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System Integration vs Software Development

Ronan McQuillan
12 min read · Jun 16, 2023

When we’re adding new technical capabilities, the first challenge is figuring out what our most cost-effective option is. More often than not, this means weighing up system integration vs software development.

Specifically, we need to make a decision based on what we’re trying to achieve, the technical resources we have available, and what our current tool stack is capable of.

Custom builds aren’t cheap - so it makes sense to get the most out of our existing tools.

Today, we’re diving deep into the pros, cons, use cases, and key decision points for choosing between system integration and software development.

We’ll also see how the lines are getting blurrier - along with the role Budibase plays in helping you to build integrated, streamlined solutions with minimal custom code.

But first, let’s think about the basics.

System integration vs software development: what’s the difference?

Obviously, we want to kick off by getting our definitions in order.

Here goes.

What is system integration?

System integration means connecting one or more tools, software modules, data sets, or other digital assets to achieve capabilities that none of the constituent parts can provide in isolation.

In other words, creating a cohesive solution out of otherwise separate components.

For example - say we wanted to create a solution so that our support team can flag customer tickets that might be of interest to other departments.

Rather than building a whole new platform, the easiest option is probably to link our ticket management software up with our internal comms - whether this is via email, instant messaging, or some other channel.

The rationale here is that we’re already paying for tools that are capable of providing the functionality we need - so it doesn’t make much sense to go to the expense and disruption of building a whole new platform.

That’s the basic idea anyway. Let’s think a bit more concretely about what this means in practice.

Types of system integration

System integration can work in a few different ways. Which option is right for you depends on factors including:

  • What your existing tools can support.
  • Your technical abilities.
  • Your budget.
  • Security needs.
  • Performance requirements.
  • The scale of the relevant processes.
  • Plus other factors.

The most common ways to integrate software systems include leveraging:

  • Application Programming Interfaces (APIs) - The most common and flexible way to connect applications based on resources and functions that vendors provide.
  • Webhooks - Preconfigured API endpoints for sending specific data.
  • Middleware - A hidden software layer for performing integration functions including API management, authentication, data management, and automation.
  • Automation platforms - Tools like Zapier that can draw on different integration methods to create cross-platform automation flows.
  • Low-code platforms - Leveraging other integration strategies within low-code development tools.
  • Shared data assets - When multiple tools query a common data source.

One thing that should stand out here is that these solutions are aimed at very different kinds of people. On one end of the spectrum, there are professional developers and on the other, there are less technical colleagues who still need to integrate systems.

This ties in with a couple of other issues. For instance, we’ll often be able to achieve a higher degree of customization and flexibility with solutions that require more technical skills - although with the rise of low-code this is no longer inevitable.

System integration vs software development

(NordiCapis )

One downside is that we can be constrained by what different tools are capable of - including what’s exposed by vendors in their APIs, or even if there’s an API available at all.

For example, with legacy tools, we might need to modify the code base to be able to achieve any kind of interoperability.

What is software development?

This one should be pretty self-explanatory. In our context, when we talk about software development, we mean creating entirely new tools from scratch.

Traditionally, this has meant hard-coding solutions.

However, nowadays, more and more businesses create applications with other methods, including existing frameworks, reusable modules, low/no-code tools, and other strategies for expediting developments.

The primary benefit of custom developments is fairly obvious. We can effectively build whatever we want, as long as we have the resources.

Of course, in the real world, this isn’t always the case.

The reality for most IT teams is that it’s a struggle to find the development resources needed for current projects - let alone new ones. This is a culmination of a global shortage of qualified developers, accelerating demand for digital transformation, and tough economic headwinds.

This can make custom builds unviable - especially for relatively simple applications or adding specific functionality to your existing tool stack - at least through traditional software development strategies.

Software development also brings along a host of associated work - across lifecycle management, hosting, maintenance, patch management, security, access, support, testing, and more.

These aren’t software development as such, but they’re additional things we’ll have to account for when we build our own solutions.

Software Lead Times

(GoodFirms )

When do we need system integration vs software development?

Okay, no we know what we’re dealing with we can think about the situations where we need system integration vs software development - along with some scenarios where both might be viable options.

As we hinted at earlier, there are potentially a few competing concerns at play here.

We’ll come onto the more granular pros and cons in a second, but for now, we simply want to outline some exemplar scenarios.

In the broadest terms, the distinction is as follows:

  • System integration is used when we want to unlock capabilities using functionality that’s mostly already available through our existing software stack.
  • Software development is used when we need to create entirely new capabilities that our existing tool stack can’t offer.

At least, this is the theory.

In the real world, a lot of use cases won’t fit neatly into this dichotomy.

For example, say we wanted to link our CRM to our online store in order to get a fuller view of our customers’ behavior across different channels.

But we needed to create an intermediary module that performs some automated data cleansing and compliance functions. This would primarily be a systems integration project - but one that involves an element of software development.

Similarly, a huge proportion - if not the majority - of software development projects will require at least a degree of system integration.

For instance - coordinating modules built by different colleagues or connecting to external tools, libraries, or web services rather than building everything from scratch.

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But our focus today is guiding you through the process of weighing up system integration vs software development in situations where you’re trying to create a solution to solve a particular business problem.

And for that, we need to know how to make a suitable cost/benefit calculation.

Costs vs benefits

Essentially, the challenge is figuring out the most cost-effective solution for achieving whatever capability we need.

In the vast majority of cases, it’s really a question of whether we can solve our underlying problem through system integration alone or whether we’ll need to turn to custom development.

That is, when it’s possible, integrating existing tools is almost typically going to be a faster, easier, and cheaper option. If integration alone won’t cut it, we can look toward custom developments.

But there are exceptions to this.

For example, although building an entirely new solution from scratch might cost more up-front - it might also enable us to make longer-term savings, by reducing the need for external services and SaaS subscriptions.

Alternatively, we might need to balance our technical requirements with operational realities.

Say, a systems integration-focused solution achieved 90% of the functionality we could get through custom development, but we could ship it much faster and at a fraction of the cost.

We’d need to make a decision about whether filling this capability gap would be worth the additional expense and lead time in terms of the underlying business justification.

Custom Builds stats

(McKinsey )

Resourcing system integration vs software development

We’ve said a couple of times already that our decision will often be a function of the technical resources that we have available to us.

Let’s unpack what this involves in practice.

Human resources

First, let’s think about the kinds of colleagues that are involved in each type of project. Traditionally, software development projects are carried out by dedicated development teams - with the exact makeup of these determined by the scale and scope of the project.

This could include developers, designers, DevOps professionals, QAs, data specialists, UX, project managers, and or a whole host of other roles. Or, it could equally be one person tackling everything.

In either case, the skills barrier and level of specialization required are relatively high. Then there’s the question of whether we have sufficient internal development resources - or whether we’ll need to engage with external contractors.

We’ll see a little later how low-code is shifting the boundaries a little bit.

Systems integration is a bit less of a clear-cut case.

There are specialist system integration engineers that work primarily within large software development projects to ensure compatibility between modules.

However, when we’re talking about creating integration solutions between existing nodes, this is just as often carried out by non-developers in the IT team, ops professionals, or technical colleagues within other departments. Take a look at our guide to building a workload management tool.


It’s also important to thoroughly consider exactly how and where we can incur costs within systems integration vs software development projects.

The big elephant in the room for custom developments is always labor costs. Software projects take a long time and engineers cost a lot of money - there’s just no getting around this fact.

This means that the cost incursion is primarily up-front.

Integration-focused solutions work a little bit differently. The labor costs of setting up integrations between existing tools are normally comparatively low.

What we need to watch out for are the other recurring costs that we’ll pick up along the way.

If each node in a solution charges for its API on a per-request basis, this will quickly add up. It also means that our costs increase as our solution scales - which is not necessarily the case with custom builds.

Take a look at our round-up of data transformation tools .


Finally, there’s the question of who is responsible for maintaining and supporting our solutions on an ongoing basis. Short answer for custom developments: it’s us. Or, if we’ve used a contractor, it’s them but we need to pay for it.

The situation with integration solutions is a bit more manageable. See, for the most part, we won’t have actually created any functionality - we’ve just connected existing functionalities together across different platforms.

Therefore, much of the responsibility is taken off our shoulders. At least, vendors are responsible for maintaining functionality within their platforms. We just need to make sure our integrations work correctly.

However, this introduces challenges of its own.

For example, it leaves us in a difficult situation if a vendor decides to sunset a particular platform, or massively increases the costs of using a particular feature.

These are all factors that you’ll want to consider in your cost/benefit calculation.

System Integration vs Software Development

(CloudZero )

Blurring the lines

We touched briefly on the overlap between system integration and software development earlier.

But how useful is this distinction really?

For one thing, there’s a strong argument that a lot of development projects largely consist of getting an existing API to do the heavy lifting - plus a little bit of interface design and configuration.

This is a bit of an exaggeration, but it points to an important truth.

That is, in reality, it’s actually pretty tough to separate integration projects and development projects.

This has been exacerbated by the rise of low-code development tools.

Nowadays, an increasing number of business applications are being built by non-developers - using platforms that make it easy to design interfaces, automate processes, and connect to external platforms, without extensive coding skills.

Let’s check out how Budibase is leading the charge.

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Take a look at our ultimate guide to custom app development .

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