Custom Software vs. Off-the-Shelf Software: Which is Right for Your Business?

MercuryWorks is a web development company that builds mission-critical applications for business. As such, it might be easy to assume that we recommend custom software development over off-the-shelf software for everyone who darkens our doors looking for a better app.

But we don’t.

Our portfolio of work catalogs a fraction of the thousands of apps that we’ve built from scratch and modernized over the years, but it doesn’t include the companies who we’ve advised not to build right away. The truth is that while custom software development can make all the difference for a business, it’s just not the right choice for every business. So as you dive into software comparison, here are some of the main differences between custom software and off-the-shelf, and when we advise our clients to build or buy.

Custom Software vs. Off-the-Shelf Software Solutions

There are many factors involved in choosing to develop a custom application, but it’s not a decision to be taken lightly. In fact, we typically recommend development only after companies have eliminated off-the-shelf solutions.

If you haven’t done it yet, take some time to explore off-the-shelf software first. A good rule of thumb is that software you’ve bought should be able to handle about 80% of your needs out of the box, and maybe you can improve that percentage a bit by using integrations and workarounds. If off-the-shelf doesn’t offer enough functionality, it’s also possible that there is industry-specific software (such as a CRM for the automotive industry or an email automation system for homebuilders) that can accomplish the majority of a business’s needs. If you can’t do it all in one platform, you still might be able to integrate several with the support of your development team.

Even if you’re not sure if off-the-shelf software will work for your needs, it’s wise to exhaust other possibilities first before looking for a custom solution.  

In most cases a packaged application is more affordable than custom, and it’s also a great way to figure out what you do and don’t need. When it comes time to build, you’ll save money and time in the development process by having an idea of the specific requirements that you can’t find off the shelf.

Why Build Custom Software (and When)

In many cases, an off-the-shelf solution may work well enough to help your company without needing to invest more in a custom application – but there are some key scenarios where you may need a custom build.

1. Your current software is more trouble than it’s worth to keep up.

When you’ve engineered workarounds or just kept the same old software for a long time, it becomes more and more difficult to stay up to date without taking up a lot of developer time. This occurs as a byproduct of the  technical debt  that accrues when development teams take shortcuts and create patches for software that’s not quite the right fit.

Not all technical debt is avoidable, nor is all of it bad; often it simply occurs as a result of making choices that benefit or serve an organization in the short term out of expediency or cost-savings. With some concessions and/or some developer elbow grease, an out-of-the-box solution may save you headaches and funds for a while, but not unlike credit card debt it grows exponentially over time””and it ends up being more expensive in the long run. 

When it requires multiple disparate systems that aren’t well connected to meet your business needs, it’s probably time for a custom application. We often consult with business leaders that will begin to explain their current system with “It used to work, but…” and then list the many symptoms of technical debt, such as slow or buggy performance, or inflexible code that needs to be entirely rewritten to achieve modern functionality. If that sounds familiar, it’s probably time to think about building your own.

2. Your business has outgrown your current solution.

Even packaged software that works well isn’t always in your financial best interest. If you’ve grown to a scale where your consumption rate is no longer cost-effective (such as with software operating on a licensing model), a custom application is probably a better alternative. 

Growth chart

While enterprise plans for large companies may come with some measure of customization, there is often a tipping point where custom development is not only a more economical solution, but it gives you the finesse and functionality that an organization of large size needs to improve productivity and streamline processes.

3. Custom software can offer you a significant competitive advantage.

A customer-facing application that delivers a poor experience is a liability, as is an internal application that measurably impedes your company’s ability to deliver. Competitive companies are agile. They pivot quickly and are able to innovate. If your software does not allow you to adapt, that is a strong indicator that you may need a custom application.

On target darts

A good litmus test here is to consider the role of software in your organization: 

  • Software that merely supports your business is often best bought off-the-shelf. It may not have all the features you’d love in an ideal world, but it’s likely good enough.
  • If software is your business, or it’s absolutely critical to your business’s ability to deliver on your offering, we recommend a custom solution that you own yourself. Rather than being subject to the whims of other companies and their development cycles, you can be confident that feature updates, stability, and configuration are all entirely under your control. 

In custom software development, as in all areas of business, there are tradeoffs. While a custom application can give you all the functionality you’d like, it’s more expensive to build and maintain. And while packaged software is often more straightforward and affordable up front, it’s limited in scope and may contribute to substantial technical debt and greater costs over time.

Custom Software and Off-the-Shelf Software: Get an Expert Opinion

Whatever your choice, it’s important to consult with a development firm that brings years of expertise and your best interests to the table. At MercuryWorks, we build mission-critical applications that stand the test of time by addressing our clients’ immediate needs with an eye towards future growth. Working with you in an advisory capacity, we can help get to the root of your problem and make recommendations appropriate for the scope and scale of your business.

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