As the SaaS industry evolves, so do SaaS pricing strategies. Usage-based and hybrid pricing models are becoming the standard, aligning the value delivered with the price customers pay. These models cater to modern preferences and offer flexibility, but they also introduce complexities—particularly in revenue management. A reliable revenue management platform is essential to tackle these challenges, ensuring accurate billing, forecasting, and reporting while preventing revenue leakage.

Research shows that many companies still struggle with billing inefficiencies, which can ripple through operations and hinder growth. For SaaS organizations, a robust solution that integrates seamlessly with existing systems is key. Features like data metering and contract configuration are essential for adapting to market changes.

This raises a critical question for businesses: should they build a revenue management tool or buy one? To answer that, evaluating the Total Cost of Ownership (TCO) is crucial. TCO includes not just initial costs but also long-term expenses like maintenance, scaling, and resource allocation. 

While building your own tools for revenue automation may offer a different level of customization, it often comes with unforeseen costs as business needs evolve. Purchasing a SaaS revenue management solution typically provides more predictable costs, including subscription fees and vendor support, mitigating risks related to compliance and scalability.

Key Considerations When Choosing to Build or Buy

1. Resource Allocation

The allocation of resources is one of the most critical factors when deciding whether to build or buy a revenue management system, as building a solution in-house demands significant investment in human and technological resources. The development, deployment, and ongoing maintenance of a custom system can stretch financial budgets, consume valuable time, and require dedicated personnel—potentially diverting resources from key business initiatives.

For many organizations, this trade-off can lead to a misalignment of priorities. Assigning internal teams to build and manage a non-core system often means sidelining efforts that could enhance the company’s primary product offerings or market positioning. Such a focus on internal infrastructure risks diluting the organization’s ability to innovate, compete, and grow in its core business areas.

Building: A custom solution comes with substantial ongoing resource requirements, which may distract attention from revenue-generating activities. Over time, maintaining and updating the system can strain internal teams, creating inefficiencies and hindering long-term growth.

Buying: Provides the opportunity to allocate resources more strategically. By leveraging an external, off-the-shelf platform, companies can redirect personnel and financial investments toward advancing their core offerings, improving customer experiences, and driving revenue growth. 

2. Team Focus and Expertise

Building and managing a revenue management system in-house requires significant dedication of both human and technical resources. This approach necessitates a team focused on development, deployment, and ongoing maintenance, diverting attention from core product innovation. The team must possess specialized knowledge of account and billing automation and the intricate financial processes tied to usage-based pricing. This expertise can be difficult and costly to cultivate.

Purchasing a platform brings built-in advantages of external expertise. These solutions are designed and maintained by professionals with deep knowledge of financial operations, tailored specifically to the needs of finance teams. Vendors continuously refine and update their systems, ensuring platforms remain robust and feature-rich. This allows internal teams to focus on core business priorities, leaving the complexities of system maintenance to specialized providers.

Building: Provides full control but requires a high level of expertise and ongoing resource investment, which can distract from strategic goals.

Buying: Leverages external expertise, enabling internal teams to focus on innovation and growth.

3. Cost Structure and ROI

The financial considerations of building versus buying a revenue management system cannot be overlooked. Developing a solution in-house typically involves significant upfront investment, covering software development, infrastructure, and the resources required for ongoing upgrades, security, and scaling. These costs are often unpredictable and tend to escalate over time.

In contrast, purchasing a revenue cycle management platform offers a more predictable cost structure. With subscription-based pricing models, costs scale with usage, allowing businesses to manage their budgets more effectively. Pre-built platforms have the advantage of faster implementation, enabling companies to achieve ROI more quickly. For businesses seeking immediate improvements in revenue management efficiency, this can be a critical advantage.

Research indicates that organizations adopting commercial platforms report saving 30-50% on integration efforts compared to custom-built solutions. These savings, combined with the streamlined operations provided by an external platform, can significantly reduce overall costs and drive operational efficiency.

Building: Offers a customized solution tailored to specific needs but comes with higher, less predictable costs and longer timeframes for ROI realization.

Buying: Delivers a cost-effective and predictable solution with faster implementation timelines and the added benefits of a revenue cycle management platform designed to optimize financial processes and accelerate ROI.

4. Data and Integrations

Effective data management and seamless integration are fundamental to the success of revenue management systems, particularly when navigating the complexities of usage-based and hybrid pricing models. The system must accurately collect, process, and synchronize usage data across various business platforms such as CRM, ERP, and customer support systems. This ensures billing reflects actual usage, promoting customer satisfaction and safeguarding revenue integrity.

The primary challenge lies in achieving smooth integration with existing infrastructure while maintaining flexibility to adapt to new technologies or evolving business processes. This requires a deep understanding of technical integration and the operational workflows unique to the business. 

Building: An in-house system offers the potential for highly customized integrations tailored to specific needs. However, this approach requires substantial ongoing management, technical expertise, and resources.

Buying: Commercial platforms often have robust, pre-configured integrations designed to work seamlessly with popular business tools. 

5. Scalability and Performance

As businesses expand, their revenue management systems must evolve to handle increasingly complex scenarios, particularly in hybrid, multi-tiered, and usage-based pricing models. Building a system in-house allows companies to create a solution tailored to their unique needs, including advanced capabilities like data metering, which is critical for consumption-based pricing. This high level of customization ensures the system can manage complex calculations and varied billing scenarios as the business scales.

But maintaining scalability in an internally developed system requires significant investments in infrastructure, continuous technological updates, and dedicated resources to adapt to new pricing strategies and transaction volumes. This means ongoing, resource-intensive efforts to align the system with business growth and market changes. It’s no surprise that over 75% of growing SaaS companies transition to commercial billing platforms within five years to address these scaling challenges effectively.

Buying a platform provides immediate access to pre-built, rigorously tested solutions designed for scalability. Commercial platforms have advanced features like built-in data metering and analytics capabilities, enabling businesses to manage growth effortlessly without the technical and operational burden of maintaining the system. These solutions are continuously updated by vendors to support a wide range of pricing models, including complex hybrid and usage-based structures, ensuring that they remain reliable as businesses expand.

Building: Offers custom scalability and tailored features like data metering but requires ongoing investment in technology and resources.
Buying: Provides out-of-the-box scalability with advanced capabilities, allowing businesses to grow efficiently with minimal operational overhead.

Conclusion

The decision to build or buy a revenue management system requires careful consideration of a company’s resources, expertise, and long-term goals. Building a system in-house offers the advantage of full customization and control, enabling tailored solutions for specific business needs. However, this approach often comes with unpredictable costs, significant resource demands, and ongoing maintenance challenges.

Purchasing a system delivers quick scalability, predictable expenses, and reduced operational complexity. Pre-built platforms benefit from continuous vendor support and updates, ensuring they remain aligned with evolving market needs. Market surveys reveal that 70% of businesses report greater satisfaction with purchased solutions, citing their reliability, advanced features, and ease of use.

To make an informed decision, companies should conduct a thorough cost-benefit analysis, evaluating the Total Cost of Ownership (TCO) and weighing it against the organization’s strategic priorities. Engaging key stakeholders across departments and consulting with vendors to explore their platforms’ capabilities can provide critical insights. Whether building or buying, the goal is to implement a revenue management system that supports scalability, enhances efficiency, and drives sustainable success.