The question is usually asked as build or buy. There is a third answer that is right more often than either: keep the system you have and add the piece it lacks.
No rule settles it in general. The following test settles it for one system at a time.
01Buy when the process is ordinary
If you do something the way most companies do it, a product built for most companies will serve you well and cost less than anything made to order. Bookkeeping, payroll in one country, email, general project tracking and standard e-commerce are in this group for nearly everyone.
- The product does most of what you need without customising.
- You are willing to adopt its way of working where it differs from yours.
- The price still makes sense at the number of users you expect in three years.
02Extend when the core is sound
A system that holds years of history and that people know how to use is an asset, even when it frustrates them. If the complaint is about one missing function, one report or one connection, build that and leave the rest alone.
- A portal or app in front of an existing ERP.
- An integration that removes retyping between two systems.
- A clean-up of duplicate and incomplete records inside the system.
- An intelligence layer that reads the data the system already holds.
03Build when the difference is the business
Custom software is justified when the process it runs is the reason customers choose you, or when no product was designed for it.
- The list of customisations a product would need is long. At that point you are paying for custom software and a licence.
- You would have to join three products to cover one process.
- The data may not leave your own infrastructure.
- Licence cost per user has overtaken the cost of owning a system.
04Count the cost over years, not at purchase
A product looks cheap on day one and a build looks expensive. Over several years the comparison changes: licences rise with headcount, customisations must be redone at upgrades, and a rented system leaves you with nothing if you stop paying.
A built system has its own running cost: hosting, maintenance and changes. Ask for that figure alongside the build quote. Any supplier who gives one number without the other has given half an answer.
In short
- There are three options, not two. Extending what you have is often the best.
- Buy for ordinary processes, build for the ones that set you apart.
- Compare cost over several years, including licences, upgrades and maintenance.
- Ask who owns the code and the data before choosing any route.
Questions
Is custom software always more expensive?
At the start, usually yes. Over time it depends on user numbers, licence terms and how much a product has to be bent to fit. For a process used by many people for many years, owning can cost less than renting.
What is the risk of building?
That the result is late, wrong or cannot be maintained. A written specification, delivery in visible stages and full ownership of code and documentation are the protections against each.
Can we start with a product and move to custom later?
Yes, and it is a sensible path. Make sure from the first day that you can export all your data in a usable form.
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