Custom Software Development UK: When to Build vs Buy
Build custom or buy off-the-shelf? Learn when custom software is the right choice and how to make the decision.
Jonas Höttler
Custom Software Development UK: When to Build vs Buy
One of the most important technical decisions for any business: Do you buy off-the-shelf software or have something custom built? The wrong choice can set you back years or cost hundreds of thousands.
In this guide, you'll learn how to make this decision systematically and when custom software is the right choice.
Table of Contents
- Build vs. Buy: The Fundamental Question
- When You Should Build
- When You Should Buy
- The Decision Process
- 5-Year Cost Comparison
- FAQ
Build vs. Buy: The Fundamental Question
The Two Options
Buy (Off-the-Shelf / SaaS):
- Use ready-made software
- Monthly/annual license fees
- Standard features for standard processes
- Examples: Salesforce, HubSpot, SAP, Monday.com
Build (Custom Software):
- Individually developed solution
- One-time development costs + maintenance
- Tailored exactly to your processes
- Full control over features and data
The Hidden Third Option: Hybrid
Often the best solution is a combination:
- Standard software for standard processes
- Custom development for your differentiation
- Integrations connect both worlds
When You Should Build
1. Your Process is Unique
If your business process distinguishes you from competitors, it shouldn't be squeezed into a standard tool.
Examples:
- Proprietary algorithm for pricing
- Unique customer journey
- Industry-specific compliance requirements
- Complex workflows that standard tools can't handle
2. You Need Competitive Advantage
Custom software can become a strategic asset:
- Faster processes than competitors
- Better customer experience
- Unique features that can't be copied
- Data sovereignty and proprietary insights
3. No Suitable Software Exists
Sometimes there's simply nothing fitting:
- Niche industries
- New business models
- Special regulations
- Unique data sources
4. You Expect High Growth
With strong growth, SaaS costs can explode:
- Per-user pricing at 1,000+ users
- Transaction fees at high volume
- Enterprise tiers with premium pricing
5. Data Control is Critical
When you need full control over your data:
- Sensitive customer data
- Regulatory requirements (GDPR, etc.)
- No dependency on third parties
- On-premise requirements
When You Should Buy
1. The Process is Standard
For generic processes, mature solutions exist:
- CRM (Salesforce, HubSpot)
- Accounting (Xero, QuickBooks)
- HR (Personio, BambooHR)
- Project management (Asana, Monday)
- Email marketing (Mailchimp, Klaviyo)
2. You Need It Fast
Time-to-market is critical:
- SaaS: Days to weeks
- Custom: Months to years
3. Budget is Limited
Short-term, buying is cheaper:
- No development costs
- Predictable monthly expenses
- No technical team needed
4. You Don't Have a Tech Team
Without technical know-how internally:
- No capacity for maintenance
- No expertise for requirements
- Dependency on external developers
5. The Process Changes Frequently
If you're still experimenting:
- Quick testing of different approaches
- No "lock-in" to a self-built solution
- Flexibility through tool changes
The Decision Process
Step 1: Define the Problem
Answer concretely:
- What is the business problem?
- Which processes are affected?
- What is the desired outcome?
- How do you measure success?
Step 2: Analyze the Market
Check existing solutions:
- What software exists for this use case?
- How well do they fit your requirements?
- What do they cost at your expected usage?
- What compromises would you have to make?
Step 3: Prioritize Requirements
Divide requirements into:
- Must-Have: No solution without this feature
- Should-Have: Important, but workarounds possible
- Nice-to-Have: Would be nice, not critical
Step 4: Fit-Gap Analysis
For each potential solution:
| Requirement | Software A | Software B | Custom |
|---|---|---|---|
| Feature 1 | ✓ | ✗ | ✓ |
| Feature 2 | Partial | ✓ | ✓ |
| ... | ... | ... | ... |
Step 5: Calculate TCO
Total Cost of Ownership over 5 years:
Buy:
- License costs × 60 months
- Implementation / Customization
- Integration with other systems
- Training and change management
- Opportunity costs of compromises
Build:
- Development costs
- Maintenance (15-25% p.a.)
- Infrastructure
- Internal team or agency retainer
- Opportunity costs of longer time-to-market
Step 6: Strategic Evaluation
Beyond costs:
- Is this a differentiator?
- How important is data control?
- What are the risks of vendor lock-in?
- How fast do I need to be live?
5-Year Cost Comparison
Example: CRM System for 50 Users
Option A: Salesforce (Buy)
| Item | Year 1 | Years 2-5 | 5-Year Total |
|---|---|---|---|
| Licenses (£75/User/Month) | £45,000 | £180,000 | £225,000 |
| Implementation | £30,000 | - | £30,000 |
| Customization | £15,000 | £20,000 | £35,000 |
| Total | £90,000 | £200,000 | £290,000 |
Option B: Custom CRM (Build)
| Item | Year 1 | Years 2-5 | 5-Year Total |
|---|---|---|---|
| Development | £150,000 | - | £150,000 |
| Maintenance (20%) | - | £120,000 | £120,000 |
| Hosting | £6,000 | £24,000 | £30,000 |
| Total | £156,000 | £144,000 | £300,000 |
Result: Similar costs, but custom offers more control and no ongoing license costs from year 6+.
Break-Even Analysis
Custom typically pays off when:
- User count > 100 (user-based pricing)
- Transactions > 10,000/month (transaction fees)
- Usage duration > 5 years
- High customization would be needed
Conclusion
The build-vs-buy decision is never clear-cut. The right answer depends on your specific context: budget, timeline, strategic importance, and technical capacity.
At Balane Tech, we help companies make this decision - and then implement it. Whether integrating SaaS tools or custom development. Contact us for objective advice.
FAQ
What does custom software development cost in the UK?
Simple applications from £25,000, medium complexity £60,000-£150,000, enterprise solutions £150,000-£500,000+.
How long does custom development take?
MVP: 3-4 months, full product: 6-12 months, enterprise: 12-24 months.
Can I switch from SaaS to custom later?
Yes, but with effort. Data migration and process changes take time. Plan the switch carefully.
What about low-code/no-code platforms?
Good middle ground for some use cases. Faster than custom, more flexible than SaaS. But: Limited scalability and vendor lock-in.
Who should decide on build vs buy?
CTO/IT lead for technical feasibility, business owner for process requirements, CFO for budget. Ideally a joint decision.
How do I minimize risk with custom development?
Start with MVP, validate early, work agile with regular releases. Avoid "big bang" launches.
