Build vs. Buy- The Ultimate SaaS Debate

Abe Storey
Abe Storey
Build vs. Buy- The Ultimate SaaS Debate

Organizations with complex digital workflows and system requirements inevitably run into their come-to-Jesus moment: they either need to build a custom solution in-house, or bite the bullet on a big purchase.

But few SaaS products meet every single need of every single organization. At some point, the conversation becomes: do we sacrifice on some functionality, or do we build a bespoke solution that does everything we need it to do?

Spoiler alert: there is no one concrete answer to whether an organization should build a custom technology solution in-house or buy a ready-to-use SaaS product. The reality is--it depends.

So let’s break down the arguments for each across five key points:

Extensibility: Does the solution meet our needs, or create more manual work?

The first step in evaluating whether to build or buy a solution is to evaluate if it will meet the organization’s needs. This means looking at the ways in which the solution interacts with your data and systems. A few questions your team needs to ask are:

  • Does the solution function within your existing workflows, or will you need to change your processes?
  • Does the solution consolidate or integrate with disparate data sources, or will it create silos?
  • Will this solution still be a good fit for your organization next year, or will your needs outgrow the solution?

If the answer to more than one of these questions is no, then at a functional level, a bought solution may not actually meet your organization’s needs.

Note that complex requirements create time-consuming builds

An organization with complex workflows and many disparate systems may benefit from building a bespoke program in-house, but be forewarned: the more complex your needs are, the more likely it is that the build will be difficult, expensive, and take a long time to get right.

Before you consider architecting a complex solution in-house, first consider simplifying your processes and requirements.

Security: Do we have the resources internally to maintain security compliance?

One nice thing about a SaaS solution is that security maintenance is done for you. One not-so-nice thing about SaaS solutions (that can sometimes ruffle a few IT feathers) is that security is outside of your control, and often comes in a bit of a black box.

There are two things to consider when it comes to security:

  1. Whether the bought solution meets your security requirements
  2. Whether you have the internal resources necessary to proactively monitor a bespoke system and patch for threats

Reactive cyber security capabilities aren’t enough

If your organization lacks the internal resources for things like penetration testing and round-the-clock threat monitoring, then a bespoke system is likely opening you up to more vulnerability than the advantages are worth.

Your organization needs to have the resources to proactively handle cyber security before threats and breaches happen. If it doesn’t, this is a deal-breaker, and it’s time to make your peace with a buyable solution.

Cost: How do the lifetime costs of buyable and buildable solutions compare?

The number one obstacle to a homegrown solution is usually cost. SaaS solutions can present an attractive alternative, since development, testing, deployment, and maintenance are all baked into a monthly or annual rate.

But the argument goes a bit beyond what the invoice says. In many cases, there are costs that don’t appear as line items, such as:

  • Time needed for training
  • Migration costs and downtime
  • Deployment costs and lead time
  • Long-term contract restrictions
  • Licensing and server costs
  • Costs for additional seats as your team grows

You’ll need to evaluate these factors for both a built and bought solution to determine which will be most cost-effective for you and your team. The answer might surprise you.

Time is money, during deployment AND use

Another often unrealized cost of software that decision-makers may not necessarily feel is the labor associated with an ill-fitting solution. Anything that creates additional manual work for humans is ultimately going to cost more long-term than it will appear to on paper.

For example, if a bespoke solution will save 30% within a year of its use over a bought solution, but will create an additional five hours per week in manual work for its users, then it might not be coming at the cost-savings that you think it is.

Time to deployment: Will lead time for the project negate some of its benefits?

Without a doubt the strongest benefit to a buyable solution is simply that it’s already built – you only need to migrate, train your team, and maybe make some adjustments to your processes.

For a custom-built solution, the timeline is often nebulous, changing due to unexpected variables, such as issues with finding talent, testing, and development. Custom systems are attractive because you’re able to meet so many of your own needs when you design something from scratch, but that flexibility inevitably comes at the cost of a much lengthier timeline for internal adoption.

Maintenance: Do you have the resources?

Another strong benefit to a buyable solution (SaaS is starting to pull ahead) is that maintenance is a fixed, predictable cost; but let’s set costs aside for a minute.

Right now, we’re in the midst of a labor shortage that’s predicted to last at least another ten years, and there’s an even bigger problem for tech: there aren’t enough people with the skillset to build solutions anymore.

The technology talent gap is probably starker in this industry than in any other space, simply due to the fact that things change so quickly. As a result, not only does development and maintenance cost more – in some cases, you’re looking at long wait times, and limited access to talent.

Agencies and SaaS companies are managing these problems on their own. It’s up to you to decide if your organization wants to manage them too, because you certainly will if you build your own in-house solution.

The verdict: Long, nuanced answer

Like most debates, this one doesn’t have a succinct or satisfying answer. At the end of the day, it’s going to be up to your stakeholders to do some empathetic decision-making, and consider how gains in some areas and compromises in others may affect customers or other teams.

You can have the most secure solution in the world, but if user adoption is an obstacle, then work-arounds will negate those iron-clad security measures. And you can find the cheapest SaaS solution on the market to meet 70% of your team’s needs, but if that 30% costs you more in work-around labor, then it’s not really saving you any money.

In general, a buyable solution is faster, easier, and more cost-effective to adopt, and a home-grown solution is going to check more of your organization’s boxes. In life however, there are exceptions to every rule, and ultimately it’s going to take a 360º consideration of the solution’s use cases to make a decision that everyone can really live with.

Abe Storey
Abe Storey

Abe Storey is the founder and CEO of Entri, which helps simplify the DNS configuration process for software companies and their users. Previously, he worked in the ad-tech space as the Director of Product Management at Kargo and founded Rhombus. He's passionate about SaaS, ad-tech, and entrepreneurship.