When organizations need to implement software solutions, they have two options:
- Custom building it (in-house or outsourced)
- Buying an off-the-shelf commercial product
For businesses looking to quickly solve a commonly defined business problem, buying an off-the-shelf software product makes a lot more sense than building custom. It's significantly cheaper, faster, and easier than building these products from scratch, as they’re already created based on the uses of others like you.
Although this approach may work for many universal functions and challenges, some businesses face unique edge cases that can’t be solved by a software solution built for the general market. In this situation, custom-built software makes the most sense.
In the past, building custom solutions took a great deal of time and money. But that’s changing.
Thanks to the rise of no-code software development, custom-built solutions are now a lot faster to create. And because it takes 5-10x fewer hours to build a product with no-code tools, it's also substantially cheaper. This has tipped the scales toward “build” for many businesses that previously felt stuck trying to make an ill-fitted/rigid buy solution work for their unique needs.
What to consider when deciding whether to build vs. buy software
While no-code makes it significantly easier to build custom software for use cases that didn’t make sense before, the reality is that it’s still a large undertaking since you’re starting from scratch.
Just like in traditional software development, you’ll need to deeply understand the problem you’re trying to solve, the functionality you’ll need, and the goals you want to achieve.
Depending on your specific use case and needs, sometimes off-the-shelf solutions are still your best option.
Here are four guiding factors you might consider when deciding whether to build vs. buy your software:
This is the single most important and nuanced consideration. Will your total cost of ownership be lower if you build or buy? To answer this question, we recommend you evaluate the following dimensions around cost:
- Up-front build costs: What will it take to build your tool from scratch with no-code? Is it possible to customize your existing SaaS tool to fit your needs, and if so, how much will that cost? Most of the initial no-code builds we work on range from $20-200k, depending on the complexity of the feature set.
Rebuilding an entire SaaS tool like Salesforce would clearly take millions of dollars, but usually companies don’t need to build everything. In fact, often the benefit of custom is to strip out lots of unused features to make things easier for your users.
- Ongoing software costs: How much do you expect to pay in licensing fees (given how much you plan to grow)? How does that compare to ongoing maintenance costs from owning your solution?
Clearly if you expect many more users, and/or if you plan to hit SaaS limits that bump you to a higher per-user tier, your ongoing costs can get high. With an owned no-code solution, you’re typically paying a much lower hosting fee. No-code tools handle basic technical maintenance for you just like a SaaS tool, but you may need a low-level of developer support for ongoing feature tweaks and fixes.
- Ongoing business costs: Often the build vs. buy options result in slightly different software solutions, which means different costs/revenue for your business. For example, if a non-custom SaaS tool requires a full-time, in-house staff member to manually execute processes, then their cost is attributed to your cost of owning the SaaS tool. Or if your SaaS-based client portal is causing poor experiences and churn that you could address from a custom solution, that loss of revenue should also factor into your cost of ownership.
- Migration costs/timing: Migrating your existing data and operations from one tool to another can have a wide range of costs. Some functions are easily portable (just flip the switch), whereas others require extensive data migration, retraining of staff, piloting (i.e., running both tools simultaneously), etc.
Relatedly, timing can sometimes be a factor if you need to move to a new solution quickly – this is often less of a factor for businesses with ongoing operations, since anytime is a good time to migrate. No-code can help in this case, since it’s fast to build and can connect to other data sources to make migration easier.
- Selling your software: In some cases, businesses want to turn their cost into revenue by selling their software to other businesses as a SaaS tool. If you have this in mind, you can imagine offsetting some of the other costs associated with the build option.
2. The value of ownership
For some organizations, developing and owning software that solves their unique business problems is a strategic move. It empowers them to unlock new opportunities to compete – in ways where commercial off-the-shelf SaaS will always lag with its one-size-fits-all functionality.
For example, custom software can allow you to offer a better client experience (and market against that), be more nimble in an industry that evolves quickly, or have the option to swim against the current (which SaaS tools always follow).
3. Business risk
There is risk to both build and buy. With the SaaS buy, the risk is that you’ll suddenly hit a limitation that you need to overcome quickly and can’t. With custom build, the risk is that you’ll build the software in a poor way and it won’t deliver on its original promise. The key to the latter is working with the right software development partner and taking the right approach to the build.
Implementing a software build can be a big effort and very distracting from other parts of the business. You should only take that on if you have the right people and a clear enough vision for what you want.
Need a no-code developer to help build your software?
If you’ve decided that building custom software is the right option for your business, Airdev can help.
We’ve worked with hundreds of startups, growing businesses, and Fortune 500 companies to launch complex, production-grade apps in a fraction of the time and cost of traditional development. See how we helped one manufacturing company migrate from their SaaS to a totally custom ERP in just months.
Contact us here to discuss your custom project.