Software: Buy Vs. Build

Is Custom Software Right for You or Should You Go With the SaaS Approach?

Have you identified a business problem that can be solved with the right kind of software? Excellent! The next big decision on your plate is probably going to be choosing between custom and off-the-shelf software—buying an existing system, like a SaaS (Software as a Service) product, or building your own custom software.

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Pros and Cons of Buying Vs. Building Software

Apr 18, 2021, 09:56 AM

Buying software means using an already-built platform and paying a license or subscription fee to use it. You subscribe to a SaaS platform like Salesforce, Slack, or Dropbox (or thousands of others that exist). Building software, on the other hand, means working with a development team—within your organization or outsourced—to build a system completely customized to your needs. 

Buying and building both have pros and cons. Your situation and your needs will determine the best option for you.

Buying SaaS Off-the-shelf

The first thing that comes to mind about a SaaS option is the availability. It’s already created, nicely packaged, and it can be “shipped” to you with just a couple of clicks. Other advantages of buying off-the-shelf are:

  • It requires a smaller investment in the beginning.

  • You can implement it almost right away (you still need to account for the learning curve).

  • You can make an informed decision through existing customer reviews.

When you choose to implement a SaaS system, you usually aim for an 80% match with your needs and your processes. This is the industry rule of thumb. However, in practice, that number is closer to 60%—you can expect a 60% match between your needs and what off-the-shelf software offers. Which brings us to the disadvantages of this approach:

  • Poor product fit, which leads to the need to implement workarounds or buy additional software solutions to compensate.

  • Increased costs over time.

  • You will pay for features you’ll never use.

  • You don’t have a say in how the product evolves, like what new features are developed and what features are discontinued.

  • The vendor can choose to discontinue the software altogether and you’d have to scramble to find a new solution fast.

How to Evaluate SaaS Software

Evaluating SaaS options is not an easy task. The first thing you need is clarity—to know exactly what you expect from the software. Our suggestion is to divide these expectations into three major groups:

  • Must-have features: these are non-negotiable. If a SaaS option doesn’t have all of them, it will not make the shortlist.

  • Should-have features: these aren’t 100% mandatory, but they will add significant value to your business processes. 

  • Nice-to-have features: functionality that could be valuable (now or in the long run), but launching without it is not a deal-breaker.

These three pillars should give you a good idea of what you’re up against. Remember what we said above about the rule of thumb: A SaaS should match 80% of your needs? When you set out to evaluate your off-the-shelf options, we advise you to aim for 90%.

Why be so picky?

Because not everything works as advertised in software. You will find unexpected glitches and features that seem useful but are far too complicated to use in real life.

If none of the off-the-shelf SaaS platforms meet your needs, you may need custom software. 

Building Custom Software

Custom software mitigates the risks listed above. Some of the primary selling points of custom software are:

  • The software is created to match your exact needs, so there will be no extra or unused features.

  • The solution can evolve along with your needs. With agile/scrum development, custom software is an ongoing process and can adapt and evolve as you need it to.

  • Better security. Custom software has security features that are specific to your industry and consider the most common risks to you, not to the other thousands of clients.

  • You have an undeniable competitive advantage. No competitor of yours uses the same solution, so you have access to unique insights and unique ways to leverage your custom software.

At a glance, it might seem like bespoke software is always the way to go, right? Well, not always. Even though Far Reach is a custom software development company, there are a few reasons why we don’t recommend this solution to everyone:

  • Higher initial costs, along with smaller investments as the project progresses. Custom software is a long-term investment.

  • Timeline to implementation. Bespoke software takes time to be developed, even to an MVP stage.

  • Time investment from your staff. For custom software to be successful, you need to invest time meeting with the development team, running internal analyses, offering detailed feedback, and so on.

Signs You Need Custom Software

See if you could benefit from custom software.

There is no one-size-fits-all when it comes to choosing the right software approach. Even more, you don’t have to think in absolute terms: buy versus build is a false dichotomy. There’s the middle ground, too.