Is custom software development worth the investment?

Custom software costs more upfront than off-the-shelf alternatives. For many organizations that cost is justified. For others it is not. This article explains when custom software development delivers a strong return on investment and when it does not.

When custom software makes financial sense

Custom software is worth the investment when one or more of the following conditions are true:

  • Your process is a competitive advantage. If the way you operate is what sets you apart from competitors, building software around that process protects it. Off-the-shelf software forces you to work the way your vendor designed it, which means working the same way as every other company using that product.

  • You are paying for features you do not use. Enterprise SaaS products charge for capabilities built for the broadest possible market. If you are using 20% of a platform and paying for 100% of it, the economics of custom software improve significantly over a three to five year horizon.

  • You have an integration problem. Many organizations run on a combination of systems that do not talk to each other. Custom software, or a custom API layer, can connect those systems and eliminate the manual work of moving data between them.

  • You have outgrown your current system. Systems built for a smaller version of your business eventually become constraints. Custom software can be designed to scale with your growth rather than forcing a migration every few years.

When off-the-shelf is the better choice

Custom software is not always the right answer. If your needs are well-served by an existing product, buying is faster and cheaper than building. We will tell you that directly if it applies to your situation. We have done it before.

The clearest signal that off-the-shelf is the right choice is when your process matches what the product does. If you need accounting software, buy accounting software. The market for general business tools is mature and competitive.

How to think about the cost

The upfront cost of custom software is real. So is the ongoing cost of a system that does not fit, of manual workarounds, of data that lives in three different places, and of a competitive process that anyone can replicate by buying the same product you use.

The right comparison is not custom software versus the license cost of an off-the-shelf product. It is custom software versus the total cost of the alternative, including implementation, customization, integration work, training, and the cost of the limitations you accept.

What you can expect from Volare Software

We work on 3 to 12 month engagements with teams of one to five developers. We give you a range estimate after a discovery call and we commit to the monthly team cost. You can scale the team up or down and you can pause the engagement if your priorities change.

Contact us for a no-obligation discovery call, or read more about our custom software development services.