In our last article, we discussed why off-the-shelf software may be a good fit for your business. Now, we’ll talk about why custom software might be what your business needs instead.
Off-the-shelf software can limit a company’s ability to match its operating model to the software it uses. Out-of-the-box features often don’t provide the kind of custom processes and efficiencies companies need, potentially leaving its operations non-optimized and its offerings undifferentiated from the competition. With custom software, features and functionality can be designed to exactly align with the company’s operations, reducing inefficiencies and enhancing the software’s value to the business.
Custom software can also help companies create a better customer experience, especially customer experiences driven by software. Tailored experiences can be delivered by custom software far better than off-the-shelf solutions. Through unique and better customer experiences, such as a simpler or more appealing user interface or journey to purchase, a business can differentiate itself against its competitors with software no one else has that helps it deliver more value to its customer market. In this way, the technology used can provide a strategic market advantage.
These and other types of custom processes and trade secrets can be encoded into the company’s software and can be hard for competitors to replicate without significant cost to retool their own operations and reverse engineer the product, again providing a key strategic advantage of custom software and creating a Unique Value Proposition (UVP) over the competition.
With custom software, businesses can also gain more meaningful data and insights from their operations. With custom business intelligence, companies are better able to use data and reporting to expose new opportunities for improvement in productivity, revenue gains, and controlling costs.
Another benefit of custom software is the ability to better avoid the long-term vendor lock-in effect of off-the-shelf software. For instance, instead of buying a CRM system like Salesforce or Microsoft Dynamics, the business can hire a developer to build their own system, thereby escaping the perpetual third-party license fees and the negative consequences of amassing all of their data in a platform they don’t own. Maintaining full control over its own data enables companies to better discover new business opportunities through actionable insights that custom business intelligence applications deliver, while having more control over protecting the privacy and security of customers and users.
However, custom software can have its own effective vendor lock-in, as different developers design software in different ways. Developers often find software they’ve been hired to fix was badly designed to begin with, meaning they will either have to make a lot of compromises to fixit, or rip out the old system completely and replace it with their own software, adding up to more cost and delays.
Most custom software is built in a monolithic fashion, meaning the individual systems used to form the total application are glued together, making scalability more difficult, so larger companies expecting to need to scale their software with their business’s growth need to assess this risk carefully.
Companies also often find that features weren’t built in response to real business problems, and only a small percentage of the features are actually used and add value to the business. It also takes substantial time to deliver new custom software, meaning you may not be able to pivot fast enough to adapt to industry, market, and technological changes.
Finally, reliability and security can be a concern with newly built custom software. This is especially true when companies try to take shortcuts to save cost, leading to lower quality and lots of bugs. New applications haven’t been truly battle-tested until they’ve launched, and problems may arise that could impact usability and up-time.
Despite these risks, custom software is often the right way to go for companies looking to create a competitive or strategic market advantage they can’t get with off-the-shelf software.
In our next article, we’ll discuss why the B3 hybrid custom software platform brings together the advantages of both off-the-shelf and custom software, while reducing the risks inherent in both.
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