Custom Software Development vs Off-the-Shelf Solutions: What to Choose?
October 14, 2022
As an entrepreneur or business executive, you may need to decide between purchasing off-the-shelf (standard) software or finding a custom software development partner.
The two options differ from each other, and it’s worth knowing which one suits your specific needs.
Whenever you buy off-the-shelf software, you pay for a license or subscription fee to use a pre-made product. Meanwhile, with bespoke software development, you have a precisely tailored solution for your company’s needs. In addition, you can expand, change and adapt the software to changing requirements at any time.
You don’t have this flexibility with the off-the-shelf solutions – they offer a set product you often can’t modify. Depending on the application use cases, you may even need to adapt processes to the standard software. With custom software development, on the other hand, developers can design the solution around your existing processes and technologies.
If you’re still wondering which option to go with, this article will help you make a well-informed decision. We’ll take a deeper look at both of them, their pros, cons, and projects each is suitable for.
What is custom software development?
Custom software development is a service that optimises business processes. Companies specialising in that help other businesses create tailor-made, secure and scalable solutions for their operations. Plus, bespoke software development comes with great flexibility and adaptability options. This is a vital element of software in today’s turbulent market conditions and changing consumer behaviour.
Most software development companies now incorporate Agile principles and product focus in their work practices. Agile developers don’t just execute coding tasks. They actively contribute to the software product vision. Instead of simply writing code and deploying an application, product-minded developers engage in expanding the product’s scope, use cases and even market presence. Plus, increasing enterprise data across healthcare, manufacturing, or banking industries urges companies to explore data-driven decisions through custom software. No wonder the global sector of business software development services reached the colossal $429 billion in 2021.
Custom software development strengths
With bespoke software development, you’ll secure the following benefits:
- Scalability – for optimal business performance, custom software products need to be scalable. Scalability ensures that your application can grow and accommodate sudden increases in traffic or shrink in size when required.
- Competitive advantage – while off-the-shelf solutions are property of other companies and you pay to use them, custom applications belong to your company only. Once the developers are ready with the coding and deploy the software product, it becomes one of your most valuable assets and gives you a competitive advantage.
- USPs – Unique selling propositions offer higher chances on the market. With uniquely designed features and specially developed technology that powers your app, software becomes one of your company’s assets.
- Better integration – integrating your new software solution with existing technologies is essential for cost-effectiveness and smooth operations. Developers make integrations via APIs that allow various data formatting. The data that flows between apps can be better adapted and exchanged if the solution is bespoke.
- More security – according to the US Cybersecurity and Infrastructure Security Agency, three major vulnerability threats involve VPNs, improper patching and cloud-based solutions. With a custom software development partner on your side, you can rely on cybersecurity measures being prompt and on-point.
Custom software development weaknesses
These are the few cons of bespoke software development:
- Higher initial costs – in the beginning, you’ll inevitably need to pay more for custom software development compared to purchasing standard software. This, however, is a long-term investment in your business intelligence. You can calculate your project’s ROI in more detail here.
- The time factor – Developing a custom software solution takes longer than downloading an off-the-shelf solution. In the usual scenario, you’ll have to hire a team of developers, project managers, QA specialists and business analysts who will all contribute to the success of your project.
Custom software development can unfold its full strengths if you’re developing a client-facing application that your own clients will use. First, the development team will need to gather technical and business requirements to determine the business scope, performance needs and other vital metrics. Then, you’ll have regular team meetings discussing project progress, current priorities and future developments.
Custom software development is also suitable for core business processes. For example, let’s say you’re a transportation company and want to develop an internal solution that your employees will use daily. Purchasing off-the-shelf software might not fully satisfy your needs if your business processes are complex and specific. Custom software solutions are more appropriate in such a case because they’ll fully cover your business needs.
What are off-the-shelf solutions?
As the name suggests, an off-the-shelf solution is a mass product (such as MS Word or Excel) for a large number of customers. Therefore, it is (at least at first glance) also more cost-effective than investing in custom software development for special needs and business processes. You can usually buy (or rent) the standard software online and configure it yourself. Off-the-shelf software contains functions that are suitable for the average user. However, specifically because it was designed for a wide audience, it’ll never cover all the bases of any one user.
In order to be able to connect off-the-shelf solutions with other existing software, you’ll require interfaces allowing both systems to communicate with each other. Depending on the software, such interfaces are either already available or must be purchased separately. Examples are accounting software or Customer Relationship Management (CRM) solutions.
- Immediate access – one of the most apparent benefits of standard solutions is that they’re ready to use as soon as you pay for them.
- Demo options – such products often offer triad periods or demos free of charge. You can test if the product satisfies your needs and, if so, purchase the fully functional version.
- Usually cheaper – at first, off-the-shelf solutions are the more affordable option, but in the long run, they might be cost-inefficient if you don’t use their full functionality spectrum.
When purchasing an off-the-shelf solution, expect to come across these disadvantages:
- Non-customisable business logic – standard solutions don’t allow you to adapt your existing business logic around them. Instead, you need to adjust your processes according to its specifications.
- Limited integrations – most off-the-shelf software offers limited integrations. Dimitar Dimitrov, a Middle software engineer at Dreamix, shares that if these are available, they usually cost a fortune.
- No control – a standard software solution is a property of a particular IT company, and you don’t have any control over the next versions. The manufacturer might even stop properly supporting your software product or take it off the market altogether.
Generally speaking, the more standardised a process is, the more suitable standard software is. For instance, you are very well served with an off-the-shelf solution for accounting or personnel administration. From a cost-benefit point of view, it wouldn’t be practical to invest in bespoke software development, as this would not bring you any added value. If you want to dive into further details about the pros and cons of off-the-shelf solutions, check out this article from Todor Gigilev, Head of Business Development at Dreamix.
Which one do you need?
Before you can make a final decision on whether to invest in custom software development or if off-the-shelf software would be enough, ask yourself these essential questions:
1. Will the software be core to your business model?
Think about whether your future software product will be core to your business or if you’ll need it to optimise some internal processes.
For software that will take over standard processes, you can find affordable off-the-shelf solutions that meet your requirements. You’ll use such kind of software internally (your customers won’t have access to it), so there is usually no need to hire developers.
On the other hand, if you need a client-facing application that your own customers will use, the better option is to go with custom software development. Once finished, the software product will be a core asset in your business model, earning you clients and profit. This might be a SaaS product (Software as a Service), a web application or a mobile app that depicts your business service. As a rule of thumb, you should partner with an experienced IT vendor in your particular business domain. Otherwise, you risk long onboarding time, delayed deployments and low product quality.
2. Initial price vs accrued costs
When deciding between custom software development and off-the-shelf solutions, the financial aspect always comes into question.
Standard software usually comes at a cheaper initial price and a monthly subscription model afterward. The downside is that it’s harder to customize – your initially small payment could skyrocket if you try to implement any meaningful changes.
Bespoke software, on the other hand, has a much more impressive price tag to begin with. But you can much more easily expand or change it after the fact. In the long term, that ease of customization might end up saving you money.
Ask yourself how long you intend to use the software. If you’re looking for a short-term product, off-the-shelf would work for you. But if you’re looking at several years, maybe even decades? With tailor-made software, several or even all of your departments can become digital, accelerating business processes and growth.
3. Do you want to keep your legacy system?
If you have any existing enterprise software, you may want to update it or at least build some additional functionalities. Here, the term “legacy system” comes into play. Perhaps your legacy technology covers critical business processes but is slowly becoming outdated. As time goes by, older systems often can no longer keep up with the changes within a company.
Custom software is usually the solution if you only want to expand old software with some additional functions. However, this venture is sometimes too complex, and it is wise to invest resources in a new software solution. The software developers you’ll be working with can analyse your technological and business requirement. Then they can provide an assessment and recommendations on the best way to proceed.
We’ve seen that there is no one-size-fits-it-all approach to what to choose: custom software development or off-the-shelf solutions. Each option inevitably comes with specific pros and cons, and you’ll have to decide what best suits your business needs. Take into account your immediate needs, as well as your plans for the next couple of years.
A standard solution might be better if you only need software to cover a standard business process such as accounting or staffing. Such solutions usually come with fewer third–party integrations, but they’re available to use right away. However, custom software development might be the more suitable choice if you digitalise a core business process or build a client-facing app. In addition, custom solutions can grow with your company, adapt to new circumstances and provide better overall security.
Still not sure which option best suits your situation? Get in touch and ask us! Our developers and consultants will talk to you about your software vision and help you make the best choice based on your needs and requirements.