Off-the-shelf SaaS vs custom development: how to choose as an executive

When a software need becomes critical (CRM, internal operations, e-commerce, reporting, automation), the same question comes up: buy an existing SaaS or build a custom solution. The right answer mostly depends on your business context, your constraints, and how much differentiation you’re aiming for.

Off-the-shelf SaaS: when the need is standard

An off-the-shelf SaaS is relevant when your need matches a common use case (invoicing, customer support, HR, project management). You benefit from a widely used product that is continuously updated.

SaaS advantages

• Fast time-to-market: deploy in days or weeks.
• Low upfront cost: subscription instead of a large investment.
• Maintenance included: fixes, security, updates, support.
• High reliability: product used by thousands of companies.

SaaS limitations

• Limited customization: you sometimes need to adapt your processes to the tool.
• Scaling costs: per-user licenses, add-ons, extra fees.
• Sometimes frustrating integrations: incomplete APIs, paid connectors.
• Vendor lock-in: data, workflows, dependence on the vendor’s roadmap.

Custom development: when software becomes a competitive advantage

Custom makes sense when the software is at the heart of your model: a specific customer experience, unique business processes, operational optimization, complex integrations.

Custom advantages

• Perfect fit for your business: the software matches your processes, not the other way around.
• Differentiation: you build a strategic asset.
• Integration control: API-first approach, data flows, custom automation.
• Data control.

Custom limitations

• Higher upfront investment: budget, scoping, governance.
• Longer time to production: even an MVP takes time.
• Full responsibility: maintenance, security, documentation.

The 7 criteria to decide quickly (and well)

1) Urgency and time-to-market

• If you must deliver in under 4 to 8 weeks, SaaS often wins.
• If you can iterate with an MVP (simple version), custom becomes realistic again.

2) Business differentiation

Ask a simple question: “If this software worked 2x better, would it truly change our trajectory?”

• If no: SaaS.
• If yes: custom (or hybrid).

3) Total cost of ownership (TCO)

Don’t only compare “subscription vs project budget.” Compare over 24-36 months:

• SaaS: licenses, modules, users, integration costs, premium support.
• Custom: build, hosting, maintenance, evolutions, monitoring, support.

4) Integration complexity (existing IT stack)

The more systems you have (ERP, CRM, BI, field tools, IAM, master data), the more the question becomes: “What integrates best?”

A SaaS can integrate very well, or become a wall if the API is limited.

5) Security, compliance, and data requirements

• Sensitive data, hosting constraints, segmentation, logging, fine-grained permissions: custom can be safer because you control the architecture.
• A SaaS can still be excellent if the provider meets your requirements (GDPR, DPA, SSO, audits, export, data residency).

6) Evolution and roadmap

• If your needs change fast: beware SaaS tools that are too rigid.
• If your product must evolve continuously: custom gives you control.

7) Internal capacity to run a product

Custom requires a minimum level of discipline: prioritization, testing, user feedback, backlog management.

Without governance, you risk building a tool “for everyone” that satisfies no one.

A simple decision grid (for leadership teams)

Give a score from 1 to 5 for each line (5 = very true). Then look at the overall trend.

Common mistakes to avoid

Choosing a SaaS “by default” and stacking workarounds

When a tool doesn’t fit, people add plugins, scripts, fragile automations, manual exports. The result is a messy stack and hidden costs.

Building custom too early

The classic trap: rebuilding a CRM, a support tool, or a full invoicing system without real necessity. Validate the need first, then invest.

Underestimating maintenance

Custom isn’t “we build it and we’re done.” You must plan for fixes, updates, logs, alerting, security, and continuous improvement.

Forgetting the exit plan (reversibility)

SaaS or custom, define from day one: how you retrieve your data and how you switch solutions if needed.

The most effective approach in real life: hybrid

In many companies, the best strategy is:

• SaaS for generic functions (support, standard CRM, payroll, emailing)
• Custom for the core business (customer portals, back-office, pricing, orchestration, automation, AI)

A concrete example (very common)

• SaaS: CRM + helpdesk
• Custom: a back-office that centralizes data, business rules, workflows, and pushes to SaaS tools via API

You get the best of both worlds: speed + differentiation.

How to decide in 2 workshops

Workshop 1: business scoping (90 minutes)

• Business objective (growth, margin, quality, compliance)
• Current process + friction points
• Define what is essential (“must-have”) vs “nice-to-have”
• Define success metrics (time saved, conversion rate, fewer errors)

Workshop 2: options and scoring (90 minutes)

• Benchmark 2-3 shortlisted SaaS options
• Quote for the custom MVP option
• Score against success metrics + estimate TCO over 24/36 months
• Decision: SaaS, custom, or hybrid

Conclusion

Choose SaaS when the need is standard, urgent, and the competitive advantage is low. Build custom when the software carries your differentiation, integrations, business rules, or data constraints. And consider hybrid as soon as your company grows: it’s often the best compromise and supports an iterative approach.