The business case for building custom software is compelling — but also complex. In the best instances, custom software can solve intractable problems and give mid-market firms a distinct competitive advantage. But in the worst instances, custom software can fail to deliver on its promises while costing the firm not only money, but precious time from key resources. The critical question facing any company trying to improve through technology is when to choose custom software versus off-the-shelf software.
Off-the-shelf software has the advantage of accessibility, affordability, and applicability. Because developers create these products for the broadest possible base of users, they provide the fundamental features most businesses need in user-friendly formats. But that is also their biggest weakness. Because off-the-shelf software tries to appeal to everyone, it isn’t perfectly suited to any specific user. It may be helpful in certain cases, but when it comes to providing meaningful business solutions, it will always fall short.
The advantages of custom software counteract the limitations of off-the-shelf alternatives. Software built to align with a company’s business plan delivers maximum impact by removing specific points of friction, facilitating important workflows, and working organically within an organization. Because it’s custom-built, this software works exactly as users need it to, offering them a toolkit that includes everything important without anything extraneous. Nothing on the consumer software market can offer lasting business solutions as quickly or comprehensively.
But that doesn’t mean every piece of custom software is perfect. As mentioned, some offer little in terms of real value despite the premium companies pay for custom development. That makes the software a waste of resources and a lost opportunity to leverage technology.
Fortunately, there is a reliable way to balance the risks and rewards of custom software: evaluate custom software vs off-the-shelf software on a case-by-case basis. Sometimes off-the-shelf will work, and other times custom is the better (or only) option.
You need custom software when:
1. Pioneering a New Approach
Today, every company aims to be an innovator. But there are few — if any — existing software solutions to support those ambitions. When companies need business solutions that are unique to their strategies or situations, custom software is the only source. However, that doesn’t necessarily require building something from the ground up. In some cases, the custom software with the biggest impact doesn’t offer something completely original. Instead, it streamlines the features of a complex off-the-shelf product to make those features more accessible and quicker to leverage or combines off-the-shelf products with custom software in a novel way to create a more comprehensive product.
2. Operating Across the Digital Realm
The coronavirus pandemic accelerated the digital transformation already underway at many companies. When businesses suddenly needed to work remotely in new ways, they discovered the gaps in operations where things had yet to be digitized. Unfortunately, closing these gaps so that a company can operate seamlessly isn’t always easy to do with off-the-shelf software options. By design, those options can’t meet the exact shape and size of the missing pieces in a company’s digital transformation efforts. But custom software can. Partnering with developers who can expedite a working software solution lets companies extend digital access as widely and quickly as possible.
3. Separating from the Competition
In the past, the key differentiators between market leaders and everyone else came down to things like talent, history, and access to capital. Now, however, technology is the key differentiator. Companies that leverage it to improve efficiency, productivity, agility, and innovation give themselves advantages that their competition can’t match. That is especially true when companies use custom software to distinguish themselves from those dependent on off-the-shelf software. Even a relatively small or simple piece of customized software can help a company overcome an obstacle or seize an opportunity that translates into meaningful market share. Most importantly, custom software is a singular asset that the competition doesn’t have (and can’t have). For that fact alone, it helps companies gain ground and hold a lead better than most other key differentiators.
The debate over custom software vs off-the-shelf software isn’t a debate at all. Instead, frame it as a search for business solutions. There are times when off-the-shelf software proves more than adequate — why develop your own word processor, for instance? And there are other times when the benefits of custom software are too enticing to ignore. If you focus on maximizing those benefits instead of stuffing custom software full of bells and whistles, it can vault your company to places it wouldn’t have reached otherwise.