At Embrace.ai, we often encounter a pivotal question from businesses diving into AI: Is it better for organizations to build their own AI solutions or buy them? This decision shapes not only immediate AI initiatives but also long-term technological strategy. Here, we explore both paths to help you make an informed choice.
Understanding Core vs. Context
Geoffrey Moore, a respected technology thought leader and author of the tech classic “Crossing The Chasm”, introduced the concept of “core vs. context.” Core activities enhance a company’s sustainable competitive advantage. They are unique, hard to replicate, and directly boost market power. Context activities, however, do not directly contribute to competitive advantage and are more operational or supportive in nature. This core vs context concept very much applies to the build vs buy question for AI solutions.
Copyright © Geoffrey A. Moore. Diagram inspired by his writings.
When to Build AI Solutions
Building your own AI solutions can make sense when the technology is central to your business strategy (i.e. a “core” capability). If the AI capability you need is a source of differentiation or is integral to your own product offering, creating a bespoke solution can offer significant benefits. Are AI-enabled product capabilities central to what your customers are paying you for? If so, building may be a good option.
Building requires knowhow and engineering capability. Typically, large companies with substantial revenues find themselves in a position to allocate the necessary resources for development. They can afford to innovate in specific areas, ensuring their solutions are perfectly aligned with strategic goals. If you have technical teams that have capacity and ability, and there’s not a more strategic focus area to apply them, you may consider building.
Image generated with help from Midjourney.
When to Buy AI Solutions
Purchasing solutions, especially Software as a Service (SaaS), offers distinct advantages. SaaS providers continuously enhance their offerings, allowing your business to benefit from the latest improvements without additional investment in development. Embrace.ai has been building its solution since early 2023. From our perspectives, some of the capabilities we’ve built, all of which we view as non-trivial to construct include:
- User-friendly interfaces for content management
- Dashboards that track usage trends and success rates
- Comprehensive user management and administrative controls
- Robust data governance and permission settings
- Seamless integrations with other platforms like Google Drive, Confluence, and SharePoint
- Secure API connectivity
- Integrations to destinations like Slack and Teams as well as embedded chat widget or chatbot
- Continual assessment of various LLM providers, foundation models, and AI-ecosystem technology providers
- Ensured data security and privacy
Our POV is that these features are typically well beyond the scope of what most companies would want to develop independently.
Embrace.ai’s user-friendly interface for content management
Key Questions To Consider
Deciding whether to build or buy requires careful thought. Here are some questions to contemplate:
- Consider the highest and best use of your engineering resources. Are they better spent on creating unique AI capabilities, or could they support broader business goals more effectively through other projects?
- Maintenance is another critical factor. Are you prepared to support and upgrade a custom solution as you would any other core product? This ongoing commitment can be significant.
- Finally, assess whether your AI needs are truly unique. Many organizations believe their requirements are special, but often, existing solutions can meet their needs effectively and efficiently. Are your needs truly so different that only you can construct the right solution?
Conclusion
Every company is unique, yet common threads exist in choosing between building and buying AI solutions. By understanding your business’s core needs and evaluating the potential return on investment in either scenario, you can make a strategic decision that aligns with your long-term goals.
At Embrace.ai, we guide businesses through these complex decisions, ensuring that your approach to AI not only meets your current needs but also positions you for future success. Whether you build or buy, the right choice can propel your company forward in the competitive landscape.
To learn more, book a demo of Embrace.ai.
Text generated with help from Embrace. Images generated with help of Midjourney.
