Gen AI: Should you build or buy?

With organizations racing to put more generative AI tools in users’ hands—and software vendors rapidly integrating those tools into their products—CIOs face a familiar choice: develop their own solutions in house, or invest and adapt tools already available in a fast-growing AI marketplace. 

Yet it’s not a simple build-vs.-buy question, says Prakash Ramamurthy, chief product officer at Freshworks. CIOs should take a build and buy approach to accelerate gen AI adoption and capture the value it brings to their business.

It’s an approach, says Ramamurthy, that many CIOs  already take with broader tech strategy: Build the solutions that provide competitive advantage to your business, and outsource the rest. Of course, gen AI is no panacea. 

“Don’t look at gen AI as a hammer looking for a nail,” says Ramamurthy. “Look at it as the extra boost to solve the problems you already have.”

The case for building

Enthusiasm for AI is now universal among IT leaders. Foundry’s 2023 AI Priorities study found interest in a broad range of gen AI use cases, including chatbots and virtual assistants (56%), content generation (55%), industry-specific applications (48%), data augmentation (46%), and personalized recommendations (39%).

However, AI skills are in short supply, and expertise in the gen AI space is even more scarce. That’s why it’s important to focus internal AI development on core business needs, says Ramamurthy. “Take your scarce resources and apply AI to your domain of expertise,” he explains. 

For a manufacturing company, this could mean focusing gen AI initiatives on reducing risk in production plants or improving supply chain efficiencies.  For example, AI can optimize production planning and scheduling, even for complex manufacturing processes. It can quickly process and analyze a wide variety of data for material availability, production capacity, and customer demand to recommend the best scheduling plan.

In a pharmaceutical company, AI can accelerate drug development through the identification of key proteins, or turbocharge drug design by speeding up the ability to generate complex molecular structures.

“If it’s not your core business competency – the things that you wake up every morning thinking about – then you shouldn’t be building it yourself,” Ramamurthy says. Any distraction from developing and delivering your core product or service, regardless of industry, can waste resources and opportunities. Organizations need to be laser-focused on expanding their customer base and growing their business, and not pivot to try to become a software development company if it is not already their core expertise, he adds. 

The case for buying

A narrow development focus does not mean that IT leaders should bypass the opportunity to embrace gen AI across the rest of their IT architecture. Virtually every vendor or service provider is looking for ways to build gen AI into their solutions. IT leaders should challenge existing vendors to deliver AI capabilities quickly – or find new vendors that can. 

“Gen AI can supercharge your solutions, so you need to find vendors that can deliver the shortest time to value,” Ramamurthy says.  “Pick the ones that have done a disproportionate amount of AI investment in the solutions they’re building.” 

Respondents to the Foundry AI Priorities Study said they’re already seeing good results from the gen AI capabilities vendors have added to existing applications, including productivity tools (86% see a positive impact), security (84%), and marketing/sales apps (82%). 

A build-and-buy strategy ensures that IT teams can focus on supporting their organization’s main business without draining internal time and resources, while still gaining access to turbo-charged capabilities across the entire IT stack.

“You need to embrace gen AI aggressively,” Ramamurthy says. “Look at ways to use AI to hypercharge your core competencies. But do not confuse that with your ability to do superhuman things in areas that are not your expertise. In those areas, evaluate vendors with proven gen AI solutions that provide quick value for you.”

For more insights about innovating with AI, visit The Works.