I’ve recently had several discussions about business software, which can solve specific problems in various industries, such as eCommerce shops and airport shuttle booking software. I was surprised by the amount of resources many small and medium-sized business owners are willing to spend on building customized software tools.
Businesses have two main options when it comes to software solutions: custom-built or out-of-the-box. Custom-built software is designed and developed specifically for a business and purpose, while out-of-the-box software is a ready-made solution that is sold and resold to many businesses in the same industry.
While both options have their advantages and disadvantages, the choice ultimately depends on the specific needs and goals of the business. However, they also need to consider their experience, expertise, and resources available for managing a software build. Let’s explore some pros and cons of custom-built and out-of-the-box software and discuss which option might be right for your business.
Custom-built Software
Pros:
- Tailored to the needs of the business and can cater to specific nuances of the business’s way of working and their unique value proposition.
- Provides a competitive advantage by offering unique features not available to competitors.
- The business has full control over the software, including features, functionality, and maintenance.
Cons:
- Developing custom-built software can be time-consuming and expensive, taking resources away from other areas of the business.
- Your business may not have the experience or resources to manage the build of custom software well to achieve the desired outcomes.
- Custom-built software often starts from zero. All base functions have to be created from scratch, adding to the implementation cost.
- Requires constant maintenance and updates, as new requirements and changes in business processes arise and as technology changes.
Out-of-the-Box Software
Pros:
- More affordable and can be quickly set up, allowing smaller and medium businesses to allocate resources to other areas of their business.
- Made by domain experts and designed to cover the basics as well as future functions you may not even use, yet. Industry best practices and customer experience research would have gone into creating a well-developed product over a significant amount of time.
- Typically user-friendly, requires little to no training for employees, and it is maintained and updated by the creator of the software.
Cons:
- May not be tailored to the specific needs of the business, and integration with the rest of the business is a major consideration when choosing a provider.
- Not unique to the business, meaning competitors may have access to the same software and features.
- The business may have limited control over the software, including features, functionality, and maintenance.
Which Option is Right for Your Business?
The choice between custom-built and out-of-the-box software ultimately depends on the specific needs and goals of the business. If your business has complex processes that require unique software solutions, custom-built software may be the best option. On the other hand, you need to ask the question where those complex processes arise from. Do they ultimately service the purpose and mission of your business, or do they themselves need to be reviewed and aligned with industry best practices.
A business that shares the most common requirements of the industry and differentiates itself not through software features, but unique offerings and services, may benefit more from out-of-the-box software to quickly deploy a solution without getting into the software development business.
It’s essential to weigh the pros and cons of each option and consider the specific requirements of your business before making a decision. Additionally, consulting with an independent expert is always a good idea to determine which option is best for your business.
Ultimately, making an informed choice and putting a well-integrated software solution at the centre of your business activity usually delivers a step toward increased productivity and growth, and a better experience for your customers and staff.