Develop Custom Software or Buy it Commercial Off the Shelf?

By Steve Bungay, Director, Envision IT Group

When it comes to purchasing products for activities such as word processing, spreadsheet or presentation software, it’s not difficult to decide whether we should buy a ‘packaged off the shelf’ product or get one custom developed. The packaged products come with loads of functionality and typically provide more functionality than needed.

It is however not so easy to make this decision when it comes to business applications. Unlike word processing or spreadsheets, a business depends upon these applications. They require customisation and are very difficult to change. Business applications of different shapes, sizes and hues are available ‘Commercial Off the Shelf’. They comprehensively cover almost everything from Accounting to Financial Systems, ERP, CRM etc.

Then why do people need to think and decide on whether or not to develop ‘custom’ applications. This post explains salient points in relation to these two approaches.

Commercial Off The shelf Systems (COFT)

COFT systems are functionally rich and come with almost all the functionality. Typically, depending upon a business type and size, multiple products such as Accounting, ERP, CRM etc. are available to select from.

Cost of COFT implementation is usually not as straight forward like a word processor or a spreadsheet.

Typically, COFT implementation requires a business or gap analysis activity to identify customisation that need be carried out to implement the system.

The system is then ‘configured’ and / or ‘customised’ to suit the business.

Pros of COFT System

1. Short Implementation Time: The COFT systems are usually ready and require only customisation. It usually takes less time when compared to ‘custom development’.
2. Lower Costs: Cost of implementation are usually lower as the work involves ‘customisation’ and not writing the software code.

Cons of COFT System

1. Limited Customisation: The COFT products are functionally rich but the customisation capability is usually limited. There are workarounds to implement business specific processes or the processes must change to suit the product. This adds to process overheads and leads to the next point. Custom changes are usually not possible or may take a long time. It is common for new updates to take months or years or cost huge.
2. Not so Efficient or Productive: Due to workarounds, the systems are not so efficient or productive when compared to ‘custom developed’ applications.
3. Vendor Dependence: The business is entirely dependent on vendor for changes and upgrades. There are ongoing maintenance fee and you need vendor product knowledgeable or certified people to carry out updates. This can add significantly to costs.
4. Scope and Cost Creep: COFT implementations remain as susceptible to Scope and Cost creep as the custom software development does.

Custom Software

As the name suggests, custom software is build on the specific requirements. Typically, custom software offers lesser functionality when compared to COFT systems. It makes up for the lack of functionality by providing all or most needed functionality in an efficient manner.

A comprehensive ‘business analysis’ exercise must happen before a custom system can be made.

Pros of Custom Software

1. Only Option when requirements are unusual: When the requirements are unusual, involves innovation, new ideas and highly efficient systems are needed, custom software is the only option.
2. Intellectual Property and Capital: Custom software creates intellectual property and capital for its owners and establishes them in a leadership position. The same cannot be said about COFT based products as they remain dependent on main product vendors.
3. Highly Efficient Productive: Being custom built, the systems are highly productive and efficient. They map user requirements well and are usually well integrated with other systems.
4. Easy to Maintain and Manage:  The are easy to maintain and manage as usually the organisation or vendors have complete access to system. They can modify the system as needed.
5. Less Vendor Dependence: Product Vendor dependence is minimum. The code changes can be made easily to provide changing requirements.
6. Lesser Ongoing Costs: Generally there are no ongoing royalties as in case of COFT. Also, generic skills can be used for development. This lowers the ongoing costs and offsets higher cost of development.

Cons of Custom Software

1. Higher Initial Cost: In general, initial cost of custom software development is much higher than the COFT implementation.
2. Longer time to implement: It takes longer to implement a Custom Software project than a COFT implementation.
3. Fully functional but not feature rich: As Custom software is designed for specific requirements, it is fully functional. The flip side is, it usually is not as feature rich as a typical COFT.
4. Scope and Cost Creep: Custom software development is as susceptible to Scope and Cost creep as the COFT implementation.

About Envision IT

Based in Melbourne Australia, Envision IT specialises in custom software development. Our methodology delivers projects quicker while enabling incorporation of changing requirements. We therefore deliver our projects WITHIN budgets and timeframe and WITHOUT blowing costs.

The methodology is especially good in ‘software upgrade’ tasks wherein we drastically reduce costs and development time while ensuring no loss of data during the upgrade process.

Our systems are easy to use and renowned for being highly productive, efficient and ultra-low maintenance. For more information visit www.envisionit.com.au or email info@envisionit.com.au