Core vs Commodity: The Classification That Matters
Not every system in your firm deserves custom development. The first step in any build vs buy decision is classifying your tools into two categories.
Commodity systems handle universal functions — email, calendar, payroll, basic file storage. These are well-served by off-the-shelf SaaS. The switching cost is low and the vendor’s roadmap aligns with your needs.
Core systems define how your firm delivers work — project management, estimating, client workflows, reporting, and operational coordination. When these systems are rented, your firm’s operational DNA is shaped by a vendor’s product decisions.
Operational Leverage Analysis
The financial case for custom systems is not about saving money on day one. It is about operational leverage over time.
A custom internal system eliminates integration friction between tools, removes manual reconciliation steps, and gives your team a single source of truth. The labor hours recovered — and the errors avoided — compound month after month.
For a firm spending 40 hours per month on manual workarounds at $75 per hour, that is $36,000 per year in recoverable capacity — before counting the strategic value of faster, more accurate decision-making.
The Real Cost Comparison Framework
When comparing SaaS to a managed internal system, most firms make the mistake of comparing monthly subscription cost to monthly development cost. This misses the full picture.
A proper comparison includes: subscription fees, integration and maintenance labor, training and onboarding for each tool, data migration risk, and the opportunity cost of working around tool limitations. When these factors are included, the managed system model often reaches break-even within 12 to 18 months.
Strategic Timing Triggers
The right time to consider custom systems is when one or more of these conditions apply:
- Your SaaS stack exceeds $2,000 per month across core operational tools
- Your team spends more than 20 hours per month on manual workarounds or data reconciliation
- You have outgrown the configurability of your current tools
- A vendor change or pricing increase has forced an unplanned migration
- Your firm is entering a growth phase where operational efficiency directly impacts margin
If two or more of these apply, the financial and strategic case for internal systems is worth evaluating.