Skip to main content

Implementing new technology in your business is never an easy thing.  Some technology is inherently easier to deploy than others, but all software projects require commitment and resources to be successful.  One of the decisions people face when implementing new systems is whether to go with a packaged software system versus custom software.  The additional trend of software as a service can make this choice even more complicated.

In the past when I have researched this topic, I usually have no trouble finding articles trying to sway me one way or another.  This guide is designed to be an objective look at the pros and cons of out-of-the-box software vs. custom software.

Custom Software

When we refer to custom software, we are talking about a system that is tailor made for your organization from the ground up.  It is one of a kind and unique to your business.

Pros

  • You can get exactly what you want.
  • You have total, or near-total control over what the product looks like.
  • Typically, the ROI is higher since the product is tailored to your company.
  • Future customization is easier, since it is a custom product.
  • It can grow with you, start out with basic features and add more as you go along.
  • Change it whenever you want.

Cons

  • The up-front cost tends to be higher.
  • The delivery time is usually slower since it has to be built.
  • User support is usually more limited since there is nobody else that uses it.
  • Scalability can be a challenge if not thought through in the beginning.
  • Might be fewer vendors who can support it.
  • You need to be able to direct the development path.

Packaged Software

Pros

  • Usually faster to deploy. Install, train, and use.
  • Lower up front cost most of the time.
  • Less interaction with vendors is required.
  • Larger support community, or vendor support.
  • Normally has more formal training resources available.

Cons

  • You get what’s in the box, usually not much flexibility.
  • You may end up paying for features you are not using.
  • User buy-in can be more challenging, as they were not part of the design process.
  • Limited ability to change and adapt the system.
  • You are locked into the vendor’s development cycle.

Making the Choice

Choosing between custom software and packaged software can be challenging.  Many times, I see clients shy from custom solutions because they are not “tech people” or they think it is to expensive.  At the same time, I also see companies spend a lot of money to develop custom solutions that are designed to support a fundamentally inefficient business process.   The choice should be made based on the intersection of ROI and future flexibility.

If you feel like your current process needs to be overhauled, and you are willing and able to get user buy-in to change the way they operate, then packaged software might be a viable option.  Packaged software is typically built on standard or best practices.  When you buy it, you are signing on to do your work the way the system wants you to.  Sometimes that is a good thing.

On the flip side, there are times when your process is locked in, or you need to extend your current system in a unique way.  In these cases, custom software might be a good fit.  Done properly, the development process will get buy in from the users and make them feel like they are helping design the system.  This improves the adoption rate and allows you to extract value quicker.  Finally, since the custom software is made to fit your company perfectly, it is far easier to fet ROI on the system.

Conclusion

Whatever your decision, the most important thing is to get bang for the buck.  Make sure you are actually using the system.  If not, you just end up spending money and getting nothing in return.  Worse, you might even have to call someone like me to do an implementation turnaround, just to get the results you should have gotten the first time around.