Custom software or off-the-shelf? A decision guide for growing SMEs
At some point every growing company hits the limits of spreadsheets and generic tools. The next step is a real decision: subscribe to ready-made software or build something that fits. Here is how we help clients decide, including when we tell them not to build.
Start with five questions
- How unusual is the workflow? If your process is standard (invoicing, email marketing, basic CRM), ready-made software is cheaper and better tested. If it has industry-specific steps, such as tracking stone by dimension or matching legal cases to questions, custom wins.
- How many systems must talk to each other? One or two integrations are fine with SaaS and its connectors. Five systems exchanging data daily usually need a custom layer, even if the systems themselves are off-the-shelf.
- How many users, and for how long? Per-user SaaS pricing is friendly at ten users and painful at a hundred. Over five years, a custom system often costs less for larger teams.
- Is the software part of what you sell? If customers use it, or it is a competitive advantage, owning it matters. If it is back-office plumbing, ownership matters less.
- How fast do you need it? SaaS is live this week. Custom software takes months. Sometimes the right answer is SaaS now and custom later, with data export planned from the start.
Compare five-year cost, not the first invoice
Custom software looks expensive because the cost is upfront and visible. SaaS looks cheap because it is monthly. Put both on a five-year timeline: subscription fees multiplied by growing user counts, plus the cost of workarounds and manual steps the tool does not cover, against the build cost plus hosting and a maintenance budget of roughly 15 to 20 percent of the build per year. For many SMEs with 30 or more users and a specific process, the lines cross in year two or three.
Hybrid is often the answer
Most of our successful projects are hybrids. Accounting stays in an accounting package. Email stays with the provider. A custom system handles the operational core that is unique to the business and integrates with the rest. This keeps the custom scope small, which keeps cost and risk down, and avoids rebuilding things that already exist.
Signs you should not build yet
- Nobody in the company can describe the process end to end without disagreement. Fix the process first.
- The data you would need is not being captured anywhere today.
- You are under ten users and the problem is mostly reporting. A good dashboard on top of existing tools may be enough.
- There is no owner on your side with time to make decisions during the build.
How to decide in two weeks
We run a short, paid discovery that produces the artefacts you need to decide either way: a map of the workflow, a data model, a list of integrations, a clickable prototype of the key screens and a fixed quote for a first release. You keep everything. About one in five discoveries ends with us recommending an off-the-shelf tool and a small integration instead of a build, which is a good outcome for everyone.
If you decide to build
Insist on these from any vendor: you own the code and the accounts, the stack is mainstream and documented, work is delivered in short cycles you can see, and there is a support plan for after launch. Those four conditions remove most of the risk people associate with custom software.
Read about our custom software development process, or see StoneCloud ERP for an example of a custom system that became a product.
Working on something similar?
Tell us where you are. We are happy to compare notes before there is any project to talk about.