Custom software vs off-the-shelf

Part 1 - Flexibility and Cost

Jake Dowie

about 5 years ago·11 mins read

This is the first article in a 3-part series designed to highlight some common differences between custom software (also known as bespoke software), and off-the-shelf business software (either SaaS or on-prem).

The three articles will focus on the following areas:

• Part 1 - Flexibility and Cost (this article)
• Part 2 - Speed of Implementation and Support
• Part 3 - Security and Expertise

When we refer to off-the-shelf software we're referring to products such as:

Flexibility

Greater usability, functionality, scalability and differentiation, simpler integration

Flexibility is probably the most important feature of custom software, and for some very good reasons:

Custom software fits your operational processes exactly

With custom software you’re in charge of the features, functionality and workflows, meaning it can be moulded around your operational processes.

Slick sales demos that hook you into a SaaS product sometimes don't live up to their promise.

These subtle differences often relate to operational processes that for good reason are embedded in your company.

Differentiation and branding

Whether your custom applications will be outward facing (customers, partners or suppliers), or inward facing (staff), it’s equally important for them to reflect your brand.

The most successful software providers in the world build software that is easy to recognise not just because it's branded, but because the user experience is differentiated from their competitors.

Usability

Providing only the functionality your users really need means your applications will be more intuitive, and crucially, simpler to use.

Improved operational integration

Custom software is, by its nature simpler to fully integrate with existing systems and processes than off-the-shelf. Closer integrations between software systems should mean not only streamlined processes but also a reduction in shadow IT.

Control over product direction

Custom software will always be fully aligned with your business goals and always move in the direction you want.

Control of development speed

Custom software allows you to control the speed of development and you don't end up paying for functionality you don't yet have the resources to fully utilise.

Changing licence agreements & costs

Off-the-shelf software vendors can often change their licencing arrangements leading to unexpected costs.

Cost

This is the greatest misconception around custom software

Isn’t custom software more expensive? This is the greatest misconception around custom software.

Paying for unused functionality

The nature of custom software means you only pay the costs of functions and integrations you’ll use.

An integrated solution

With custom software, there’s no need to cobble together multiple products to create the functionality you need.

A single source of data/truth

It’s rare that you’ll find a SaaS offering where you remain in full control of your data.

Increased demand means increased costs

As your company grows and more SaaS user licences are consumed, costs will increase.

SaaS costs are difficult to track

The costs of multiple SaaS products can quickly add up – SaaS costs are notoriously hard to track.

Additional resourcing requirements

CRMs, ERPs and often productivity suites usually require specialist administrative resources and customisation.

Reducing development costs

Modern development processes mean custom software is always getting cheaper:

• The growth of Cloud infrastructure and Serverless technologies leads to reduced infrastructure management costs.
• Cloud-native development means reduced on-premise infrastructure & hosting costs.
• Modern Dev Ops practices contribute to significant reductions in infrastructure management costs.

Increasing licence costs

Off-the-shelf software's licensing model can become more expensive as your business grows.

Changing business needs

If you outgrow off-the-shelf software, your options for replacement can be extremely expensive.

No vendor lock-in

A decent software partner will provide you access to the source code of your software in case you need to change suppliers.

R&D tax credits

Research and development tax credits can significantly reduce the costs of custom software development.

Conclusion

In summary, the hidden, associated and increasing costs of SaaS can become a greater issue over time. Custom software, by comparison, is an investment and you should find that the relative costs decrease over time.