Nithin Mummaneni is the founder and CEO of Infinity Loop.getty​Everyone is racing to automate procurement workflows. Doing so, I think, attacks the wrong problem.That’s because operational efficiency is easy to measure while negotiation quality isn't. The biggest opportunity for AI is giving procurement teams more leverage when they negotiate.It's much easier to tell a CEO that contracts move 40% faster than it is to prove the company consistently negotiates better commercial outcomes. But only one of those meaningfully improves margins.Before founding Infinity Loop, I spent years restructuring Fortune 500 companies and renegotiating some of their largest supplier contracts. Across healthcare and pharmaceuticals, technology, financial services and consumer goods, I kept finding the same pattern. Companies were overpaying suppliers because they consistently entered negotiations with less information than the supplier sitting across the table.Today's procurement AI market is largely focused on automation: better sourcing, better spend visibility, better workflow management and better contract routing. Those are worthwhile improvements, but they optimize the administrative work surrounding procurement, not the commercial outcome procurement exists to deliver. Executives shouldn't mistake operational efficiency for financial impact. Ultimately, executives and boards want to know whether the company is getting competitive commercial terms from its suppliers.​Procurement professionals are often at an information disadvantage in negotiations because suppliers negotiate the same products and services every day. They know where they have pricing flexibility, which objections work and which concessions cost them little. They build institutional knowledge from hundreds or thousands of negotiations.​​Meanwhile, procurement teams negotiate across hundreds of categories, and many still lack clean spend data or reliable market benchmarks to work from. Many aren't even brought into commercial discussions until the business has already decided what to buy.That means by the time a spend analytics dashboard identifies an issue, the contract has been signed, the statement of work is underway and the leverage has disappeared. No amount of workflow automation fixes that.The mistake many organizations are making is assuming AI's role is to replace negotiation. For the foreseeable future, people will negotiate with people. The commercial stakes are too high and supplier relationships are too important to hand strategic negotiations over to autonomous agents.Where AI can fundamentally change procurement is in everything that happens before the conversation begins. AI can help benchmark supplier pricing against market rates, surface historical agreements across the enterprise, identify clauses worth negotiating, highlight commercial risks and bring together the internal and external intelligence procurement teams need before they ever sit down with a supplier. The goal is to make every negotiator dramatically harder to negotiate against.That's negotiation leverage, which is what creates enterprise value.​If I were evaluating procurement AI today, I wouldn't start by asking how many workflows it automates. I'd ask three questions instead.First, does it consistently improve negotiated savings compared with the supplier's opening position or a credible market benchmark? If negotiated outcomes aren't improving, the technology isn't delivering ROI.Second, does it reduce prep time? Procurement professionals often spend much of their time gathering information, because missing one pricing term or clause can cost real money. AI should cut that prep time down and let teams run more deals. Third, does every negotiation start with real market intelligence? Most procurement teams still walk into supplier conversations on gut feel and old memos instead of a benchmark. Until that's standard, the AI investment stays cosmetic.If AI can't demonstrate measurable improvement across those three metrics within its first 90 days, it's probably solving the wrong problem.Having spent much of my career working alongside procurement organizations, I've come to believe it is one of the most strategically underutilized functions in the enterprise. Procurement influences one of the largest drivers of profitability: what a company pays for everything it buys.For decades, procurement has been measured by process efficiency: faster approvals, better compliance and lower administrative costs. Those metrics matter. After all, procurement exists to create commercial advantage by ensuring every supplier relationship delivers maximum value to the business.The organizations that I believe will outperform over the next decade will have procurement teams negotiating from a position of strength through better intelligence, better benchmarks and better timing than the supplier across the table.AI can elevate procurement professionals, but those who succeed will use AI to turn negotiation into a repeatable competitive advantage.​Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Do I qualify?