Introduction
In the digital age, businesses rely on software to outperform the competition. There are existing systems for every business process you can imagine.
There are dozens of options to choose from, including CRMs, ERPs, project management, billing, and accounting. However, choosing the right solution (or solutions) is easier said than done. Usually, after trying several SaaS (software as a service) vendors, managers come to the conclusion that it is not one-size-fits-all, and they might prefer to undertake some custom software development instead of signing another multi-year contract for a licensed product.
Unlike out-of-the-box SaaS solutions, custom software is tailored for the organization's business processes, unique workflows, strategy, and human capital in mind.
In this article, we'll explore the pros and cons of both bespoke software and commercial off-the-shelf software and when to choose one or another, guiding you to the right decision for your organization.
Custom software
How do you know if custom software is the right choice for your business? Let's take a look at the pros and cons.
Pros of custom software
- Customization and scalability. One of the biggest pros of building your own custom software solution is that it will be purpose-built to operate in exactly the ways you need it to. Off-the-shelf options tend to be limited in customization capabilities, but your custom product will be tailored to your unique needs, business requirements, and organizational challenges. This control also means you can add any new features and specific requirements at any time, ensuring your platform grows with your business, supporting you instead of slowing you down.
- Greater control. As the sole owner of a new software product, you will have full control over user options, security measures, and system updates. When you need a change, you have the power to make that change. You also have the option to market the product itself, turning it into a new revenue stream by offering a ‘white label’ version to other businesses. Proprietary software enables regular updates, shorter development times for urgent features, and an enhanced user experience that the organization fully controls.
- Competitive edge. A custom software solution provides its users with a competitive advantage through the most efficient, connected, and scalable technology available. The limitations of off-the-shelf software can make it hard for businesses to meet their more complex needs, and a tailored software solution will help you get ahead of the game, differentiating your business from others in the crowded marketplace.
- Compatibility. Many companies rely on multiple technology platforms and systems to support every department's operations. However, when disparate platforms fail to integrate effectively, these ecosystem inefficiencies can hinder business growth. Building your own solution ensures seamless integration with any existing software, tool, and process already in use.
Cons of custom software
There's a lot to love about custom software, but it's not for everybody. The two most significant drawbacks are the cost of the upfront investments and the time of the development process.
Like anything that is made to order, a custom solution will require more time and money upfront than an off-the-shelf product. For many companies, the initial cost alone makes off-the-shelf a more feasible option.
However, it's important to remember that off-the-shelf solutions may not always be the most cost-effective in the long run, due to the opportunity costs of ill-fitting features and processes or rising license and subscription rates.
The other upfront requirement is time. From the painstaking planning to the coding and testing, custom software development is certainly a longer process than implementing an off-the-shelf solution.
Examples of custom software: Syberry's DaVinci platform
At Syberry, we're a little biased toward custom software development, but we had to make the same ‘build or buy’ choice that so many of our clients are making.
A few years ago, we were a small firm with a handful of employees, and things were simple. We maintained our records primarily through spreadsheets, supplemented by well-known CRM and project management tools.
But even in the beginning, we knew we would have to start building a solution to support our growth and retain and improve the quality of our services before we could become a bigger organization. As we grew rapidly, scaling up to a couple of hundred employees and acquiring big customers, we realized it was time to get more sophisticated.
At first, we used a network of third-party systems, including Salesforce. But we quickly realized that we wanted to optimize our software to fit our specific needs and our processes (and not the other way around) and that our integration needs were becoming far too complex. We needed a clean, custom ERP that could power our whole business.
We called our internal system DaVinci as a tribute to the famous Italian Renaissance-era inventor and engineer. It was designed in-house and built by our development team with the end goals of replicating all the most valuable features of the systems that we used, removing all known redundancies, matching our unique requirements, and considering future needs arising from further growth. The cornerstones of the system were excellent user experience and knowledge retention in a single, accessible location.
Despite high initial investments to get our custom ERP up and running, the journey has been well worth it. We increased our efficiency by replacing the messy workflows with a clear system that management has full control over, and we also dramatically improved visibility into everything happening at the company.
Off-the-shelf software
Off-the-shelf software is a ready-made, typically SaaS, solution created by a third-party vendor and designed to support a large number and variety of operations in a specific business domain.
Off-the-shelf software is generally sufficient to support simple, straightforward business goals. It may require some configuration, but it is generally fairly ‘plug and play’ ready, with lower upfront costs but ongoing subscription and licensing fees.
Pros of off-the-shelf software
- Lower initial cost & quick deployment. If you are a startup or small business with limited cash resources, pre-built software may be a compelling option, as it is typically more cost-effective to purchase and implement. Off-the-shelf solutions should be ready to use as soon as you pay the subscription fees and implement them, with minimal configuration required. If an off-the-shelf solution meets most of your needs, it may be the smartest choice to use it. Rather than paying development fees and missing opportunities to streamline operations, you can focus on enhancing client experiences and driving revenue growth.
- Known functionality & user feedback. Pre-built software often includes features that match common business requirements, allowing you to preview, test, or try it before making a purchase. Reviews and peer community support help assess the reliability and usability of a product.
- Updates and maintenance. Many off‑the‑shelf software solutions include regular updates, bug fixes, and support. All handled by the vendor, often at no extra cost.
Cons of off-the-shelf software
- Minimal customization. While many existing SaaS solutions offer some customization, they are built to serve the masses. This means you may need to adjust your processes and workflows to the software, rather than the other way around.
- Lack of control. While it can be an advantage for the vendor to control updates, it also means you're at the mercy of their product roadmap, rather than your own. While buyers and users can request new features, repairs, or upgrades, all key decisions are out of your hands, and some of these upgrades come at additional costs to the subscription price.
- Integration and compatibility challenges. Pre-built software may not integrate smoothly with other platforms, devices, or products you are using (or may want to use in the future). When this is the case, you may be implementing more logjams and obstacles than efficiencies into your ecosystem.
- Long‑term costs & vendor dependency. Although ready-made software may be cheaper to buy initially, its long-term costs may outweigh the upfront investment required for custom solutions. Every customization or add-on you may want will also incur a cost, leading to inflated budgets and additional spending. You’re also dependent on the vendor for updates, support, and compatibility. Risks include being locked in or abandoned.
- No competitive edge. While you might use a well-known software, your competitors may use the same tool, so you would lose any competitive advantage, since the software is not a differentiator.
Examples of off-the-shelf software
Off-the-shelf software is prevalent across various industries and business needs, and there are numerous excellent types of software available on the market for everything from customer relationship management (HubSpot, Salesforce) to accounting (QuickBooks) to e-commerce (Shopify).
Every industry has access to off-the-shelf software solutions as well. If you suspect that your software needs are relatively common within your industry or department, it's worth researching what might already be available and whether it's a good fit for your existing business operations and workflows.
When should you choose a custom software product? Consider seeking custom software development services if your software needs are complex, your unique processes are a competitive advantage, you have the time and resources available to outsource software development, and you're interested in owning (and potentially profiting from) your software solution.
Cost of custom software
We highlighted the upfront cost as a potential drawback. But how much does a custom software development cost, exactly? Well, it depends.
The cost of a custom software application can vary from a few thousand to millions of dollars, because no two custom software applications are identical, and most likely, two software development companies would quote you differently. Think of it like building a house. A 1-bedroom cottage and a 15-bedroom mansion are both types of houses, but the details and costs will vary dramatically.
The application's size and complexity, along with the creative design involved, the integrations required, the complexity of data migration, and other factors, will all contribute to the cost.
As you interview potential development partners, pay careful attention to how they scope out the project by using our tips for validating software estimates. Unfortunately, a quote that seems too good to be true probably is.
Differences between custom software and off-the-shelf software
As you saw in the pros and cons, there are several key differences between custom or proprietary software and off-the-shelf software. These are the most important:
Cost. Most of your expenses with custom software are upfront, while your off-the-shelf software costs (which may be greater in the long run) are spread out over time.
Time. Off-the-shelf software can be implemented very quickly, while custom software (when done right) will take a while to ramp up
Customization and Control. While off-the-shelf solutions keep control in the hands of vendors, custom software gives users complete control over setup and the further evolution of features and processes, empowering them to create a solution that perfectly meets their most complex business needs.
Syberry's expertise in software development
You saw a glimpse of our development expertise in our DaVinci story. Here's another example of how we helped a client drive business growth with a custom sales management system.
Our client ran a nationwide online marketplace that allowed his customers to sell their old electronic devices, and they wanted a way to automate most of their work, but two things were stopping them:
First, the client's existing software was not functioning well. Our first step was to modernize the legacy software to bring it up to speed, so it would help, rather than hinder, his attempts to drive revenue.
To address this, we identified specific features and delivered them within a week, then proceeded with our collaboration. Our team improved the business processes within the existing web app in several ways:
- We integrated it with two postal services to automatically create shipping labels for users
- We implemented form data validation to prevent errors
- We created a mechanism to detect and prevent fraudulent activity
- We added more device models to the available list
- We redesigned the web app to give it a modern look and improve usability
- All of this made our client's job easier and made their customers' experience smoother
The client's second issue was that their subscription to an analytics and business management service (which included functionalities like parcel tracking, payment monitoring, debt management, and quality assessment) was expensive, and its features didn't meet our client's needs.
Rather than switching to an alternative SaaS solution, we decided to build a new system from scratch, incorporating all the functionality our client needed. This new system allowed our client to calculate device prices for sales, determine business revenue, and see overall business analytics, all in one place.
Thanks to Syberry's custom web apps, our client was able to scale up his business and spend less time on repetitive work. The business now sells more device models and attracts more clients than ever before, and we were thrilled to help them achieve their goals.
Choosing the right software solution isn't easy, but we can help
To recap, custom software is tailor-made for the user, providing businesses with complete control over features, processes, and workflows, both now and in the future. Although it's more resource-intensive (in both time and money) upfront, it quickly pays for itself as a decisive competitive advantage.
Off-the-shelf SaaS software is generally a good choice for smaller companies, those seeking to save money upfront, and those with standard or straightforward problems that their software needs to solve.
Even keeping these criteria in mind, deciding whether to build or buy a software solution isn't always a straightforward question. At Syberry, we're happy to help you make that decision for your business. While of course we hope ‘build’ is the correct answer, our priority is to help you solve your business problems in the best way possible. And if that means buying an off-the-shelf SaaS solution, we're happy to recommend the ones we think will be the best fit for your organization.
