Should I use Custom or Off-the-Shelf Software?

Is it wrong to answer “yes” to an either/or question? In this case, it seems appropriate. Experience says that highly successful companies (think Amazon, AirBnB, Uber, and Google) leverage a combination of mass appeal software solutions and bespoke or tailor-made solutions to run their business. In some cases, that custom software is the core competency that drives their value.

Organizations often contract custom software development firms to design and build solutions that complement their off-the-shelf investments. While large, reputable providers of ERPs, CRMs, and WMSs provide the majority of functionality to manage a business, there are often unique business requirements that call for “bolt-on” custom-developed applications to drive the next level of business performance. 

In an effort to optimize these large IT investments and maximize your achievement of the “art of possible,” we traditionally see a healthy combination of both custom and off-the-shelf solutions. So, if the answer is “yes” to both, how do you determine when to go “off the shelf” vs the custom software route? and what are the benefits if you do? 

When you’re looking for a foundational piece of software--whether it’s an ERP solution to drive accounting and distribution or a large scale platform to manage your customer database--off-the-shelf solutions are often a smart investment. If you can find a solution that fits your business model, your licensing needs and your budget, the stability that one of these large platforms can bring a lot of benefits to your business. Leveraging it as thoroughly as possible is important, but this is where the discussion around custom solutions typically comes into play.

In my experience, the most obvious and valuable reason for developing a custom solution is that it meets your specific business needs. As custom software solutions are developed with only your business in mind, it will include all the functionality you identify as necessary to be successful. There will not be any superfluous functionality that is not of value to the users, therefore driving efficiency up and creating greater end user adoption. 

So while you may get 80% of the way there with your ERP, finding a custom software development firm to work with you to develop the last 20% can mean you get the functions, workflows, and analytics you truly need to succeed in your specific business goals.

Having worked  in cross-functional leadership roles in Fortune 300 companies, I know that custom software is a great way to drive collaboration across departments. How different departments communicate will often determine success, and bespoke solutions enable the technology to support the organizational culture. This allows the technology to support the people and does not require the people to adjust to a rigid, out-of-the-box solution. 

I’ve seen this act of working collaboratively across the functional areas of a business lead to cooperatively designed solutions, closer-knit teams, and overall positive business results. Initiatives like this can also create a pride in ownership, which significantly increases end user support and adoption. 

I have also found that custom solutions scale to the ever-changing business environment that most companies face today. In an unprecedented era of acquisitions, divestitures, and overall business transformations, custom solutions grow or retract with the business. Companies also better identify and communicate their evolving needs when working with a custom software development partner. 

Client-specific software is also often the lower cost, higher value solution over time. While the main driver is a better ROI than off-the-shelf solution, the total cost of ownership can be less for a bespoke model. While initial development costs may be higher, ongoing licensing and hosting fees are traditionally lower,  and additional development costs are minimized as you leverage the custom development platform utilized for the initial build. 

Other key advantages I have experienced in using custom software are that the solution is proprietary to you, it can be maintained as long as needed for the business, and it’s often less susceptible to security breaches.. I’ve also seen small custom software teams deliver value during the iterative development cycle rather than only at the end point of delivery and launch.

Listen, there is always going to be an important role for the Oracles, Netsuites and JD Edwards’ of the world. Organizations of a certain size should absolutely look at tools like Salesforce or ZoHo CRM. Granted, they need to have the staffing and IT teams to support those tools, but they bring features and benefits to large scale organizations that make a meaningful impact. Adding custom features to a SalesForce instance that aligns with your sales organization or custom reporting and operational data intelligence onto your NetSuite instance is simply tailoring that excellent tool to truly fit your business.

I recommend challenging yourself to truly assess what problem you are trying to solve. Explore your options; ensure you and the organization make the best educated decision. Don’t be afraid to say “yes” to both.