What is ‘custom software’?

Custom software refers to software and applications that are designed and developed specifically for one organisation.

Unlike subscription-based software, custom software matches exact workflows and requirements. It can be tailored to integrate with legacy systems, align with unique business rules, or deliver features not available in standard offerings.

While this personalisation can be attractive, it often involves higher upfront costs, longer lead times, and reliance on expertise that may leave with staff turnover.

For some organisations with highly specialised needs, custom software may feel like the only way to achieve the right fit. For most, however, the drawbacks in terms of cost, complexity, and risk make it a difficult path to sustain in the long run.

What does SaaS mean?

Software as a Service (SaaS) is a model where software is hosted in the cloud and accessed over the internet, rather than installed on an organisation’s own servers. Instead of purchasing licences outright, organisations pay a recurring subscription fee, which typically includes hosting, security, maintenance, and ongoing updates.

SaaS makes it possible to access business-critical applications on any device, anywhere, at any time. Because the provider manages upgrades and patches centrally, organisations benefit from continuous improvements without the disruption of manual upgrades. This model contrasts with other cloud delivery approaches, such as Platform as a Service (PaaS) and Infrastructure as a Service (IaaS).

What is SaaS ERP?

Enterprise Resource Planning (ERP) software brings together an organisation’s core functions into a single, integrated platform, including:

• Finance
• Supply chains
• HR and payroll
• Content management
• Analytics
• Asset management and more

SaaS ERP delivers this capability through the cloud. Instead of maintaining complex infrastructure on site, organisations access their ERP securely over the internet. The subscription model means hosting, security, and upgrades are handled by the provider, giving organisations faster deployment, combined with predictable costs.

By combining ERP’s breadth of functionality with the flexibility of SaaS, organisations can scale more easily, respond to change faster, and focus resources on strategic outcomes rather than IT maintenance.

SaaS ERP vs custom software: key differences

While both SaaS ERP and custom software are designed to support core business operations, the way they are delivered, maintained, and scaled is very different.

SaaS ERP is built on proven, cloud frameworks with continuous updates, while custom software is developed from the ground up to meet specific needs, often at greater cost.

Understanding the trade-offs is essential when deciding which approach is best for your organisation. The most important differences are grouped into the following areas:

• Deployment time and cost
• Scalability and maintenance
• Flexibility and customisation
• Integration and updates
• Security, hosting, and data compliance

Deployment time and cost

One of the clearest differences between SaaS ERP and custom software lies in how quickly each can be deployed, and the costs involved.

SaaS ERP platforms are designed for smoother and less risky rollouts. Because they are preconfigured with industry-specific practices, organisations can get up and running far sooner than with custom development. Subscription pricing also reduces the need for large upfront investment, making costs more predictable over time.

By contrast, custom software usually has a longer cycle. Features must be designed, coded, tested, and integrated before use, increasing both time-to-value and upfront cost.

However, this can make custom software cheaper in the long term due to not having to pay an ongoing subscription fee.

Scalability and maintenance

SaaS ERP is designed to adapt as an organisation grows. Capacity can be increased quickly, and new functionality can be introduced without major disruption. Because the provider manages performance and delivers updates automatically, organisations avoid the overhead of scheduling and resourcing regular maintenance themselves.

Custom software offers a different type of flexibility. Organisations can shape the system around their evolving requirements and decide exactly when and how to extend its capabilities. The challenge is that this usually involves extra development effort, and long-term upkeep rests with the organisation or its partners.

While this provides control, it also increases reliance on dedicated technical resources.

Flexibility and customisation

Custom software is built to meet an organisation’s unique requirements, making it highly adaptable to specific workflows and business rules. This level of personalisation can create a strong fit with existing processes and support niche use cases that standard platforms may not address. The trade-off is that each adjustment requires development effort, which can extend timelines and increase costs if needs change frequently.

While SaaS ERP may not offer unlimited customisation, it provides extensive configuration options that allow organisations to tailor workflows, reporting, and user access without rebuilding the software.

This balance ensures organisations can adapt the platform to their needs while still benefiting from ongoing upgrades and innovations provided by the vendor.

Integration and updates

SaaS ERP platforms are built to connect seamlessly with a wide range of applications and modules. Integration is usually faster because providers design their products to work together within a single ecosystem, and updates are delivered automatically to ensure compatibility. Regular upgrades also means organisations have access to the latest features without the disruption of manual installations.

Custom software can also integrate effectively, especially when designed with existing systems in mind. The advantage is complete control over how integrations are built and managed; the challenge is that each connection requires dedicated development, and updates must be coordinated carefully to avoid breaking existing links.

This flexibility also requires ongoing investment of time and expertise.

Security, hosting, and data compliance

SaaS ERP providers invest heavily in security and compliance. Hosting is managed in secure data centres with measures such as encryption, regular patching, and resilience built in. Because updates are applied centrally, organisations benefit from the latest protections without having to schedule or resource them internally.

This model also makes it easier to meet industry standards and regulatory requirements.

With custom software, the level of security and compliance is determined by the organisation itself. This can be an advantage for businesses that need very specific controls or want to design their own hosting environment. The downside, however, is that maintaining those standards requires dedicated expertise and ongoing investment.

When to choose SaaS

SaaS ERP is often the better fit for organisations that want predictable costs and the assurance that their software will remain current without additional overheads. It suits organisations that need to scale quickly, adapt to regulatory change, or avoid the risks and expenses of maintaining their own infrastructure.

Bear in mind that SaaS ERP is not foolproof and isn’t guaranteed to work for everyone. There are seven essential steps you can take to ensure you choose the right ERP system and unlock the benefits one can provide:

1. Determine your business needs
2. Choose: SaaS vs on-premises ERP
3. Does it have upper-management support?
4. Does it have end-user (employee) support?
5. Is it scalable for future growth?
6. Does it integrate with your existing systems?
7. How much does it cost?

We go through these steps in much greater detail in our article, ‘How to choose the right ERP system’. Give it a read below:

When custom software might make sense

Custom software can be a practical choice for organisations with highly specialised needs that are not well served by standard ERP platforms. It allows complete control over functionality, hosting, and security, which may be important for industries with niche regulatory requirements or complex legacy environments.

Organisations considering this path should weigh whether the benefits of a tailored fit outweigh the long-term effort needed to maintain and evolve the system. In many cases, custom development is best reserved for situations where competitive advantage depends on unique processes that cannot be supported by a configurable SaaS ERP platform.

Why SaaS ERP is the smarter choice for most organisations

The case for SaaS ERP extends beyond individual organisations. Research shows the global ERP software market is set to almost double, from $48 billion in 2022 to $96 billion by 2032. Half of all companies are currently acquiring, upgrading, or planning to update their ERP systems, and 83% report that ERP projects meet their return on investment targets.

Importantly, 78% of organisations also report improved productivity following implementation. These figures highlight how central ERP has become to long-term efficiency and growth.

By adopting SaaS ERP, organisations gain these benefits while reducing risk and overhead.

Don’t believe us? Real-world results from TechnologyOne customers show how this works in practice:

• Waipā District Council in New Zealand saved 1,920 hours per year through AP Automation, cut invoice processing costs by 66%, and now matches 95% of invoices automatically to purchase orders.
• City of South Perth transformed digital services through TechnologyOne’s Digital Experience Platform, with more than 87,000 residents accessing services online and customer satisfaction rising through real-time feedback.
• City of Unley cut off-site paper storage by 70 linear metres annually and increased record capture rates by 800% in some departments.
• Australian Renewable Energy Agency (ARENA) is using TechnologyOne to manage more than $1 billion in renewables funding, improving governance and accountability across its investment programs.
• Several councils in the UK, including Worchestershire, identified up to £900,000 worth of revenue-generating and saving opportunities thanks to OneCouncil.