Build vs Buy - A One-Page Decision Framework

The build versus buy question comes up in almost every technology decision a mid-market business makes. It should be straightforward but it rarely is, because the people selling you software want you to buy and the people building it want you to build.

Here is a framework that cuts through both biases - the kind of question tech consultancy should be able to answer in five minutes. Four criteria, scored simply, with a clear recommendation at the end.

Criterion 1 - Is this core or commodity?

This is the most important question and the one most businesses get wrong.

A commodity function is something that every business does in roughly the same way. Email. File storage. Payroll. Calendar management. These are standardised, predictable, and well-served by existing platforms. Buy them. Subscribe. Do not waste time and money reinventing what already works.

A core function is something that defines how your specific business operates differently from competitors. Your pricing logic. Your client onboarding workflow. Your quality control process. Your reporting structure. These are unique to you, shaped by your market, your team, and your history.

If you subscribe to a SaaS platform for a core function, you are forced to adapt your operation to someone else's design. If you invest in development and build for a core function, you get something that fits exactly.

Score it: commodity = buy. Core = build. Somewhere in between = keep reading.

Criterion 2 - How well does the SaaS actually fit?

If you are considering a SaaS platform, run this test. List the ten most important things you need the platform to do. Now check how many the platform handles natively - not with workarounds, not with customisation, not with "coming soon" features.

If the platform handles eight or more natively, it is probably a good fit. Buy it.

If the platform handles five to seven, you will spend significant time and money on configuration, custom fields, and workarounds. The total cost of ownership will be much higher than the subscription price suggests.

If the platform handles fewer than five, you are buying a platform and then rebuilding it to fit your needs. At that point, you are paying twice - once for the subscription and once for the customisation. Build instead.

Criterion 3 - What is the three-year total cost?

Calculate the full cost of each option over three years.

For buy: annual subscription multiplied by three, plus projected price increases of eight to twelve percent per year. Add implementation costs, training, integration development, ongoing administration, and any premium features you will need to unlock as usage grows.

For build: development cost, testing, deployment, initial support period, and ongoing maintenance. Include internal project management time. Be honest about contingency - add twenty percent.

Compare the two numbers. In many mid-market cases, the build option breaks even within eighteen to twenty-four months and is significantly cheaper by year three. The build option also produces an asset you own. The buy option produces an ongoing cost that increases every year.

Criterion 4 - What is the exit cost?

This is the criterion most people skip and it is often the most important.

For buy: what does it cost to leave the platform after two years? Calculate data migration, process redesign, team retraining, and the business disruption during transition. This number is typically two to four times the annual subscription. It is the reason vendors can raise prices with confidence.

For build: what does it cost to change or replace the custom solution? If it is well-built with clean code, good documentation, and standard technologies, the answer is "it costs developer time." If it is a bespoke monolith with no documentation, the answer is "it costs everything."

A good build has a low exit cost. A bad build has an infinite one. A SaaS subscription always has a moderate-to-high exit cost that increases with time.

The framework

Score each criterion:

Criterion 1 - Core or commodity? Core = build (2 points). Commodity = buy (0 points). Mixed = 1 point.

Criterion 2 - SaaS fit? Strong fit = buy (0 points). Moderate fit = 1 point. Poor fit = build (2 points).

Criterion 3 - Three-year cost? Build cheaper = 2 points. Similar = 1 point. Buy cheaper = 0 points.

Criterion 4 - Exit cost? Low build exit = 2 points. Similar = 1 point. Low buy exit = 0 points.

Total: 0-2 = buy. 3-5 = depends on context, but lean toward whichever has the lower three-year cost. 6-8 = build.

The real answer

Most mid-market businesses should do both. Buy commodity tools - email, storage, communication, basic accounting - and let your IT and process strategy decide which core operational systems justify building instead.

The mistake is buying everything because monthly subscriptions feel safer. They are not safer. They are more expensive, less flexible, and harder to leave than most people realise.

The other mistake is building everything because custom feels superior. It is not always. Some problems are genuinely solved by existing platforms, and building from scratch when a good product exists is vanity, not strategy.

Use the framework. Score it honestly. Let the numbers decide.