The verdict in three sentences
The rule is simple: buy the commodity, build the competitive advantage. A CFO who has accounting software custom-built wastes money; one who buys a package for a process that drives their margin sacrifices differentiation. The entry price lies: over 3 years the gap between buying and building narrows, and it's the exit cost and obsolescence that make the real difference.
Build vs buy: the 3-year TCO
Total cost of ownership (TCO) includes far more than the sticker price. Here are the 2026 orders of magnitude for a 30-50 user SME.
| Item | Buy (package) | Build (custom) |
|---|---|---|
| Licences / initial development | 12,000-35,000 EUR | 45,000-100,000 EUR |
| Configuration / integration | 5,000-20,000 EUR | included |
| Annual subscription | 6,000-18,000 EUR/yr | 0 EUR |
| Maintenance / enhancements | partly included | 6,000-15,000 EUR/yr |
| Total cost over 3 years | 20,000-60,000 EUR | 45,000-100,000 EUR |
| Royalty after 3 years | ongoing | none |
| Exit cost / lock-in | high | low (code owned) |
The package is cheaper at 3 years, but the royalty never stops and the exit cost (migration, data re-export) can be heavy. Custom costs more upfront but amortises over the long run with no subscription.
The 8-criteria build/buy scoring
To decide without emotion, score each criterion from 1 (favours buy) to 5 (favours build). A high total leans towards building.
| Criterion | Leans buy (1-2) | Leans build (4-5) |
|---|---|---|
| Competitive advantage | commodity | core business |
| Process specificity | standard | unique |
| Usage horizon | < 3 years | > 5 years |
| Number of users | high | low to medium |
| Speed of rollout | urgent | plannable |
| Lock-in tolerance | acceptable | to avoid |
| Ability to maintain | low | team / partner |
| Initial budget available | limited | available |
An overall build-leaning score means the software touches your differentiation, you'll keep it long, and lock-in threatens you. Conversely, a buy score says: don't reinvent the wheel, buy and focus on your business.
Mini case study
Claire is CFO of a 45-employee industrial SME in Lille. She's torn over her production-planning tool. Buy option: a package at 28,000 EUR over 3 years (18,000 licences + 10,000 configuration) then 8,000 EUR/yr royalty. Build option: 62,000 EUR development + 10,000 EUR/yr maintenance, code owned. At 3 years, buy = 44,000 EUR, build = 92,000 EUR. But her scheduling method is her edge over competitors, no package covers it 100 %, and she targets an 8-year lifespan. Over 8 years: buy = 68,000 EUR (ongoing royalty) plus recurring reconfiguration, build = 132,000 EUR but an owned, differentiating asset. She chooses build to protect her margin and avoid costly lock-in.
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FAQ
Is buying always cheaper?
Short term, yes, almost always. But the annual subscription never stops and the exit cost can be high. Over 5-8 years, owned custom software can become more economical, especially with many users.
When must you absolutely build custom?
When the software carries your competitive advantage and no market solution covers your specific processes. Building a commodity (payroll, accounting) is, by contrast, almost always a mistake.
Is obsolescence risk higher when building?
Not necessarily. A package can be dropped by its vendor or force a costly version upgrade. Well-architected custom software, with owned and documented code, evolves at your pace.
What is the exit cost?
It's what you pay to leave a solution: data re-export, migration, retraining, sometimes contractual penalties. It's often underestimated with high-lock-in packages and near zero when you own the code.
Can you combine build and buy?
Yes, it's often optimal: buy the commodities (accounting, HR) and build custom the module that makes your difference. The challenge is integration between the two, to be priced from the start.
Let's scope your project. Give us the functional scope, your user count and usage horizon, and we'll deliver a scored build/buy assessment and the 3-year TCO of both options. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
