The Real Cost of Building Your Own Internal Tools
It’s a phrase I’ve heard countless times in SaaS operations: “We can just build that ourselves.”
It always starts with the best intentions. You’ve got smart developers and countless other costs to manage, so why not build something internally? But a year later, that “quick internal tool” is everyone’s least favourite topic.
Whether to build or buy software is a question all leaders face at some point, but it’s particularly common in growing SaaS businesses that are filled with developers eager to solve challenges. The temptation to build in that environment is real. Yet, in most cases I’ve seen, choosing the build route ends up far more costly than anyone expected at the outset.
Below, we’ll unpack why building internal tools can feel appealing, the hidden costs that show up later, and how to make a balanced decision for your business.
Why Teams Choose to Build
Most build-vs-buy decisions are made in the early years, when resources are tight. It’s easy to see the appeal to build - it feels faster, cheaper and more easily customized. It can feel wasteful not to use the development resources you have at your fingertips.
The idea of a tool built exactly for your needs, with flexibility to tweak as you grow, can sound ideal. This is especially true if a business feels like their operational challenges are unique. Maybe the pricing model is unusual or customers are complex. It’s tempting to think that nothing off the shelf could fit as well as a custom build would.
And sometimes, that’s true. But before diving into building your tool, it’s worth understanding the reality of what that build could actually be costing your business.
The Actual Costs of Building In-House
The costs that creep up when building internally aren’t always obvious ones. Below are factors you should consider when comparing your build case to buying something from the market.
1. Your Roadmap Takes a Backseat
Quite simply, this isn’t what you hired your developers to do. Unless you are in the business of building customer service tools, your developers weren’t hired to solve your support team's process challenges.
Developers are expensive. Their highest value lies in advancing your product and strengthening your position in the market.
If two developers spend three months working on an internal project, that’s roughly six developer-months diverted from your product roadmap. Time that could have been spent delivering revenue-generating features to customers.
It’s a double cost: you’re paying for the internal build and potentially losing momentum externally. In a rapidly moving market like SaaS, six months can be the difference in leading the market or falling behind your competitors.
2. The Endless Upkeep You Didn’t Budget For
Internal tools are never “one-and-done”. Like anything custom built, they need updates, bug fixes, and evolving features.
If you estimate maintenance consumes around 20% of initial build time, that six-month project from earlier now adds one month of developer effort every year that follows. That’s time diverted from your core product.
Beyond code upkeep, you’ll need people to maintain documentation, train new team members, and ensure security and compliance as your business grows. Skip those steps, and the tool quickly becomes outdated.
3. The “Frankenstein Effect”
Many of us have seen it happen: a small project quietly becomes a monster. It’s what I like to call the “Frankenstein Effect”. What was originally started as a neat solution for one problem morphs into a catch-all for every new request to get tacked on.
Over time, you’re left with a disjointed tool that’s hard to use, harder to maintain, and nearly impossible to train new team members on.
Once these systems expand to touch multiple workflows, they become almost impossible to separate later. Everything becomes interconnected and moving away feels like open-heart surgery. By the time you’re ready to scale, you’re tied to a tool no one actually wants to use but everyone depends on.
4. The Human Cost: Lost Knowledge, Frustrated Teams
When you build internally, knowledge often sits with one or two people. If they leave, that context and knowledge walks out the door with them. Training or upkeep on a system can be incredibly difficult after this.
At the same time, top talent expects internal systems that just work. There’s nothing to kill enthusiasm faster than onboarding a great new hire and having to explain,
“This is our internal CRM. It’s a bit clunky. Only Sally really knows how to run that report.”
Internal systems shape employee experience as much as customer experience. As your business matures, your technology stack should mature with you.
So How Do You Decide?
Every situation is unique and there are times where building in-house can make sense, but fewer than most teams expect.
Here are a few questions to guide your decision:
Does this generate revenue or a competitive advantage?
Will building this tool return money to the business or meaningfully differentiate your product? If not, it’s probably best to buy. Focus your time and energy on your product instead.
Is our situation actually unique or are we re-inventing the wheel?
Most internal operations follow the same basic principles. Could your challenge be solved by configuration or customization instead? It’s unlikely your developers have the time or desire to stay ahead of businesses who devote their entire workforce to solving these problems. After all, they’re busy trying to solve your customer’s challenges.
Can you adapt your processes rather than rebuilding what already exists?
If a tool doesn’t perfectly fit your process, it may not necessarily be a bad thing. Many external tools reflect industry best practices. If they clash with how you work, it may be worth asking why before you build. Consider configurable or API-friendly tools that can continue to grow with you.
So when would building internally be the right call?
If the tool directly supports your core product, creates an actual competitive advantage, or solves a workflow so unique that nothing on the market comes close – it might be worth building. For example, if your product relies on a unique algorithm or workflow that defines your competitive advantage, that’s worth owning.
If you do build, treat it as you would any other product with an owner, roadmap and plan for maintenance.
Final Thoughts
For most internal processes, your business is better off buying what already exists so you can focus your time where it matters: building what makes you unique.
Investing in the right tools early might feel like extra effort now, but it saves far more time and frustration later on.
If you’re weighing this decision or untangling an internal system that’s outgrown its purpose, let’s map it out together. A few thoughtful choices now will free your developers to focus on what truly sets your business apart.
