Custom Development vs. Out-of-the-Box Software

How to Choose Between Custom Development and Out-of-the-Box Software

It’s the question we get asked the most: what are the advantages of a bespoke solution over licensed software (SaaP) or software as a service (SaaS). There are plenty of articles out there, but since we encounter this question so often, here’s our take on it.

Features and Customisation

  • by definition, a custom solution has all the features you require and can be fully customised
  • out-of-the-box software meets most needs for most companies, but it probably won’t meet all your needs; adding new features or customising existing ones may be a lengthy process or impossible

An out-of-the-box solution will have most of the functionalities required, and it will provide you with a usable workflow. However, it is likely it will come with compromises. Some features will be missing or working slightly different than expected. Software vendors continuously incorporate user feedback into their product roadmap. But getting your desired features added might take a lot of time or it might not happen at all, if it is not aligned with the needs of other users.

Think of reports for example. Out-of-the-box software will give you basic reports as per its functionality, but you may not get all the information you need from them. In a bespoke application, reporting can be done exactly the way you need it to be, presenting a detailed analysis of the current situation and projected outlook of your business.

On the other hand, by trying to satisfy all the stakeholders involved, it is not uncommon that a custom application ends up being overly complex, with a lot of unnecessary features and hampered user experience. This diminishes the benefits it is supposed to bring. During the business requirement analysis phase we can help you prioritise features which should go into the final product, to bring the most out of it, while still keeping your budget and time constraints under control.

It is often good to start using an SaaS, as it will give you an idea of what the limitations are, and how they can be improved. Once you have outgrown the capabilities of your SaaS solution, and you have the required resources, it is worth upgrading to a custom developed software.

Costs

  • developing custom software costs more upfront
  • long-term expenses of SaaP or SaaS software adds up in the long run, often surpassing the cost of a custom solution

There’s no denying it, that the upfront costs of developing a custom software are much higher than that of deploying an out-of-the-box product. You need to factor in not only development costs, but also business analysis, system design, testing and maintenance. On top of this, you need to factor in your own time spent in meetings with the development team and hardware costs.

Out-of-the-box products distribute these costs across many customers, and as a result the costs are lower. However, if you factor in the licensing costs of every new version of a packaged software, or the subscription costs of an SaaS software, you’ll quickly find that the difference in cost is not that significant.

Most out-of-the-box software companies employ a pricing model which makes it exponentially more expensive if you have more users. In case of SaaP, you need to buy a license for every computer you intend to use it on, while SaaS also gets more expensive the more users you have. The amount of users you expect to have and the projected growth of your company, is one the most important things to factor in when estimating software expenses.

Based on the number of users in your company who will use the software, the cost of an out-of-the-box software might surpass the cost of a tailor-made solution in 2 to 5 years.

Evolution of costs, comparing one of our custom solutions to an SaaS similar in features
Evolution of costs, comparing one of our custom solutions to an SaaS similar in features

Speed of Implementation

  • custom development can take months or years to finish
  • out-of-the-box software can be deployed almost instantaneously

The development of bespoke applications can take a lot of time, depending on a variety of factors, such the size of your company, number of stakeholders, etc. Out-of-the-box solutions, like SaaS products on the other hand, can be deployed in 0 to a couple of days, depending on configurations, approvals and user training.

When developing a custom solution for our clients we employ agile techniques, prioritising critical functionality so we can deliver a usable product in the shortest time possible. Often, we recommend that you continue using parts of your existing software infrastructure while we gradually integrate their functionality into the new software and migrate old data.

After deployment

There are multiple things to consider regarding what happens with your software after it has been deployed. These are user training, scalability, data security and maintenance.

As far as user training, most custom development companies, such as ours, offer an in-depth training of the complete application as part of their services. Companies that develop packaged software often offer the same type of training for a fee, while SaaS software usually has generic online tutorials, which are less preferred than organisation-specific training.

Scalability is also a very important factor when deciding between custom or out-of-the-box software. Consider how you’re going to use the software in the future, how many users and features are you going to need? Custom software allows you to add or remove features as you need them, or change certain functionality as your company shifts and grows. This flexibility is not achievable with out-of-the-box software.

Data security is very important. Every SaaS or licensed software vendor is competing to be the most secure, as a data breach might have a substantial effect on their sales and reputation. The same measures have to be applied when developing a bespoke solution, so choosing the right development partner is crucial. We follow strict security standards when developing, and set out a detailed maintenance plan to avoid vulnerabilities to attacks in the future.

Software maintenance is another issue which you should look at when making your decision. Incremental updates for the version you own, are typically free for out-of-the-box software. Depending on the vendor, version changes may come at an additional cost. All vendors will release updates when necessary, so you don’t have to worry about accumulating technical debt. The same should apply to custom software. Choose a development partner that guarantees periodical software updates and security patches as part of a support and maintenance agreement. For our clients, we offer constant monitoring of their software, apply fixes and security updates as soon as they’re available, and constantly update the underlying software and hardware so no technical debt is accumulated.

The Conclusion

Choosing to build a custom solution or buy an existing software product comes down to the needs of your business. During the initial phase of business requirement analysis we always make recommendations of whether an out-of-the-box software or a custom-built solution would be a better fit. In fact, we use a lot of SaaS software ourselves. Some out-of-the-box solutions, such as accounting software, are universal enough to handle the needs of most companies.

However, sometimes the software has to handle business processes that are unique to your company. We always tell our clients, that a company should not change its workflows to adapt to the software, but the software should adapt and accelerate the way you work. So if you feel your software is not working for you, but the other way around, a tailored solution might be the way to go.

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