Dinner was just ending at SaasCo's post-funding celebration when the head of development dropped a bombshell. “Our customers are in love with the product” he began, “but we’re continuing to get feedback asking for a visual project performance dashboard.” At that moment, everyone went silent. The CEO leaned in looking intrigued. The CTO? He looked up looking less enthusiastic.
Requests for enhanced in-app analytics weren’t new. However, SaaSCO had just scored its Series B and investors were watching closely. Customer retention and upsell opportunities took top priority. The problem was that the engineering team was already stretched too thin. “Can we build it ourselves?” The CEO asked. “Or is there something we can simply add in?”
This simple question, “should we make it or buy it?”, created a major strategic crossroad. Making the wrong decision could increase development costs or even force engineers to shift their attention away from features that drive revenue.
A structured make vs. buy example can prevent these mistakes. It’s not just about spreadsheets; it’s about looking through a lens that evaluates what drives your business forward and holds it back.
The Core Question: Should You Build It or Buy It?
The make vs. buy decision is deeply rooted in manufacturing, but in the digital age, it takes on a new level of urgency. For rapidly scaling SaaS companies, the question of whether they should allocate internal resources to develop this capability or ascertain it from an outside vendor is crucial. It’s not just a financial decision; it’s a strategic investment.
Differentiating Strategic vs. Tactical Decisions
Not all make-or-buy decisions are of the same value.
- Choosing Asana or ClickUp for internal project management? Tactical.
- Deciding whether to build a customer-facing analytics module? Strategic.
Strategic decisions influence customer experience, your product offerings and even your competitive edge. If your decision ultimately touches upon user-facing features or core revenue streams, making the wrong one can have serious financial repercussions.
The Hidden Risks of the "We Can Build It" Mindset
It’s not uncommon for tech companies to have a bias toward building everything in-house. But this type of thinking is risky:
- Underestimate Maintenance: Dashboards you make in-house will always need constant updates and security patches.
- Opportunity Cost: Every hour your tech team spends working on a non-core feature is an hour lost from building something that helps improve your product offering.
- Burnout: Trying to maintain too many custom-built tools can lead to burnout and negatively impact workflow.
Key Factors in Your Make-or-Buy Analysis
A smart make vs. buy analysis takes both quantitative and qualitative factors into account. Let’s take a deeper look:
Quantitative Analysis: The Financial Calculation
Calculate the Cost to Make:
Development Costs:
- 3 Frontend Developers: $120,000 x 0.75 = $90,000 x 3 = $270,000
- 2 Backend Developers: $130,000 x 0.75 = $97,500 x 2 = $195,000
- 1 QA Engineer: $100,000 x 0.5 = $50,000
- 1 Project Manager: $110,000 x 0.5 = $55,000
The total dev cost is $570,000.
Infrastructure Costs:
- Server Hosting: $20,000/year
- Database Licenses: $100,000/year
- Security Tools: $15,000
The total infrastructure cost is $45,000.
Ongoing Maintenance:
- $570,000 x 0.15 = $85,500/year
Opportunity Cost:
- Delay in launching a core feature estimated to generate $250,000 in ARR.
- A 3-month delay will cost $62,500.
A total 3-year cost to build equates to $888,000.
Calculate the Cost to Buy: Yurbi
- Subscription/Licensing Fees: $30,000 for three years is $90,000.
- Implementation & Integration Costs: A one-time cost of $35,000.
- Training Costs: 20 team hours multiplied by $75 per hour is $1,500.
Over the course of three years, it’ll cost $126,500 in total.
Find the Break-Even Point:
- Build Cost (3 Years): $888,000
- Buy Cost (3 Years) $126,500
The cost difference is $761,500.
Qualitative Analysis: Beyond the Numbers
The cheapest option isn’t always the smartest. Below is a breakdown of how SaaSCo evaluated qualitative factors.
Core Competency
SaasCo’s greatest strength is content management workflows, not BI infrastructure. Building analytics requires skills in visualization and security, none of which are in their wheelhouse.
Speed to Market
- Build Timeline: 9 months.
- Buy Timeline: 6 weeks.
That gives SaasCo a 7.5-month competitive advantage when choosing to buy.
Expertise & Quality
Even with a strong team, trying to match the maturity of a BI platform that’s been evolving for years. Buying ensures enterprise-grade security, scalability and UX.
Scalability & Future-Proofing
Buying means ongoing scalability, updates and additional features that are handled by a vendor vs. SaasCo owning tech debt on the day of purchase.
A Practical Make vs Buy Analysis Example: "SaaSCo's" Analytics Dilemma
Let’s tie everything together.
The Situation at SaaSCo
SaaSCo is a mid-stage B2B project management SaaS. Their users require visual dashboards where they can export and share with their clients. The CEO wants to own the IP and then “build it the right way.” The CTO feels that this will delay their roadmap by approximately nine months and take 20% of their developer team off their most important projects.
SaaSCo's Cost Analysis
| Line Item | Build (3-Year Estimate) | Buy (3-Year Estimate) |
|---|---|---|
| Development (Dev salaries, PM, QA) | $570,000 | 0 |
| Infrastructure (servers, licenses, security) | $45,000 | 0 |
| Ongoing Maintenance (3 years) | $256,500 | 0 |
| Opportunity Cost (core feature delay) | $62,500 | 0 |
| Licensing Fees (3 years) | 0 | $90,000 |
| Integration & Training Costs | 0 | $36,500 |
| TOTAL | $888,000 | $126,500 |
Download the full Make vs. Buy Cost Analysis spreadsheet to customize your own decision-making process.
SaaSCo's Strategic Choice
Even if the price points were identical SaasCo’s leadership realized:
- Being able to deliver dashboards quickly gave them a competitive edge.
- Engineers could stay focused on core functionality.
- Customers received what they wanted faster.
SaasCo decided to buy and never looked back.
The 'Buy' Option: Accelerating Value with Embedded Analytics
Modern-day buy solutions like Yurbi isn’t clunky add-ons. They’re embeddable platforms built to integrate seamlessly with your app. These white label platforms come complete with: drag-and-drop dashboard creation, enterprise-grade security, no-code report builders and custom branding.
For SaasCo, Yurbi checked off every box on their must-have list.
Ready to check every box like SaaSCo? Book a live demo and see how easily you can embed powerful, white-labeled analytics—no code, no hassle, just results in weeks.
Is Building In-House Ever the Right Call?
Most definitely. There are definitely situations where building wins:
- When no other adequate solution exists.
- When the feature is your own product.
- When you have unique compliance needs.
But for other non-core functionality, such as dashboards, chat support or billing systems, buying is usually the better choice.
[External Link: Link to a reputable source like a Gartner or Forrester report discussing the trend of buying vs. building enterprise software components.]
Still Thinking of Building? Here’s Your Final Checklist.
Before you build, review the following checklist with your leadership team:
- Have we calculated the cost of ownership, including future upgrades and customer support?
- Is it worth pulling engineers off core projects?
- Can we afford to delay delivering products for nine months or more?
- Are we really ready to become BI, UX and data security experts?
If the answer is no to any of the above questions, it’s time to run your own make vs. buy analysis example.
The decision to make or buy isn’t just technical; it’s existential and financial. While choosing to build something outside your company’s core strengths can slow down progress, having a detailed analysis, like SaasCo’s, will help you move forward with confidence.
Be sure to contact us to help make your decision easier. Learn more about the benefits of embedded analytics to strengthen your case for buying over building.