As businesses grow, they often find that they invest in a wider range of software solutions to help them maintain their operations. This could be everything from Enterprise Resource Planning (ERP) solutions, Customer Relationship Management (CRM) platforms, or various sales pipeline tools.

However, while each of these software solutions serves its purpose, at some point, most businesses reach a point where they need to decide if their next piece of technology is purchased off-the-shelf or custom-made.

Both formats have their range of pros and cons, and there’s no right or wrong answer when deciding a path forward. Below are a few points to consider, however, to ensure you’re choosing the best option for your business.

What are Off-the-Shelf Software Solutions?

Off-the-shelf software solutions are often the first stop for most businesses looking to upgrade their systems or introduce new tools into their organization. There is a wide range of these options available, both in an on-premise format and cloud-based.

Although not all of these tools are designed for a specific category of business, most organizations can find off-the-shelf software that fits the majority of their needs, even if they don’t necessarily need every feature or benefit they offer.

By far, one of the best benefits of an off-the-shelf solution is both its affordability and accessibility. Most third-party tools and applications come with scalable subscription plans and are ready to use right away. This can be a great option for smaller businesses that want to scale their capabilities while keeping their budgets in check.

Disadvantages of Using Third-Party Software

Although third-party software solutions are convenient to use and have an affordable price point out of the gate, there are certain disadvantages to keep in mind, especially as your business grows more reliant on them long-term:

• Limited Customization: Despite many software solutions coming loaded with different features and benefits, many times these solutions are rigid and won’t allow you to customize them too much. This can be quite restrictive for some companies and doesn’t really allow them to maximize the solution’s value.

• Dependent on Supplier's Schedule: When you use widely available software, you are at the mercy of the vendor's development timelines for future updates and fixes to the software. This can be an issue for businesses that require specific changes or improvements in order to get the best use out of their investment.

• Vendor Dependency: Migrating to new software can also be difficult. Many vendors have contracts that make it hard for businesses to switch providers without incurring financial penalties. This can mean businesses are locked into using certain products longer than they’d prefer to.

Considerations When Designing Your Own Solution

Instead of needing to absorb the disadvantages of off-the-shelf solutions, having your own custom-built software can come with a wide range of benefits. For starters, businesses have full control over every feature and function the solution has. Instead of paying for software that only does a percentage of what a business would like, they can design a solution from the ground up to function exactly as needed.

Of course, this level of customization does come with much higher upfront costs. Depending on the size of the business and the nature of the software, building a custom solution can be a significant financial undertaking. Some customer software projects can range from a few thousand dollars to hundreds of thousands.

The good thing, however, is that while the upfront spending is much higher when designing your own solution, they’re typically built to support more scalability. The longer the company uses the solutions, the better the ROI and the more efficient use of business resources.

How To Decide Between Buying and Building Your Next Software Solution

Before deciding on whether or not your business wants to stick with third-party solutions or create your own custom software, there are a few important things to consider:

Consider Your Short- and Long-Term Requirements

When you choose your next software solution, you want to make sure it not only meets all your business requirements now, but also in the future. Take the time to outline your primary objectives with the new implementation and make a checklist of important features it needs to have.
Very rarely do third-party solutions have “all” the features you need, but that may not be a deal breaker. By having all your short and long-term requirements ironed out ahead of time, you’ll be able to decide what the right course is for the business.

Know Where Your Company is Strong

While it might be tempting to jump headfirst into a custom development project, it’s important to know what your strengths and weaknesses are. No different than considering a DIY home renovation project, you want to make sure you have the skills and capabilities necessary before you start knocking down walls.

Take the time to assess your organization's current situation and decide if the timing is right. If your teams are already at full capacity or don’t have the necessary resources to support a major project, it might be better to stick with the software solutions you currently have.

Separate Needs and Wants

Whenever you’re looking for a new software solution, it's essential to distinguish between your "must-have" features and your "nice-to-have" features. While some level of compromise is often needed in either direction, choosing a solution that lacks any essential functionality can negatively impact your business operations.

Be Sure To Have a Clear Budget in Mind

A key difference between off-the-shelf and custom-built options lies in how costs are structured. This is really important to keep in mind when you’re trying to decide on a realistic budget for your software needs.

It’s important to remember that custom software projects don’t always have a clear price tag. Just like in home renovation projects, things can come up unexpectedly during the build that could mean you need to spend more than you were expecting.

Keep this in mind when you’re trying to settle on a budget that works best for you.

Choose the Right Solution for Your Business

When you’re considering your new software integrations, it’s important to weigh the pros and cons of sticking with third parties or designing your own solution. By following some of the points discussed, you’ll ensure you’re choosing wisely and get a finished product that allows you to extract the most value from your investment.

Author Information

Author Name: Dalip Jaggi

Author Bio:

Entrepreneur, technologist, and passionate business leader sum up the core of Dalip Jaggi, co-founder of Revive Real Estate, a PropTech company with a goal to democratize house flipping. Since its 2020 inception, Revive has become the smartest solution for homeowners across the nation to maximize their home’s value.