Bespoke Software vs off-the-shelf software: when to buy and when to build
Software & TechnologyWeb
9 Apr, 2019
Attitudes to the procurement of web and IT services have changed radically over the past five years. Organisations have outsourced non-core functions and many are increasingly embracing generic cloud-based solutions to drive down costs and refocus on the core operations that underpin their business.
When to buy
In many circumstances this makes sense given the ready availability of off-the-shelf solutions allows organisations to simplify business processes and quickly and easily extend the scope of their activities.
For example, problems with budgetary control and reporting can be tackled through the adoption of an appropriate software package. Similarly control of cost and cost reduction can easily be achieved with an off-the-shelf solution by automating very simple, routine processes.
One step further, off-the-shelf software has also reduced barriers to enter certain marketplaces. For instance, accounting software now allows organisations to accurately and quickly comply with legislative changes – such as the way Value Added Tax is calculated and accounted for – an area where an accountant would traditionally be required.
As such, it is without doubt off the shelf solutions have improved a wide variety of business processes and reduced barriers to entry into certain marketplaces.
When to build
But this “one size fits all” approach to software can become problematic when extending beyond basic business operations to underpinning essential core aspects of a business – the heart of competitive differentiation.
At a time when differentiation is a major indicator of success in the global market, every company is looking to offer competitive and highly differentiated products and services. However, gaining advantage over competitors becomes more difficult when an organisation’s core product or service is delivered by off-the-shelf solutions common in the marketplace.
As a result, competitive advantage has to be sought elsewhere, for example: in after-sales service, quality, price or in the competencies of the employees of the organisation. Software developers will need to consider client needs beyond the obvious.
The next issue is whether an off-the-shelf solution will actually deliver all the capabilities and features an organisation needs and wants? Or will they have to bend and change their business operations to the suit the software’s ‘vanilla’ configuration? And this is where bespoke software makes a significant difference, a reality most organisations learned first hand.
Being constrained in this way by an investment that fails to support real business needs and cannot deliver the scalability required to support business growth is a real and all too common trap organisations fall into today.
And then comes the biggest problem of all. Organisations then try to use such software for tasks that are not routine, or worse yet, decide to tailor to make it fit with the way the company does business.
If a company acquires an off-the-shelf package and then decides to tailor it, the value of buying an off-the-shelf application diminishes rapidly. The usual benefits of reduced cost, speed to market and high quality are rapidly undermined by the cost of adapting and maintaining the tailored solution. In effect, they are investing in a bespoke solution after all – but now with all the disadvantages of ongoing license fees and upgrade costs. The result can be the worst of both worlds – functional compromise and no future proofing.
Of course, the biggest reason why most organisations choose off the shelf solutions is the perceived lower cost when compared to following a bespoke path. However, undertaking a three to five year total cost of ownership comparison can be revealing. Whilst the bespoke development investment is loaded towards the beginning of the cycle, there are no on going licensing costs to consider – so things tend to even out, if not tilt in the favour of bespoke as time passes. Moreover, for any organisation planning expansion, adding in the costs of additional licenses and training for each new employee can further decrease the appeal of an off the shelf solution.
Of course, for the majority of deployments, off the shelf works – there is no need to recreate the wheel. But at some point, most organisations are likely to require a piece of software with functionality and features that are simply not available off the shelf.
What is meant by off the shelf software?
Off-the-shelf software refers to software that’s already build and is ready to be used. By its nature, off-the-shelf software is bound to be generic in many ways so it responds to as many scenarios as possible within a given category. For example, an off-the-shelf CRM system will generally attempt to cover as many needs it can possible cover for a client and pack as many features as deemed feasible. However, when implementing those features the software vendor will always look at the benefits for a large pool of potential clients and leave out everything is too costly to implement, frustrating other potential clients as a result.
What does bespoke software mean?
Bespoke software (or custom software) refers to software that is purposely built to address a set of specific needs an organisation might have. Because it’s built with a clear purpose in mind, bespoke software tends to do the job it was built to do much better than off-the-shelf software. Using the example mentioned above, a bespoke CRM system will generally have all the features and the functionality needed by an organisation and leave out generic features that don’t apply to its specific case, ensuring the custom solution is more efficient, easier to use and focused on its intended purpose than off-the-shelf solutions.
Why is bespoke software expensive?
Software developed on-demand to address well-defined needs requires the solution developer to study and understand the specific case where the bespoke solution is going to be applied and then dedicate the resources to make it happen. A WordPress agency looking to create a bespoke membership platform, for example, will look to understand how the solution is going to be used, if API integration is necessary, what technical conditions need to be met, what unique challenges such a project entails, what type of work will be required, what type and number of specialist resources will be necessary, how difficult an endeavour the entire project will be and even how to sensibly balance constraints and goals, among other important details.
Totally has been developing bespoke software solutions for nearly 20 years, during which time it has a accumulated tremendous experience in how to deliver successful projects to adequately address specific needs. Learn more about our solutions, see who our clients are and get in touch if you need experienced help with your project.