When a company outgrows spreadsheets and e-mail, it faces a question: buy ready-made software or have a custom information system developed? You will find advocates of both paths online. Some warn against lengthy development, others against off-the-shelf solutions that will never quite fit. The truth usually lies somewhere in between. There is no one-size-fits-all answer; it depends on how specific your processes are and how important they are to your business.
In this article we show you what to base the decision on, what to ask vendors and why the choice often doesn’t have to be black and white.
What we mean by off-the-shelf software and a custom system
Off-the-shelf software is a product used by many companies at once. Typically you subscribe to it as a cloud service or buy a licence. The vendor develops it for a broad market, so it contains the features most customers need. Customisation is only possible to the extent the product allows, usually through settings, add-ons or integration via an API.
A custom system is built for one specific company. It is based on its processes, uses its terminology and does exactly what is needed, nothing more and nothing less. The company usually owns the source code, or at least has the assurance that it can keep developing it, and decides for itself where the system goes next.
When off-the-shelf software makes sense
For routine areas that work the same way in most companies, a ready-made solution is often a sensible choice. Typical examples are accounting, payroll, company e-mail, calendars or document sharing. These areas are defined by law or established practice, and there is no point reinventing them.
Off-the-shelf software is a good choice when:
your processes match the way the software works and you don’t have to bend them,
you don’t need major customisation or complex integration with other systems,
the area is a necessity for you, not a competitive advantage,
you need a solution quickly and have no time for development,
the number of users and the volume of data are within the range the product is designed for.
The advantages are fast deployment, predictable costs and the fact that the vendor takes care of updates, security and operations. The downside is that you have to adapt. And if the vendor changes its terms or features, or discontinues the product, your options to respond are limited.
When a custom system pays off
A custom system pays off where off-the-shelf software forces you to bend your processes or keep part of the work on the side in spreadsheets. Signs that it is time to consider your own solution:
You use several tools that don’t talk to each other and copy data between them by hand.
Your way of working is specific, and that is exactly where your edge over the competition lies.
You pay for lots of features you don’t use, while the ones you need are missing.
A web of spreadsheets, macros and workarounds has grown around the off-the-shelf software, and only one person understands it.
You want to offer customers or partners your own portal or app.
You need to keep your data under your own control, for example for security reasons or to make further use of it.
Typical examples include production planning, job management, booking systems, client portals or industry-specific processes for which no good product exists on the market. In such cases a custom system often replaces several tools at once and eliminates manual copying between them.
What to focus on when deciding
Don’t compare purchase costs alone. A meaningful comparison covers the whole life of the solution, that is, several years of operation. Consider these areas:
Time and errors
How much time do your people spend working around the limits of the current solution, retyping data and searching for information? How many errors does that cause, and what does it cost to fix them? These costs don’t appear on any invoice, but you pay them every month.
Growth and change
How easily can the system be extended when the company grows, opens a new branch or adds a new service? Off-the-shelf software may have limits on the number of users, records or features. A custom system can be extended, but only if it is well designed from the start.
Data and vendor lock-in
With off-the-shelf software, check whether you can export your data in a usable format at any time and whether the product has an API for connecting other systems. With a custom system, ask who will own the source code, where it will run and how ongoing support and development will be provided. In both cases it is good to know what happens if you want to change vendors.
People
Even the best system is useless if people don’t want to use it. Off-the-shelf software with generic screens can be needlessly complicated for your colleagues. A custom system can speak their language and show only what they need. On the other hand, you have to expect that designing and fine-tuning it will require your time and feedback.
Combining both approaches
The choice doesn’t have to be black and white. A combination often works best: accounting stays in proven software, e-mail and documents in standard office services, and a custom system covers what is key for the company, such as jobs, production or customer communication. The two worlds are connected, so data doesn’t have to be retyped. Documents can, for example, be issued in the custom system and passed to accounting automatically.
This approach combines the advantages of both paths. You don’t pay for developing routine functions, and in the area where your added value lies you have a tool made exactly for you.
Start with a small first version
A custom system doesn’t have to be built all at once. Large projects that try to solve everything in one go tend to be risky: they take a long time, requirements change during development and the first results arrive late. The opposite approach works well:
Choose the part of your work that holds you back the most today.
Design a simple solution for it and put it into operation.
Collect feedback from the people who use the system.
Gradually add further modules based on real needs.
The risk is lower, you see results sooner and the system grows with you. What’s more, after the first stage you know much better what you want from further development.
How custom system development works
If you decide on your own solution, it helps to know what to expect. Development usually goes through these steps:
Analysis: together we go through how you work today, who will use the system and what matters most to you.
Design: a design of the screens and data structure is created, so you can check that the solution matches your idea before any programming starts.
Development in stages: the system is built piece by piece, and you can try out and comment on each part.
Data migration and training: existing data is transferred to the new system and people learn how to work with it.
Launch and support: after launch the system is fine-tuned based on real operation and developed further as the company’s needs evolve.
Your role doesn’t end with the brief at the start. The best results come where the people who will use the system are involved in the project throughout. Their feedback during development is far more valuable, and much easier to incorporate, than changes after launch.
Common mistakes when deciding
Deciding on the licence or development price alone. What matters is the total cost and benefit over several years, not the first invoice.
Copying the current state. A new system shouldn’t just turn old spreadsheets into an app. It is an opportunity to simplify your processes.
Trying to solve everything at once. A huge brief is hard to estimate, takes long to develop and is even harder to roll out.
Underestimating data migration and training. Even a good system can struggle if historical data is missing or people don’t know how to use it.
Unclear ownership. Before you start working together, clarify who owns the source code, the data and access to the server.
Questions to ask before deciding
Which activities are unique to our company and which do we do the same way as everyone else?
Where do we lose the most time today and where do errors occur?
Is there a product on the market that covers our needs without major compromises?
What will the total cost of off-the-shelf software be over several years, including all licences and add-ons?
Are we ready to invest time in working together on the design of a custom system?
Who will look after the solution after launch?
How we can help
Not sure which path is right for you? Tell us how you work today, which tools you use and what holds you back. Together we will go through your processes and recommend a solution that makes sense both technically and commercially. Sometimes it will be a custom system, sometimes a well-configured off-the-shelf product with smart integrations. What matters is that the result genuinely helps your business.