'Should we build this or buy it?' is usually asked too late — after the spreadsheet workaround has calcified into process, or after a custom build is halfway to recreating a commodity tool. The question deserves a framework, not a gut call.
Here is the one we use. It is not complicated, and its honest application frequently recommends not building software — which is exactly why it works.
The core question: is this process a differentiator?
If the way you handle this function is roughly how everyone handles it — payroll, email marketing, standard invoicing — buy. SaaS vendors have amortized the cost of getting the common case right across thousands of customers; you will not out-build that economics, and you should not try.
If the process is how you win — your pricing logic, your matching algorithm, a customer experience competitors cannot copy with available tools — custom starts to make sense. The test: does the software encode something a competitor would have to discover independently? If yes, owning it has value beyond the license fees you save.
Count the real cost of each path
SaaS pricing understates its cost when the tool only covers part of the need. Add the integration work, the per-seat pricing as you grow, the manual bridge processes, and the cost of contorting your workflow to fit the tool's model. Sometimes that total still beats building — but count all of it.
Custom software's hidden cost is permanence: you own every future change, dependency update, and security patch. A realistic comparison includes maintenance, not just build cost — typically a meaningful annual percentage of the initial build. If nobody will own the software after launch, that is an argument for SaaS.
- Does this process differentiate you, or is it a solved common problem?
- What does the SaaS path really cost including workarounds and integration?
- What does the custom path really cost including maintenance and ownership?
- Will you still be served by this in three years of growth?
- Do you have someone — internal or retained — to own the software long-term?
- Is a hybrid viable: SaaS for the commodity core, custom for the differentiating layer?
The hybrid answer is often the right one
The cleanest outcomes are frequently neither extreme: a SaaS platform handles the commodity 80% — commerce engine, helpdesk, CRM — while custom code provides the connective layer that makes it yours. APIs exist precisely for this; a well-built integration layer can be the difference between five tools that coexist and one system.
This is also the lowest-risk path. You can add custom increments where they demonstrably pay off, rather than betting a whole build on an untested hypothesis.
Signals you are choosing wrong
Building because 'we're unique' when the uniqueness lives in one spreadsheet formula is a common expensive error — replicate the formula in the SaaS tool's automation layer first. Buying an enterprise platform for a ten-person team's workflow is the opposite one: you inherit complexity priced for an organization ten times your size.
If the honest analysis says buy, buy — then spend the engineering budget on the integration that makes the tools act like one system. If it says build, scope the smallest version that carries the differentiating value, and resist the urge to rebuild the commodity parts around it.