DecisionBranch

Build vs buy software decision tree template

Build in-house or buy off the shelf?

Use this template
RecommendedBuy SaaSExpected value −160,500 · 49,500 ahead of Hire an agency to build

The tree

Build or buy the internal tool?50%35%15%70%30%80%20%Build or buy the internal…EV −160,500→ Buy SaaSBuild in-houseEV −232,500Delivered on time−180,000Overruns by 50%−270,000Abandoned, then buy−320,000Buy SaaSEV −160,500Price stays flat−150,000Price rises 30% at renewal−185,000Hire an agency to buildEV −210,000Fixed-price, delivered−200,000Change requests add 25%−250,000

Outline

# Analytical, costs as negative payoffs over 3 years (lower is worse)
Build or buy the internal tool?
  Build in-house
    Delivered on time (p 0.5): -180000
    Overruns by 50% (p 0.35): -270000
    Abandoned, then buy (p 0.15): -320000
  Buy SaaS
    Price stays flat (p 0.7): -150000
    Price rises 30% at renewal (p 0.3): -185000
  Hire an agency to build
    Fixed-price, delivered (p 0.8): -200000
    Change requests add 25% (p 0.2): -250000

How to use it

  1. Press Use this template. The tree opens in the editor, no account needed.
  2. Edit the outline on the left. Indentation is the tree; (p 0.4) is a probability, (cost 5000) a cost, : 200000 a payoff.
  3. Watch the expected value and the recommended branch update as you type. Open Analysis for the risk profile and the switch points.