Custom Software vs Off-the-Shelf Software: the Pros and Cons

Is it better to choose tried, tested, and immediately available software – or develop a custom application from scratch? It is a critical decision that, sooner or later, will arise in the lifecycle of virtually every company. What are the benefits of each type of software, what problems can occur, and what should you avoid at all costs?

Does your company need new tools to streamline existing processes? Do you want to grow into using new sales channels? Is the software you are using already outdated and no longer supported by its developer (i.e., they’ve stopped releasing updates and patches)? Or maybe you have a brand new business idea that requires implementing new software?

With any IT project, you must decide on the early stages whether to use an established, off-the-shelf solution or create proprietary, custom software tailored precisely to your company’s needs.

Examples of Custom Software and Off-the-Shelf Solutions

Off-the-shelf, or out-of-the-box, software is a digital solution that can be used immediately or after a short customization process. These tools are typically created to fulfill a specific business purpose or function. Their target audience is global and usually consists of companies from a wide range of industries. With off-the-shelf software, you can quickly build websites, manage product information, or launch an online store. Plus, with a large user base, such solutions are well-tested, well-supported, and frequently updated.

Off-the-shelf software, however, does not always meet all the specific requirements of the business. Sometimes, the company’s needs are so unique that it’s necessary to develop a bespoke solution. We often encounter similar cases in the new technologies sector and when companies are looking to optimize their processes or expand their businesses. Choosing a tailor-made solution ensures that the software fulfills all the requirements and provides the largest possible competitive advantage.

Benefits of Custom Software

First and foremost, developing a custom solution allows you to precisely tailor it to your business processes and your customers’ purchasing journey. You also can ensure that the new software is compatible with your legacy systems, as integrating them will be a part of your development team’s duties.

Also, if you’re looking for new software for the purpose of gaining a competitive advantage in your industry, it’s better to develop a custom solution. Offering your users a personalized service is an effective way to stand out from your competition from the very start.

Plus, let’s not forget that tailor-made digital solutions give you much more flexibility during implementation. It is between you and your development team to decide when to launch the software’s various features. You can start with a minimum viable product (MVP), i.e., the software’s core functionality, and add more features as the project grows. Maintaining direct contact with your technology partner also allows you to suggest and implement changes and modifications to the software much faster.

Drawbacks of Custom Software

The two main drawbacks of implementing custom software are increased costs and development time. Creating a dedicated IT solution requires spending more funds before the custom software goes live. The development lifecycle of custom software typically takes several months to a few years. Whether you can afford to incur the costs and wait times for your solution solely depends on your company’s needs and resources.

Selecting the right technology partner is a crucial element of the custom software development process. In fact, it is a decision that will make or break the entire project. With a tailored solution, it’s much harder to halt development in the middle and start looking for a new IT partner. With this in mind, a software developer should be selected after an in-depth analysis and careful deliberation. Check your potential IT partner’s past projects, case studies, and feedback from former clients. You will be able to see if they have the appropriate experience from similar projects or understand the specific needs of your industry – and, by extension, your company.

Developing proprietary software perfectly tailored to your individual business needs may sound tempting. Nevertheless, cooperating with an inexperienced IT solutions provider may result in problems and errors already found and fixed in off-the-shelf solutions. You may also encounter issues that should have been addressed in the planning phase, further delaying development and driving up the project’s final cost. Worse, the risks of such outcomes are higher if your technology partner has no experience developing software similar to your company’s requirements.

Benefits of Off-the-Shelf Software

The circumstances differ if your business uses standard processes and sells relatively simple products. After all, why reinvent the wheel if you just need a website or e-commerce platform to showcase your company’s offerings? The technological scaffolding is already there, so all that’s left is customizing the software to your needs and uploading content.

The costs of off-the-shelf solutions generally fall into two areas. The first is licensing, as most enterprise-class solutions come with a fee, usually a monthly or annual subscription (SaaS - Software as a Service). With the development already done, you only pay for a license to use the software, so the cost should be lower than that of a proprietary solution. The second is customization, i.e. filling the database with products, uploading descriptions and photos, or designing individual pages. This all amounts to this kind of software usually being considerably cheaper and quicker to launch.

Off-the-shelf software is generally developed and maintained by global corporations, with partners implementing their products and thousands, if not millions, of users worldwide. Subsequently, finding a vendor that’s already taken care of the development will be simple; there are often many choices when it comes to off-the-shelf software. So, if the software is disappointing – and, by extension, your IT partner’s performance is unsatisfying – you can quickly find a replacement (in contrast to the custom software development process).

As an additional advantage, popular off-the-shelf software tends to spawn large, active communities that offer plug-ins, extensions, and support. As a result, many problems faced by new users have ready-made solutions. Better still, having a community already familiar with the software will save your company on the cost of training employees to use a newly implemented solution, as they might have already used it before.

Drawbacks of Off-the-Shelf Software

Ironically, most potential problems with off-the-shelf software arise from the same place as the benefits. As just one of many users, you have little influence on its development. Consequently, some less standard functionalities you’d like to see implemented – e.g. integration with particular, unpopular legacy systems – may never happen.

Similarly, though more problematically, there’s the issue of updates and bug fixes. On one hand, a bug you have encountered might be already known to the developer. However, they plan to fix it sometime down the road – at no specified date. In the worst case, the developer may simply stop providing support for the software altogether. Alternatively, occasionally a system update may even remove a crucial functionality for your business processes without warning.

With this in mind, it’s wise to carefully examine the software’s costs, despite the apparent initial savings it offers. Subscription plans may give the illusion of being more affordable by spreading the cost of the software over months or years. Plus, you have no guarantee that the price of the off-the-shelf software won’t increase. So, if you plan on using software for a long time, it’s worth checking whether its vendor offers a one-time purchase option. There are situations where, in the long run, subscription-based rates amount to a higher cost than creating a custom software solution from scratch.

Off-the-shelf software is designed to attract and appeal to as many users as possible, which means it will contain hard-coded features that your company simply doesn’t need. You may not notice the difference if you could just turn them off. However, sometimes those additional options make the software more challenging to navigate and adversely affect its performance. This may discourage users and, at worst, drive customers away from using your system entirely. It’s also possible that, with inflexible billing models, you will pay for features you don’t need and might never use.

Conclusion

Whether to develop custom software or buy an off-the-shelf solution is a crucial decision that must be made at the very beginning of the project lifecycle. You must carefully consider your company’s position and the requirements for the final product. No matter what you choose, in-depth analysis and a comprehensive audit of existing available solutions will significantly increase the chances of your project succeeding and your selected software serving you for a long time.