Tracks/Track 11 — Economics of Build vs Buy/N11-10
Track 11 — Economics of Build vs Buy

N11-10: The AI Build vs Buy Decision Document

Creating the definitive decision document that survives board scrutiny.

3 Lessons~45 min

🎯 What You'll Learn

  • Structure the decision document
  • Present balanced analysis
  • Include risk matrices
  • Get stakeholder buy-in
Free Preview — Lesson 1
1

Lesson 1: Decision Document Structure

The Build vs Buy Decision Document has 6 sections: (1) Strategic Context — why this AI capability matters, (2) Options Analysis — build, buy, partner with TCO for each, (3) Decision Matrix — weighted scoring across 8 criteria, (4) Risk Assessment — what could go wrong with each option, (5) Recommendation — with confidence level, (6) Implementation Plan — first 90 days.

Strategic Context

Connect the AI capability to a specific business outcome with dollar value.

Without strategic context, the document is an engineering exercise
Options Analysis

At minimum 3 options: build in-house, buy from vendor, and hybrid/partner.

Each option must have a 3-year TCO projection
Confidence Level

High (>80% data available), Medium (50-80%), Low (<50%).

Honest confidence levels build executive trust
📝 Exercise

Create the framework for your Build vs Buy decision document. Define the strategic context and identify the 3 options to analyze.

2

Lesson 2: Weighted Decision Matrix

Score each option across 8 criteria: Cost (TCO), Time-to-Market, Quality/Performance, Strategic Control, Scalability, Security/Compliance, Team Impact, and Vendor Risk. Weight each criterion based on your organization's priorities. The option with the highest weighted score wins — but the gap between options matters more than the winner.

Criterion Weighting

Assign weights (1-5) based on organizational priorities. Total must sum to a constant.

Time-to-market usually gets highest weight in startups; control in enterprise
Scoring Scale

1-5 for each option on each criterion. Use pre-defined rubrics for consistency.

Define what 1, 3, and 5 mean for each criterion before scoring
Gap Analysis

If the top two options are within 10% of each other, the decision is a toss-up.

In toss-ups, default to the option with lower reversibility risk
📝 Exercise

Build the weighted decision matrix for your AI capability. Score all options and identify the winner with gap analysis.

3

Lesson 3: Stakeholder Alignment Process

The decision document must be reviewed by: Engineering (technical feasibility), Product (strategic fit), Finance (budget approval), Legal (IP and compliance), and Security (risk posture). Each stakeholder reviews their section and provides a go/no-go. All must be green for the recommendation to be approved.

Review Sequence

Engineering → Product → Finance → Legal → Security → Executive Approval.

Each reviewer has a specific section they own
Dissent Documentation

If any stakeholder disagrees, document the dissent and the mitigation.

Documented dissent protects everyone if the decision goes wrong
Decision Record

Archive the final decision with all signatures, dissents, and rationale.

Essential for post-mortems and future reference
📝 Exercise

Map your stakeholder review process. Identify who reviews which section and what constitutes their go/no-go criteria.

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Module Syllabus

Lesson 1: Lesson 1: Decision Document Structure

The Build vs Buy Decision Document has 6 sections: (1) Strategic Context — why this AI capability matters, (2) Options Analysis — build, buy, partner with TCO for each, (3) Decision Matrix — weighted scoring across 8 criteria, (4) Risk Assessment — what could go wrong with each option, (5) Recommendation — with confidence level, (6) Implementation Plan — first 90 days.

15 MIN

Lesson 2: Lesson 2: Weighted Decision Matrix

Score each option across 8 criteria: Cost (TCO), Time-to-Market, Quality/Performance, Strategic Control, Scalability, Security/Compliance, Team Impact, and Vendor Risk. Weight each criterion based on your organization's priorities. The option with the highest weighted score wins — but the gap between options matters more than the winner.

20 MIN

Lesson 3: Lesson 3: Stakeholder Alignment Process

The decision document must be reviewed by: Engineering (technical feasibility), Product (strategic fit), Finance (budget approval), Legal (IP and compliance), and Security (risk posture). Each stakeholder reviews their section and provides a go/no-go. All must be green for the recommendation to be approved.

25 MIN
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