Custom Software vs Off-the-Shelf Software: Which One to Choose?

Since we are in the digitalised age, things are evolving rapidly. If companies want to differentiate themselves from the competition, employing digital solutions has become essential.

Software solutions dramatically improve organisational performance, increase output, and address the ever-changing demands of the target markets. Depending on their needs, each firm must choose whether to purchase off-the-shelf software plans or develop exquisitely tailored software.

In this article, we'll discuss the distinctions between two main kinds of software, as well as key considerations to make the appropriate option that will support the expansion of your business.

What is Custom Software?

Custom software or bespoke software is created to meet the unique demands of individuals or companies. 

Designed for a more personalised approach, bespoke software is built up either by developing a whole new app or upgrading the functionalities of already existing solutions. Custom project development includes a process of needs gathering, code construction, testing, deployment and maintenance of software with a narrowly defined set of requirements. 

Custom software development efforts comprise customisation, modernisation, and management.

• App customisation refers to the process of modifying commercial off-the-shelf (COTS) software to meet specific needs.
• App modernisation plays a crucial role in ensuring the viability of a company’s custom software to satisfy the ever-changing demands of users and the market. 
• App management increases the effectiveness of software through supporting tasks like installation, updating, performance and availability optimization.

In fact, those development processes can be performed by internal development teams or outsourced to a third party.

1. Example

• Healthcare industry: Secure software is required in modern medicare for patient monitoring, insurance integrations, resource management, etc.
• Insurance: Advance apps that have AI chatbots, individual service plans, and other useful features.
• Banking and Financial Services: Pursuant to Juniper Research, the total number of mobile banking users will surpass 3.6 billion by 2024. This is the opportunity for a lending organisation to offer specialised services through the tailor-made app.
• Logistics and Retail: Customising online shopping apps, blockchain logistics solutions, and a variety of other software help businesses in this industry meet their client's requirements, raise consumer loyalty, and broaden their horizons.

2. Cost of Custom Software: Key Considerations

There are various aspects to consider when determining the cost of bespoke software solutions, such as the size of your corporation and the complexity of your app development.

However, by examining these elements, you may get a general estimate of what your company's average software development cost will be:

• Software complexity: depending on different demands, such as a customised update or a multifunctional enterprise application, a widely different scope of work and funding will be varied.
  
• Level of polish: it’s worth keeping in mind that the more polish your software, the more time, expertise, and effort it will require.
  
• Development team’s location: Your software development budget is significantly impacted by the team's location. There’re some regions where the costs for outsourcing are relatively affordable such as Vietnam, the Philippines and India. 

Moreover, you also need to ensure the balance between technological innovation and operational excellence. Concentrating mainly on the innovative tech stack is not always the right strategy, especially when the costs of creating bespoke software are relatively more expensive than off-the-shelf software's cost.

Thus, it’s essential to consider the ROI of custom software development to realise when you are at risk and whether it’s time to make decisions in the best interest of your business.

3. Why Choose Custom Software?

Tailored solutions that serve your specific needs: With bespoke software, corporations can make changes anytime, upgrade regularly based on their needs, and implement feedback from customers. When an organisation offers more personalised solutions, it adds value to the business/ customer relationship. This extra value increases customer loyalty and extends user retention.

Unique services: To differentiate yourself from your competition, you need unique software or features that others can’t, or won’t, provide. If you value exclusivity, custom products may suit your requirements instead of off-the-shelf software.

Easier integration: In today’s era of big data and specialisation, custom software might be better positioned to integrate with various digital tools you are using. With developers on staff or retained, you can integrate custom software with existing business software effortlessly. In addition, bespoke software can apply existing processes without having to conform to the restrictions of an arbitrary API. 

Scalability requirements: Scalability is a crucial indicator for growing enterprises. Whilst your requirements are limited now, you will need to consider extended needs when your business grows. If scalability is a prerequisite for your software development needs, investing in a custom software solution may be more cost-effective.

4. Who Should Use Custom Software?

• Your procedures are unique, and they must be digitised.
• Your business plan is distinctive and can help you gain competitive advantages.
• Ever-changing requirements of users that need regular updates and trending features.
• Your existing software is inadequate, and your IT infrastructure needs to be upgraded.
• Have the intention to expand your company’s operations.

5. Keys to Effective Custom Software Development

• Collaboration

An essential initial consideration is to get buy-in from key participants and make sure that they communicate and work on the same page. In this context, the collaboration includes staff from different departments, such as product owners, developers, designers, testers, and more, working together on requirements, sharing knowledge across development teams, and working hand-in-hand to increase quality and responsiveness.

• Requirements are defined

One of the crucial results of collaboration is a clear, shared vision of the software’s main function. Thus, according to IBM, “businesses should effectively define and manage demands to ensure they are addressing user requirements while meeting compliance and staying on schedule and within budget.”

• Methodologies, technologies and practices

With defined demands, which may likely change more than once, implementing mature, modern development methodologies and practices can help develop software quickly and effectively. Some technologies and methodologies to consider:

- Agile development: by breaking down needs into consumable functions, agile software development may quickly deliver on those functions.

- Data analytics: by analysing all the information collected from users, you can make sense of a deluge of data through dashboards, visualizations and predictive capabilities. These data can help you understand customer demands and uncover hidden trends to build on-demand solutions.

What is Off-the-Self Software?

As a pre-packaged, mass-produced solution, off-the-shelf software is available for immediate use. When developing this application, the vast majority of commercial organisations and numerous customers are targeted. However, this type of software cannot meet the demands of particular business requirements. In a word, it is a ready-made module designed for public rather than private usage.

1. Examples

The exceptional usability and unlimited accessibility of off-the-shelf software solutions, which are developed for the public and large types of audiences, are always what set them apart.

Thus, when talking about a ready-made product, you can think about many pre-installed programmes on your mobile, desktop, or server. This includes mail services, antivirus software, media players, or operating systems. 

Furthermore, CRM systems such as Hubspot, and Salesforce, and accounting software like FreshBooks, QuickBooks, and others are considered as off-the-shelf software.

2. Cost of Off-the-Shelf Software

Ready-made software is typically less expensive than bespoke software, and to begin using it,  you simply need to pay a one-time cost. This is because the actual cost of launching and running the programme is divided among a much larger user base.

Payment can be made in monthly, quarterly, or annual instalments, depending on the subscription plan. However, there are some additional fees that you’ll need to pay attention to, such as license fees, initial installation, and configuration fees.

You are required to pay for offered features by default, even though not all of them are used. In case these functions are not compatible with your existing system, it could interrupt your workflow and result in a time or investment loss.

3. Why Choose Ready-made Software?

Initially cost-friendly: As off-the-shelf software are developed for a variety of users, they are are pocket-friendly compared to custom solutions. Besides, many canned solutions offer discounts and a free trial period, permitting you to try the software before purchasing it.

Available for instant use: Without creating any form of specialised software, you can purchase the program and run it immediately.

A large community of users: As generic software is used by several people, it’s easier to connect with like-minded people in the community and ask questions about the product. Public reviews and comments may assist you in resolving common difficulties and making the best decisions for your organisation.

4. Who Should Use Canned Software?

This “one-piece suiting all model” is suitable for:

• Organisations with a small budget.
• Just need simple products without customisation.
• Need software that can run immediately and is easy to use.

Comparison of Custom Software vs. Off-the-Shelf

Making the Decisions

• What are your specific requirements?
• What is your current budget?
• How much control do you desire over your software?

Wrapping Up

When deciding between custom software and commercial off-the-shelf, consider all of its possible factors and choose the software that is suitable for your particular needs. Also, you’ll have to consider how your decisions will influence the business in the long term. 

Each type of software has different benefits and drawbacks; however, custom software is scalable as your business grows. Thus, if you’re looking for a personalised software solution, the KMS Solutions development team always assists our clients in consulting and choosing the appropriate software for business. 

For 13+ years of experience in this industry, we’ve offered exceptional skills, talents and proven approaches to support many clients around the world with the best software solutions.