GenAI: Build vs Buy - Navigating the AI Adoption Landscape

In today's rapidly evolving technological landscape, GenAI stands out as a game-changer for businesses across industries. As you consider adopting GenAI, you're faced with a crucial decision: should you build an in-house solution or purchase one from a vendor?

In my experience, this choice isn't just about technology; it's about aligning your AI strategy with your business goals, organizational structure, and risk appetite. In fact, there's no one-size-fits-all answer. The right approach depends on a careful evaluation of your unique circumstances.

To do that, you need to think of AI as the tool for doing the 'laundry and dishes' while allowing us to focus on art and innovation. This analogy underscores the transformative potential of GenAI. It's not just about automating tasks; it's about freeing up your organization's creative and strategic capacities. But to harness this potential effectively, you need to make the right choices in your adoption strategy.

Assessing Your Organization's Maturity

The first step in your GenAI adoption journey is to evaluate your organization's AI maturity. Ask yourself:

• Are you a small or medium-sized enterprise (SME) or a large global financial institution?
• What are your most pressing use cases for the current financial year?

Your maturity level will significantly influence your approach to GenAI adoption. For instance, a global financial institution might have the resources and need for a highly customized in-house solution, while a SME might benefit more from a vendor-based approach.

Prioritizing Use Cases

Next, GenAI applications typically fall into three categories:

1. Large Language Model (LLM) text generation
2. Text categorization
3. Data extraction

Each of these categories requires different considerations. For example, if you're focusing on text generation for standardizing organizational policies, you'll likely need a high level of customization that relies heavily on institutional knowledge. In this case, an in-house solution might be more appropriate.

On the other hand, if you're looking to implement an intelligent conversational agent for routine tasks, a vendor solution might be more suitable, given the maturity of the market in this area.

Risk Management and Controls

In addition, as you delve into GenAI adoption, you must carefully consider risk management and controls. You must ask yourself:

• How advanced are your guardrails?
• Are you complying with regulations like GDPR or Singapore's MAS policies on the ethical use of AI?

If these considerations are critical for your organization, you need to decide between building internal guardrails or opting for a vendor-based solution with built-in safeguards.

For instance, if you have specific requirements for bias detection, language support, or PII (Personally Identifiable Information) detection, an in-house solution may be necessary to meet your unique needs. However, if you're looking for general protection against issues like copyright infringement, privacy violations, bias, and toxicity, specialized vendors can provide robust solutions.

Developing a Build-vs-Buy Framework

Moreover, in order to make an informed decision, you should develop a comprehensive build-vs-buy framework. This framework can help you evaluate potential solutions across at least 10 key parameters, including infrastructure requirements, internal familiarity with the solution, availability of guardrails (e.g., hallucination prevention, bias detection), compliance with relevant regulations like GDPR, and others that align with your requirements.

By scoring potential vendors or in-house solutions against these parameters, you can make a more objective decision that aligns with your organization's needs and goals.

1. Conduct an AI Maturity Assessment: Gather key stakeholders from IT, legal, and business units to assess your organization's current AI capabilities, resources, and needs. This will help you understand where you stand and what gaps need to be filled.

2. Identify and Prioritize Use Cases: List all potential GenAI use cases in your organization and prioritize them based on potential impact and feasibility. Focus on the top three that align most closely with your current year's business goals.

3. Draft Your Build-vs-Buy Framework: Start creating your evaluation framework by listing the key parameters that matter most to your organization. Assign weights to these parameters based on their importance to your specific context.

Remember, the key to successful GenAI adoption lies in understanding where you are, what you want to achieve, and what your end goals are by the close of the year. There's no universal solution – it's all about aligning your approach with your specific organizational needs and objectives.

By taking these steps, you'll be well on your way to making an informed decision about whether to build or buy your GenAI solution. This strategic approach will help ensure that your GenAI adoption not only meets your immediate needs but also positions your organization for long-term success in the AI-driven future.