Build or Buy? Do the Analysis

Your decision to rent an off-the-shelf SaaS software solution or create a custom software solution (which you own) bears many consequences. Here’s a quick analysis to help you determine the best option:
Cost
Off-the-Shelf / SAAS
  • Generally, an upfront configuration cost with ongoing subscription fees.
  • Fees increase as more users are added.
  • Operational expense
VS
Custom Software
  • One-time investment that can save you money over time (8-24 month return vs. SaaS).
  • Adding users is generally no/low cost.
  • Capital Expense
CONSIDERATIONS
  • If software will be in use for 2 years or more, consider custom software.
  • If you have more than 10 users, consider custom software.
  • Ability to depreciate custom software as a capital expense offers tax advantages.
Functionality
Off-the-Shelf / SAAS
  • Ready-made applications that offer a broad range of features of which many may not be useful for your situation.
  • Alternatively, some needed features may not be offered, requiring work arounds or additional software.
VS
Custom Software
  • Glove-fit functionality designed and guaranteed to meet your organization’s needs.
CONSIDERATIONS

Determine how many of the Off The Shelf software features your team will utilize and compare this to the primary use cases that your team actually needs.

Implementation Time
Off-the-Shelf / SAAS
  • 4-12 weeks of configuration and training in year one at best; possibly longer if the solution is integrated with other systems.
VS
Custom Software
  • 6-16 weeks to custom develop.
  • After 1-2 months of usage, small improvements, and updates are implemented.
  • Training times are typically less, as software is built around your staff and processes.
CONSIDERATIONS

Compare implementation and training times vs. short and midterm benefits.

Adoption
Off-the-Shelf / SAAS
  • Adoption of SaaS software can take a long time and requires strong management.
  • Learning and adopting the built-in workflows of that software can be a challenge as they may vary from the norm.
VS
Custom Software
  • Adoption of custom software is typically high because the users are intimately involved in creating the solution..
  • The solution is designed around the staff’s needs and workflows, so utilizing it feels natural.
CONSIDERATIONS

Assess the complexity of the workflows and use cases that this software covers. The more complex they are, the more difficult adoption can be.