ROI calculator: should I build or buy analytics for my SaaS?

SaaS companies continuously strive to be the “best-of-breed” software solution for customers in their segment. Be it a CRM system provider, HR ATS platform provider, or a MarTech player.

Within that challenge, SaaS companies focus most of their resources to the improvement and innovation of their core platform. In that way, they can stay ahead of the competition and remain the forefront innovator within their domain.

Yet at the same time, this is not always enough for the modern software buyer of today.

The challenge of a best-of-breed approach? It’s in the little things.

SaaS customers demand more and more features for the recurring license fees they’re paying. Features that are often not core to your business’ expertise. For example, tailored insights in the data they generate day in, day out with your platform are high on their list of must-haves.

Typically, a standard integrated dashboard will do the job in the initial startup growth phase. However, as of a certain customer base, your users will start asking for more complex functionalities. Requests such as language specific dashboards, interactivity, advanced filtering,… they are piling up.

ROI calculator for building vs buying analytics

At that point, you need to tackle these questions, before you’re losing clients to competitors that do offer killer reporting. That’s where most SaaS companies get confronted with the build or buy decision:

“Shall I build myself one-by-one custom reports or shall I integrate an off-the-shelf SaaS dashboard building block?”

Now, how do you make a well-advised decision there? To do so, you’ll need to have a good view on the costs & the revenue of each case. In this post, we’ll compare the ROI of both build & buy with a fictional example, including an ROI calculator to try it out yourself!

How to make the build-or-buy decision

Let’s look at a fictional SaaS company: MyAwesomeATS. They offer an HR Applicant Tracking System (ATS) to their customers. An ATS is a software tool that helps you keep track of your recruitment funnel of new, potential colleagues and employees.

Current status of reporting

At this moment, MyAwesomeATS has one custom programmed dashboard in their ATS platform. It shows rather basic recruitment metrics like recruited candidates over time with more detailed candidate information in a static table.

ROI calculator for MyAwesomeATS

Over the past year, they’ve grown to a customer base of 100 customers. They currently have 5 different customer reporting requests outstanding, important enough to start tackling these.

Future plans: build or buy a reporting module?

To implement these client requests, MyAwesomeATS stands before a choice. Either they will build the custom dashboards themselves, or they will partner with an embeddable analytics component like Cumul.io.

Customer requests range from adding more advanced objects like a funnel and a sankey diagram; inserting interactivity between objects; measuring progress vs customer-specific KPIs; segmenting the results based on candidate gender, age, role, recruitment channel, etcetera.

A cost-effort analysis will guide them to make this decision. To help product companies make this type of calculation, we created a calculator tool.

We’ll first explain how the calculator works. Then, we’ll illustrate how to use it through the use case of MyAwesomeATS.

The embedded analytics ROI calculator

Our ROI calculator is based on a number of key factors that influence the price of embedding vs. building a reporting module.

  • In terms of costs:
    • The number of dashboards you want to embed
    • The amount of experience & salary of your developers
  • In terms of revenue:
    • The amount of clients that will use the dashboards
    • How much you’ll charge your clients for the dashboard module

Depending on how many dashboards you want to build, you’ll need more time & resources to build it yourself. Your developer’s experience level will influence how fast you can develop the dashboards.

Note that this ROI calculator is an estimation to help you get a better understanding of the costs. Do take into account that there are more factors case-by-case that can slow down custom development:

  • Dashboard complexity: the more features you need, the faster your development time will start growing exponentially
  • Amount of data: when data grows, you’ll need a lot more time to optimize the backend
  • Amount of charts: if you’re adding more charts & chart types to each dashboard, you’ll need more development time as it doesn’t scale across dashboards

Make the calculation for your own SaaS product, using our ROI calculator below! Simply adjust the filters to your own situation and see how the ROI will evolve over time.


Using the ROI calculator for MyAwesomeATS

The cost of building vs embedded analytics

To understand better how this calculation works, we’ll illustrate the case of MyAwesomeATS.

MyAwesomeATS wants to add 5 dashboards to their platform with interactivity. Their developer has a medior profile, which leads to the following estimation of man hours.

Build Buy
Connect data Multitentant DB (equal in both cases) Multitenant DB (equal in both cases)
Create dashboards – 40 days per dashboard (5x)
– 45 days for interactivity
– 1 day per dashboard (5x)
– out-of-the-box interactivity, multi-lingual,…
Integrate dashboards 5 days of integration work 1 day of integration work
Maintain 5 days per dashboard per year 2 hours per dashboard per year
No license fee License fee

When we filter in the dashboard, the initial set-up cost to build & embed 5 dashboards will be:

  • €171,500 of costs to completely build it themselves, in more than 6 months time
  • €19,200 of costs to integrate Cumul.io dashboards, in 6 days time

So during the first year, the cost will be almost 9x higher if you decide to build it yourself. The development cycle will easily take 6 to 8 months, depending on how many developers you have, before you can even start monetizing the dashboards.

The return on investment of embedded analytics

Of course, there’s not only costs. You can generate new revenue off your embedded analytics module. You can offer the module as an upsell to your clients, for example.

MyAwesomeATS has 100 customers that want to use the reporting module. Assume they charge clients €50/month to use the module. That equals:

  • €60,000 of new annual revenue when embedding Cumul.io
  • €30,000 of new annual revenue when building it yourself, taking into account a development delay of 6 months

Now, let’s compare that revenue to the initial investment:

  • When embedding Cumul.io: after 1 year, you’ll already see a positive return of +€40,800
  • When building it themselves: even with €30,000 in revenue, you’ll still end up with a negative balance of -€141,500

Final notes

As shown in the example, it can easily take a couple of years to gain back the initial investment if you decide to build an analytics module yourself.

Also take into account that it can easily take a couple of months to build the reporting component, versus a few days to integrate. So, you’ll be losing out on potential revenue during that initial setup period as well.

Have you made up your mind yet about the build-or-buy debate? Start your Cumul.io trial today & get your first dashboards up and running in no time! Or simply contact us if you need more information.

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