With so many ready-made software available for a variety of industries and business processes, why would you ever want or need a third-party software company to develop custom software for your business?
No ready-made software does exactly what you need.
Control and ownership of the software that runs your business is necessary or desirable as a strategic advantage. Both may apply to your situation and within these general reasons there are other factors that you should consider.
Nothing is appropriate
If you purchase ready-made software, you may need to change your company to adapt to the software model. Existing software may come close to what you need, but nothing is just right for all your essential functions. You can also ultimately pay for many functions that you do not need and that you will never use. The effort and costs of modifying existing software, if possible, can far exceed the costs of software purchase. In some cases, the cost of adapting existing software may exceed the cost of custom software!
When choosing an existing software system that does not fit perfectly, you have two choices:
- Change the way your company works to accommodate the software.
- Adapt the software to your business needs and processes.
The first option can be attractive; it can even improve your business. If the difference between how existing software works and how your company works is not too large, small changes to your business activities to enable new software may be a cautious option. On the other hand, if the changes are too far-reaching, uncomfortable or adversely affect your business model, it is unacceptably disruptive to adapt your business processes to the software.
The second option is not always possible; not all ready-made software is customizable. Sometimes the results of the adjustment are disappointing, cumbersome and expensive.
When customization is possible, there are 5 factors to consider:
The gap - what is the difference between how the software works and how it should work for you?
The costs - how much time and money are needed to adapt the software to your needs?
The feasibility - is it even possible to warp the software to meet your requirements?
The friction - how willing or able is the software supplier to meet your needs and changes?
The future - what are the maintenance costs and resources needed to keep the software changes intact when new versions are released? If the new software system is closely aligned with the way your company works and the effort and costs of adjustment and maintenance are acceptable, then the standard solution is probably less expensive than using a modified system.
Another consideration applies if your industry is a highly regulated sector such as finance and healthcare. In this case it may be best to stay with non-adapted, standard software where the supplier has important incentives to keep him informed of changing compliance requirements.
On the other hand:
If your business has to work the way you designed it, and standard software is incompatible with this, or there is no suitable software in the first place, then a custom software solution might be the best option.