Choosing between custom software versus off-the-shelf software can be difficult in some cases. Your business model (whether traditional or digital) and uniqueness of business processes should dictate what will work best for you. And there are times when off-the-shelf software makes the most sense. For example, most smaller businesses may only need accounting software or just be happy with a customer relationship management (CRM) product.
But whatever size company, you may need more depending on your business goals. Using software to simply aid in your day-to-day tasks is important but may not get you where you want to go in the long term. If you want help to grow your business or increase revenue, you’ll need to look at all options. There’s so much more value to software, particularly custom software, that can be realized when you make it part of your overall strategy and plans to succeed. Custom software can bring to life a new idea with innovation that can move your company into a new revenue stream. Or, it can simply and effectively improve the way you do business, moving you ahead of the competition. This is especially true if your unique processes can’t be adequately addressed with off-the-shelf products.
For starters, look at your current business model and evaluate what path your business will take, your objectives, and how your strategy will get you there. If technology/software is part of the plan to innovate or differentiate your product, consider custom software and budget accordingly. Otherwise, buying off-the-shelf for your business may be the way to go. Check the competition. What are they doing differently? What makes you special? What additional products and/or services will you add as time goes on. Choose wisely after all considerations have been evaluated.
Building Around Existing Platforms
Sometimes software concerns get pushed to the backburner as the busy workday takes over. And then things begin to change or become more difficult. The need for software solutions become especially apparent when there is a need to solve a problem. For example, if you’re already in business, you may be looking for a better way for salespeople to communicate with customers. An innovative solution may be to develop an app that would allow 24/7 communication between customers and account managers. But is this a good reason to jump into a custom software project? Or is there an off-the-shelf product that would work?
Since this type of solution is on the wish list of many companies, it may likely already exist. Why? Chances are there is something out there called a white-label solution that was developed by a software company. This white-label solution is a generic, non-exclusive option that was created for a specific client. It’s essentially sold and rebranded under another company name. Many times, these solutions are available and can be easily replicated and shared. And this ready-made product will likely save you time and money, bringing your solution to your customers faster. But it doesn’t really stop there. There is more to consider before making your move. You should take a step back to see how such an addition or change will affect the rest of your business processes.
For example, if your solution is an off-the-shelf product, the real question is how this solution will integrate with your existing systems. Can you expect a seamless experience? Or, will it cause more problems than it’s worth. You should consider if you’ll need to do extensive adjustments to make it work the way that you envisioned. Are you expecting to spend money on changes to the new or existing software or systems? Will you need to increase user licenses, purchase additional hardware or software, and so on? You should also consider the long-term investments of this option before making the purchase. Will you add new departments or new services, increase the number of employees, work with new vendors, etc.?
Ways to Incorporate Existing Options (SaaS, PaaS)
But there are ways to effectively incorporate other software options into your existing systems. For example, solutions such as Software as a Service (SaaS) that solve a problem so you won’t have to reinvent the wheel can be cost effective. This solution is managed at one central location, hosted on a server, and is accessed from the internet. Users of SaaS are not typically responsible for hardware or software updates.
Also known as on-demand, web-based, or hosted software, Salesforce is one of the best examples of a SaaS. Salesforce is a customer relationship management solution used by companies to manage prospects, leads, and customer information.
There are numerous cloud-based solutions in this category including common ones like Google Apps, GoToMeeting, Cisco WebEx, Slack, Zendesk, and Microsoft Office 365. Such an option works well for small businesses who want to quickly set up shop online, have short term projects that need online collaboration, or need apps to be accessible on the web and mobile devices.
Platform as a Software (PaaS) is another option to consider. PaaS provides a platform for the purpose of software creation. Delivered over the web, the platform allows for designing and creating applications (middleware) that are built into PaaS with special software components. It lets developers focus on building the software and not have to worry about things like operating systems, software updates, storage, or infrastructure. These types of applications are scalable and highly available due to their cloud characteristics.
PaaS is cost effective and allows for the creation of customized applications and greatly reduces coding. Some of the more common examples include AWS Elastic Beanstalk, Windows Azure, Google App Engine, Force.com, Apache Stratos, OpenShift, Heroku, and Apprenda.
Many times, the selection of software is based on budget. If you’re the owner of a small start-up business with limited funds, custom software may not be an option. In addition, you may not have an IT team in place. If you do have an IT team in place, you may not want to pull them off their regular projects to reinvent a wheel. Off-the-shelf options like presentation, graphic, accounting, and other software offerings may make more sense—at least until your business is proven successful and starts to expand.
On the other hand, if your daily business operations will rely heavily on technology and digital transactions, you may decide to increase your budget in this area. For example, if you don’t require a small fleet of trucks due to your drop/ship business model, you may look at increasing the technology budget based on the role it will play in your operations. Will online shipping and digital customer service (live chat) options drive your revenue? Are you a new mattress manufacturer who’s developing innovative mattress designs and containers that require custom software?
If you decide you’re not ready to make the custom software investment, you should determine what you will need to initially get by. What business processes will play paramount roles in your day-to-day operations. Then once your business is thriving, you may need to turn to custom software to digitally transform your business, improve processes, adopt automation, etc.
Benefits vs. Limitations
Off-the-shelf software solutions can save you time and money. They work well for small startups and small businesses who don’t rely on unique processes. Off-the-shelf software can help you get up and running in no time with low, upfront costs. You won’t be responsible for updates or its maintenance. So, if the problems you face are typical for your type of business, the off-the-shelf options may work well for your needs.
But there are limitations to this ready-made software option. First and foremost, off-the-shelf software may not suit all your business needs. It may be difficult to modify. And it can present compatibility issues. The low, upfront cost advantage may not be worth the long-term costs (modifications, license renewals, additional users, etc.) that you might face with this option. But more importantly, it’s available to your competitors so they can offer the same services! This makes it harder for you to differentiate your business from the others.
Today’s customers are easily swayed for a better experience and exceptional service. How you choose to conduct business will affect your ability to keep them loyal to your brand. For instance, how engaging and user friendly is your website? Is your buying process simple and intuitive? Or are you losing business because of an unfavorable buyer’s journey? Vying for customers who are selecting products and services from their smartphone or laptop means you need to stay ahead of the latest trends. This requires flexible and adaptable software that can keep up with changes and keep you on top.
So, whether you choose custom or off-the-shelf software, the decision that you make can have long-lasting effects on your business. It’s important to determine specifically what your software will address and how it will make a difference to your bottom line. If your plan is to make improvements or to create a new revenue stream, the right software choice can make all the difference.