Custom Software vs Off The Shelf: The Pros & Cons
Should You Use an Off The Shelf Software Solution or a Custom One?
You want to be competitive and grow your business. How you manage and process data are essential factors for reaching both objectives. That’s where software comes in.
Choosing the right software to integrate into your business can be a dizzying process. There are thousands of options out there, each one promising to deliver expediency, efficiency and growth.
But there is no need to be daunted by the options. When taking the right approach, the decision will be clear.
Step 1: Define which type of software meets your business needs.
The best first step when determining your requirements is to define what your business needs and how you can give it the upper hand.
Business should always lead technology and not the other way around. Without this up-front preparation, technology will lead the business instead of the other way around.
Here are some areas you can examine to develop a picture:
- Clearly define what advantages and differentiating qualities set your business apart from others.
- Determine what processes can further leverage those differences and how software might assist.
- Interview staff and key stakeholders to get an idea of what they’re thoughts are about the software they use
- Brainstorm and ask people with knowledge to share their thoughts about software solutions in your business area.
Learn more about the impact of software on business performanc
- 5 Ways Software Can Slow Down Your Workflow
- How Off-the-Shelf Software Often Struggles to Meet Today’s Business Needs
Step 2: Define what’s needed to propel forward
Once the needs are defined in step 1, developing the flows, processes and systems needs fall into place. These should be written down and agreed to.
Some questions to guide defining those needs in addition to the above are:
- Are our processes seamless and do they flow easily from one department to the next?
- Are you moving fast enough to surpass your competitors?
- Are you transparent enough for your clients?
- Can you save money by automating certain processes?
- Are you struggling with more than one type of software?
Step 3: Research your off-the-shelf software options
Armed with the knowledge of what the business needs and wants one can determine what software or collection of software to power the business on.
There are typically two options to look at:
- Off the shelf pre-built software
- Custom build
Off The Shelf vs Custom Software
Off the shelf software is pre-built systems the typically can’t be altered significantly. These can include software like MS Word, Salesforce or QuickBooks. Those systems tend to do what they do well and are specific purpose drive.
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These systems can feature rich, which if needed are great. If not, they can be over complicated for what the true business need is.
Advantages and Disadvantages of Off The Shelf Software
Advantages of Off The Shelf (OTS) Software:
- Lower up-front cost
- Contains many features, often more than you need
- Support is often included or can be added with a maintenance contract
- User communities and forums for support
- Upgrades may be provided for free or at a reduced cost
- Faster to deploy
- If it’s software-as-a-service (SaaS) there is no hardware or software to install
Disadvantages of Off The Shelf (OTS) Software:
- Slow to adapt or change to industry needs
- May have user, transaction or other fees that can make scaling costly
- Your feature request may get ignored if it doesn’t benefit the larger customer base
- May require you to change your process to fit the software
- May use different terminology than your business and required adjustment to a new language
- Higher customization fees (proprietary software vendors often charge very high hourly fees unless they provide an open API)
Custom Software Development
Often the needs of your business are unique and off-the-shelf software doesn’t meet the needs of your business. In this case, custom software development makes a lot of sense.
More often than not, custom software developers are happy to provide you with a rough estimate for a custom build. Read our ‘finding the right fit’ article for tips in determining the right software developer for you.
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Pros of Custom Software Development:
- You can start with the minimum necessary requirements and add on later. Less can be better.
- Can be tailored to your exact business needs and processes
- Changes can be made quickly
- Matches your business language
- Typically unlimited users and transaction at no extra cost
- A unique solution that can potentially give a business advantage.
Cons of Custom Software Development:
- High initial cost
- All changes and feature requests will be billable
- May incur additional costs ramping up new developers
There is a common conception that custom is always more expensive than off the shelf. While this might be the case for many consumer systems, there are many enterprise systems like SAP that run in the millions to setup and deploy.
Often customers will employ these systems and only use 5% of the functionality, when they can get all of what they need for a fraction of the price through custom development.
Hybrid Software Solutions
The hybrid solution typically involves taking an existing piece of software with access to source code and tailoring it for your unique business needs.
This would be an application with most of the features needed by the business but requires incremental changes to meet specific demands. In this way, a business can pull in the best of both worlds – having a system customized completely for their needs while leveraging functionality that has already been created.
The options in software are unlimited. This can be overwhelming and confusing. But once the needs of the business are clear, making the right chose in software also becomes easier and clear. Business before technology, not the other way around.