Off-the-Shelf vs. Custom Software: Making the Right Choice for Your Business

Custom Software vs. Off-the-Shelf Software

Growing companies invest in enterprise software solutions to simplify their business processes and fulfill the needs and objectives of their organizations. When you plan to implement a business software, you will face the perennial question of whether to “build or buy” the required solution. Obviously, your decision is going to impact the growth and success of your business.

To choose between build and buy, you need to understand the differences between custom software (build) and commercial off-the-shelf software (buy).

Custom software is made only for one company, tailored to its needs; off-the-shelf software is a ready solution that has been developed for use by numerous businesses sharing common interests and standardized processes.

It’s important to make a comparative assessment between custom software and off-the-shelf solutions in terms of ownership, development time, cost, performance, business suitability, availability of support, and scalability before deciding to invest in any of the two approaches.

What is Custom Software Development?

Custom software development is the process of designing, developing, testing, and deploying software that caters to a specific set of users, processes, and unique business requirements. Also known as bespoke or tailored software development, it’s focused on defined requirements and enables you to achieve a competitive edge by fulfilling your unique business needs.

Custom Software: Development Process

Once you’ve identified that your unique requirements definitely warrant a custom build, you need to decide how you’re going to make it happen. There are two options: either build the new solution in-house with the teams you have, or outsource the work to a specialist custom software development partner.

By outsourcing your custom software development project to an external partner, you will not only save costs, but also give your team more capacity to focus on their core competencies. Assuming you’ve decided to outsource development, it now makes sense to explore the major steps involved in a typical custom software development process.

Six Steps in Custom Software Development Process

Identify Your Requirements

Choose Your Development Partner

Plan Your Project

Develop & Implement The Solution

Testing & Quality Assurance

Post Launch Maintenance

#1Identify Your Requirements

Have a good idea of the main objective you’re trying to achieve. Whether it’s addressing a customer pain point or creating a whole new experience that will change how customers interact with your company, make sure you can define this as clearly as possible. This helps potential software development outsourcing partners to elaborate on how they will help you to achieve it.

Consider these factors when identifying your exact requirement:

What KPIs do you expect the custom software to hit
Time and budget required for developing the solution
Inputs from internal stakeholders who will be impacted the change
Research and set realistic expectations with respect to the software’s capabilities and outcomes
Think about your existing systems, what integrations you might need or what technical skills will be required during development

#2Choose Your Development Partner

The best custom software development partner works collaboratively with you throughout the entire software development process, making incremental changes that allows the solution to become the best it can be.

A good custom software development partner:

Excels in all areas of programming, understands your goal from a business perspective, and creates the required functionalities to achieve it
Uses Agile methodology that brings you closer to the incremental development process and allows high quality solutions to be delivered faster and more flexibly
Never compromises on the software’s quality, functionality, performance, security, and testing by trying to win on cost
Avoids becoming stagnant by embracing continuous learning and adopting cutting-edge tools and state-of-the-art technologies
Has a diverse experience with a wide-ranging client roster and portfolio that makes them highly reliable and credible
Demonstrates operational compatibility by minimizing language and time zone barriers as much as possible
Shares similar performance standards, values, and working practices as that of yours for maximum efficiency (culture fit)
Follows a proven software implementation and post launch model that covers successful validation, maintenance, training, and optimization
Retains long-standing client relationships by valuing collaboration, delivering high quality solutions, and providing ongoing technical support

#3Plan Your Project

Once you’ve identified your software development partner, put together a flawless project plan that stays as close to your timeframe and budget as possible – all while producing the highest quality final output.

Key considerations to prepare a detailed and flexible project plan:

Count the complexity and unique challenges of custom software development
Make room to accommodate changes and decision-points that cannot be predicted beforehand
Support incremental development, regular updates, and continuous feedback as the solution takes shape
Create an initial brief to guide the development process that gives everyone a clear target to aim for, solidifies expectations, and acts as a continuous point of reference
The project brief should include well defined, measurable, and crystal clear goals and objectives that precisely explains what you need the solution to achieve from a business perspective
Set realistic expectations by prioritizing the ideas and features in your brief to determine which are must-haves and which are nice-to-haves
Try to define the Minimal Viable Product (MVP) with just enough features outlined to satisfy early adopting customers, so you can get feedback for future improvements and additions
Consider any industry laws and regulations that your software development partner needs to adhere to, so you don’t run into any breaches down the line

#4Develop & Implement Your Solution

Although your software is not developed in-house, it’s useful to have some basic knowledge on the development process from the point of view of your software development partner.

Knowing the basics of software development methods like Agile will allow you to:

A brief overview of Agile software development methodology:

Agile is a flexible, iterative approach to software development that prioritizes collaboration, rapid prototyping, and continuous improvement. An agile software development team:

Six Steps In Agile Software Development Cycle

1. Concept

2. Inception

3. Iteration/ Construction

4. Release

5. Production

6. Retirement

Agile Software Development Cycle

#5Testing & Quality Assurance

Acceptance Test Driven Development (ATDD) is one of today’s most efficient and user-centric approaches to testing software. This approach takes on the end user’s perspective to validate functionalities and brings benefits to the solution owner, development team, and the end user.

Knowing the basics of software development methods like Agile will allow you to:

STEPS INVOLVED IN A TYPICAL ATDD PROCESS

1. Create Tests

Create tests based on business cases, conditions, and functionality limitations

2. Run Tests

Tests are run to failure, to prove the required features don’t exist already and the tests themselves aren’t faulty

3. Write Code

Developers write the code by understanding what criteria should be met in order to pass testing

4. Test Code

The new code is tested against defined cases to analyze failures and make adjustments required

5. Refactor Code

After passing all tests, the code is cleaned up to meet quality standards

Benefits of Acceptance Test Driven Development:

#6Post Launch Maintenance

Launching your custom software solution is just the beginning. It’s important to add continuous iterations that optimize the software, ensure its compatibility with other IT systems, fix bugs, and improve the user experience.

Key considerations during the post launch phase:

Establish a clear channel of communication and invite continuous feedback from both internal and external users
Utilize the feedback to maintain and improve your product
Discover unexpected compatibility issues or find new ways to extend the life of the solution
Evaluate continuously to uncover the need for a new functionality you never considered
Compare the solution’s performance, usability, and features by referring to your defined KPIs, goals, and expectations
Determine if the development company you worked with were a good fit
Ask your project managers to evaluate the project processes, technologies used, team members, and overall functionality and performance of the solution
Understand how well the entire project went from start to finish
Be self-critical when analyzing the performance of your internal teams, as this gives you the opportunity to learn and improve

Pros and Cons of Custom Software

Is Custom Software the Right Choice for your Business?

PROS

Features tailored to your exact needs
Fully compatible with your business ecosystem
Adapts and scales to meet your growing business needs
Robust security features
Offers you a distinct edge over competitors
Easy to embrace the latest technology
No additional/ hidden licensing costs (pre-defined terms)
Complete ownership and rights to the software and IP
Full control over customization, scale, and functionality

CONS

Could be a higher initial investment
Results in blown budgets and missed deadlines when the project goes into wrong hands
Ongoing support and maintenance may or may not be included in the partner’s plan
Requires more time and collaboration from key stakeholders and super users
Takes time and effort to develop
Success depends on the software development company’s reputation, knowledge, and experience

Who Should Use Custom Software?

When should you consider building the required software? Here are some of the most frequent use cases of custom software development:

You are running a highly complex and specific business that calls for a unique software with tailored functionality
You need tech capabilities to integrate multiple pieces of software used to perform various business functions
You need to reduce the growing software overheads, such as third-party licenses and subscription costs
You want a finished solution that’s easy for your employees or customers to use with minimal training
Your organization has dynamic workflows that may undergo changes frequently
You want to replace legacy software and upgrade your IT infrastructure with a modern, automated, cutting-edge software
You need an adaptive software application that scales with your business requirements
You need to enhance and establish your brand by personalizing customer journeys

Cost of Custom Software

Custom software development is a smart investment that allows your business to reap benefits in the long run. The actual cost of custom software development is lower than the cost of switching from one ready-made software to another. Custom software saves you from several additional expenses, such as subscription charges and software license fees imposed by off-the-shelf software sellers.

Factors that influence custom software development cost:

Number of features and the level of complexity and sophistication of the application
Geographical location and size of the outsourcing development team
Choice of technology, programming languages, custom UI and UX design, licenses, etc.
Technology expertise of the team - if you need developers with special expertise, that will also add to the price
Choice of the target platform where you are going to deploy the software
Your product's target demographic segments as well as the app's complexity
Custom integrations required with existing systems or third-party platforms
Migration costs to move your data from an older system to the new software
Cost of continuous maintenance and ongoing support
Different types of testing required to ensure the reliability and intuitiveness of your application

Examples of Custom Software

Businesses embracing custom software development have successfully built new capabilities on top of their existing enterprise applications. Companies across various industrial segments are leveraging custom software solutions to meet their unique requirements at a competitive cost, modernize back-end and legacy applications, and deliver better digital experiences for their customers and employees.

Custom Software Success Stories from 10 Different Industry Segments

Here are some of the top custom software solutions delivered by Fingent to our clients.

1. e-Commerce Procurement

Fingent assisted Kogland, a leading B2B supplier of medical equipment and consumables, to upgrade and transform their online marketplace. The newly customized B2B ecommerce platform makes healthcare procurement easy and fast for Kogland.

Standardized pricing without the involvement of middlemen
200% increase in web traffic from targeted customers
50% increase in conversions

2. Transportation Management

Texas-based Cheetah Transportation Systems leveraged Fingent’s custom software development services to implement a personalized transportation management system. The new system allows Cheetah’s customers to view their order status in real-time and access up-to-date shipping data. With a customized software solution, Cheetah re-imagined their logistics and supply chain operations:

Streamlined and accelerated ordering, tracking, and delivery processes
Cut licensing and subscription costs by eliminating complex third-party software integrations
30% improvement in Turn Around Time (TAT)
40% time-saving attained through automated tasks and real-time reporting

3. Real Estate & Property Management

SimpleRent, the custom SaaS-based property management software developed by Fingent is helping its owner Ben Sealey and many other realtors to overcome day-to-day complexities in managing properties, tenants, payments, maintenance, and complaints.

Simplified the software for property managers and tenants
Eased the handling of maintenance requests and complaints
60% time savings through automation
3-4% reduction in rent collection service charges

4. Healthcare

Fingent deployed a custom data visualization solution for the performance analysis of hospitals in England. The solution comprehends data from the NHS network to gauge hospital performance, including key metrics. It provides users with interactive, visual graphs linked across multiple disciplines, and detailed analysis of performance measured against key parameters.

Shows financial, clinical, and geographical information
Highlights key performance issues and indicators
Customizable dashboards for individual requirements
Real-time access to vital health information

5. Law Firms

Fingent developed a custom Artificial Intelligence software to enhance and expedite the tasks involved in processing workers’ compensation claims. The software, known as Ambit AI, employs Optical Character Recognition (OCR) and AI for smart data extraction and leverages contextual analysis to extract meaningful insights from larger datasets.

Enables legal attorneys to quickly validate workers’ compensation claims
50% decline in claim cycle time and associated personnel costs
57% cost-drop for the insurers, carriers, and claim admins
Average case settlement time reduced to 1-2 days

6. Education

Educational establishments face challenges related to managing credit hours in a time-efficient way. We helped our client develop a pioneering approach – a customizable course mapping & pivoting application – for addressing compliance issues related to educational programs and also helped them render learning requirements in a simple and comprehensive manner.

High scalability and integration capabilities leveraging web, cloud, and mobile
Anytime, anywhere access to data through secured user profiles
LTI integration – Interoperability with other education platforms
60% reduction in cost and effort spent on course management

7. Financial Services

AEC Advisors, an investment banking and corporate finance advisory firm based out of New York, experienced business transformation with a customized survey management cum analytics and reporting software developed by Fingent.

Ability to create and circulate customized surveys prior to the yearly conference held by AEC Advisors
Quickly generate KPI reports based on survey responses
Secure, scalable, and flexible IT architecture to address AEC’s specific needs
Make it convenient for AEC’s clients to securely share complex financial information

8. Manufacturing

A custom order management application for a manufacturer who builds customized sheds for growing families needing more space! That’s the story of Lakeside Cabins, headquartered in Ohio. The manufacturer collaborated with us to build an in-house software customized to support the different stages of their building processes. Fingent created a personalized, flexible, easy-to-maintain, and scalable order management software with the following features:

Custom-built 3D configurator that allows customers to configure building designs, generate floor plans and invoices, and reduce human errors
Integrated modules to manage CRM, dealers, sales orders, purchase orders, work orders, and route-optimized delivery schedules

9. Travel

We developed a customized native Android mobile app for a real-time safety measurement and rating platform that enables travelers to gauge their personal safety level at any moment, from anywhere.

Highly sophisticated analytical engine to provide recommendations to users
Data from trusted sources and crowd-sourced reports are integrated with smart, data-driven, statistical algorithms
Delivery of personalized and quantifiable travel security content
Improved consumer outreach with marketing assistance

10. People Development

Artificial intelligence offers a sound solution to personalize learning for each individual, while not compromising the learning goals. Skill Lake, a customizable people development platform built by Fingent, leverages AI and ML to facilitate continuous and personalized learning for organizational training providers.

Personalized course recommendations and learning content for users
Discovery of relevant content promotes learner engagement
Customized learning paths, mentoring, and competency mapping

What is Off-the-Shelf Software?

Commercial off-the-shelf software solutions are standardized and generalized applications built for the mass market. Off-the-shelf applications come pre-packaged with a bundle of generic features and cannot be deeply personalized for specific uses by a business.

Commercial software solutions offer a one-size-fits-all approach that fails to address specific business cases. They provide a set of standard features which can’t be customized to handle your unique needs. This is where custom software comes into play.

Pros and Cons of Off-the-Shelf Software

PROS

Designed for quick installation and use
Low upfront costs
Regular upgrades in terms of features
Enjoys wider adoption among users
Easy to get online reviews and feedback before buying the software
Access to community support

CONS

Not designed to meet all of your business requirements
Additional costs needed for software customization
Includes several features that you don’t require
Lacks many features that you desperately need
Rigid and difficult to modify
Limited scope for integration with other software pieces
Compatibility issues
Same software is available to many of your competitors

Who Can Use Off-the-Shelf Software?

Off-the-shelf software is more suitable for small and mid-sized companies that are looking for a cost-effective option with only the basic features to get their job done.

What kind of businesses can opt for off-the-shelf software?

Companies that can manage day-to-day operations with a generalized software solution
Those who need to get started with a working software right away
Small companies with limited budget allocations for IT requirements
Startups with no immediate plans for mass-scaling
Companies that don’t want to integrate the commercial software with their existing systems or third-party apps

Cost of Off-the-Shelf Software

Off-the-shelf software offers a very cost-effective and low risk option for small businesses with lower budgets.

What kind of businesses can opt for off-the-shelf software?

The software provider’s operational costs are split between many clients
Users need to choose a subscription model, likely with per user/per month pricing, based on the provider’s pricing plan
Price structures of license fees vary depending on the vendor
You will end up paying for several unwanted capabilities offered as part of the commercial package
In certain cases, you may even need to hire expensive implementation partners for installation, setup, and integration of the new software with your existing applications
Lack of differentiation between you and your competitors could diminish your competitive advantage
Lack of interoperability between a pre-built solution and existing systems can increase your customization costs

Examples of Off-the-Shelf Software

Off-the-shelf software solutions are characterized by ease-of-use, accessibility, a set of comprehensive features, and an upfront price tag. Some of the popular examples include:

Mail services, such as Gmail, Outlook, Zoho Mail, etc.
Video telephony software programs, such as Microsoft Teams, Zoom, Skype, etc.
Operating systems, such as Microsoft Windows, Linux, MacOS, etc.
Accounting software packages, such as QuickBooks, Xero, ZohoBooks, etc.
Photo-editing programs, such as Adobe Photoshop, Affinity Photo, Pixlr, etc.
Media player software like Windows Media Player, VLC, KMPLayer, etc.
CRM software, such as Salesforce, Odoo, MS Dynamics, etc.

Differences Between Custom Software and Off-the-Shelf Software

Every business is unique in terms of their nature, way of operation, and size. So are the problems faced by each business. Pre-packaged off-the-shelf-software solutions are not sufficient to handle the unique challenges affecting each business. For example, some companies want an application to manage their e-commerce delivery and fulfillment, while some require a solution for data analysis or workflow automation.

Here’s a quick comparison of custom software vs. off-the-shelf solutions that will help you choose the right option:

Evaluation Criteria	Custom Software	Off-the-Shelf Software
Features and Functionalities	Exclusive feature list customized to your specific needs	Standard set of features built for the mass market
Development Time	Long development process, but a guaranteed investment for a profitable future	Faster to implement with the vendor’s support
Development Cost	Requires significant upfront investment, but the costs will pay off in the long run	Moderately priced, but forces the user to pay for unwanted software features
Support and Maintenance	Software is fully supported and maintained by your outsourcing partner	Risk of unplanned downtimes, support will be based on the vendor’s terms and conditions
Compliance to Business	Built to comply with your organization’s ecosystem and standards	Requires a high level of customization and extra components to function
Third-party Integration	Enables seamless integration with compatible external apps	Inherently inflexible, doesn’t support deep customizations or integrations
Scalability	Highly scalable and adaptable to your future business requirements	Time-consuming and costly customizations needed to address the rising needs
Data Security	Highly resistant to cyber infiltrations, tested thoroughly at each stage of development	Vulnerable to cyber attacks and software glitches

Evaluation Criteria	Custom Software	Off-the-Shelf Software
Features and Functionalities	Exclusive feature list customized to your specific needs	Standard set of features built for the mass market
Development Time	Long development process, but a guaranteed investment for a profitable future	Faster to implement with the vendor’s support
Development Cost	Requires significant upfront investment, but the costs will pay off in the long run	Moderately priced, but forces the user to pay for unwanted software features
Support and Maintenance	Software is fully supported and maintained by your outsourcing partner	Risk of unplanned downtimes, support will be based on the vendor’s terms and conditions
Compliance to Business	Built to comply with your organization’s ecosystem and standards	Requires a high level of customization and extra components to function
Third-party Integration	Enables seamless integration with compatible external apps	Inherently inflexible, doesn’t support deep customizations or integrations
Scalability	Highly scalable and adaptable to your future business requirements	Time-consuming and costly customizations needed to address the rising needs
Data Security	Highly resistant to cyber infiltrations, tested thoroughly at each stage of development	Vulnerable to cyber attacks and software glitches

How Can Fingent Help?

Fingent’s end-to-end custom software development process is tailored to meet our clients’ business needs, challenges, and goals. We help turn your ideas into tangible deliverables with maximum business proficiency. Let it be anything – web and mobile app development, cloud migration, enterprise software, modernization of legacy systems, or SaaS development – we offer innovative and reliable software solutions that will delight your customers, simplify your team’s job, and help your business scale.

What makes Fingent your ideal custom software development partner?

We truly understand your business’s needs, wants, and any applicable constraints
We take a conscious effort to bring our expertise to your business problem or opportunity
Proven track record - ample experience in solving complex business problems with customized solutions
We help you accomplish a fine balance between quality and affordability
A highly experienced software engineering and project management team that understands the dynamics and intricacies of your business
Resources, knowledge, and expertise to make your custom software solution possible and effective
A firm focus on developing long-term solutions that will be readily available for updates, fixes and expansions when required

“We don’t simply initiate your project. We step into your shoes and understand your business landscape to give you the most purposeful solution.”

Dileep Jacob

SVP-Operations, Fingent

Our custom software development experience spans across multiple industries and advanced tech, including data analytics, augmented and virtual reality applications, artificial intelligence, robotic process automation, internet of things, cloud, mobile, and more. We follow an impeccable workflow and a set of best practices to foster structured software development and reduce the cost of your business operations.