Modification date: August 11, 2021

What Is Custom Software for Business?

What Is Custom Software for Business, and Does Your Company Need It?

Custom software, sometimes known as special software, is software specially created for a certain company or individual. The alternative would be mass-market software such as commercial off-the-shelf (COTS) solutions or free open-source software.

While many companies across every industry can benefit from custom software, it may not be the perfect choice for every business. Let’s take a look at some of the advantages of custom software versus COTS to help inform your organization’s decision.

Advantages of Custom Software

Custom software product development increases the effectiveness of the business due to process automation. As discussed above, when business processes are adequately automated, they decrease time and other resources.

First and foremost, because custom software is designed specifically for your business, it can take into account any and all specific expectations, preferences, processes, and challenges that off-the-shelf solutions are simply not equipped to handle. And because your organization works in close collaboration with the custom software developer, the product can be adjusted as needed both during and after development. Furthermore, during the initial stage of software development, i.e. the discovery phase, you can include representatives from each team that will be using the software — such as marketing, engineering, research and development, general management and others — to ensure the new product supports the goals of every department and the company as a whole.

Second, when you use software designed specifically for your business, it’s very likely that that is the only system you’ll need to use. You will not need to purchase licenses from third-party vendors or pay per-user fees. And if you do use additional systems, your custom software will be designed to integrate seamlessly with the other platforms. No more managing duplicate data on various platforms or using your staff resources for manual data management across platforms.

On the other hand, we see that a lot of clients using off-the-shelf solutions are juggling many different software platforms to compensate for the gaps in each solution. When every crucial task — from content marketing to stock management to client management to finance — needs its own system, the costs (in time, money, and human resources) add up quickly.

And finally, when you invest in custom software, your business ends up owning the code, as opposed to having a temporary contract for the use of software. This is beneficial from the perspective of perpetual access and power to make changes as needed. But it’s also a critical business asset to have on the balance sheet. If you plan to sell your business one day, this custom software designed specifically for your business and its unique needs will add significant value.

But Isn’t Custom Software Expensive?

Custom software development is often considered expensive compared to readymade solutions and products. This might be true in regards to software that meets your most basic needs — for example, there’s no need for a small business to commission a custom accounting software rather than simply purchasing access to Quicken. However, as a business’s needs get more complicated, the case for investing in custom software quickly becomes clear. In many instances, COTS solutions require intricate setup procedures in order to operate correctly in the context of a particular user’s business. This may involve asking full-time employees to stop what they’re working on for weeks in order to customize the new solution, and it may even require hiring outside experts. So much for an “off-the-shelf” solution. The cost of setup alone — not to mention maintenance and any opportunity costs due to associated delays — might well exceed the upfront cost of custom software development.

In addition to those setup costs, off-the-shelf solutions often entail per-user, per-month costs, which tend to increase along with the number of users. And anytime the company producing your COTS solution updates the software, that means spending even more time and resources making sure the new version of the solution meets your needs and remains compatible with any other programs you are using.

Choosing between Off-The-Shelf and Custom Software

There are two main considerations to explore if you’re considering off-the-shelf software.

The first is whether the software solution you’re considering aligns with your business processes. Because any off-the-shelf software solution will have standard processes and workflows built in. If those don’t match your businesses, then in order to make the software work for you, you’ll have to redesign your processes to meet its parameters and its limitations. Additionally, the software likely won’t take into account any more complex processes your business has in place, so you’ll need to be prepared to spend time and money compensating for any inefficiencies that arise as a result of the mismatch.

Custom software, on the other hand, will be built around your company’s unique needs and processes. Your team can work closely with process engineers and the software vendor to ensure all of your processes, dependencies, and workflows are documented and accounted for. And a good software development company will be able to consult on how to automate and streamline any processes that aren’t currently working optimally for your business. In short, everything is created with your needs in mind.

The second key consideration is ongoing support. If you’re considering off-the-shelf solutions, you need to get very clear with each vendor about whether they offer professional setup or support services — and, if they don’t, what third-party service providers exist to fill in the gaps.

It should be noted that most reputable custom software developers also offer support service during product implementation and after so that, whenever you need to make a change, fix a but or better understand a function of the software, you know exactly who to call for expert help.

Yes, custom software often involves a significant upfront investment, and no, it’s not always the right choice for every business. But if your company is looking to solve unique operational challenges, enhance the customer experience, or build a vehicle to empower ongoing revenue growth, custom software may be exactly the solution you need.

Publication date: August 31, 2020

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