We are debating whether to build a custom AI engine to run our proprietary client onboarding process or just buy a SaaS tool and modify our workflow. How do we make this decision without getting stuck in analysis paralysis?

Question

Tyler Smith · Accepted Answer

This decision should be approached using the Strategic Real Options framework. You must evaluate the flow cost of waiting versus the hidden, lump-sum cost of upgrading or building a custom solution.

Building custom software is notoriously expensive and introduces massive operational drag. Before you write a single line of code, ask if this custom engine will directly protect or enhance your Three Uniques. If it does not, you should buy.

Use Keith Cunningham's Thinking Time method to answer this question: How might we use existing SaaS tools to achieve eighty percent of our desired outcome so that we can test our assumptions before investing capital?

If you buy, you can implement the solution as a 90-day Rock with minimal risk. If the tool fails or the market shifts, your sunk cost is low.

If you choose to build, you must have the right seat on your Accountability Chart to manage it. This person must GWC the role of product owner. If you do not have that internal capacity, building custom software is a recipe for a massive, expensive failure.

For most mid-sized businesses, the right path is to buy and integrate. Keep your capital focused on scaling operations and preparing for a clean exit, rather than becoming a software development shop.