Software is integral to driving business operations and engaging customers. However, while we all acknowledge the importance of software, we would generally prefer to manage our software costs (and that of our IT systems as a whole). This is especially the case for small businesses, which have very limited resources on-hand for IT development and support.
To fulfill the need for affordable software, numerous Software as a Service (SaaS) offerings are available on the market. These promise first-in-class solutions to typical software needs, but at relatively low per-month or per-year costs, instead of high upfront acquisition and hiring costs.
Though SaaS is promising, a closer inspection reveals a number of critical problems with the model, especially for companies that require customization and other key inputs to succeed.
Off-the-Shelf Software Advantages and Disadvantages
As noted above, SaaS or off-the-shelf software promise lower upfront costs. In a way, this is a form of outsourcing your IT needs – i.e. you’re relying on an external provider. For a monthly or annual fee, your vendor will provide you with an important feature (such as facilitating payments on your website) along with continual maintenance, support and updates.
In addition, you’re free from the cost of having to install and locally support the software onsite. Instead, SaaS solutions are supported online by the provider, which lets you channel resources towards core business activities instead of ballooning IT needs.
To the credit of these vendors, key capabilities that were previously unavailable to independent content creators and small businesses were brought to the market as affordable solutions. From e-commerce platforms, content creation suites to automated marketing suites, small businesses could finally leverage current software technology to drive their operations.
There’s no doubt that SaaS has changed the business environment of many industries through effective, affordable and broadly accessible solutions for many functions and needs.
However, while off-the-shelf software can provide a good start, it’s difficult to rely on them when customization, rapid feature iteration and efficiency are required.
It’d be wrong to cast off-the-shelf software as a panacea. In fact, in many cases – be it for small, medium, large or even enterprise-sized businesses – there are inherent flaws to SaaS that make it inefficient or potentially even cost-prohibitive.
Adapt Your Operations to the Software
The strength of SaaS – i.e. a standardized solution offering baseline features at affordable cost – is also a weakness. Cookie-cutter solutions could miss certain (and potentially valuable) areas of your business operations and processes. In such cases adopting off-the-shelf software will mean adapting your workflows around the software.
For example, the SaaS vendor may not adhere to the same lexicon of your business operations. In this case, you might need to change your operations to adapt to the software or require your staff to be aware of the differences, which could add a layer of work and risk internal mistakes.
This could push inefficiencies into your business operations, which can add to your costs in the form of direct monetary costs (e.g. hiring), additional time spent and redundancy. In industries where lowering operating costs are vital to profitability, such as the financial sector, asking for operational inefficiencies just to integrate off-the-shelf software is difficult to justify.
Static Feature Set
Although you could potentially get essential functions from off-the-shelf software, you’re still at the whim of your vendor’s product development cycle. In other words, it’s your vendor that will ultimately decide what functions you get to receive and when. This can result in your business falling behind current and emerging technology trends, leaving you behind your competitors.
Speaking of your competitors, there’s also a high chance that some of them are also using the same software (and from the same SaaS vendor) as you. Besides potentially being left behind some competitors (who can customize their software), you’ll also lack differentiation with other competitors. You’ll basically be squeezed from both ends in terms of features.
If we look at it another way, too much functionality can also be a bad thing. Some SaaS-based solutions are incredibly powerful, but they’re also highly priced. Your business might only need a specific subsection of functions, but SaaS providers are unlikely to provide those separate from the total package (or they might keep certain functions in higher-priced tiers).
In this respect, you could be better-off with a custom application that only provides the functions you need – i.e. without burdening you with other elements. In the long-term, this could help you save on costs, not just in terms of licensing software, but on time spent training your staff.
Certain content creation software could be difficult to scale on a SaaS basis. For example, the monthly cost of $50 per month for five users might be manageable, but not for 500. With many SaaS providers just specializing in providing individual functions, collecting that many licenses – and for many employees no less – could become a cost-prohibitive expense.
Lack of Integration
Because your vendor decides on the functionality of your software, you could also lose on key opportunities for cross-software and services integration. Its availability would let you leverage your software tools to enhance efficiency by sharing information (e.g. keeping a client record at different departments up-to-date), but it’s up to the software vendor to make it possible.
The lack of integration would basically result in workarounds such as manually entering client information or doing other processes that can eat into your staff’s time (and your bottom line). Moreover, your information system will end up in siloed islands, which could make backing-up and security a concern
SaaS Vendor Could Stop Support
Finally, your software vendor could potentially end support for your application in an inopportune time. This is a major risk with relying on an off-the-shelf software solution, one that can seriously affect your critical operations and leave you rushing for an alternative. In addition, the software suite will also be left vulnerable to cybersecurity threats.
Alternative: Find a Custom Software Development Company
To generate maximum efficiency in your operations and fully meet your business’ requirements, it would be a good idea to consider custom software development.
Granted, you might have limited IT resources, especially in terms of budget and skilled human resources, but external software development companies are available to cost-effectively help you in terms of designing, developing and maintaining custom applications.
A strong custom software developer – i.e. one with the skill-sets, tools and capacity you need to run your business – will generally offer a complete package of services for your software. These services include both development and lifecycle maintenance, which ensures that your custom application is always secure and kept up-to-date with the latest features and security standards.
Are you looking for a unique software solution to meet your needs? Then contact us to discuss how our custom software development solutions will equip you to achieve efficiencies, improve your products and services, and differentiate your company from the competition.