AI Strategy in Action: A Case Study on Make-or-Buy for AI-based Services

Miriam Gräf, Maren F. Mehler and Sara Ellenrieder

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: Organizations integrating artificial intelligence (AI) services to optimize their performance regularly face a make-or-buy (MoB) decision, whether they develop AI services internally, purchase from external providers, or decide on a combination of both. The literature lacks detailed knowledge on how MoB decisions for AI-based services are uniquely influenced. We conducted a case study in a large mobility and logistics organization to derive these factors. We interviewed 16 experts on AI and MoB decisions to validate existing factors regarding MoB for IT and identify additional factors specific to AI services. Our findings suggest that strategic importance and data security are particularly relevant when making MoB decisions for AI services. In addition, the latter and case differentiation are specific factors we identified for AI services. The guidelines derived from our study provide a framework for organizations and scholars to evaluate MoB for AI services for informed decisions that align with their strategy.

Date: 2024-07
New Economics Papers: this item is included in nep-cmp
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