For most companies, software is an essential aspect of running a successful business. Companies rely on different solutions to manage their supply chains, track finances, streamline projects, and more. But as a business grows, it reaches a critical decision point – should it continue relying on readily available commercial software, or is it time to develop its own custom solution?
There’s no one-size-fits-all answer to this question. The ideal approach depends on various factors unique to each company. Understanding the advantages and disadvantages of each option is the first step toward making a smart decision that supports your business’s long-term objectives.
While ready-made solutions offer quick implementation and cost savings, custom software can provide greater customization and scalability. Below, we’ll provide some information to help you choose between the two.
Off-The-Shelf Software Solutions
It doesn’t matter what industry you’re in or the type of business you operate, there is likely a software solution available that can help you simplify or improve certain elements of your operations. In most cases, the challenges you might be experiencing aren’t as unique as you might think, and others have already expressed a need for a viable solution.
Often labeled as “enterprise solutions,” these software products are specifically engineered to meet the needs of a wide range of businesses. However, some may be better suited to larger organizations with more complex operating structures.
The main appeal of an off-the-shelf solution is its immediate usability. Once an account is set up or a subscription is activated, businesses can often start using the software’s benefits right away. Depending on the specific software chosen, these benefits could include more organized customer relationship management, improved data storage capabilities, access to analytics and business intelligence tools, or more secure cybersecurity measures.
The Problem With Off-The-Shelf Solutions
Even though off-the-shelf software solutions can be quite useful and typically have a lower cost barrier to use, there are some potential drawbacks to using these types of solutions. These include:
- Limited Customization Options—All off-the-shelf software will have some form of feature limitation. Even for platforms that offer more features for different pricing tiers, the infrastructure that supports these solutions often limits the amount of customizability a business can expect to have for its own unique use case.
- Vendor-Controlled Updates – When using a public software option, you’re at the mercy of vendors and their development teams to release new features and make updates to fix issues. This can be very limiting for businesses depending on what types of updates they’re waiting for and can mean they’re not able to get as much value out for the platform as they would like
- Vendor Lock-In—Sometimes, businesses find that the software they’re using isn’t the right fit for their company. However, software vendors often have vendor lock-in periods that mean that businesses won’t be able to immediately switch to another service free of charge and may have to use their software longer than they need.
Why Custom-Built Software is Different
Unlike off-the-shelf software, custom software is carefully designed to specifically fit your business in ways that a generic solution can’t. It’s the equivalent of getting a custom-fitted suit tailored specifically for your shape rather than buying one off the rack and needing to make alterations before you can wear it.
The core principle behind most custom software is to maximize the value of your investments. Instead of purchasing a large software package with features that you might only use a small fraction of, custom-built software presents your business with a solution designed to meet your business needs while ensuring minimal waste and maximum resource utilization.
Naturally, developing a solution from scratch comes with a higher price tag. The cost of custom software can range from thousands to hundreds of thousands of dollars depending on the scale of the business and what the solution is intended for. That being said, considering this type of software is designed to help businesses achieve maximum success, the return on investment can be substantial.
Buying or Building Your Software – What Should You Choose?
There’s no universally correct answer to choosing between purchasing or developing software solutions. Every business needs to evaluate its specific requirements in relation to its budget.
To simplify this decision-making process, though, here are four things you can consider to help guide you toward the right choice:
Purpose of the Software
Every software solution has a unique business purpose. It’s important to make sure that this aligns with your own business objectives.
While many business’s needs for effective financial management or streamlined communication are universal, not all software solutions are designed to support every industry. Certain solutions may lack important features specific to your sector that could significantly impact your success.
If the software you’re considering provides the competitive advantage and features you need while staying within budget, go ahead and purchase it. But if essential elements are missing, it might be worth exploring a custom solution tailored to your specific industry requirements.
How Your Company is Structured
Smaller businesses or those with limited resources might find taking on major software development projects difficult. Even if you’re considering outsourcing the development work, these projects often demand significant internal collaboration and resource allocation.
It’s important to honestly assess your company’s current structure and determine if starting a custom software project is feasible at this point. It might be more beneficial to use an already-designed one until your teams have grown enough to support larger-scale projects.
Where the Software Fits in Your Business
Trying to get a pre-built software solution to perfectly match your business requirements isn’t always possible. In most cases, customization options are limited – no different than trying to renovate a house the way you want it but being told you can only make specific changes.
It’s important to distinguish between your “needs” and “wants.” Compromising on desired features is different from lacking essential components critical to running your business effectively.
If your research reveals that too many off-the-shelf solutions fall short of your expectations, it’s time to explore the possibility of a custom software solution and get some quotes from potential vendors.
Amount of Time and Resources Required
Budget is naturally a crucial factor in your decision. The key difference between off-the-shelf and custom software lies in cost transparency. Ready-made solutions usually have clearly defined pricing, making the total investment more predictable.
Custom software projects, on the other hand, can often experience unforeseen expenses, both during development and in the long run, for maintenance, performance upgrades, security enhancements, and other necessary adjustments. This is similar to home renovations, where unexpected costs can arise the more walls you open up or the longer a project runs.
However, custom software offers the advantage of complete control over the development roadmap. You can decide how much to invest in various features and elements. While an off-the-shelf solution might be quicker and cheaper upfront, the long-term benefits and cost-effectiveness of custom software could outweigh the initial investment for your business.
Choosing the Right Software Solution for Your Business
Businesses needing software solutions to fuel their growth have a variety of options at their disposal. However, before committing to a subscription, carefully weigh the factors discussed above and assess whether custom software might be a more suitable choice for your specific needs and long-term goals.
Author Information
Author Name: Dalip Jaggi
Author Bio:
Entrepreneur, technologist, and passionate business leader sum up the core of Dalip Jaggi, co-founder of Revive Real Estate, a PropTech company with a goal to democratize house flipping. Since its 2020 inception, Revive has since become the smartest solution for homeowners to maximize their home’s sales value across the nation.
