The Framework
Answer these 5 questions honestly to determine whether SaaS or custom software is right for your workflow.
Q1: Is this workflow a competitive differentiator?
If yes → lean toward custom. Your unique process is a moat; don't standardize it away.
If no → SaaS is likely fine. Commodity workflows don't need custom solutions.
Q2: How painful are the integrations?
If SaaS requires 3+ integrations or manual data exports → custom may be cheaper in year 2.
If SaaS works standalone or has native integrations → stick with SaaS.
Q3: What's your 3-year total cost of ownership?
Include SaaS subscription fees, integration costs, and internal labor for workarounds. Compare to custom build cost + 3 years of hosting/support. If custom breaks even in under 24 months → build. Otherwise → buy.
Q4: Can you tolerate SaaS roadmap risk?
If this workflow is mission-critical and you can't afford vendor feature changes → custom gives control.
If you're OK with being at the mercy of a vendor roadmap → SaaS is less risk.
Q5: Do you have internal ownership capacity?
Custom software needs a product owner who will evolve requirements over time. If you lack that capacity → SaaS forces discipline through constraint.
Example: CRM Decision
A services business evaluating CRM:
- Q1: Sales process is standard (not a differentiator) → SaaS
- Q2: Needs integration with QuickBooks and scheduling tool → manageable with Zapier → SaaS
- Q3: $50/user/mo × 10 users × 36 months = $18K. Custom build would be $40K → SaaS wins
- Q4: Roadmap risk is low; CRM features are mature → SaaS
- Q5: No internal capacity to own a custom CRM → SaaS
Decision: Buy SaaS CRM.
Conclusion
Use this framework to replace gut-feel debates with structured analysis. The answer is often hybrid: SaaS for commodity, custom for differentiation.