Which AI support plan should Northline fund?
Choose one plan. After you commit, the partner changes its offer.
The question
Northline Software is fictional. You advise its COO. One integration team and a $4m upfront budget can support one AI support triage plan. Assume equal service quality across plans. Maximize net incremental cash over 24 months. The monthly figures include only avoidable cash costs and savings. Upfront costs include transition costs. Assume no ramp, discount, or residual value.
| Upfront cost | Full months before launch | Net cash per live month | |
|---|---|---|---|
| Build | $2,400,000 | 8 | $300,000 |
| Buy | $3,800,000 | 5 | $310,000 |
| Partner | $1,200,000 | 2 | $180,000 |
Cash starts after launch. The partner’s monthly contribution already accounts for its initial fee.
“What should Northline fund today, and which assumption matters most?”
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A strong answer, step by step
Open each step in turn. This is one strong answer, not the only one.
Step 1: Use a common time limit
“I’ll compare the net cash each route contributes by month 24. I’ll subtract the upfront cost and count only the months after launch.”
Why it works: The launch dates differ, so monthly contribution alone cannot rank the routes.
Step 2: Commit to a plan
What would you do here? Open the move you’d make.
Build and retain control
Tempting, but it misses something. Build earns $2.40m over 24 months. Control could matter over a longer horizon.
Buy the provider and its team
Tempting, but it misses something. Buy earns $2.09m over 24 months. The purchase price offsets its earlier launch and higher monthly cash.
Partner and launch in two months
The strong move. Partner earns $2.76m over 24 months, the highest total at the initial fee.
See how a strong candidate says it
“I would choose Partner. Its 22 live months bring net cash to $2.76m after the upfront cost. I would confirm the launch date and the fee in writing.”
Why it works: A faster launch offsets the lower monthly contribution.
Step 3: Respond to the higher partner fee
What would you do here? Open the move you’d make.
Fund Build
The strong move. Build now earns the most by month 24.
Fund Buy
Tempting, but it misses something. Buy beats the revised partner offer. Build still earns $310,000 more than Buy.
Keep Partner
Tempting, but it misses something. Partner still launches first. The fee cuts its net cash by $880,000 across 22 months.
See how a strong candidate says it
“Before signing, the partner adds $40,000 per live month. I would switch to Build. Partner drops to $1.88m, below Build at $2.40m and Buy at $2.09m.”
Why it works: Recheck the ranking after the terms change.
Step 4: Name the switch point
“I would reconsider Partner if the added monthly fee falls to $16,363 or less. I would ask engineering for a dated launch plan. A two-month delay to Build would make Buy the best offer at the revised fee.”
Why it works: A specific concession gives the COO a negotiation limit. A dated plan tests the largest delivery assumption.
The answer, in short
- Decision
- Choose Partner at the initial fee. Choose Build at the revised fee.
- Because
- The fee increase costs $880,000 across 22 live months and removes Partner’s lead.
- What would change it
- Partner wins if the extra fee falls to $16,363 per month or less, with all other inputs fixed.
What evidence would you need from finance to confirm that the savings become cash?
Common traps
- Comparing only the cash per live month.
- Counting the months before launch.
- Treating the first choice as fixed after the terms change.
Check your answer
- Did I name a choice?
- Did I use the same 24-month limit for each route?
- Did I revise my choice after the new offer?
- Did I name a condition that would change it again?
Last reviewed Nov 10, 2026