Own system vs SaaS subscriptions: when does it pay to consolidate?

It always starts innocently. A booking tool at DKK 300 a month. A CRM, because sales grew. A time-tracking tool, one for digital signatures, one for forms and a small automation tool that moves data between them. Three years later the finance lead sits with the card statement and counts 23 subscriptions, and nobody is quite sure who uses four of them. Each one is cheap. Together they are one of the largest IT costs in the business, and staff still spend time copying customers from one system to another.

What is SaaS sprawl and why do subscriptions keep growing?

SaaS sprawl is the term for subscriptions growing faster than anyone’s overview of them. It happens for good reasons: each department solves its own problem quickly, and a credit card is easier than an IT project. Each new tool adds a new database of your customers, a new login and a new invoice that grows with the number of users. When you grow from 10 to 25 employees, the bill typically grows by the same factor, while the value stays roughly where it was.

• Per-user pricing: every new hire costs money in every tool.
• Overlap: three tools each hold their own customer list and their own calendar.
• Glue: automations and exports that keep systems in sync and break without warning.
• Plan changes: features you use move to more expensive tiers.
• Forgotten accounts: former staff with access, and licences still being paid for.
• Administration: someone has to create users, manage permissions and renew agreements in each system.

How do you run a subscription audit?

Before you can decide anything, you need the numbers. A subscription audit typically takes half a day and needs only card statements, bank statements and a spreadsheet. Use the checklist below and run through it for every tool:

1. Pull 12 months of card and bank statements and find every recurring software payment.
2. Record the monthly price, billing model (per user, per transaction, flat) and renewal date.
3. Add the owner: who ordered it, and who uses it today?
4. Count active users against paid licences.
5. Mark overlaps: which tools store customers, tasks, calendars or documents?
6. Note integrations: which data moves automatically, and which is moved by hand?
7. Check the export and data processing agreement for every tool holding personal data.
8. Give each tool a verdict: keep, cancel or candidate for consolidation.

The audit often produces a quick win on its own: unused licences and forgotten subscriptions can be cancelled straight away. The most important result, though, is the list of consolidation candidates. That is typically three to six tools that all touch the same core process, such as customer, job, time and invoice. That core process is what an own system should solve. We describe how to find and price such processes in the guide to digitising manual processes.

What do SaaS subscriptions cost vs an own system over 5 years?

Here is a worked example for a service business with 20 employees. Today it pays around DKK 11,500 a month for a per-user CRM, a booking tool, per-user time tracking, a customer portal module, forms and an automation tool. That is DKK 138,000 a year. We assume a 5 % annual price increase. The alternative is an own system that combines customer, booking, time and portal, at a build price of DKK 250,000, which is mid-range in the market for a system of that size, plus DKK 45,000 a year in running costs, equal to 18 % of the build price. Bookkeeping and email stay on SaaS in both scenarios and are therefore left out.

What the table leaves out

The table only counts licences and running costs. The time staff spend moving data between systems is not included, and it is often the largest item. If three people spend half an hour a day copying and reconciling, that is over 300 hours a year. Risk belongs in the calculation as well: an own system needs an up-front investment and a supplier you trust. If your headcount grows fast, break-even moves earlier, because SaaS pricing rises per user. If you are few users and stable, SaaS can be the cheapest option for the whole period. We have a more detailed template in the guide to software project budgets.

When should you choose SaaS and when should you build your own?

The answer is rarely all or nothing. The healthiest stack we see has off-the-shelf SaaS around the edges and one own system in the middle that owns customers, jobs and the way you deliver. We go through the wider trade-off in custom software vs off-the-shelf.

What does the choice mean for data, ownership and GDPR?

Every SaaS tool holding personal data is a data processor, and you need a data processing agreement with each of them. With 15 tools, that is 15 agreements, 15 places where data may sit outside the EU, and 15 places where a former employee might still have access. An own system keeps the data in one place, and you decide where it is hosted. Read why location matters in the guide to hosting data in the EU. The other big question is ownership: with SaaS you rent. With an own system you should own both code and data, and the contract should say so. See the checklist in who owns the code.

How do you consolidate subscriptions without stopping operations?

Plan the order around the renewal dates from your audit. An annual subscription renewing in three months is a natural first target, because being ready in time saves a full year’s licence. Always keep the export from the old system until you have run a full month in the new one without errors.

Which myths and red flags should you know about?

• Myth: "An own system is always more expensive." Over 3–5 years it is often cheaper when there are many users and much overlap.
• Myth: "SaaS needs no maintenance." Someone still has to manage users, permissions, integrations and renewals.
• Red flag: the supplier of the new system wants to own the code or charge per user for a system you paid to have built.
• Red flag: the plan is to recreate every feature from every tool. Build what you use and drop the rest.
• Red flag: no plan for moving data and running in parallel during a transition period.
• Red flag: the calculation leaves out the manual time, or it leaves out the running costs of the new system.

The most overlooked point is the one about features. A typical SaaS tool has hundreds of features, and most businesses use a small share of them. When you specify an own system, start from what staff actually click on today and what they miss. That keeps both the price and the complexity down, and the system becomes easier to learn.

What does an own system cost with Ceptiv?

Not every consolidation needs a DKK 250,000 system. If you are replacing two or three tools around one process, it often fits our web packages: Medium at DKK 36,000 plus DKK 900 a month with 24 features and 2 integrations, or Large at DKK 54,000 plus DKK 1,200 a month with 36 features and 3 integrations. The monthly price covers hosting, maintenance, updates, support, security and backups, and it stays the same when you hire more people. With Large the 5-year price is DKK 126,000 in total. See the packages under pricing, or get a fixed price within 24 hours for your own consolidation.