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An Indian IT services firm: build, buy, or partner?
You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.
Case timer
00:00
1. Read the prompt aloud
Read it slowly, then pause. Let the candidate ask questions before they structure.
A large Indian IT services firm wants an AI coding assistant for its developers. Should it build one, buy one, or partner with a technology provider?
Format note: Candidate-led: you drive the case and ask for data; the interviewer answers only what you ask.
2. Answers to clarifying questions
Give these answers only if the candidate asks. If they ask something not listed, give a sensible answer or say it does not matter here.
If asked: What share of developer time is spent writing code, and how much does the assistant speed it up?
Answer: About 40 percent of time is coding; pilots show about 10 percent faster coding.
If asked: How many developers would use it?
Answer: 10,000 developers; about 70 percent used it regularly in the pilot.
If asked: Are there limits on where client code can go?
Answer: Yes. Many clients require that their code stays inside the firm's own cloud setup.
3. The hypothesis a strong candidate states
Listen for an early, testable guess like this one. It does not need to match word for word.
Speed to launch matters because every month of delay loses value. My hypothesis is that buying or partnering beats building, and that the data rule on client code will decide between the two.
4. A model structure
Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.
- Compare three-year net value of each option
- Yearly value once live
- Buy: fast, licence cost, data leaves the firm
- Build: slow, high upfront cost, full control
- Key: Partner: medium speed and cost, data stays inside
5. The working, step by step
Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.
Step 1: Yearly value once live
What a strong candidate does: Candidate: "What does a developer cost?" Interviewer: "About INR 1,500,000 a year (INR 15 lakh), fully loaded." Candidate: "Then value is developers x cost x coding share x speed-up x adoption." That is INR 42 crore a year.
Value per year (INR): 10,000 × 1,500,000 × 0.4 × 0.1 × 0.7 = 420,000,000
Step 2: Buy
What a strong candidate does: Candidate: "What would a ready-made product cost, and how fast?" Interviewer: "INR 1,500 per developer per month, live in one month, but code is processed in the vendor's cloud." Over three years, with two years and eleven months of value:
Buy: 3-year net value (INR): (3 - 1 ÷ 12) × 420,000,000 - 3 × 10,000 × 1,500 × 12 = 685,000,000
Step 3: Build
What a strong candidate does: Interviewer: "Building would take about 12 months and INR 250 million, then INR 60 million a year to run." So only two years of value in the three-year window.
Build: 3-year net value (INR): 2 × 420,000,000 - (250,000,000 + 2 × 60,000,000) = 470,000,000
Step 4: Partner
What a strong candidate does: Interviewer: "A provider would run its model inside our cloud with our code, live in about four months, for INR 100 million a year." That gives two years and eight months of value.
Partner: 3-year net value (INR): (3 - 4 ÷ 12) × 420,000,000 - 3 × 100,000,000 = 820,000,000
Step 5: Test the swing assumption
What a strong candidate does: Candidate: "Adoption drives everything. If only 40 percent use it, does partnering still pay?" It does, but by much less.
Partner at 40 percent adoption (INR): (3 - 4 ÷ 12) × 10,000 × 1,500,000 × 0.4 × 0.1 × 0.4 - 3 × 100,000,000 = 340,000,000
The recommendation to listen for
At the end, say: "The CEO walks in. What is your recommendation?"
Partner with a technology provider that runs its model inside the firm's own cloud. First, it has the highest three-year net value, about INR 82 crore, against INR 68.5 crore for buying and INR 47 crore for building. Second, it meets client rules, because code stays inside the firm, which the ready-made product does not. Third, it launches in about four months, far faster than building. Adoption is the swing factor: at 40 percent use, net value falls to about INR 34 crore, so the plan must include training and usage targets from day one.
Risks a strong answer names: Adoption may stall if developers do not trust the suggestions; The provider's price may rise after the first contract; Faster coding only pays if the firm uses the time for more client work.
Next steps: Negotiate a three-year contract with price protection; Launch with two business units and track weekly usage and code quality.
Strong versus weak
A strong answer
Asked for the data needed, compared options on value over the same period including launch delay, used the client-code rule to break the tie, and tested adoption.
A weak answer
Chose to build "for control" without counting a year of lost value, or bought the product without asking where client code would go.
Score the candidate
Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.
This case has no exhibit. Score Exhibit reading on how the candidate used the data you gave them: did they pick out the number that matters and say what it means?
Total
0 out of 25
Score all five criteria to see the band and the feedback template.