, which doesn't sound like an awful lot.

[00:02:56] But they spent billions of dollars on third parties, whether that's an items processor or hiring contractors to fix houses before they sell them, set about to be sold. And I imagine there that third party spend dwarfed the actual payroll of the company. So if you think about that, it becomes kind of important. And if you think about Apple, for instance, I don't think Apple has produced a product in years. They outsource all that to third parties.

[00:03:23] And when you realize that, it becomes interesting how complex procurement can be. But you're absolutely right. I think the size of procurement and the work that procurement has been taking on has increased significantly since I started in the late 1990s. It's a little scary to say that. And when I started in procurement, it was all about saving money.

[00:03:49] So we would take requirements, get them down to the lowest common denominator, bid it out, negotiate hard and get savings. And it was easy. It was pretty cool because we could cherry pick the projects that we worked on. We could really, really move and shake it and add value that way. And things really changed for us when Enron failed.

[00:04:15] When Grammar Leaves of Liley in the United States came in, well, people now say you have to manage your suppliers as though they're internal stakeholders. You can no longer say outsource that and don't worry about it sort of thing. And so two things happened, right? The complexity of the sourcing process got much, much longer and much more tricky. So you had to underwrite financials of the company. You had to look at their control environment. You had to do all these kinds of things. And secondarily, the gates of hell opened up from a volume perspective.

[00:04:44] Because you couldn't cherry pick your projects anymore, all of a sudden you need to be involved in all third-party acquisitions. So the process became longer and the volume went up. And I like to say that we went from saving the company money to actually saving the company. And now in 2026, as we're sitting here, procurement also needs to save the world. So we now need to make sure that they don't pollute, they don't hire slaves. You got to make sure that their supply chains are stable and secure, that they don't have conflict minerals in it.

[00:05:13] So if you think about all these things that have been added to it, sometimes that means a whole new system has been added to it. And that manages that little type sub-process. So that is really where the fragmentation comes in. It was bad enough when you had a system that managed your spend and then want to manage your contracts and want to manage your sourcing process. And now you also have the third-party risk tool. You also have the supply diversity tool. You also have the anti-corruption solution.

[00:05:42] And it becomes sort of all over the place and is very hard to manage. And that's what makes it very difficult to be in procurement because it becomes sort of the ping-pong between multiple systems and data sources. And it becomes unmanageable at some point. Yeah, completely agree. And people often forget that procurement touches, spend, risk, compliance, and now ESG scores as well. There's so many focusing on that right now.

[00:06:09] And many teams, though, are still relying on spreadsheets and email chains. And I've got to ask, what are the hidden costs of that patchwork approach, that legacy way of working? I think a lot of the hidden costs comes down to – it's what I used to say when I talk to prospects. It's done manually poorly in Excel. That's typically how it's done, right?

[00:06:32] And because it's done poorly, companies take on risk that they're not necessarily aware of because a lot of folks possibly can do the work on the side of their desk and they don't document it properly. So if you become audited, for example, like you have issues there. You also say that procurement processes take longer, so time to execution takes a longer time.

[00:06:57] So all these things cost more money either through the acquisition of risk or through just spending more manual efforts and elbow grease and getting things done. And let's be honest. A lot of these things, while important, aren't the things that are necessarily adding value to the company. Meaning it is important that we do ESG things. There's no doubt about it. But it sometimes comes at the cost of reducing cost or increasing innovation or whatever the case may be.

[00:07:26] I think that's where the rubber meets the road, where we have to think about how can we automate some of these things, still get the work done as efficiently as possible, but free people up to do the value-added work. And before you join me today on the podcast, I was reading how you describe Focal Point as procurement's first full orchestration layer. So what does orchestration actually mean in practice? How is it different from maybe another procurement tool that's added to the stack?

[00:07:56] And for anyone listening in this space, tell me more about it. So procurement orchestration has kind of been flavor of the month for some time now. Let's be honest about that. Yeah. And what I always say is that procurement has been orchestrating stuff for as long as I've been in procurement. It's just now the complexity says that it warrants a system or an operating system to sort of hand things off between systems, processes, people, and departments and so on. Right?

[00:08:25] So I think what I like to do or like to describe is Focal Point has two kind of different layers, right? Like one is the data layer where you can double click on any entity or any object within the solution and see everything that's going on within that object. So for example, everything that's going on with a supplier. So what are you spending with them? How quickly are you paying them? How many projects are they bidding on? What is the risk quality of that supplier? Who are the subprocessors and so on? So you can see everything in one spot.

[00:08:53] Same thing by category, same thing by stakeholders, same thing by whatever the case may be. So the data layer becomes very important because if you can't have access to the data, it becomes very challenging to get your work done. Secondarily, we have a workflow or an orchestration layer, whatever you want to call it, right? And that is basically saying, all right, let's say you have a process, whether that is onboarding a supplier or managing the risk of a supplier or managing the supplier in totality or doing a sourcing project.

[00:09:23] And it's important that the process can be laid out from left to right with the right stakeholders, with the right inputs, outputs, and auditability from the time it starts till the time it ends. So that, you know, you get it done quickly. You get it done right by the right people. And you can also document the decision-making along the way. And that's kind of how I think about orchestration.

[00:09:48] And orchestration for me is not when someone says, I need something and it goes through the track and ends up as a PO. Like, while that's important, it's a small part of what procurement does. And I think what we want to do is we want to bring orchestration to everything that we do, whether that is a contract renewal or managing suppliers holistically or setting up your category strategies so that you're maximizing the value of the money that you're spending. And it's fascinating when you think about it.

[00:10:17] We have some prospects that are managing billions of dollars and the strategy for how they're going to acquire something in those categories is still done in Excel. And it's fascinating to me how at 2026, we're still using that as sort of the strategy tool. Yeah, 100% with you there. And many digital transformation projects, they famously fail because they disrupt existing workflows though.

[00:10:43] So how do you approach non-disruptive transformation that sits on top of some of those legacy systems rather than forcing a complete rip and replace? I think that's part of the strength of these solutions, right? Is that, you know, it's both a strength and a weakness, right? Because it becomes an addition to type product rather than as a replacement of.

[00:11:07] And that makes it hard because now you have to go in and sell a new solution to procurement stakeholders who don't necessarily budget for these kinds of things, right? So management assumes that because you have all these systems, they talk to each other. That's just not the case, right? So that's one thing. But really what I like to do is start small, right? If you try to boil the ocean and fix every single solitary thing, it becomes disrupted by design.

[00:11:34] So what we like to do is we like to take one process or a couple of processes and automate the heck out of them. So people are going to say, wow, that was easy. And then you sort of layer on more and more complexity and more and more things as you kind of go.

[00:11:48] And the other thing about it is if you allow experts to work in their systems of choice while the users work in a user-friendly user interface that they can see everything in one spot, hence the name of the company, right? That it becomes less transformation and more like just incremental, right? And we have a very large retail customer in the United States.

[00:12:15] I think it's the third largest retail company in the world where basically all the users of the procurement function, meaning that the business users out in the business, all they do is they see focal point. But the risk experts work in their risk system. The contract people work in their contract system. But to the stakeholders themselves, they're none the wiser that is being orchestrated behind the scenes so that people get the work to them as and when needed.

[00:12:44] And it becomes less, like I said, transformational because it's just natural. People are interacting with the system as they would any other system. And it's easy to use. And they don't really see the ducks feet under the water or how that's moving, which is kind of the whole idea of it, right? And, you know, it's fun. It's a lot of fun to do it. And we have lasted 15 minutes in a podcast without mentioning AI, which is a tech podcast. So we have to mention it.

[00:13:13] It's almost the law these days. But AI is entering procurement conversations very quickly and predictably. So where are you seeing real value today in terms of visibility, automation and control? And where are expectations possibly running ahead of reality? You must see some of this stuff too. It's fascinating because, like you said, we get asked about this all the time. Like, is it AI? We're like, well, what does that actually mean? Right?

[00:13:41] I still think people are still trying to figure out what AI means. And if all you have is a hammer, everything looks like a nail. And what we're trying to do is we're trying to look at the things that are repeatable and are done often that requires a lot of menial manual work. And we want to use AI to automate that. So if you think about, for example, how do you onboard a supplier?

[00:14:10] Well, typically you get a five-page form that people fill out to onboard a supplier. And what we do, for example, is we can get the supplier's email address and we can then go to use AI queries to find all the available information about that supplier. So when that supplier logs in, all they have to do is validate that that is correct. And we just streamlined the heck out of that.

[00:14:33] And then once the data has been validated, then we can use a whole bunch of AI queries as well as API calls to validate that information. So that, yes, the bank account's been validated. The tax ID's been validated. We make sure that they're not on a sanctions list. We make sure there's no adverse media out there. There hasn't been a cybersecurity event. And so when it shows up in accounts payable to be validated, all that work is done manually behind the background. And you still keep the human in the loop to make sure that's safe.

[00:15:02] So, again, like that's a typical really good use case of APIs to validate a data sources work really well with AI to make sure that that process becomes entirely frictionless, right? There are some other things that we do quite often on the compliance side, for example.

[00:15:18] So if you have things like security reviews, SOC 2s, ISO certifications, certificates of insurance, like all the things that are sort of necessary to remain compliant, we are setting up workflows using AI to validate that, number one, the COI meets the criteria that sets a set in the contract. And number two, that if there isn't, let's say the supplier is falling short of requirements, that you have actions to take right within the solution.

[00:15:47] But then you also can look at things like reading a SOC 2 report. They're 50, 60 pages long and it's boring and laborious to read it. But AI can do that in a snap and come up with a very quick snapshot of, okay, here's the strength, the weaknesses, and the action items that can be taken. Like all those things are very, very cool. But these are things that I've done several hundred times a month, right, for large companies.

[00:16:13] And now that can be done in seconds rather than the three hours it takes to actually read a SOC 2 report. Which is kind of cool. I still think now there's a lot of hyper on AI where people want to talk to it like it's chat DTP. Yeah, yeah. And I think that is valuable, but it's not repeatable and it's not necessarily auditable, right?

[00:16:37] So I think there's value in it, but I think getting things into a structured format so that it becomes repeatable and scalable is really where we need to get to. And I think procurement is still finding their way in a lot of different areas where can we really apply AI so that it actually shorten down the process and maintain the robustness and the quality of the output.

[00:17:03] But I think that's going to be the key because everything kind of looks good, right, when it's AI driven and those kinds of things. But it's really about finding the real use cases for it where it maintains the accuracy and maintains the scalability of something while still doing the thing it's supposed to do.

[00:17:23] And while AI is seen as shiny and exciting on the shadows there, we also have governance and compliance pressures also increasing across every industry now. So how can a more maybe connected data rich procurement environment strengthen oversight without slowing down decision making? It feels like there's somewhat of an opportunity there too. For sure.

[00:17:47] And I think, you know, I hate to do this, but I have to give credit to Europe because Europe has actually built a very good framework for how AI should be managed inside enterprises. And the United States, we're not there yet. But Europe and the UK have done a very good job of framing those things out.

[00:18:05] And I think following that principle or those principles, we can actually get to a really good monitoring framework for how we look at AI inside the enterprise and create that governance that is required. And I hope and expect that until it becomes a regulation here in the United States, that is also how most companies will lean towards Brussels. And again, like it's weird to say that, but that's probably what's going to happen, right?

[00:18:33] Because in the lack of guidance, you kind of make your own, right? But I do believe that, you know, for example, we use AI queries today for some of our customers to say, all right, is this supplier and their subcontractors GDPR compliant with the EU extension, sorry, UK extension, for example. And again, it's a very quick thing that otherwise people would look up manually, if at all, done in the wild, right?

[00:19:02] Yeah, 100%. And I also think that there's almost a mindset shift that's required to make a lot of this a success. And I'm unsure on how much of a gap that could actually drive. But if we did fast forward a few years, what do you think will distinguish enterprises that treat procurement as more of a strategic capability from those that continue to view it as a back office function? And do you see a big difference being made here? I do.

[00:19:30] And I think the thing that is always fascinating to me is that when you take a step back, like I was mentioning before, and you kind of treat procurement as a police function, right? You sort of say, like, make sure you've checked all these boxes, and then you can go off and do your thing. You know, necessary, but probably not sufficient to drive value. And I think when you kind of take a step back and think about, let's say procurement puts through a billion dollars worth of transactions per year.

[00:20:00] Yes, it's important that you save money on those billion dollars that you kind of turn through the pipeline. But the secondary benefits are how can you drive innovation with the companies that you're working with? Because some of these companies know your process better than you do in often cases, right? And you're making a strategic mistake if you don't ask those companies for feedback. So how are you deploying your technology or your system or your process at my competitors, and how are they gaining from it?

[00:20:29] Like, it's a simple question to ask, and your suppliers would love to talk to you about that stuff. But you've got to open the door for them to do that. And then on the more tactical side, procurement can also help you do things like free up capital. I know that sounds weird, right? But if you're paying your suppliers in 30 days, that's well and good. But if you can add another 15 days or 30 days to that payment term, you free up a ton of working capital. And that also comes at a cost.

[00:20:56] And the other thing that procurement can do, if you actually pay attention to it, is to say, okay, what is the prevailing market doing out there for certain categories of spend? And this gets really nerdy into the procurement stuff. But in certain categories, in certain jurisdictions, for example, in the United States, the average payment term for a management consulting invoice is actually over 90 days.

[00:21:19] So if you're paying your management consultant in 15 or 30 days, you're actually leaving a lot of money on the table because most management consultants are actually factoring in the 90-day payment cycle into that pricing. So it's about, number one, figuring out what the prevailing rates are and then enforcing that inside your company through managing the supplier contracts and then managing your accounts payable process. And these are things that companies don't necessarily think about when they think about procurement. They think about that as a treasury function.

[00:21:48] The fact of the matter is treasury tries to look at accounts payable, sorry, accounts receivable as the main dryer of working capital, whereas accounts payable could actually sometimes be a better harbinger of bringing that value. So I think by freeing up processes, by making sure that things are done efficiently and effectively and looking at the more broader edict of procurement, yeah, you can add a lot of value. And I think that's what's going to drive some companies to be more successful than others.

[00:22:16] And before I let you go, I always try and give my guests an opportunity to right a few wrongs, step on my virtual soapbox here, and maybe lay to rest a few myths and misconceptions. And I would imagine you've come across more than a few of them when you're looking up procurement trends online. Any myths and misconceptions that frustrate you when you read about procurement online that we can finally lay to rest today? May anything spring to mind?

[00:22:43] I think always procurement is seen as the bad guy, right? And I think that is oftentimes true. And I've certainly worked in organizations where the job of procurement is to beat people down within an inch of their life so that they can get the best price, right? And I always found that that is a short-term gain, a long-term pain type of thing, right? Because I always tell my stakeholders that you have to be your friend to get a friend.

[00:23:11] And I think that is what procurement is evolving into now is they're becoming more strategic. But I think management above procurement have to make that as an option, right? And I also think that another myth of procurement is that we can always involve procurement at the last second so that they can just slam through the process, right? That's a fool's errand, right? Procurement can be strategic if you let them be part of your decision-making process up front.

[00:23:40] And I think, you know, it goes both ways. You have to be your friend to get a friend. And if you want to get things done quicker with procurement, you have to work with them, not against them. And I think that is a powerful moment to end on. And for anybody listening that would like to find out more information about Focal Point, carry on the conversation about all things procurement. Where would you like me to appoint everyone listening? So they can go to getfocalpoint.com and read about us there.

[00:24:08] You can reach out to me on all the socials. So I'm quite active on LinkedIn. So just look for Anders Delivik. And I'm not the bicycle repairman in Norway. I'm the Norwegian in Atlanta, Georgia in procurement. So there you go. When I'm looking for the links to add to the blog post, I might come across that guy as well. So thank you for the heads up there. And great talking about procurement. We all know it touches everything from spend, risk, compliance, et cetera.

[00:24:36] As you've mentioned there, most teams are still stitching it all together with spreadsheets. So it's interesting learning more about AI, how it might make it possible to bring order to the chaos, not by replacing people, but by giving them the visibility, the automation and the control that they need across everything. So thank you for talking about this, shining a light on it and busting a few myths along the way. Thanks for joining me. Thanks for having me, Neil. It's a pleasure.

[00:25:02] I think there was a lot to take from this conversation with my guest today, especially around how procurement has quietly become one of the most important and yet complicated parts of the modern enterprise. And one of the things that stood out to me was this idea that procurement is no longer just about cost saving. It should sit at the center of risk, compliance, supplier performance, resilience and even innovation.

[00:25:29] But if businesses are still trying to manage all of that through disconnected tools, manual work and spreadsheets, they're making life so much harder than it needs to be. And this is one of the areas that technology can dramatically improve. So maybe the real opportunity here is to stop viewing procurement as a process to work around and actually start seeing it as a function that can genuinely help move the business forward. But over to you.

[00:25:58] Tell me about procurement in your organization, the good, the bad, the ugly and everything in between. I want to hear all your stories. So techtalksnetwork.com. You'll find 4,000 interviews there. Share ways to work with me. And most importantly of all, how you can contact me, even leave a voice message. But while you're looking for that, I'm going to prepare for another guest. So stick around and I will be back very soon with another guest. Speak to you then. Bye for now.