What are the advantages and disadvantages of off-the-shelf software compared to custom software development?
For many small business owners, off the shelf solutions (or sometimes called pre packaged software) provide a cost effective way to automate business processes and improve scalability. However, off the shelf solutions aren’t always the best choice. Custom software development is becoming increasingly popular as it offers an attractive array of advantages, including the ability to build a bespoke solution that perfectly aligns to the business’s needs and has the flexibility to scale as the business grows.
Let’s break down a few of the top advantages and disadvantages of each path:
|Custom Software||Off-the-Shelf Software|
|Advantages||Tailored to your exact business needs|
Greater control over security and data
Can evolve with business needs
Complete ownership with low recurring expenses
Changes and customization can be done relatively easily
|Usually lower up-front costs|
Quick setup and readiness to use
IT support is easily available
People may already know how to use it
Quality is easier to predict up front
|Disadvantages||Higher upfront costs|
Lead times to develop and launch can be long
Requires management of a development project
May be difficult or expensive to get post-launch IT support
Quality is harder to predict
|Low flexibility to adapt to business needs|
Can’t evolve with your business needs
Pay for features you don’t need
Limited or no integration functionality
Typically requires a high recurring expense
If you’re unsure if you should purchase an off the shelf solution or choose custom software development, we recommend pricing out both options from end-to-end and analyzing the short and long-term ROI of each.
Read More: 6 Clear-Cut Steps to Decide - Custom vs Off-the-Shelf Software
How can small businesses maximize the ROI of custom software development?
Custom software development solutions require an investment in resources: time, personnel, and money. Maximizing your ROI on this investment is critical.
Software ROI can be defined as an organization’s gain or benefit from implementing new software or technology. It can be calculated as:
While the investment cost is simple to calculate or define, benefits or gains from software investment may vary from one business area to another. It may result in increased revenue, improved employee productivity, a rise in automation, or even higher cost optimization.
Because ROI can be seen in a variety of areas (some more qualitative than quantitative), putting together a strategy to maximize ROI can be complex. However, to help get you started, here are a few tips to maximize your ROI:
- Set goals for how you want the new software to impact your business. As we mentioned, custom software solutions can provide gains in a number of areas, so the first step should be to decide where you want to see these gains. This will help you align your decisions throughout the project to this goal.
- Choose the right software company. There’s potentially no other factor that will affect your ROI than your custom software development team. Make careful choices to balance the cost of development and the quality of services that the custom software developers have.
- Invest in training. To maximize the value of your software solution, ensure users know how to use it. Without proper training, users will be unlikely to take advantage of its full potential.
- Utilize automation and AI. Making use of automation and even AI can reduce your labor overhead and improve efficiency. Consider automating software testing or even using a tool like OpenAI for software idea generation.
- Track results: Track results to monitor the ROI and make sure that the software is delivering on its promises. Don’t be afraid to make adjustments in real time if something isn’t giving you the results you’re after.
Read More: 10 Software ROI Factors You Should Measure & Improve.
What criteria should a small business consider when selecting a software development partner?
Finding the right development partner to build your custom software applications is critical. As a small business, you should look for a partner who specializes in working with companies of your size, who understands the unique needs of a growing business, and who can provide you with the technical skills needed to bring your software idea to life and maximize your ROI.
A few things to look for:
- Portfolio of work with SME clients. Look for a development partner with a strong reputation and track record of delivering successful projects specifically to SME clients. Ask for references from previous clients and check their reviews online.
- Knowledge and expertise in your domain. Determine if the partner has the necessary knowledge and expertise to develop the software you need. Consider not just their technical expertise but also their industry knowledge, project management expertise, and business acumen.
- Strong communication skills. It is important to have clear and consistent communication with the custom software development partner. Make sure that you can easily get in touch with them and that they are willing to listen to your feedback and concerns.
- Appropriate security practices. Make sure the partner has the necessary security measures in place to protect your data and ensure the safety of your business.
- Documented development methodology. Having a well-documented and well-executed project development process in place will improve efficiency and help the team tackle challenges that pop up along the way.
Read More: How to Choose a Software Development Company in 10 Steps
How can custom software development help small businesses achieve their business goals?
While the investment in custom software development can be significant, businesses can see a significant long term return on investment (ROI) compared to purchasing pre-packaged software.
Every organization will have a unique business case for developing custom software solutions. However, a few benefits we’ve seen businesses enjoy with an investment in custom software include:
- Increased workflow efficiencies thanks to software being optimized to meet specific business needs.
- Direct integration with other software tools in an organization’s tech stack, which can help to improve efficiency of business processes and reduce the overhead of maintaining 3rd party integration tools.
- Dedicated support from software developers who designed and built the application themselves.
- Extensibility and future-proofing against changes to business needs and business growth.
Read More: 12 Dos & Don'ts of Custom Small Business Software Development
What types of custom software development solutions are best suited for small businesses?
Every business will have a unique set of priorities and requirements. The type of custom software solutions that will work best for your business will depend on your industry, your growth stage, short and long-term priorities, and in-house capabilities, among other things.
In short, the most suitable software development solutions are those that solve a client’s business goals. Some examples of software applications that can prove useful are:
- Customer relationship management (CRM) - Software designed to assist with customer management, including marketing, sales, and support touchpoints.
- Supply chain management (SCM): Software for managing the flow of goods and services between a business and its suppliers and customers.
- Human resources management (HRM): Software for managing employee recruitment, hiring, training, and payroll.
- Inventory management: Software for tracking and managing inventory levels, orders, and sales.
- Business intelligence (BI): Software for collecting, organizing, and analyzing business data.
- Schedule management: Software for creating, organizing, and managing employee schedules.
- Demand forecasting: Software for predicting customer demand and inventory needs.
- Accounting: Software for handling financial transactions, processing invoices, and producing reports.
- Business process management: Software for automating and streamlining business processes.
- eCommerce marketplaces: Customer-facing software for managing online stores and selling products or services.
- Loyalty apps: Mobile or web apps used by customers to earn, manage and redeem loyalty points.
- Reservation system: Software that enables customers to request, manage, and cancel bookings for services.
Read More: 12 Dos & Don'ts of Custom Small Business Software Development
What services do custom software development companies offer?
Top development companies will be able to provide comprehensive custom software development services to help with every aspect of developing small business software solutions, from optimizing business processes to data architecture design and project workflow management. You’ll likely be able to companies that offer software development for small businesses along with other services such as:
- Custom app development services
- Customization of an off the shelf solution
- Technology selection and validation
- Software architecture assessment and design
- Business automation and optimization
- Software testing and QA
- Post-launch technical support
- Data migration and integration
- Project management
Regardless of the stage of the development process you are in, a software agency should be able to help you optimize your processes and make better development decisions. We recommend you speak with the software development agencies you are interested in working with to see if they offer the services you are looking for.
Ready to get in touch? Contact us today to discuss your project.
What is your software development process?
At SoftKraft we are dedicated to creating custom software solutions that deliver real business value. We start every new partnership with an initial discovery, research, and estimation phase to ensure all project requirements are clearly understood, then we move on to a planning phase, and then into well-managed front-end development sprints.
You can expect our software development for small business process to follow these steps:
- Initial discovery, research & estimation
We listen to understand what you want to build, what features your product should have, and what bottom-line results you want.
- Workshops & planning
The results-driven design thinking approach we use at SoftKraft is a catalyst for the iterative custom software development process. It combines the best software development methodologies. Get ready for an intense design workshop that will clarify your business idea and help us build a much better custom software solution.
- Development sprints
Software development life-cycle is a structured and repetitive process that is divided into smaller parts - sprints. Each iteration covers a part of the project scope that is deliverable in a short and controllable period of time. Following agile methodology best practices, each sprint ends with a demo of a working part of the product by our development team, which then opens user acceptance testing.
- Stabilization & release process
Custom software development is a complex process that needs a stabilization phrase. During this stage, we focus on perfecting every area that makes the final product meet the business agility goals. When the stabilization stage is over and we have positive user feedback from the first users we can deploy the first version of the custom software into the production environment.
- Support & aftercare
After successful custom software development we can continue to provide your small business support. We can monitor the performance, and we are ready to fix all the issues based on the SLA or a different arrangement.
Depending on the client and project needs, we set the rules for support and technical improvements. We set the error handling rules, issues priorities, time of our reaction, and the amount of time of our developers that we should book monthly without sacrificing product quality.
Learn More: SoftKraft Software Product Development Process