SaaS solutions are often the fastest and most cost-effective way to digitize business processes in the early stages of business. Systems are available immediately, and the initial investment is lower. There is no development process and no implementation of a custom-built solution.
This approach makes sense. Business processes are still relatively simple, and the number of users is small. The system supports day-to-day operations, with minimum investments in time or resources.
The number of processes that need to be managed grows as the business evolves. One CRM system was enough at the beginning, but the same process may require an ERP system or customer support platform, and additional tools later. Each problem is solved by a new system which becomes one more place where information moves through the business.
Choosing SaaS enabled the business to grow. Now, existing systems are no longer able to support organizational operations. New requirements demand new capabilities, and additional integrations become too complex at this point. Once easy to manage, changes now affect multiple teams and systems.
The build vs buy decision is no longer a technology question. It depends on how systems support daily operations, how they can support the next stage of business growth. When does the build vs buy decision become a strategic business decision?
New tools are introduced in response to specific business needs at the time. The decision makes sense; a new reporting method is needed, or the customer support system requires improvements.
As business processes become more complex, different departments start using different solutions in daily work. The real challenge is now how the systems work together.
The sales team enters customer data into the CRM, while operations rely on the ERP system. Customer support uses a separate platform to manage customer information, and the finance division works in accounting software. Every system has its own purpose, but the information required for a business process is no longer stored in one place.
Changing a customer's status in one system requires a check in another. Some information is transferred through integrations, but the rest depends on manual input. The number of places where information can be lost continues to grow.
A company uses a CRM for sales, an ERP system for order management, and a separate platform for customer support. A customer requests changes to an order. Now the information moves across all departments and systems, and each team only sees part of the process. Every check of the order increases the time needed to complete the request.
It’s all because of individual decisions that made sense at the time. When the business becomes more complex, the systems begin to slow down the growth.
The described situation is the result of a series of decisions. More and more people become involved in daily processes. Information is stored in multiple places, and the number of checks increases with complexity. Processes that were simple now require coordination across multiple teams.
SaaS solutions work very well for most organizations in their early stages, as business processes keep close to standard operating models. Exceptions require a different approach; it’s when products and services go through additional approvals before being authorized.
SaaS has its own predefined workflow. Problems begin when larger clients require additional financial reviews before an order is approved. The SaaS system cannot support that workflow, so communication moves to emails and phone calls.
The process is no longer fully visible in the system. Some decisions are made outside the official workflow, through agreements between employees. Certain reviews now rely on communication between the employees involved, and their knowledge of the information and process.
Every new exception adds another step. The number of exceptions grows, and so does the time needed to complete day-to-day operations. Employees adapt to the system limitations that no longer reflect the actual way of work.
Integrations are a response to business needs. Companies want to connect systems, to reduce manual data entry and speed up business processes. Administrative work is reduced, and repetitive tasks become less common.
The business now relies on a large number of connected systems. Changes that once affected a single process now require multiple adjustments; every new change affects the flow of information inside an organization.
What happens when a company introduces a new service? The process begins in the CRM system, but the same data is also used by the ERP system and internal reporting. Data transfer between systems needs to be adjusted without disrupting existing integrations. Every connected process is expected to work.
What was once a simple change now involves multiple systems and a growing number of dependencies. Integrations have connected the systems, but they also add a new level of complexity to day-to-day operations.
It is difficult to measure the time employees spend every day keeping business processes running, but that time is also part of the software cost. Part of daily work turns into administrative tasks. These tasks were never part of the original plan, decisions require additional coordination now, and some steps in business exist only to connect separate processes. The activities consume working time, even though they were not seen as a business cost.
Operational complexity grows through a series of small adjustments. An additional review takes only a few minutes, but it brings another person into the process. These changes seem insignificant, but they become part of day-to-day operations.
A similar pattern appears when organizations use a large number of separate tools. Organizations know that centralization reduces costs, but they continue to add separate tools to address business needs. The biggest expense is no longer the software itself, but the time invested in keeping everyday processes running.
Operational complexity is only one part of the decision. Long-term costs and operational fit are equally important when evaluating if existing SaaS solutions can still support business growth.
New services are introduced, additional processes are added, and businesses expand into new markets. The organization expects greater flexibility from the system, which struggles to support new requirements. It becomes a limitation to future business growth. Existing processes continue to work, but new initiatives require adjustments and compromises or workarounds.
A new service requires a different pricing model. The business opportunity exists, and so does the market. The problem begins when the system cannot support the required changes. The organization can no longer decide how the business will evolve based only on its needs. Part of those decisions depends on the software vendor and the system's capabilities. New requirements must fit into an existing framework, but the system was never designed around the organization's specific needs.
Requirements become more complex with business growth, and the existing system struggles to support the organization's direction. The real question is no longer whether the system works today, but whether it can support the business tomorrow.
Most companies choose the fastest and most cost-effective way to digitize their business in the early stages of growth. It supports business growth and provides the functionality needed at that stage.
None of the challenges described in this article automatically mean it is time for custom software. Individual exceptions, or integrations can often be managed successfully within existing systems. Up to a point.
But how long can existing solutions support business growth without compromises or workarounds? Organizations then look for a system that supports their business processes and future plans. A custom solution is one of the realistic options for future development.
There is no universal moment when a SaaS solution stops being the right choice. The decision to build a custom system comes when existing solutions can't support the way the business operates. At that moment, the build vs buy discussion is no longer about technology; it becomes a requirement for future business growth.
If this topic reflects a project you are considering, talk to Nordit directly or use the project estimation flow to get a structured first estimate.
