In the fast-paced world of AI, leaders constantly face the challenge of deciding whether to build AI solutions in-house or to purchase them from vendors. During our panel discussion at AI Dev Summit 2024 in San Francisco we gathered AI leaders from PayPal, Chime, and Gusto to uncover the decisions these leaders go through when deciding on building vs buying AI solutions. The panel was moderated by Remy Thellier, Head of Partnerships at Vectice.
This is the first article in our 3-part series where we uncover the insights from Khatereh Khodavirdi, the Vice President of Consumer Global Growth Enterprise for Data Science Analytics and AI Products at PayPal.
About the Speaker
Khatereh began her journey at eBay, where she helped establish the first-party advertising department and scaled it to a billion-dollar business. At PayPal, she has held various leadership roles, driving data science and analytics initiatives across multiple domains, including revenue operations, global SMB, and consumer business.
Khatereh oversees a comprehensive data science and ML team focusing on personalization, marketing data science, and consumer insights. In addition to her role at PayPal, she is an instructor at Stanford University and a board member and advisor at StartX.
Remy Thellier’s key Takeaway
“From my conversation with Khatereh, I gained several key insights about deciding whether to build or buy an AI solution. It's important to thoroughly analyze factors such as time to market, return on investment (ROI), and the flexibility and complexity of each option to ensure they align with our long-term company goals.
- Involving the team in the decision-making process through a bottom-up approach, including vendor demos, discussions, and debates, leverages our collective expertise and democratizes the process. This collaborative culture fosters a sense of ownership, promotes curiosity, and cultivates a continuous learning mindset, leading to a more engaged and motivated team.
- To prevent distractions, it’s essential to involve a focused group of team members in the evaluation process, ensuring efficient participation and avoiding project delays. Additionally, understanding the strengths and skill sets of our team helps determine if the solution aligns with our core competencies. Building expertise internally may be a long-term strategy, while buying a solution can bridge gaps in the short term.
- Finally, fostering a culture of continuous learning with a diverse team ensures we remain agile and capable of tackling new challenges in the rapidly evolving AI landscape.”
Khatereh’s Top 5 Tips for Leaders Making Build vs. Buy Decisions
1. Evaluating Time to Market and ROI
Q: What factors do data science leaders consider when deciding whether to build or buy a solution?
Khatereh emphasized the importance of considering time to market and return on investment (ROI) when making the build vs. buy decision. As a data-driven leader, she highlights that a thorough analysis of these factors helps ensure that decisions align with long-term company goals.
"As someone who values quantitative objectives, I would focus on factors such as time to market, ROI, and the complexity and flexibility of a build versus buy solution. This ensures that you are making the right long-term decision for the company"
Khatereh also stressed the importance of assessing solutions' flexibility to adapt to future needs and the complexities involved in implementation.
2. Involving Team Members in Decision-Making
Q: How do you involve your team in a buy versus build decision?
One key takeaway from Khatereh's approach is her belief in bottom-up decision-making. She involves her team in the decision-making process, allowing them to participate in vendor demos, ask questions, and engage in productive debates.
"I don't believe in a top-down decision-making structure, not only for the buy versus build dilemma but for decisions in general. I advocate for a bottom-up approach to decision-making," she said.
This involvement democratizes the decision-making process and leverages the team's collective expertise to make more informed decisions.
3. Building a Collaborative Culture
Q: What do you see as a core benefit from a people perspective?
Involving the team in these decisions also has significant cultural benefits. It builds a culture where employees feel they have a stake in the game, promoting curiosity and a continuous learning mindset. "You want to build a team culture that people feel like they have a skin in the game"
Katereh believes fostering a sense of ownership and participation leads to a more engaged and motivated team, which is crucial for driving innovation and achieving business goals.
4. Managing Team Focus
Q: How do you approach the decision when you consider the strengths and skills of your team?
Khatereh suggests involving a focused group of team members in the evaluation process to prevent distractions from core goals. This approach ensures that not everyone is overwhelmed and that the organization maintains its productivity while exploring new solutions.
"I have four different verticals of AI applications, with two or three representatives from my team involved in each. They join demos with vendors, ask questions, and assess the solutions. This approach ensures we have a diversity of thoughts."
She also highlights the importance of time-bound participation in managing involvement efficiently and preventing project delays.
5. Leveraging Team Strengths and Competencies
Q: How do you approach the decision when you consider the strengths and skills of your team?
Khatereh also discusses the importance of understanding the team's strengths and skill sets. The decision to build or buy should not be solely based on existing skills but on whether the solution aligns with the team's core competencies.
"The decision to buy versus build isn't just about whether you have the necessary skill sets internally. Sometimes, you might choose to buy a solution in the short term while you develop the expertise internally."
She emphasizes the importance of building a team with diverse skill sets and fostering a culture of continuous learning to ensure that the team remains agile and capable of tackling new challenges as they arise.
Final Thoughts
Khatereh's insights provide a comprehensive framework for AI leaders grappling with the build vs. buy dilemma. Leaders can make informed decisions that drive long-term success by considering factors like time to market, ROI, team involvement, and core competencies.
Her emphasis on curiosity and continuous learning also highlights the need for teams to stay agile and adaptable in the ever-evolving AI landscape.
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By Alexander Gorgin, Analyst at Vectice
