Custom software vs SaaS: when to build

Buying a SaaS (subscription software) is almost always the fastest way to solve a problem. Building custom is the way to solve the one no SaaS covers well. The right question is not which is better, but at what point one option stops being worth it compared to the other.

If your process is like everyone else's, buy. If your process is what sets you apart, build. And if you are somewhere in between, start by buying and build what hurts.

What each one is

• SaaS: a ready-made product you use for a monthly or yearly fee. The vendor maintains it.
• Custom: a system built for your operation. The code and the data are yours.

Advantages and limits

Signs a SaaS suits you

• The process is standard: basic accounting, email, video calls, generic project management.
• You need to be running now and have no time to build.
• You have no team to maintain software.
• The integrations you need exist and work.

Signs it is worth building

1. You pay for several SaaS tools and glue them with spreadsheets. The real cost is the time of whoever copies data from one place to another.
2. You adapt your process to the program, and that adaptation costs you efficiency or quality.
3. The software is part of your value proposition. Your differentiator should not live inside someone else's product.
4. The fee grows with your success. If they charge per user or volume, the cost shoots up just as you grow.
5. You need control of your data for privacy, regulation or deep integration.
6. Local particularities the SaaS does not cover well, such as SRI electronic invoicing (integrated invoicing guide).

How to compare with numbers

Do not decide on the first month's fee. Do this calculation over three years for each option:

• SaaS: fee × users × 36 months, plus extra modules, plus the manual work it does not eliminate, plus the cost of migrating if you ever switch.
• Custom: initial development, plus hosting, plus maintenance and improvements. To understand how that budget is built, read how much custom software costs.

And add what you do not see: the cost of an error from a manual process, the lost time and the risk of the vendor changing terms or shutting down.

The middle path

Many companies do not choose "all or nothing":

1. They start with a SaaS to validate the process.
2. They build custom the module that hurts most, connected to the SaaS through an API.
3. They replace in stages whatever makes sense.

It is a low-risk route: you never bet everything on a big development from day one. A clear example is companies that grow with an off-the-shelf ERP and custom modules around it.

Risks of building (and how to reduce them)

• Fuzzy scope: define in writing what goes into the first version.
• Dependence on whoever builds it: demand code and documentation in your name.
• Forgotten maintenance: budget for support and evolution; a retainer plan covers that.
• Reinventing the wheel: do not build what a SaaS solves well (email, payments, chat).

Our stance

We do not sell custom software to those who do not need it. If a SaaS solves your case, we will tell you. If your process is what makes you different, we build it in stages with deliveries you can test. Learn about our custom software development service or tell us your case from contact.