Build or Buy: Decision Framework for AI Agents

This document is a technical report that discusses the decision-making process regarding the development or procurement of AI agents, particularly in the context of procurement functions. It outlines how Agentic AI is evolving from a pilot phase to a fully operational role within organizations, emphasizing the importance of bespoke logic in procurement and other functions such as finance, HR, and legal. The report argues that while off-the-shelf SaaS products offer convenience, they often lack the tailored controls and logic necessary for effective procurement processes. It highlights the economic implications of choosing to build custom solutions versus buying generic products, detailing how licensing costs can accumulate and how custom builds can provide long-term value. The document also addresses the strategic advantages of building bespoke solutions that align with organizational processes, thereby avoiding the pitfalls of standardization that come with purchased products. Overall, it presents a nuanced view of the trade-offs involved in the build versus buy decision.