It is a commonly held belief that commercial, off-the-shelf (COTS) software is a better choice than custom software.
While there are several reasons to choose COTS software, sometimes going with a custom software solution makes more sense.
Of course, if your present software works well and meets all your business needs, there is no reason to switch to something new, whether it’s a custom or a COTS solution.
But, if you find yourself frustrated by your current business software, then an evaluation of new approaches might be in order. Additionally, while COTS software usually comes with a lower initial price tag than custom development, it’s not always the best choice in the long term.
Let’s look at the arguments for COTS software first.
If you’re in a big hurry or just need generic software that provides common functions, then a COTS solution is probably in your future. That’s because COTS software is usually available immediately, or can be configured in a short period of time.
While you might not need most of the features found in software packages (there is a reason they call it “bloatware”), the good news is that most commercial packages have had their development amortized over tens of thousands of users, bringing the cost per user down to a reasonable level.
The fact that there’s a user community and that most vendors offer reasonable technical support also makes COTS software attractive.
But, COTS software is not always the best business decision when the option of custom software from a competent developer is available.
Here are five cases where custom software might be the superior option:
1. When You Want To Be Unique or Delight Your Customer
As Canadian marketing guru Terrance O’Reilly notes, “The brain is not interested in sameness, it is only interested in the different, the unusual.”
We all know that the user experience is critical for customer-facing organizations. If it’s unique and delights the customer, then you have a competitive advantage that can define your brand.
Many off-the-shelf solutions make companies all look the same.
If you want to avoid becoming a cliché, you might need custom development.
2. When You Want To Preserve Workflow Compatibility
You understand the workflow of your business, so you know all the “must haves” in any call for new software.
If critical functions for your business are not offered by the COTS software you’re considering, then going with custom software is your best choice.
Furthermore, if you buy a software platform that drastically changes the way your employees work, then you may have purchased the wrong software solution.
Most COTS software is not designed with your specific business in mind, so it‘s no surprise that it often changes patterns that have been efficient in the past, but now require additional steps, or a reorganization, to fully use the new business platform.
Don’t let COTS software dictate how your business will run.
Custom software should fit your business like a glove because you get to specify how it will work.
While most COTS software can be changed in limited ways, it often can’t be easily rebranded or reconfigured to match your specific workflow.
COTS software can force you to compromise on requirements, and it can be overly complicated to use. Training courses and support materials may cover functions that your company doesn’t or won’t use, making it more difficult to learn and use.
As Dave Miller warns,
“You are not in control. The vendor’s plans for the future may not always fit with your own. As a single customer amongst many, you may not be able to get the features you want implemented.”
If any of this is a concern, it may be time to call a custom software developer.
Then, there’s the issue of integration with your existing business software.
If the COTS software you’re considering doesn’t have the ability to work with APIs (application programming interfaces) or offers an ETL (Extract, Transform, Load) tool, you may find it difficult to exchange data among your various enterprise software platforms with COTS software. With a custom solution, a “data bridge” among IT systems can be built into the final package.
3. When You Want To Be Quick To React To Change
Sometimes the reason you need custom software is that one of your biggest customers, or a key vendor, is making a software change or has a new data protocol that your business has no choice but to follow.
This is especially the case if your business is part of an integrated supply chain.
Vendors of COTS software are often slow to adapt or change to meet industry needs because they have to get a return on their investment before they spend more on their product. So, your feature request may get ignored if it doesn’t benefit the larger customer base or if it’s not on the COTS software vendor’s development plan for the year.
With custom, you‘re not locked into the schedule of a large platform vendor, allowing you to move more quickly when changes in software functionality are called for.
4. When You Want To Scale
Companies often don’t need all (or even most) of the functions of a COTS software package.
By using custom development, you can start small, choose only the features you truly need and have more built as you need them. This makes it easier for staff to learn to use a new software program, and they won’t be confused by huge menus of unnecessary functions.
As your business expands, you can scale up by having your custom developer add new features only when you require them. Similarly, there is no extra per user licensing fees as you scale up over time because you own the software.
With custom development, your business software grows with your business.
5. When You Want To Reduce Total Cost of Ownership
While the initial cost of COTS software is usually substantially lower compared to custom development, the total cost of ownership (TOC) may be more economical for custom software in the long term.
This is because much enterprise software has an initial implementation cost, an annual per-user subscription fee, and recurring maintenance and support charges.
As well, vendors often bill for upgrades, and will only support old versions of COTS software for a limited time. Each upgrade may result in some downtime for the business, and there will be a loss of productivity while employees take training and get up to speed in using the new version of the software. This can affect the bottom line if it happens too often.
There are other risks to using COTS software because as a buyer, you only have a license with limited rights and are dependent on the vendor to stay in business and to keep your data safe at all times. With custom software, you have much more control, and usually, own the code, so if your developer goes out of business, then another developer can fix or extend the codebase as needed.
Custom applications usually increase productivity and reduce costs by automating repetitive tasks.
In the end, your profits may be higher and your overall costs lower by going the custom route.
To quote Winchester Innovation:
“Off-the-shelf software can lock you into a dependency, so-called ‘velcro-ware’ that can be expensive to get out of.”
While low initial costs may be critical to your decision, favoring a COTS solution, total costs over a 5-year period may well be lower with custom, while affording your company better control over the functioning and compatibility of the software.
You have lots of things to think about when planning for new business software. An experienced custom development company like Float can help you with the planning to determine which option – custom or COTS is best for you. Contact us to discuss your options and needs.
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