Build vs Buy: How to Compare the 5-Year Cost of CRM & ERP Software
Monthly licences look cheap; one-off builds look expensive. A simple 5-year total-cost framework, with an illustrative example and the assumptions laid out.
Comparing a monthly software subscription with a one-off build is apples and oranges, unless you look at the total cost over several years. Here's a simple framework you can apply to your own numbers.
Step 1: List everything you pay today
- CRM licences (per user, per month)
- ERP or operations tools
- Accounting software
- Add-ons and marketplace apps
- Integration tools (e.g. Zapier)
- Consultant or admin time to configure and maintain them
Step 2: Project it forward
Multiply by 12 for a yearly figure, then project 5 years ahead, adding the people you plan to hire and an allowance for annual price increases.
Step 3: Price the alternative
For a custom system: the one-off build, plus hosting and support each year, plus any tools you'll keep (often accounting software).
An illustrative example
This is a hypothetical example to show the method. The figures are assumptions, not quotes or real client data. Use your own numbers.
Assume a 20-person business paying a combined £120 per user per month across its tools, growing by 3 people a year, with 7% annual price rises.
| Year | Users | Off-the-shelf (licences) | Custom (build + support) |
|---|---|---|---|
| 1 | 20 | £28,800 | £12,000 build + £5,940 support |
| 2 | 23 | £35,438 | £5,940 |
| 3 | 26 | £42,865 | £5,940 |
| 4 | 29 | £51,158 | £5,940 |
| 5 | 32 | £60,401 | £5,940 |
| Total | ≈ £218,700 | ≈ £41,700 + any tools kept |
In this example, custom comes out well ahead by year 5, but notice what drives it: headcount growth and rising per-user prices. For a 5-person team with flat headcount on a cheap plan, the answer could easily go the other way.
Don't forget the hidden costs (both sides)
- Off-the-shelf: workarounds, re-keying, spreadsheets, consultant fees, lock-in.
- Custom: your time during discovery and testing, data migration, and choosing a reliable partner.
- Both: training and change management.
Try our quick savings calculator on the homepage, or read how much a custom CRM costs.
Want us to run this comparison with your real numbers? It's part of our free systems audit.