Knowing when to buy off-the-shelf or invest in building custom software – the right choice at the right time for your business’ growth needs
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Scaling businesses inevitably face the critical build vs. buy decision: should you invest in custom-built software or opt for off-the-shelf solutions? The answer isn’t always straightforward.
While buying software provides immediate access to established systems, building custom solutions offers greater flexibility and long-term control. The right decision depends on cost, scalability, security, and competitive differentiation.
And missteps are very costly down the line.
Fortunately, it isn’t really an either/or decision: Custom-built software and off-the-shelf products serve completely different tasks for different needs – it’s more a question of knowing what your business really needs right now.
Here’s how to know whether to buy or invest in custom software:
For many businesses, SaaS software is an attractive first step for testing new ideas or hypotheses – see if your customer even wants a new feature before investing in development. Or, your non-core business functions, like accounting or your HR platform, can easily be filled with a good, industry-standard off-the-shelf product – you don’t always need to custom-build those.
The reason you’d buy SaaS for these non-core functions is their cost-effectiveness (you lower your risk) and the ability to deploy fast, test and make a decision.
However, buying software comes with trade-offs: Customisation is often limited, meaning your team will need to adapt to the provider’s processes rather than set the tone yourself. SaaS solutions often charge per user or tier, which can become costly at scale. And there’s always a data security risk – third-party platforms mean less control over sensitive information.
See all about outsourcing and insourcing your tech needs.
Custom software is more secure and 100% custom, but naturally, it’s a bigger investment in terms of time and resources. The general rule of thumb is that anything that gives your business a competitive edge, is best built custom.
This means your core product, offering or proprietary systems, data, unique customer experiences, and functions that improve operational efficiency or give you strategic advantages over competitors. Companies like Uber and Airbnb, for example, built their own technology because it’s absolutely core to their business – cannot be outsourced.
Scalability and security are the other major reasons to build: Unlike SaaS platforms that may cap functionality or charge exponentially as usage grows, custom software can be developed to scale seamlessly with business expansion.
See the benefits of custom software, the guide to scaling your software, the entire software development process unpacked and how much it costs to develop new software in South Africa.
So how do businesses determine the best path forward? The decision often comes down to six key factors:
If the software directly impacts a company’s competitive edge—such as a custom analytics platform for a data-driven firm—building is often the better choice. For non-core functions like payroll management, buying is typically more cost-effective.
If an immediate solution is needed, off-the-shelf software provides a faster, cheaper alternative. Custom development, while more expensive upfront, can provide greater value over time if the business can afford the investment.
Fast-growing businesses should evaluate whether their chosen solution can handle expansion. If off-the-shelf software will quickly become restrictive, a custom-built platform may be the smarter long-term choice.
Regulated industries with strict security requirements often benefit from custom software, as it allows for complete control over data protection and compliance.
If existing SaaS tools don’t integrate well with the company’s current technology stack, building a custom solution may be necessary to ensure seamless workflows.
Subscription-based software may seem affordable initially but can become costly as a business scales. Over time, custom-built solutions can reduce long-term costs, particularly when licensing fees for multiple tools add up.
See the latest trends and opportunities in software in South Africa and how to select the best software developers for your project.
Instead of immediately buying software or investing heavily in complex custom builds, many businesses can benefit from an alternative: low-code development.
Low-code platforms allow businesses to rapidly develop applications using a visual interface, reducing the need for extensive coding expertise. This approach enables designers, business analysts, and developers to collaborate seamlessly, speeding up both development and iteration cycles. Because low-code platforms are inherently flexible, businesses can create applications that work across different devices and integrate with existing systems more efficiently.
Discover the benefits of low-code, the cost-savings and how long it takes to build in low-code.
Determining whether to build or buy software is a complex decision that requires careful analysis of business needs, financial considerations, and long-term growth plans – see why you need a digital consultant in today’s market.
Specno helps companies navigate this process, ensuring they choose a technology strategy that aligns with their objectives. Whether optimising an off-the-shelf solution, integrating multiple platforms, or designing a custom-built system, Specno provides the expertise to make the right call and avoid costly missteps.
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