August 31, 2020

Custom VS Off-the-Shelf Software: How to Choose the Right Solution

Striving to digitize business workflow companies stumble upon two ways: to develop their custom software/application or use off-the-shelf ones. Each approach has its pros and cons and here you’ll find out how to choose the right one for your business.

Alyona Petrukhina
Content Marketing Manager

Nowadays all types of businesses from small e-commerces to enterprises face the need to digitize their workflow and resort to applications, CRMs, or ERP packages. It enables companies to work more efficiently with saving time, speeding up work cycles, avoiding paper waste, and optimizing their business operations.

Then, they faced going through tones of the solutions on the market, which would fit business needs. Companies stumble upon two ways: to develop their custom software/application or use ready-made ones. Each approach has its pros and cons and here you’ll find out how to choose the right one for your business.

1. Differences Between Custom Software and COTs

Custom software is built for the unique challenges of your situation. Whether you want to integrate your existing tools or start something completely new, custom software is designed to meet your every requirement.

To start pending a customized project from scratch, you recruit the dedicated teams of developers. The team creates the project according to your needs exclusively. On the idea stage, the company’s stakeholders list the most demanded features, while developers analyze the brand and the market to find the best implementation way.

Off-the-shelf software (ready-made, COTS – Commercial Off-the-Shelf, prepackaged) software or hardware products that are ready-made and available for sale to the general public. Such products are designed to be implemented easily into existing systems without the need for customization. For example, office suite packages, email clients, warehouses, or accounting software.

To determine what solution is the most appropriate, you need to estimate your project. First of all, define the scope of work and requirements for the software. Outline what features are necessary to solve the exact business goals. Make sure to consider all possible deliverables and constraints.

For example, if you want to create a small online store with a fixed budget, you should take a look at off-the-shelf solutions. On the second hand, huge projects can’t rely on ready-made options, due to the high requirements and customized structure.

So let’s look upon the main differences between custom and off-the-shelf software for business.

Implementation Time

The deployment of custom software takes more time than prepackaged solution implementation. The agile approach allows you to speed up the process and be involved to adapt the product to your needs. In addition to development iterations, software testing is also necessary.

The off-the-shelf solution means that you choose from ready-made options. All you need to figure out the one that fits your requirements and budget, install the software, and sort out its settings. This is the way to cut the time and the solution should be ready-to-start in a couple of weeks.

Total Costs

Talking about the price, the custom solution is more expensive in the beginning, as you cover the spent on developers and testers. Ready-made solutions usually are subscription-based and seem initially cheaper.

But keep in mind that you depend on the subscription prices, which can go up. Besides, additional functions and extensions which are available after additional fees and would be needed due to the company growth.

Functionality and Integrations

The main difference between a custom and off-the-shelf solution lies in the functionality of the finished and deployed software. If the first one includes the required features and enables you to manage customization, then the second one has a limited set of functions.

Also, you should consider the flexibility in possible integrations with your existing programs and databases. With out-of-the-box solutions, it may occur challenging due to the lack of the necessary features.

2. Pros and Cons of Custom Software

The pros of custom software include:

  • The software is completely adapted for your business. Since you take part in the development, you think over the necessary features and how to implement them. Also, you can change something or add additional requirements, which makes the final product fully suited for your tasks.
  • You have ownership of the software. So you are not dependent on third party decisions to change. Besides, you should be ready to pay extra money for the subscription or extra features. With its software, this situation will not happen.
  • Competitive advantage. Your software is the property of your company and has a unique set of functions that maximally solve your problems or those of your users.

Case. We help our partners to develop custom solutions for their business or create off-the-shelf products. For example, we have a case related to the development of software for logistics

The client needed a turnkey development of a full-featured cloud SaaS application that covers all types of transportation for logistics companies. In this case, it was more profitable for the business to resort to custom development of its product since pre-build TMS didn’t provide the required customization and flexibility. Tap here to read more cases. 

The cons of the custom software include:

  • The main disadvantage is high resource consumption. You will need to assemble a competent team of developers. Depending on the complexity of the project, it can take from several weeks to months to deploy the final product. Keep in mind that you will need to test it well since you are creating it from scratch.
  • It requires first-time investments. If you compare the initial costs of custom and ready-made solutions, then the custom one’s cost is higher. But it will likely pay off in the future.

3. Pros and Cons of Off-the-Shelf Software

The Pros of ready-made software: 

  • Fast and easy implementation. Out-of-the-box solutions are ready for the immediate start using their functions. Plus, they often don’t require a tech team. If you need a basic set of certain functions, for example, accounting software, it is reasonable to resort to this solution.
  • Initially lower price. Usually, ready-made software is cheaper than the development from scratch.

Cases. We have had several cases when it was easier and more convenient to create the necessary solution using ready-made software. For example, we developed a multifunctional merchant web portal, which is integrated with the custom API. 

Also, we have our ready-made solutions that are successfully used in some projects. As an example, the powerful LBS Platform and Bella Billing Platform.

The LBS platform offers location-based services capabilities to mobile network operators based on GSM standards. The architecture of the LBS Platform enables fast product developments, eg. crowd control, personnel management, games, advertising, etc. We have several implementation cases of the LBS platform saved time and boosted the development process.

The Bella platform is a robust billing system. It provides a complete and yet configurable solution. To implement the complete software system for an all-in-one product that serves the end customer, starting from offer and contract signing and till the end of the delivery process, we used the pre-build Bella platform as a business rule engine. 

The Cons of ready-made software:

  • Lack of necessary features and difficulty to upscale. Before buying a ready-made solution, you should realize whether the existing set of functions meet your expectations due to challenging upscaling. If the software won’t be able to solve your problems, you will either have to look for a new solution again or rewrite everything on a custom-base. Also, consider how flexible the chosen service is for various integrations.
  • Additional expenses. As we mentioned before, additional extensions and features can come with other prices. Sometimes for the implementation of specific operations, you may need the help of specialists who can get under the hood and ‘modify’ the software. 

When choosing between off-the-shelf solution and custom software development, first of all, start from the pool of features that your business requires. If you need some specific functionality, you can get by with a ready-made solution. If your company needs software with complex logic and high customization options, custom development is most likely your choice. 

If you find it difficult to decide, you can contact our specialists and they’ll be glad to help you.

Sign up for our updates!

Subscribe to our newsletters and get the latest from HYS Enterprise – industry insights, research copies, and actionable business tips straight to your inbox. Be sure to find out first.