Neelesh Kripalani, CTO, Clover Infotech
AI is often hailed as a game changer, but its true impact depends on how it’s applied. For CIOs, the real question isn’t whether to adopt AI, but how to do so strategically—maximizing value while avoiding wasted investment.
The choice comes down to three options: build an in-house AI system, buy an off-the-shelf solution, or borrow cloud-based AI services. Each path has advantages and risks. The right decision depends not on AI hype but on business goals, budget, and long-term sustainability.
Build: High-Risk, High-Reward
Building AI in-house offers full control over models and data, allowing for tailored solutions and competitive differentiation. However, it comes at a steep cost. Developing AI from scratch requires significant financial investment, specialized talent, and extended timelines—without guaranteed returns.
According to Gartner, by 2026, 60% of companies investing in AI will be forced to pause or scale back projects due to cost overruns and talent shortages. Before committing to in-house AI, CIOs must ask: Can we sustain this investment long-term?
Buy: Fast, Reliable, but Limited
Buying an off-the-shelf AI solution is the fastest route to AI adoption. It enables quick implementation, requires fewer resources, and offers predictable costs. However, it also means limited customization, vendor lock-in, and potential integration challenges.
For example, H&M, one of the world’s largest fashion retailers operating in over 70 markets, needed to enhance demand forecasting to reduce waste and optimize inventory. Instead of building a custom AI system, it adopted a pre-trained AI tool to analyse purchasing patterns and stock levels. This approach improved efficiency without the high costs and risks of in-house AI development.
Borrow: The Smart Middle Ground
Why build a costly AI model when cloud providers like AWS, Azure, and Google Cloud offer ready-to-use AI services? Borrowing AI from the cloud provides scalability, cost-effectiveness, and immediate access to cutting-edge technology without the overhead of in-house development.
Forrester predicts that by 2025, 80% of enterprises adopting AI will rely on cloud-based services rather than building their own models. While this approach offers agility and lower upfront costs, it also raises concerns about data privacy, long-term expenses, and vendor dependency. Still, for most businesses, the benefits of accessibility and flexibility outweigh the risks.
Final Verdict: Align AI with Business Needs
The worst mistake CIOs can make is adopting AI without a clear strategy. If AI is core to the business—like fraud detection in banking—building in-house may be worth the investment. For standard functions like HR automation or sales forecasting, buying a pre-built solution is often the smarter choice. And for companies seeking AI without the complexity of development, cloud-based AI services provide a practical alternative.
AI isn’t magic—it’s a business decision. The companies that succeed won’t be those chasing trends but those making strategic, informed choices.
