Build versus buy

When considering new technology solutions, organizations often face the challenging decision of whether to build custom software, buy an off-the-shelf product, or customize existing systems.

Within the AI category, this decision often comes down to whether to select and host an opensource model such as Meta’s Llama, or align with a closed source vendor such as OpenAI or Anthropic.

This template helps you create a structured analysis that considers all key factors, resulting in a professional document you can share with stakeholders.

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When to Use This Template

Use this Build vs Buy Analysis template when:

  • You need to evaluate whether to develop a custom solution or purchase existing technology
  • You’re preparing to present options to senior leadership (like CFOs or CTOs)
  • You need to document and justify your technology procurement approach
  • You want to ensure you’ve considered all major factors in your decision

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How the Template Works

The Build vs Buy template creates a comprehensive, 1-3 page formal analysis document based on information you provide. Kowalah guides you through a structured conversation about your specific situation, gathering important details about your business objectives, requirements, resources, and constraints.

The conversation is broken into manageable stages, with Kowalah asking focused questions in each area to help you think through all relevant aspects of the decision. This guided approach ensures you don’t miss important considerations while keeping the process straightforward.

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Key Components

The final document includes these essential sections:

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1. Executive Summary

A concise overview of your situation, key findings, and high-level recommendation that busy executives can quickly understand.

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2. Business Objectives

Clarifies the purpose of the technology, problems being solved, and what success looks like in terms of business outcomes (revenue growth, cost reduction, etc.).

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3. Scope and Requirements

Documents essential features and capabilities while distinguishing between “must-have” and “nice-to-have” requirements.

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4. Build Analysis

Evaluates internal development feasibility, required resources, timeline, costs (one-time and recurring), and associated risks.

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5. Buy Analysis

Assesses potential market solutions, implementation timeline, costs, and specific risks like vendor lock-in or customization limitations.

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6. Customization Option

Explores whether existing internal systems could be adapted to meet the need, including feasibility, costs, and time requirements.

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7. Cost and Risk Summary

Provides a side-by-side comparison of all options with a clear summary table highlighting key differences.

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8. Recommendation

Presents a clear recommendation based on your inputs and the overall analysis.

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Template Value

This template helps IT leaders by:

  • Saving time: Eliminates the need to create a build vs buy analysis from scratch
  • Ensuring thoroughness: Guides you through all critical considerations
  • Facilitating alignment: Creates a professional document that helps build consensus among stakeholders
  • Reducing decision risk: Structures the evaluation process to minimize oversight of important factors
  • Building confidence: Provides a defensible analysis that demonstrates diligence in the decision process

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How to Use the Template

  1. From your dashboard, select “Help me assess build versus buy options” from the Solution Exploration stage
  2. Engage with Kowalah’s questions about your specific situation
  3. Provide as much detail as you have available (incomplete information can be marked “to be validated”)
  4. Review the generated document
  5. Make any necessary edits or additions
  6. Share the final document with stakeholders

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Example Scenarios

This template works effectively for various technology procurement decisions:

  • Evaluating whether to build a custom CRM vs. purchasing an established solution
  • Deciding between developing an in-house AI application or buying a specialized AI tool
  • Assessing whether to create proprietary data analytics tools or leverage existing platforms
  • Determining if existing systems can be customized to meet emerging needs

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Best Practices

For the most effective build vs buy analysis:

  • Gather input from multiple stakeholders before starting the analysis
  • Be honest about internal capabilities and resource availability
  • Include both technical and business perspectives in your assessment
  • Quantify costs and benefits wherever possible
  • Consider long-term implications beyond initial implementation
  • Revisit and update the analysis as new information becomes available

Consider using these related templates to support your technology procurement process:

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Next Steps

Requirements Document Template

Ready to document your requirements list? Use our Requirements Document template to clarify what you need this solution to do.