Software development technologies have considerably improved the way we conduct business in the global economy, leading to a host of benefits like streamlined processes, reduced redundancies, increased time and cost efficiencies, and enhanced ease of operation and collaboration among various parties, to name just a few. Today there’s a ton of custom enterprise software that aims to provide some of these benefits. But most businesses today are looking for advanced functionality and features that can provide substantial time and cost efficiencies.
In addition, they want completely scalable software that can adapt to the increasing demands of their growing businesses. Moreover, having a seamless and centralized platform that allows employees access to real-time data can improve product and service delivery, allowing them to make or break deals in an instant, regardless of where they are located.
When it comes to financial information and processes especially, there’s added emphasis on the need for data security, privacy, confidentiality, and features. Sounds like a lot? But owing to the sensitivity of financial information, financial software does have a ton of security requirements. At the same time, it must allow employees to access sensitive financial data in real-time without making it vulnerable to breaches and cyber attacks.
Custom financial software addresses many of these challenges helping companies conduct business in a seamless and secure manner and provides many more benefits. So when you’re choosing financial software, don’t let the custom software development cost be a deterrent. The right custom financial software can yield high returns on investment thanks to its significant benefits. We delve further into the benefits of financial software, merits and demerits of custom vs. off-the-shelf software, and the cost of software development for each class of custom software.
What is Financial Software and What Benefits Does it Offer?
Financial software is any type of software that automates tasks like creating, storing, managing, processing, and analyzing financial information. There are various types of financial software that help businesses manage their finances by tracking, recording and categorizing financial transactions, synchronizing accounts, tracking and evaluating investments, and providing insightful financial statements and reports.
Some of the benefits of financial software include accurate invoicing, 100% accuracy, and complete transparency that makes it easier to detect discrepancies and frauds. Financial software can also automate bookkeeping and accounting tasks and allow information from various sources and bank accounts to be gathered and collated for categorization and analysis. Financial management software allows companies to make better investment decisions while helping them mitigate risk. Thus depending on the type of financial software, the benefits may vary.
Custom vs. Off-the-Shelf Financial Software
The dilemma that companies face when they shop for software solutions is having to choose between custom and off-the-shelf software. While each has its own set of advantages and disadvantages, over-the-shelf financial software certainly has its limitations as does any over-the-counter product, be it pharmaceuticals or ready-to-eat food! What exactly are off-the-shelf and custom financial software? Let’s dig deeper!
Custom software is built to order, as per the unique requirements of a company while off-the-shelf software, as the name suggests, is generic software that is built the same way for every customer. Custom software is built for a single company whereas over-the-shelf software is built for the mass market and can be used by any company. The main disadvantage of off-the-shelf software is that it’s not tailored to meet your unique business requirements.
Since off-the-shelf software is sold to the mass market, it must meet the broad requirements of businesses and institutions. However, it does not cater to individual business requirements. Some examples of off-the-shelf software are Computer Aided Design (CAD) software, multimedia software, and Microsoft Office Suite.
Features of Off-the-Shelf Financial Software
Here are a few considerations of off-the-shelf financial software:
- Not Tailored to Meet your Unique Requirements – One of the major advantages of over-the-shelf software is that it’s highly cost-efficient. Since it’s sold to a wide target market, the cost is largely distributed and hence is very low. But cost efficiency comes at a price! It may not fulfill the unique requirements of your financial processes, rules and regulations, or even your organization’s security standards.
- Paying for Unessential Features and Functionality – It may include features that you may never need and may also include upgrades that are irrelevant to your business.
- Paying for Licensing Fee per Person or Desktop – Unlike custom software, you will have to pay for licensing fees per person or desktop as you don’t own the software. In addition, you’ll have to pay additional fees for upgrades too!
- Maybe Impossible to Customize – Since you have no influence over the software development, it’s impossible to custom match it to meet your business needs.
- May require Non-Value Added Tasks – As it doesn’t cater to your unique business requirements, it cannot align with your financial processes and procedures. To adopt this software and align with it, you may have to change some of your existing methods, which may lead to time spent in unnecessary and non-value added activities or steps.
Benefits of Custom Software vs. Off-the-Shelf Financial Software
Custom software offers numerous benefits over off-the-shelf financial software, some of which are discussed below:
- Designed to Meet All Business Requirements – Custom software is tailored to meet all your unique business requirements. Since you have influence over the software development process, you can communicate clearly the demands and requirements of your business, including challenges and concerns that need to be addressed. The software team tries to understand the day-to-day operations of your business and incorporate the inner workings and finer details in the software. Since the software is tailored according to your existing processes it helps increase operational efficiencies and also ensures compliance with rules and regulations concerning financial accounting, privacy, and security, as applicable.
- Leverage a Seamless Platform – When it comes to financial software, one of the primary requirements is a seamless platform to allow exchange not only financial information but also facilitate smooth financial transactions over diverse mediums and platforms. It integrates different technologies and data from multiple sources, streamlining transactions and allowing companies to complete critical processes in a matter of a few seconds and at the click of a button! It can connect lenders and brokers, buyers and sellers, and startups and venture capitalists, enabling them to share important financial statements and reports.
- Centralized and Fully Integrated System – One of the crucial benefits of custom software is that it can be fully integrated with existing company applications and software. It allows the creation of a fully centralized and integrated system that allows financial transactions across multiple mediums and platforms to be handled in a centralized manner and governed by a uniform set of laws. It allows financial data across multiple channels and in different formats to be handled efficiently, benefiting both businesses and clients.
- Easy Training – Since custom software retains your business processes and requirements, it’s much easier to train staff, whore already aware of the existing system. So time need not be spent in adapting to the new system, unlike off-the-shelf software.
- High Security – When it comes to financial data and processes, security is a prime concern. One of the main advantages of custom financial software is that it can be tailored to offer high-grade security and confidentiality, which is a must for earning clients’ and end-users’ trust and confidence in your software.
Custom Software Development Cost
The average cost of custom software development is typically hard to determine because there is a wide cost range, depending on the size and nature of business. At times, the cost can be estimated in terms of the duration for each phase in the Software Development Life Cycle (SDLC).
Here’s a brief snapshot of the estimation of time taken for completion of each stage in the software development life cycle:
- Requirement Gathering and Analysis – The first stage of the software life cycle takes between 2 to 4 weeks.
- Design – Design can be completed in 2 weeks.
- Coding – Depending upon the nature and complexity of software, the coding stage might require anywhere between 3 to 8 months.
- Implementation – Custom software can be implemented in 2 to 4 weeks or longer.
- Testing – Software testing is typically completed within 3 to 6 weeks.
- Deployment – Again depending upon the software type and nature, the deployment phase can last for 3 or more weeks.
The above mentioned time frame for each phase may vary greatly as customized software has different sets of requirements and complexity.
Based on the type of business that the software is built for, the cost of custom software development can be estimated as follows:
Enterprise Class Custom Software
This is the most high-end class of business software in terms of its cost that ranges from $500,000 to $100,000,000 or more. The custom software development rate ranges from $200 to $450. The mega size of the project mirrors the number of developers which can even be a few thousand in number. The enterprise-class custom software is typically built for governments and Fortune 500 companies.
Big Business Class Custom Software
These projects are smaller in size as compared to the enterprise-class, varying between $125,000 and $4,000,000 or more. Typically any number of developers between 5 to 100 developers is required for this class of software. They are paid a rate of $200 – $300 per hour. This type of software is built for large businesses around the globe.
Mid-Tier class Custom Software
This software is built for small to medium-sized companies and ranges in cost from $50,000 and $4,000,000. Between 3 to 20 employees may be required for building this type of software. They’re paid anywhere from $150 and $250 per hour.
Small Class Custom Software
This is the class of software that is smallest in size ranging from $10,000 to $500,000. It may require a team of 1 to 10 developers who are paid between $75 and $180. This is usually built for local small businesses and startups.
Although custom software is much more expensive than off-the-shelf software, it also provides far more substantial benefits than the latter. If you’re looking for a team of experienced software developers and architects to build custom software that caters to the unique requirements of your business and provides a centralized and fully integrated financial system, contact Bitbean, an innovative custom software development company. We provide tailored solutions that can help your business grow! Read more about how we developed custom financial software for Eastern Union.