The Build vs. Buy Decision Framework

The build vs. buy decision is one of the most consequential technology choices a business can make. Get it wrong, and you'll either waste money on unnecessary custom development or struggle with software that doesn't fit your needs.

The Four-Factor Framework

We've developed a simple framework based on four key factors. Score each factor from 1-5, and the total will guide your decision.

Factor 1: Process Uniqueness (1-5)

• 1: Your processes are standard for your industry
• 3: Some unique elements, but mostly standard
• 5: Your processes are highly unique and differentiated

Factor 2: Strategic Importance (1-5)

• 1: Support function (HR, basic accounting)
• 3: Important but not core to value delivery
• 5: Core to how you deliver value to customers

Factor 3: Scale and Usage (1-5)

• 1: Few users, occasional use
• 3: Moderate usage across the organization
• 5: Heavy daily use by many employees

Factor 4: Integration Complexity (1-5)

• 1: Standalone system, minimal integration needed
• 3: Some integration with existing systems
• 5: Deep integration across multiple systems required

Interpreting Your Score

• 4-8: Buy off-the-shelf software
• 9-13: Consider customizing existing solutions
• 14-17: Custom development likely makes sense
• 18-20: Custom development is strongly recommended

Real-World Examples

Example 1: Manufacturing Job Shop

A precision machining company needed software to manage their unique quoting process, which considered machine capabilities, material availability, and operator certifications.

• Process Uniqueness: 5 (highly specialized quoting)
• Strategic Importance: 5 (quoting accuracy = profitability)
• Scale: 4 (used daily by sales and production)
• Integration: 4 (connects to inventory, scheduling, CRM)
• Total: 18 - Strong case for custom

Example 2: Professional Services Firm

A consulting firm needed project management and time tracking.

• Process Uniqueness: 2 (fairly standard PM needs)
• Strategic Importance: 3 (important but not differentiating)
• Scale: 3 (moderate usage)
• Integration: 2 (basic accounting integration)
• Total: 10 - Consider customized off-the-shelf

Beyond the Numbers

The framework provides guidance, but also consider:

• Time to market: Do you need something working next week?
• Internal capability: Can you maintain custom software?
• Vendor stability: Will that SaaS company exist in 10 years?
• Data sensitivity: Are there regulatory or competitive concerns?