When to Consider Custom Software The pros and cons of off-the-shelf software and custom software for businesses.
By Art Bergquist and Dave Aring
When your business requires a software solution, you have two options to choose from—custom or off-the-shelf. Which option you choose depends upon a number of factors. Custom software is written to meet a company’s specific needs. It is written in-house or by an outside software development company. Off-the-shelf software is usually purchased from a retailer or vendor who has developed the software and who mass-markets the product to many businesses (usually within a vertical market). Deciding between custom or off-the-shelf software often requires deliberation and an understanding of the pros and cons of each choice. The Benefits of Custom Software
It gives you exactly what you need—Each business has its own set of unique business rules. Often, the only way they can be computerized is via custom software. Why pay for features in an off-the-shelf product that you will never use?
You can own the source code—Owning the source code affords you more control over future enhancements. When clients see the value of custom software, they become more sophisticated and quickly find specific ways to improve their particular business workflow. When ideas pop into your entrepreneurial brain, you can have the existing software modified to incorporate those ideas. Additionally, owning the custom source code is a valuable asset, one that should be included in the price of the business if it is ever sold. A word of caution: Be sure the agreement you sign with the software developer gives you the rights to the source code?it’s not automatic.
More useful reports—Software must be able to produce the desired output–typically in the form of reports. Custom software allows for the creation of meaningful reports that are used to make business decisions. You, the business owner, can ensure that reports give you the information the way you want it; not how the vendor thinks you want it.
More efficient in-house help desk—Help desk personnel will be more familiar with the business rules involved and can better assist users. They will know about common issues, traps and work-arounds. This is much better than having to explain a specific issue to off-the-shelf software technical support people who usually deal with generic problems.
Decision-makers are readily available—During the design phase, decision-makers are available to make judgment calls. They have an intimate knowledge about how the software should work. Users are very good at describing the workflow, and as a result, the software can be more effectively designed to increase their efficiency.
Vested users readily accept the software—If the users have had input into the design of the new software, they more readily accept the changes. Plus, they are ahead of the learning curve because they’ve been exposed to the software during the development stage.
Money is invested in quality—A side benefit of getting the exact functionality you want in the software is wisely spending your development dollars. Every dollar that is spent goes toward making the best possible product, not adding extra features to attract the widest market.
No major license fees—With a proper agreement, you own the code. You own the software and you control its use. This is not to say that annual fees, hardware enhancements and other “cost of doing business” expenses don’t exist. Most likely, they will exist. You will need to find out what they cover and how much they are, and compare them to the same fees for off-the-shelf software.
The Benefits of Off-the-Shelf Software
Immediately available—Upon purchase, the software is yours. Deploying the software and establishing the user environment is up to you. You don’t have to wait on developers and programmers.
May cost less—The initial cost will almost certainly be less than any custom software. You may have a licensing obligation, though, where you must pay a fee on a per-user basis.
Don’t have to re-invent the wheel—For performing basic data functions, off-the-shelf software should be able to do the job. Basic customer, sales, reporting and invoicing tasks could be handled, as long as you are willing to do it the way the vendor wants you to do it.
Technical support—Technical support is sometimes free, but it also can be on a pay-by-incident basis. The off-the-shelf technical support people know their package and should be able to relate to your specific issues.
The Downside of Custom Software
May cost more—It is custom software and you should expect to pay more because custom anything is labor-intensive. Depending on the scope of the software’s capabilities, it could be considerably more expensive than off-the-shelf software. Only you can decide if the benefits are worth the expenditure.
Not immediately available—Depending on the number of developers, the scope of the project and other factors, it may take months for the application to be created. This may be greatly reduced by using developers who employ proven software development practices, such as a framework, agile processes, test-driven development, etc.
You may be re-inventing the wheel—Most applications have many of the same features and requirements, such as printing reports, displaying data and adding or modifying data. Time, money and effort will have to be spent with respect to these basic tasks that may already be available in off-the-shelf software.
The Cons of Off-the-Shelf Software
Little extensibility—The software may not be able to implement all the features you desire. However, some off-the-shelf packages allow for some extensibility via a user-scripting tool or via a report writer that enables the user to develop their own custom reports.
Usually “work-arounds” are required—There may be additional expenses to implement required work-arounds to handle specific needs for your particular business that are incompatible with the off-the-shelf software.
At the mercy of the manufacturer—You have no control as to when updates, bug fixes and new features will be available—or even if they will ever be available. Vendors typically respond to the concerns of squeaky wheels. If you are the only one experiencing a specific issue, it could be a long time before it is addressed, if ever.
Non-vested users can become frustrated—Users have no vested interest in off-the-shelf software, and there is a psychological component when installing new software. Users are placed on the learning curve and because people are reluctant to change, it usually isn’t fun for them.
In summary, if you find an off-the-shelf package that meets your requirements and is reasonably priced, then go with it. However, custom software is ideal if you need a solution that more closely meets your business requirements, implements rules for your specific business (not just for the vertical market in which your business resides) and is flexible enough to change as your business changes.
Art Bergquist and Dave Aring are senior consultants with Visionpace. For more information, contact Denise Hamilton at Visionpace at (816) 350-7900 or
