Building vs. buying an AI compliance solution: What enterprises need to know

The decision on whether to buy a ready-made solution or build one from scratch internally depends on multiple factors. However, here are a few that we consider essential.

Regulatory Requirements and Compliance Complexity

• Understand the scope of regulations - first and foremost, it is crucial to understand the scope of regulations and how they impact your business. Additionally, businesses must identify which laws they need to comply with, such as the EU AI Act, GDPR, and other relevant regulations, as well as the geographical reach of these laws.
• Compliance scope - it is also important to assess how much customization the solution requires. Does compliance demand a universal approach that can be implemented easily, or a custom solution tailored specifically to your business needs?
• Changing frequency - finally, businesses must consider how frequently regulations change and how often the solution will require modifications to stay compliant with evolving laws.

Understanding Costs

• Upfront cost vs. total cost of ownership – How much does a ready-made solution on the market cost compared to the cost of in-house development and maintenance? This includes know-how, external consultants, or hiring internal experts for regulatory compliance implementation.
• Hidden costs – Beyond the obvious costs, there are always hidden expenses. These include the need for additional personnel to oversee systems, ensure smooth operation, monitor legal developments, implement regulatory changes, and maintain security and scalability as the business grows.
• Scaling costs – While briefly mentioned above, the cost of scaling is crucial. Will compliance needs grow over time, and how will that impact your internal solution? Could developing an internal solution become more expensive and complex than purchasing a ready-made one?

Time to Implementation

• Speed of implementation – Compliance with laws is essential for maintaining financial stability and reputation. How will the speed and ease of implementation compare when developing an in-house solution versus deploying an existing one?
• Regulatory deadlines – Do you have enough time to develop, test, and deploy your own system before the law takes effect? What risks arise if you miss the compliance deadline?

Technical Knowledge & Resources

• Internal capabilities – Do you have enough internal staff to manage the project, or will you need to hire additional people to assist with development, project operations, and legal expertise?
• Hiring needs – If you lack internal capacity, you may need to hire additional staff or pay for expensive external consultants to guide you through the development of your own solution.

Scalability & Future-Proofing

• Adapting to regulatory changes – Laws evolve quickly, even if it may not seem that way. These legal changes are often highly specific and require careful interpretation. Do you have internal capacity to track and implement these changes promptly?
• Integration with existing systems – How well does the solution fit into your tech stack, workflows, or internal policies? Will you need to adjust or compromise to make it work?

Security & Data Privacy

• Data protection standards – The solution you choose must meet the highest data protection standards to safeguard your business, clients, and users.
• Data control – Many existing laws require businesses to maintain full control over user data at all times. Which solution makes this easier to achieve?

Flexibility & Customization

• Customization capabilities – Which solution best meets your needs? Is there a system that can be fully tailored, or does such a solution need to be built from scratch?
• Flexibility – In terms of potential modifications, which system is easier to maintain and adjust over time?

Vendor Lock-In vs. Independence

• A critical decision is whether you want to remain fully independent or enter a long-term partnership with a vendor.

Now that we understand the key factors influencing the decision between building an in-house solution from scratch or purchasing a ready-made solution, we can compare these two approaches.

Building and In-House AI Compliance Solution

At first glance, developing your own solution may seem like a great idea. It promises a custom-built system tailored precisely to your business needs, along with full control over compliance processes. However, the reality is that it often presents significant challenges that outweigh the benefits, especially for companies that lack expertise in a complex field like compliance. Here are key reasons why businesses should carefully consider the decision to build their own solution.

A Continuous, High-Cost Investment

Developing an in-house solution requires a dedicated team responsible for building, testing, and maintaining the system. This is not a one-time cost, but a continuous expense. If a company does not have AI compliance experts, it will need to hire additional staff or outsource specialists and consultants, which can be extremely expensive.

Additionally, maintaining a custom-built technical solution often turns out to be far more costly than anticipated. Significant investments are required for security, infrastructure, and ongoing maintenance, which exceed the costs of purchasing a ready-made solution.

Ongoing Maintenance & Expertise Development

Like other regulations, AI compliance laws are not static - they evolve rapidly. More and more countries are expected to introduce AI regulations, meaning companies must continuously monitor and adapt to changes.

If your business develops an in-house solution, it must stay up to date with every change in global AI regulations. This means that if a law changes in one country or region, your compliance team must quickly identify, understand, and relay the new requirements to your tech team for implementation.

This challenge becomes even greater for companies operating globally, as there is no unified AI regulation. 

Scalability Challenges

As a company expands globally, its compliance requirements become increasingly complex. Scaling an internal compliance system to support this growth is a major challenge. It requires more specialists, particularly those with local regulatory knowledge, which increases the complexity and cost of the solution.

In contrast, buying a ready-made AI compliance solution comes with built-in scalability. Vendors handle regulatory updates and local compliance requirements, eliminating the need for businesses to manage these challenges on their own.

Buying an AI Compliance Solution

Just as developing an AI compliance solution in-house may initially seem like a great idea, the idea of partnering with an AI compliance vendor might seem unnecessary since any partnership exposes a company to risks. However, this doesn’t have to be the case. Ready-made AI compliance solutions can significantly accelerate and simplify compliance with legal requirements. Below, we outline the key reasons why businesses should consider purchasing a ready-made solution.

A Ready-to-Use Solution with No Additional Work Needed

As the title suggests, this solution is ready for use and does not require additional upgrades. It meets the compliance needs for which it is purchased, ensuring alignment with AI regulations. The only resource required is implementation, which typically takes anywhere from a few days to a few weeks but is not demanding as developing an in-house solution.

Cost Savings

Although it may seem counterintuitive, buying a ready-made solution actually saves money. As mentioned earlier in this article, developing an in-house solution requires know-how. If a company lacks internal AI compliance experts, it must either hire them or outsource, which is in both cases costly. By purchasing a ready-made solution, companies acquire that expertise without the need to hire additional staff or enter long-term contracts with external specialists.

Allows You to Focus on Your Core Business

By purchasing a ready-made solution, you eliminate the major challenge of compliance with AI regulations. This means you do not have to dedicate massive amounts of time to organizing complex compliance processes and validating compliance logic. Instead, you can focus entirely on what you do best - your core business, leading to faster and healthier company growth.

Faster Time to Implementation

It is almost unnecessary to highlight how quickly a ready-made solution can be implemented. The process takes only a few days or weeks, compared to in-house development, which usually takes months or even years. The time saved on implementation allows companies to reallocate resources to more critical tasks.

Increased Flexibility for Business Scaling

Expanding operations across borders always presents challenges, particularly with the growing number of AI regulations worldwide. By purchasing a ready-made solution, businesses bypass regulatory complexities, saving time on identifying, understanding, and implementing compliance requirements. This makes it easier to scale into new markets, as the vendor ensures that the solution remains aligned with all regulatory frameworks.

Continuous Compliance

Finally, perhaps the greatest advantage of purchasing a ready-made solution is continuous compliance. As mentioned earlier, staying up to date with constantly evolving regulations is challenging. However, in this case, your vendor’s experts handle it for you. They monitor regulatory changes, interpret them on your behalf, and implement necessary updates within the solution. This ensures that you remain compliant with AI laws at all times.

Now that we have a clear understanding of the advantages and disadvantages of each approach, the final question remains: which option is better?

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The truth is, there is no one-size-fits-all answer. The choice depends on multiple factors, starting with your internal resources. Here’s how you can determine the right approach for your business:

1. List the pros and cons of each approach and do a quick cost-benefit analysis.
2. Evaluate several existing solutions on the market to compare their features, costs, and flexibility.

TrustPath is one of the available solutions, and we would love to help. Contact us to learn more.