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To Build or to Buy. Confused about off-the-shelf vs custom software solutions?
By Rhyn Potgieter
As a CTO or Head of Engineering, you may find yourself in a scenario where you’re asked to provide a digital solution to help sell and service a new service offering that will give your business a competitive edge in the market. You have two potential choices, build a custom software solution or buy an off-the-shelf product?
We explore the pros and cons of build vs buy in this article.
Benefits of Off-the-Shelf: Quick and (Hopefully) Cheaper 🙂
Off-the-shelf software often makes sense, especially for standard business functions like accounting (e.g. Xero), project management (e.g. M365), or CRM systems (e.g. Salesforce). The upfront investment is typically lower because the product’s development expenses are absorbed across many paying users and these types of product solutions can often be implemented quickly. Support is also generally readily available through a product support desk or user communities.
This does however come with trade-offs. You might find yourself adapting your business processes to fit the software product, rather than the other way around. This could mean that you have features included in the product that you don’t need or, more critically, you’re lacking features critical to your business functions and workflow. Scalability can also be a concern; a rigid off-the-shelf solution might not keep pace with your business’s growth or evolution.
When Custom Software Solutions Shine
Custom software is designed to precisely match your unique business requirements and workflow. While this means a larger initial investment and a longer development timeline, the long-term benefits can be substantial.
“We believe that we need to own and control the primary technologies behind the products we make and participate only in markets where we can make a significant contribution.” – Tim Cook, CEO Apple
So, when do custom software solutions pay off?
1. Unique Business Requirements
If your company has highly specialised processes or a unique service offering that provides a competitive advantage, forcing it into a generic software package might not be beneficial. For instance, a logistics company planning to use a sophisticated, proprietary routing algorithm to optimise routes and save costs would likely need a custom system to incorporate this unique advantage. It’s about leveraging what makes your company unique.
2. Complex Integration Needs
Many businesses use a variety of software tools. If a new system needs to communicate seamlessly with multiple existing, perhaps older, internal systems, an off-the-shelf solution might offer limited or cumbersome integration options, potentially leading to errors and inefficiencies. A custom solution can be designed with these integrations in mind from the outset.
3. Scalability is Crucial
If you anticipate significant growth or changes to your business model, a custom solution offers greater flexibility. Off-the-shelf software can have limitations on users, data volume, or feature additions. Custom software, especially with a modular design, allows you to add features or modify existing ones as your business evolves.
4. Seeking a Long-Term Competitive Advantage
Sometimes, the software itself is the competitive advantage. Think of Amazon’s logistics platform or Netflix’s recommendation engine – these are not off-the-shelf products. Custom software solutions can help you develop unique tools or services that competitors can’t easily replicate.
5. Specific Security or Compliance Requirements
Sectors like healthcare and finance have stringent data security and compliance regulations (e.g., POPIA or GDPR). While some off-the-shelf solutions cater to these industries, they might not cover all specific nuances of your business or local laws. Custom software allows you to build in the precise security protocols and compliance features needed.
Our Advice – Pragmatism is Key
Choosing custom software development is a significant undertaking. It requires a clear understanding of your needs, a realistic budget, and a strong development partner. However, if your business has specific requirements that off-the-shelf software cannot meet, or if you’re looking for software that could make your business more efficient and can give you an edge over your competitors, then choosing to build custom software is a significant but worthwhile decision.
The goal isn’t to choose custom software solutions for its own sake, but to carefully analyse your requirements, strategy and financials to determine if a generic solution will hinder your success or if you need something custom tailored to achieve your business goals.
Need a software solution as unique as your business?
Webtonic builds custom digital products designed to give you a competitive edge and engage your users effectively.
Take the next step. Get in touch with our team to start building your new solution!
