When it comes to introducing a software solution to digitalize business processes, managers have to choose between custom and off-the-shelf software. Both of them entail huge costs, time, and resources as well as have unique benefits to offer. Therefore, business owners sometimes find it hard to make a choice.
We know this dilemma and understand fully that any wrong decision can cost you a lot. It would adversely impact the performance of your organization in years to come due to reduced productivity and lack of competitive edge.
Don’t worry at all. We have written this blog precisely for the reason to help you make an informed decision. We will cover all possible advantages and disadvantages that a custom software solution can offer to help you get a bang for your buck.
First, we discuss briefly the differences between a custom and off-the-shelf software solution. Ready to dig in?
Let’s get the ball rolling!
Understanding the Difference Between Custom and OTS Software:
Here are some common differences between a custom and OTS software solution.
Custom Software:
Custom software solutions are specially designed, developed, and deployed solution to meet the peculiar needs of organizations. They are unique in the market and have no parallel, adjusted for catering to particular customers, so they are not suitable for a broad range of users. If you want to get custom software, you need to hire the services of a software development company.
Amazon, TikTok, and Uber are some common examples where custom software solutions are doing wonders. But it does not mean that medium- and small-sized businesses cannot afford it. With rapid technological improvement and fierce competition, their price is fast declining and approaching a level where SMEs and startups can afford them.
Different surveys indicate that custom software applications are increasingly finding applications where automation, big data management, and the like specialized tasks need to be performed. Moreover, reliable security is also making bespoke software applications a popular choice in areas such as data-driven fintech, healthcare, and logistics management.
Off-the-Shelf Solution:
Unlike a narrow set of specific functionalities that custom software offers, an Off-the-Shelf solution is a pre-packaged application that has been designed to cater to the needs of a large audience. They can be downloaded, installed, and used as it is and don’t require any services of a software house. For instance, Windows 10, Oracle, MS Office, Salesforce CRM, and like are some illustrated examples of OTS software.
Since they are largely produced to meet the broad and general digitalization needs of businesses, they find applications in customer services, eCommerce, eLearning, Travel and Hospitality industries, and the like.
They are applied for common tasks including but not limited to.
- Document processing
- Ticket booking
- Online shopping
- Database management
- Accounting and bookkeeping
- Customer services
- Customer Relation Management
Having discussed the salient features of both these software types, now we move ahead to underline some pros and cons of custom software solutions.
Pros of Custom Software Applications:
Among all the compelling pros of custom software, we can name them the following.
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Enhanced and Reliable Security:
Better security against hackers is one of the biggest benefits of using custom software solutions. Hackers love easily available Off-the-Shelf software products because they know their vulnerabilities and weak points. Therefore, it is generally observed that Off-the-Shelf software solutions offer a weaker defense against cyberattacks.
Bespoke software on the other hand offers much reliable security. You can ask the software house to add as much as security features as you need in the code. Likewise, they can set up security alerts as well, informing whenever there is an attempt for intrusion or unauthorized access to the database.
In addition, limited attack surface, frequent updates, integration of security measures from the beginning of development, reduced dependency, and tailored access control make bespoke software products more reliable and secure.
But it must be kept in mind that poorly developed bespoke software can be more vulnerable than an OTS solution. It is therefore important to invest in areas such as code reviews, threat modeling, and ongoing security assessment to acquire a secure product.
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Flexibility:
Flexibility is another major advantage of custom software. Scalability is a must-have feature in your software solution whether you are running a small business or just launching a start-up, you do expect that your future needs will grow. Hence, scalability comes in handy. It helps you meet your dynamic and growing demands with built-in flexibility in custom software.
OTF solutions don’t provide such an option. They are static and can only meet your current needs. If your demand grows or operations get complicated due to the bigger size of your business, you cannot do anything, except replace the software and add a new one.
However, it should be noted that when you outsource the development of software to a third-party service provider, you must add maintenance to your contract.
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Long-Term Return on Investment:
Undoubtedly, custom software looks expensive initially. They have an upfront cost which is much higher than readily available OTF solutions. But in the longer run bespoke software providers have higher ROI, how?
First, OTS solutions have hidden costs such as annual license fees, and like, which custom software does not have. Second, custom software provides you a competitive edge in the market, thereby boosting your productivity, and enhancing your security level. Third, bespoke solutions can provide life-long customer support and regular maintenance provided that you insist on having them in contract.
All these benefits make sure that custom solutions are cheaper and more productive in the long run.
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Complete Ownership:
Complete ownership is also a reason why companies are shifting to custom solutions. When you outsource the development of such a solution, you typically retain full Intellectual Property Rights to code and software. You can also maintain full ownership and control over data.
In other words, you can use modify, use, or distribute custom software in any way you wish. Moreover, you can avoid vendor lock-in, customize and modify the product, and add as many security features as you need. Such flexibility and convenience come in handy and you can generate steady revenue streams for your company.
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Personalized Solution for Your Business:
This is one of the most notable advantages of custom software because it helps you stand out in the market and gain a competitive edge. With a custom software solution, you have full liberty to add as many features as you need, implement feedback from customers, incorporate security features as the nature of threats evolves, and more.
You don’t expect such benefits from a ready-made software application designed and developed for the mass market.
But it is not always rainbows and butterflies!
Like every tech product, bespoke solutions also suffer from some serious drawbacks and sometimes limitations. You need to know this flipside to make a better and well-informed decision.
Cons of Using Custom Software Development:
Here are some advantages that deserve your attention.
Longer Development Time:
Custom software development is a lengthy process. There is no doubt about it. Whether you outsource it or develop it through in-house time, it would take weeks and even months, sometimes years as well. This may lead to a longer Time-to-Market and can cost you as well in terms of losing a competitive edge.
Secondly, OTS software solutions pass through all tests such as elaborate usability tests and the like. It means when they reach your desktop, they are ready to use.
That is not the case with custom software. The development team has to invest a lot to test software in terms of user perspective. It may take several iterations before they get the desired product equipped with the requisite functionalities and capabilities.
Huge Upfront Cost:
The second major con of using custom software is the huge upfront cost. It costs a lot because companies have to start from scratch. Though on a longer-term basis, it pays back, but initial cost may be overwhelming for some organizations.
If you are developing it through an in-house team, it may cost you somewhere between $25 to $35 per hour for each member of the team. Needless to say, this is a huge cost, particularly for start-ups and SMEs.
It is therefore strongly suggested that robust ROI must be calculated before going along with the custom software product.
Risk of Selecting a Wrong Vendor:
This is a big issue. You must take this matter seriously. Many IT companies are working in the market that are offering substandard software products. If you end up with the wrong vendor, you will lose time, effort, and resources.
So, whenever there is a question of outsourcing a custom software product, do research a lot. Otherwise, you will end up with a situation where either project would be delayed or it would not be built to satisfaction.
Haste makes waste, do remember this!
Final Thoughts:
Rapid digitalization has compelled organizations to seek software applications to streamline their various operational and management tasks. Managers have to choose between Off-the-Shelf and customer software solutions. Both of them have distinct pros and cons.
As far as customer software applications are concerned, they offer many pros and cons. Personalized features and capabilities as per peculiar needs, enhanced productivity and competitive edge, improved security features, better software support, and built-in flexibility and scalability are some noteworthy pros that we can name among others.
Likewise, there is a flip side as well. Custom software solutions are an investment- and effort-intensive undertaking. They take a much longer time to come to an action and any wrong decision vis-Ã -vis vendor can cost you dearly.
So, it is up to you now. Read these pros and cons carefully, analyze your requirements, calculate ROI with inputs from all stakeholders, and then make an informed decision.
Thanks for your reading. We do hope that this write-up will help you in reaching a better conclusion.