Custom software or off-the-shelf? A practical way to decide
Building your own software can be a competitive advantage or an expensive mistake. Five questions help you tell which one you are looking at.
At some point most growing businesses hit the limits of their tools. The spreadsheet has too many tabs, the software almost does what you need, and someone suggests building your own. Sometimes that is exactly right. Often it is not. These five questions help us give clients an honest answer.
1. Is this process what makes you different?
If the process is the same in every business, such as payroll, accounts or email marketing, buy software. Thousands of companies have already paid for those products to be built and refined. If the process is how you win or keep customers, owning the software that runs it can be a genuine advantage.
2. How much are the workarounds costing?
Add up the time spent working around a tool’s limits: exporting, re-keying, checking and fixing. Multiply by an hourly cost and by a year. That number is your realistic budget ceiling for a custom solution, and it is often more persuasive than any feature list.
3. Can existing tools be connected instead?
Many problems blamed on software are really integration problems. Two good off-the-shelf tools connected properly are often cheaper and better than one custom system. Check this before committing to a full build.
4. Who will look after it?
Custom software needs maintaining: security updates, hosting, small changes as the business evolves. Budget roughly 15 to 20 percent of the build cost per year for upkeep. If that is not realistic, a subscription product may be the safer choice.
5. Can you start small?
The best custom projects start with one painful process, solved well, and grow from there. If a project only makes sense as a large, all-at-once replacement for everything, treat it with caution.
Comparing the two fairly
| Off-the-shelf | Custom | |
|---|---|---|
| Up-front cost | Low | Higher |
| Ongoing cost | Per-user subscription, rising as you grow | Hosting and maintenance, fairly flat |
| Fit to your process | You adapt to the software | The software adapts to you |
| Time to start | Days | Weeks to months |
| Control over the roadmap | None | Complete |
A middle path
Many of our projects sit in between: an off-the-shelf core, such as Shopify or Xero, with a small custom application handling the part that is specific to the business. It keeps costs down while still removing the workarounds.
If you are weighing this up, tell us about the process. We will tell you honestly if an existing product would do the job.
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If this article describes a problem you have, we can probably help. Tell us about it and you will get a straight answer within a working day.
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