How the Calculator Works: This calculator compares the costs of building a solution in-house versus buying a SaaS product over a five-year period.

Build Costs: The initial build cost is calculated as: (Work Days) × (Average Daily Salary) × (Number of Employees). Ongoing maintenance costs are: (Maintenance Days per Month) × (Average Daily Salary) × 12 months.

Buy Costs: For the SaaS option, we calculate either: (Monthly Fee per User) × (Number of Users) × 12 months, or the provided Annual Price.

Five-Year Projection: We extend these calculations over five years, accounting for the higher first-year costs in the build option due to initial development.

Key Considerations Beyond Cost:

• Time to Market: Buying a SaaS solution often allows for faster implementation.
• Customization: Building in-house offers more control over features and integrations.
• Scalability: SaaS solutions may offer easier scaling, but potentially at higher costs.
• Expertise: Building requires specific in-house skills or hiring new talent.
• Maintenance: SaaS providers handle updates and security, reducing internal IT burden.

The decision to build or buy extends far beyond immediate financial implications. When you choose to buy a solution, you're not just purchasing software; you're buying time and focus for your team. This freed-up capacity can be a powerful catalyst for other strategic initiatives. Consider the projects currently on hold due to resource constraints - could these drive significant business value if given attention? Perhaps there's an innovative idea that could transform your market position, or a critical process improvement that could enhance overall efficiency. Moreover, by opting for a ready-made solution, your team maintains its focus on core competencies, potentially accelerating progress in areas where your organization truly differentiates itself. It's crucial to quantify this opportunity cost: estimate the potential return on investment for the alternatives your team could pursue with the time saved by not building in-house.

The build vs. buy decision should be viewed through the lens of your organization's long-term strategic vision. Begin by clearly articulating how the solution in question aligns with your core business objectives and competitive advantage. If the solution directly supports or enhances your key differentiators, building in-house might offer strategic benefits that outweigh short-term cost savings. For instance, a custom-built solution could provide unique features that set you apart in the market, offer greater flexibility to adapt to future needs, or allow for deeper integration with other proprietary systems. On the other hand, if the solution addresses a necessary but non-core function, buying might allow you to leverage best practices while keeping your focus on strategic priorities. Consider also the pace of technological change in your industry - will a custom-built solution be able to keep up, or might a SaaS provider be better positioned to incorporate emerging technologies? Ultimately, your decision should support not just where your business is today, but where you aim to be in five or ten years.

Both building and buying come with their own risk profiles, and a thorough assessment is crucial for informed decision-making. Building in-house carries the risk of project overruns - in time, budget, or both. Even with careful planning, unforeseen technical challenges can emerge, scope can creep, and key personnel may leave, all potentially jeopardizing the project's success. Post-launch, you face ongoing risks related to maintenance, security, and the need to keep the solution updated in a rapidly evolving technological landscape. These risks can be mitigated through robust project management and by ensuring you have the right talent on board, but they remain significant considerations. Conversely, buying a solution shifts many of these risks to the vendor, but introduces new ones. You may become dependent on a third party for a business-critical function, exposing yourself to risks if the vendor faces financial difficulties, gets acquired, or decides to discontinue the product. There's also the risk of vendor lock-in, where the costs or complications of switching providers become prohibitively high. Security and compliance risks need careful evaluation - while reputable SaaS providers often have robust security measures, you're trusting them with potentially sensitive data. Mitigating these risks involves thorough due diligence on potential vendors, careful contract negotiation, and maintaining contingency plans. Remember, risk should be weighed not just in terms of likelihood, but also potential impact on your business operations and strategic goals.

Remember, while this calculator provides a cost comparison, the final decision should consider these broader factors aligned with your business strategy and capabilities.