Whether to buy your enterprise software off-the-shelf (OTS) or have it custom-built is a question that every business will be familiar with. This question is not new, but the landscape around it has changed significantly in recent years. OTS software has become more flexible and modular, and at the same time, custom software development has become more efficient. OTS software now features improved customization and covers a much broader panorama of possible solutions, while creating custom software is now more achievable for businesses of any size.
To wrap your head around this debate, might be helpful to think of custom and off-the-shelf software in terms of prescription medicine versus over-the-counter medicine. Over-the-counter medicine (OTS software) works fine if you just have a cold, but if you’re truly ill or have something strange going on, you’re going to need to see a doctor and get a prescription (custom software).
This analogy may help frame the debate in your mind, but it doesn’t come close to capturing all of the nuance involved. For that, we’re going to have to take a deeper dive into the merits and demerits of either path.
While it seems OTS software will always be faster and easier to implement than custom software, deploying OTS software isn’t as simple as just picking one out and installing it, and the custom software development process is now more efficient than ever before.
Regardless of which direction you go, your in-house team is going to need to perform requirements gathering so that you know what a suitable product means for your organization. Do not scrimp on this. If you don’t know what your target looks like, you’re certain to miss it.
While great strides have been made to make developing custom software more efficient, you should still expect this process to take longer than OTS software implementation. Coding is now taught at the high school level, open-source platforms like GitHub have made code-snippets available universally, and there are now Drag-and-Drop interfaces (Quickbase, Zoho Creator, etc.) that enable advanced applications to be developed with little to no coding knowledge.
This might make custom software sound like something that can be delegated internally, but coding is only part of the process. You also have app design, UX design, user testing, among others, all of which require the attention of highly skilled professionals.
Ideally, custom software should provide you with something that fits your organization’s needs perfectly, however, there are almost always growing pains. No more “wish we had that feature”, but there will be bugs that need fixing, new feature ideas will emerge, etc., all adding time to the development process.
OTS software typically has a broad userbase, so these issues should be ironed out. On the other hand, OTS software is also guaranteed to miss that proverbial target to some degree because it will have been designed to meet the needs of the entire userbase, not just your company. Organizations with extremely generic requirements can usually tolerate this, so there’s no reason to reinvent the wheel, but others might find significant hidden costs down the road. If you are bending your organization around the requirements of the software, and not the other way around, that’s a good sign you needed something more tailored all along.
Data analytics has become an invaluable resource for companies to ensure efficiency and communication, but it is often an afterthought when expanding a software portfolio. If your new software doesn’t integrate correctly with your existing IT infrastructure, then you could be left sorting through data silos to find the information you’re looking for. It’s even possible for fundamental incompatibilities to emerge between the new and existing software, sending you back to the drawing board.
One of the primary advantages that custom software has over OTS software is that it can be designed to fit like a puzzle piece. The development team would analyze your existing IT infrastructure and build your software so that it integrates seamlessly.
Scalability should always be at the forefront of any long-term decisions that a business makes, and software is no different. A software package may meet the requirements of your business right now, but what happens when your business grows? Is it flexible enough to accommodate new features or even new departments?
Custom software wins in this regard because you can always continue to work with your development team and have the software evolve alongside your business. However, OTS software companies have taken note, and some are now structured in a modular way so that functionality can be added later as needed. This has narrowed the gap, but it is still very important to consider the future of your business and ensure the software you’re investing in today will be the software you’re using tomorrow.
The broad adoption of OTS software provides an advantage over custom software in terms of confidence, allowing you to check reviews or even “test drive” the software before you buy it, and many OTS software companies have excellent customer support hotlines. Online forums are also a great resource, where users pool knowledge together about use cases and pain points.
Custom software has its own advantages in this area, but much will depend upon the development team that you go with. A good development team can provide excellent support because they’re focused on your software and have a thorough understanding of your business.
Keep in mind that, if you go with OTS software and later find that it isn’t what you wanted, you may be stuck with it. Custom software can always be modified to meet your emerging needs.
For many companies, the software they use is what separates them from the competition. Consider that any OTS software is, by definition, available to any competitor. This isn’t always a matter of slight efficiency improvements either, proprietary software can be unique in such a way that no other software on the market does what it does.
It is never obvious where these tectonic advancements come from, but all it takes is for a company to identify a problem that custom software can solve, and suddenly they’re ahead of the game.
The Question of Cost
For many companies, the issue of cost will remain the limiting factor in their decision between custom and OTS software. The upfront costs for implementing OTS software are far lower than for custom software, but custom software may prove more cost-effective in the long-term for a couple of reasons: subscriptions and efficiency.
Many OTS software companies have moved over to a subscription-based business model, meaning that you’ll need to continue paying them periodically as long as you’re using their software and, if you cancel, you’re left with nothing. Custom software requires maintenance and upgrades from time to time, but once it is built, you own it.
We mentioned differences in efficiency above, but it bears repeating here. Going with OTS software that almost, but not quite, matches your company’s needs means that you’ll be bending your business processes around it in some way. Over the long haul, this inefficiency can eat away at the upfront cost savings that attracted you to the OTS software in the first place.
Making the right call
Wouldn’t it be great to find an article that told you exactly what call you should make for your business? Unfortunately, getting important questions like this right always requires a deep understanding of your business’s unique situation and needs. There’s never a right or wrong choice at the macro-level, but at the micro-level, these decisions can impact the success of your organization for years to come.
Hopefully, after reading this, you’re much closer to knowing what the correct choice looks like for your business. Here are a few questions to ask yourself: Are the needs of my business generic or unusual? If I go with the OTS software I have in mind, will I need to bend my business around that software? Could custom software provide my business with a competitive advantage?