Custom software development. Is it really worth it?

The origins of software can be traced back to the nineteenth century, when the mathematician Ada Lovelace wrote an algorithm for the Analytical Engine, i.e. a machine invented and designed by her friend – and also a talented scientist – Charles Babbage. Although the project was never completed, it is considered by many to be the first programmable computer, and the diagram made by Lovelace is the prototype for computer programs. Today, custom software development is one of the basic services of software houses, and the acceleration in digital transformation forces companies to use such offers even more. Are dedicated applications, created for the needs of a specific company, a profitable investment? Especially when there are so many ready-made solutions on the market? 

Read on to find out:

What is custom software? 

Custom software is an IT solution that the development team creates with the individual needs of a given client in mind. Programming works are preceded by various processes of getting to know and understanding the business domain of the company (e.g. through Event Storming workshops), and then developing the functionalities and specificity of the software created. 

Contrary to ready-made solutions, custom software is flexible and tailored to the real needs of the company. It is created with a view to enhancements in the daily workflow of its future users and improving the company’s business processes. It often embraces functions and solutions that are not offered by generally available computer programs.  

[su_service title=”Important!” icon=”icon: check-circle” icon_color=”#bbe2ef” size=”36″]Dedicated software is an alternative to ready-made solutions that the company can purchase on the basis of a licence. There are advantages and disadvantages to using both options that should be considered before making your final decision.[/su_service]

What is off-the-shelf software? 

Off-the-shelf solutions are made for the mass support of business processes in mind. They are created for a given industry or, for example, a specific market demand, and most often perform quite well in their limited role. They become problematic only when: the company’s requirements are wider or more specialized than the ready-made program, the processes grow and transform, the business grows quickly and expands its offer, or the software company disappears from the market. Closed software code frequently doesn’t allow major changes – and even if it does, they are very expensive – and the company doesn’t really own any rights to the application.  

Ready-made solutions are a help in the automation of predefined business processes, but will not necessarily be a response to 100% of the needs of a given company. Using off-the-shelf systems carries the same risks as with any ready-made scheme – we have to fit into it in some way.  

[su_service title=”Important!” icon=”icon: check-circle” icon_color=”#bbe2ef” size=”36″]At a time when technological solutions are often the key to gaining a competitive advantage, focusing on ready-made software may slow down the development of our company in the long run.   [/su_service]

Advantages and disadvantages of both solutions 

Both the off-the-shelf systems and custom development have their pros and cons. Large and medium-sized enterprises focused on constant development will primarily benefit from dedicated solutions. Small companies, just entering the market and having a limited offer, will rather choose a ready-made system. It will not burden them financially at the beginning, and will allow them to start automating and controlling the first processes. 

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Custom software development – price 

Custom software development is an extensive journey involving many stages. From conception and validation of the idea, through analysis of requirements and their translation into the system architecture, to the valuation, implementation, automation, testing,  maintenance and possible development. Usually this doesn’t happen step by step, but rather taking a more agile approach, which on the one hand allows for the creation of more efficient systems, but on the other makes it difficult to clearly define the budget.  

In order to estimate the overall time and budget for a given project, there needs to be a previously-prepared so-called backlog, i.e. a prioritised list of all tasks that will have to be performed at individual stages (sprints) before receiving the final product. This forces a deeper commitment between the company and the software house than in the case of a ready-made solution, which typically has a specific price, depending, for example, on the number of positions, users or implemented functions. 

The initial price of a dedicated solution is almost always much higher than the price of purchasing a licence – it is difficult to argue with that. The predetermined and relatively low annual licence fee and the quick process of implementing an out-of-the-box system are probably the most tempting factors that act as an incentive for ready-made solutions. But what about hidden fees? 

[su_service title=”Important!” icon=”icon: check-circle” icon_color=”#bbe2ef” size=”36″]In the case of a ready-made solution, we rarely pay only for the licence. There are often a number of hidden fees, including:    [/su_service]

  • Renewal of the licence fee (if the licence is not perpetual);  
  • Periodic software updates;  
  • Full licence fees for additional users (even if they use only a few software functionalities);   
  • Technical support and service contract; 
  • Data migration and transfer to new software; 
  • Integration with other systems; 
  • Adapting the system to the needs of users (if such an option exists); 
  • Implementation consultations; 
  • Project management;  
  • User training;  
  • Software tests. 

These are just a few examples of the potential costs that go into the price of boxed solutions. As you can see, in order to get a complete picture of the final price of an investment, there are many more factors to consider than you might at first think. As a result, when calculating annual or several-year expenses, you may find that the difference between a ready-made system and a custom-made system is not that significant.  

Finally, let’s emphasise one more aspect: what when the ready-made software stops responding to the company’s needs or the manufacturer disappears from the market and ceases to support his project? Closed software code prevents further development of the application in-house and the company is stuck with a legacy system that slows it down rather than develops it. In such a situation, you should take into account the costs of switching to another boxed product or, for example, operating on the principle of our Smart Decoupling. In the case of a dedicated solution, the open code allows for further system modifications; whether on your own (internal IT department) or in cooperation with the team creating the solution, or with another software house in the future. 

What is better for me: a ready-made system or a tailor-made system?

There is no single and simple answer to this question. Not every system is profitable to build from scratch, but you shouldn’t be afraid of talking to software houses or using IT consulting services. After all, investment in a system is often a decision for years ahead, the aim of which is to streamline, accelerate and automate the work of your company in order to ultimately gain a competitive advantage!  

What questions should you be answering before choosing a ready-made or dedicated solution?  

  • Can the company’s strategy change in the future? 
  • Has the company’s offer expanded or changed in any way recently? 
  • Is the company growing and is it actively hiring new employees? 
  • Has the company recently faced new challenges that came as a kind of surprise for it? 
  • Does the company already use any systems that will need integration with the new software? 
  • Are there any other systems planned for introduction in the future? 
  • Are there various degrees of software access planned (e.g. depending on position)? 
  • Is data migration to new software planned? 

If you answered yes to most of the questions, bespoke software is likely to be the better choice for you.