Custom Software Development vs Off-the-Shelf Software
The majority of today’s businesses use multiple pieces of software. Some of these are broadly used across most business types, like Windows and Microsoft Office. Other packages are more specialised to a particular industry. There’s also often a mix of software run on local devices and software applications hosted in the cloud. We may not even think of some of the cloud applications we use as ‘software’; for instance, services like Dropbox, Mailchimp and Gmail. These are however software products every bit as much the cloud applications call software, such as Xero or MYOB.
Whatever the mix of products you use, you will probably look back and see that the business started its journey using off-the-shelf software. This is typically the only choice when a business is small, simply due to cost constraints and the need to get things up and running quickly. As businesses grow the number of off-the-shelf packages in use tends to grow too. In some cases, these may have been carefully selected and implemented company-wide, in others individuals just set up something that made their working life easier.
However, as the journey unfolds, as a business matures you often end up with a bunch of siloed or only partly integrated solutions. Some improvements can often be made by using Zapier, or some other kind of standard API integration system, to enable data to flow more widely between products. However, sooner or later businesses can end up hitting limitations. Perhaps there’s nothing on the market correctly matching processes the business has developed, or the integrations have become a little unworkable. Or in some cases, licencing may have become prohibitive to scale.
Furthermore, with a collection of off-the-shelf software, it can become hard to properly control who can do what and to guide people’s workflows. Mobilisation options may be limited to just some of the packages in use, rather than encapsulating complete workflows.
When a number of these factors come into play, a business may realise that it is being significantly held back by only using off-the-shelf products. This is where custom software development is worth considering. This article is all about how custom software can make your life easier and when choosing it makes sense over off-the-shelf solutions.
But first, let’s take a moment and look at your business’s current state.
- Is some information having to be entered into more than one software package?
- Are there any business processes that you can’t currently mobilise?
- Is it necessary for the business to alter its processes to match the software?
- Do you need the information to flow better between your software packages?
- Do your customers and/or staff experience stress interacting with your systems?
If you answered “yes” to any of the above, then custom software may be the next step in streamlining your business processes and improving your internal and external user experiences.
Custom Can be Cheaper, in the Long Run
While custom software is more expensive up front than subscribing to existing packages, for some organisations a tally of the total licensing and support costs of all software that might be replaced can reveal that the longer-term TCO (Total Cost of Ownership) will be reduced by custom software. The payback period will vary depending on the situation but, given the many other advantages of custom software, it’s worth running the numbers.
This is most commonly the case for industries that use very niche software. Niche software products tend to serve smaller markets and therefore charge high prices. When you start out with just a few licences, it may not seem so bad. But when you scale up users the TCO equation for high-cost niche products can quickly tip towards custom solutions being a better choice.
Also, if you are an early adopter of niche off-the-shelf software, the license fees you start out with may change dramatically as the product commercialises over time.
Custom Software Builds Company Value
From a value-building point of view, having software that is unique to your business can not only drive growth and profitability but also build company value. If you develop some unique edge over your competition, then this will add significant value when exiting a business.
In some cases, where you have had to invent something new for an industry, you may also find that an opportunity to spin off a software product business emerges. There are many under-the-radar success stories of NZ companies that have leveraged their IP this way and now have vertical market customers in multiple countries.
There may also be situations where your business needs to do something unique to keep up with competitors. The most common example of this is when a competitor has developed a mobile app that improves their customer experience. If this is the case it is probably time to move swiftly, and obviously, the aim will be to create something better than your competitors. This could be considered a second mover advantage because usually, you can see what their app does when designing yours.
Custom Software Exactly Matches Your Workflow
When you have a collection of standard software it’s likely you’ve had to make some compromises in how you work. Some processes might not be as streamlined as they could be. Some data might end up having to be double-entered. In short, there are limitations that you have found ways to deal with.
When you start getting into the world of custom software limitations generally go out the window. The software can be coded to match your workflow exactly. So, you can design the software to follow your processes rather than forcing your processes to work with the software. This way, you can eliminate unnecessary steps and make the whole process easy for people to seamlessly work through.
The benefits can include:
- Freeing up your employee’s time
- Only entering data once
- Properly controlled and guided workflows
- Mobilisation of information to field staff
- Less induction time because staff work with one piece of intuitive software
Done right, custom software development enables data to flow, creates greater efficiency within the business and delivers an experience that keeps both staff and customers happy.
Custom Software Helps Pivot Your Business
2020 and the years following proved the importance of being nimble as a business. Companies that were able to pivot and adapt quickly reaped huge rewards during and after the pandemic. Top economic performers reported that 21% of sales come from products that didn’t exist just one year ago (McKinsey 2021). This underlines the importance of being able to pivot and adjust.
Automating workflows through custom software is one way to do this as it frees up other resources that can be better used elsewhere in the business. Doing this will help you focus on your bottom line and keep your business running smoothly. By freeing up the time of your employees you can redirect their efforts into R&D, or expand the business without hiring extra staff.
Custom Software is Now Easier to Make
Thanks to the advent of low-code systems that have come to maturity in recent years, custom software development can now be done much more quickly, cost-effectively and reliably than in the past. In some cases, prototypes can be delivered in days and MVP’s (Minimum Viable Products) in only weeks or months, when they might otherwise have taken months or years.
Perhaps the most powerful of these low-code products is Outsystems, which is more than just a low-code platform. Outsystems is actually a code generator that creates best-practice full-stack applications with a vast reduction in the amount of coding required.
Custom Software Can Connect All Your Processes
Custom software has the ability to closely integrate with other systems and products, which can help unify and streamline your operation. By integrating with other systems, custom software can automate many tasks and processes, making your operation more efficient and streamlined.
In addition, custom software can be customized to fit your specific needs – this includes taking into account your company’s size, industry, and goals. By investing in custom software, you’re investing in a tool that has the potential to improve efficiency and productivity as well as:
- Save time by automating tedious processes and eliminating repetitive tasks.
- Save money by eliminating third-party software fees and customising the software to fit your exact needs.
- Increase your efficiency by eliminating the need to hire more expensive employees.
- Increase your productivity by freeing up employees’ time to do higher value-added activities.
- Work more efficiently with one application that is compatible with all your devices.
By working with a unified solution, your team’s coordination will undoubtedly also improve, since they will have holistic and up-to-date access to business information.
A real-time dashboard is an extremely useful tool that allows you to visualise key numbers and metrics within a business as they come into underlying software systems. As opposed to reporting on the past, they give a view of the present and very recent, enabling supervisors and managers to respond quickly to anything going off-track.
Data visualisation also provides a better understanding of what is actually going on. Better yet, because it’s all custom, you can choose exactly what data is reported on, how it is displayed and when to flag exceptions. This kind of custom dashboarding can revolutionise profitability in ways that off-the-shelf generally doesn’t allow.
By now you are probably gaining a clear picture of where custom software becomes a better solution than off-the-shelf. Even large companies have often survived for a long time without any customised software, and that may be fine for what they do. You will also see disruptive start-ups operating a custom piece of software from the beginning. No matter where you are in your business growth journey, it is important to weigh up the options to ensure that you choose the best journey for your situation.
With around 15 years in the market developing apps and software, Applicable has been around the block a few times. Please feel free to reach out with anything on your mind; we’ll be open and realistic about whether or not custom software is a good fit for your needs.