Every growing business hits the same inflection point. The SaaS tools that worked brilliantly when you were a team of ten start creaking at thirty. Workflows that were once simple now involve five different platforms, manual data transfers between them, and workarounds that everyone knows are fragile but nobody has time to fix.

The temptation is to build something custom. Your own system, designed around your exact processes, integrated the way you need it. And sometimes that’s the right call. But it’s a big commitment, and I’ve seen just as many custom software projects go wrong as go right.

Here’s a framework for thinking through the decision honestly.

When SaaS Is Still the Right Answer

Let’s start with the uncomfortable truth: for most growing Australian businesses, SaaS remains the better choice for most functions, even when it’s imperfect. Here’s why.

Speed to value. A SaaS tool is live in days or weeks. Custom software takes months — often 6-12 months from concept to something usable. During that time, your problem isn’t being solved, and you’re burning money on development.

Ongoing maintenance isn’t your problem. When you subscribe to Xero, you’re not responsible for keeping the accounting engine compliant with ATO changes. When you use HubSpot, you don’t need to worry about email deliverability infrastructure. The vendor handles updates, security patches, infrastructure scaling, and regulatory compliance. This is a massive hidden cost of custom software that people consistently underestimate.

You get the benefit of collective development. A SaaS tool serving 10,000 customers is getting feature requests, bug reports, and workflow ideas from all of them. The product improves continuously in ways that reflect real-world usage. Your custom tool only improves when you invest in improving it.

Talent availability. Your employees have likely used the major SaaS tools before. Onboarding someone onto Salesforce or Asana is straightforward. Onboarding them onto your bespoke internal system requires extensive training and documentation that you’ll need to maintain.

SaaS starts to break down in specific, identifiable situations. Let’s talk about those.

When Custom Development Starts Making Sense

Your core workflow doesn’t map to any existing tool. If your business process is genuinely novel — not just slightly different from standard, but fundamentally different — existing tools may require so many workarounds that the total cost of SaaS plus integrations plus manual processes exceeds the cost of building something purpose-fit.

I worked with a logistics company that was using a combination of four different SaaS tools plus spreadsheets to manage their unique delivery scheduling process. The monthly SaaS cost was $4,500, and they still needed two full-time staff members doing manual data reconciliation between systems. Custom software cost $120,000 to build and $2,000/month to host and maintain. It paid for itself in 14 months.

Integration is your primary pain point. When your biggest issue isn’t what any individual tool does but how they talk to each other, a custom middleware layer or integrated platform can be justified. If you’re spending $2,000/month on Zapier and still hitting limitations, the integration cost alone may justify custom development.

Data ownership and sovereignty matter. Some industries — healthcare, legal, government contracting — have strict requirements about where data lives and who can access it. While most SaaS providers now offer Australian data residency, the specifics of your compliance obligations may demand custom infrastructure. This is particularly relevant under the Australian Privacy Act for businesses handling sensitive personal information.

You’ve outgrown the pricing model. SaaS pricing often scales per user or per transaction. At a certain volume, the math flips. A SaaS CRM at $80 per user per month costs $48,000/year for 50 users. If your core CRM needs are straightforward, a custom solution might cost $80,000-150,000 to build with ongoing costs of $1,500-3,000/month. At 50+ users, the crossover comes within 2-3 years.

The tool is a competitive differentiator. If software is core to what makes your business different — not back-office operations, but the actual product or service you deliver — building custom gives you capabilities that competitors using the same SaaS tools can’t replicate.

The Hybrid Approach (Usually the Best Answer)

Most businesses don’t need to choose one or the other universally. The smart play is SaaS for commodity functions and custom for differentiating ones.

Use SaaS for: accounting, email, HR management, basic CRM, project management, file storage, and communication. These are well-solved problems with mature, affordable tools. Building custom versions of any of these is almost always a mistake.

Consider custom for: your core operational workflow (if it’s genuinely unique), customer-facing tools that define your brand experience, and integration layers that connect your SaaS tools in ways the vendors don’t natively support.

A growing Australian professional services firm I’ve worked with runs Xero for accounting, HubSpot for CRM, and Microsoft 365 for communication — all SaaS. But their job scheduling and resource allocation system is custom-built because their service delivery model doesn’t fit any existing tool. The custom piece integrates with the SaaS tools via APIs. They get the best of both worlds.

Questions to Ask Before Building

If you’ve identified a genuine case for custom software, work through these before committing:

Can you define the requirements precisely? If you can’t write down exactly what the software needs to do, you’re not ready to build. Vague requirements lead to scope creep, budget blowouts, and software that doesn’t solve the actual problem. Spend as much time on requirements as you think is reasonable, then double it.

Do you have budget for the full lifecycle? The build cost is just the beginning. Budget for ongoing hosting, maintenance, security updates, bug fixes, and feature additions. A reasonable rule of thumb: plan for annual maintenance costs of 15-25% of the initial build cost.

Who will own it after launch? Custom software needs ongoing technical ownership. If you don’t have internal development capability, you’ll need a retained relationship with your development partner. Understand what that costs and what happens if that relationship ends.

What’s your fallback? If the custom build fails or takes twice as long as expected, what do you do? Having a SaaS fallback — even an imperfect one — means a failed custom project is expensive but not catastrophic.

Finding the Right Development Partner

For Australian businesses that don’t have in-house developers, the development partner decision is critical. A few things I’ve learned:

Local matters more than cheap. Offshore development can work, but the communication overhead, timezone challenges, and difficulty of iterating quickly on requirements make it risky for businesses building their first custom system. Australian or New Zealand-based teams cost more per hour but typically deliver faster and with fewer misunderstandings.

Look for industry experience. A developer who’s built systems in your industry will understand your domain, anticipate requirements you haven’t thought of, and avoid common pitfalls. Ask for references from businesses similar to yours.

If you’re evaluating options and want an independent perspective on whether custom development is the right path, a consultancy we rate can provide a straightforward technology assessment without trying to sell you a build project they’d deliver.

Insist on iterative delivery. Don’t sign a contract for a six-month build with delivery at the end. Insist on two-week sprints with working software demonstrated at each stage. This lets you course-correct early and reduces the risk of a big-bang delivery that misses the mark.

The Decision Matrix

Here’s a simplified version of how I think about it:

If the problem is common and the data is standard — use SaaS. If the problem is common but the data has special requirements — use SaaS with custom integration. If the problem is unique and the scale is small — use SaaS with workarounds (and revisit as you grow). If the problem is unique and the scale is meaningful — build custom.

Most businesses are in categories one or two. Be honest about which one you’re in before committing to a build.

Final Thought

The worst outcome isn’t choosing wrong between build and buy. It’s not choosing deliberately at all — drifting into an accumulation of SaaS tools that don’t talk to each other, supplemented by manual processes and spreadsheets, because nobody stopped to think about whether a different approach would work better.

Whether you buy or build, make it a conscious decision based on your specific situation, not a default.