How to interface with Kingbright colour sensor KPS-5130PD7C

So to use this sensor to detect different coloured lines on paper, I'd basically want three of the Sneak Thief circuit, one for each colour photodiode?

At least, that circuit was for a direct LED not reflection. I would try with one to start.

Is this something you would recommend I try and address in hardware,

No do it in software.