Is Customized Software Development Really The Most Expensive Option?

Many assume that customized software development is the most expensive option when a business needs a new app. Here’s why that assumption could be wrong.

About Customized Software Development

Custom software (sometimes called bespoke software or tailor-made software) is software that is specially developed for a business, which takes proprietary ownership of the product when it’s completed. In lieu of customized software development, some companies opt for commercial off-the-shelf (COTS) software, or existing free software, which seems to come with a lower price tag.

Since custom software is developed for a single customer, it can accommodate that customer's particular preferences and expectations. Custom software may be developed in an iterative processes, allowing all nuances and possible hidden risks to be taken into account, including issues which were not mentioned in the original requirement specifications (which, as a rule, are never perfect). In particular, the first phase in the software development process may involve many departments including marketing, engineering, research and development and general management.

Best Uses for Customized Software

Large companies commonly use custom software for critical functions, including management of content inventory, customers, human resources, or otherwise to fill the gaps present in their existing software packages. Often such software is legacy software, developed before COTS or free software packages offering the required functionality became available.

More and more businesses are now leveraging Software as a Service (SaaS) or Platform as a Service (PaaS) offerings, where customization/development cost is low and where there is no upfront cost but charges depend on the length and amount of use.

When Customized Software Becomes the Least Expensive Option

Custom software development is often considered expensive compared to off-the-shelf solutions or products. This can be true if we’re talking about typical challenges and typical solutions. However, it is not always true.

Actually, custom software is usually the preferred choice for automating various business processes.The COTS packaged software intended to handle similar operations is not all that cheap and one size really does not fit all. It will have many features you want, but not all -- and it will be missing some that you need. In many cases, COTS software requires customization to correctly support the buyer's operations.

Updates and modifications to COTS software will cost even more, and you will not be able to define which changes to make. You can only request modifications from the service provider who owns the packaged software, and depending how much your business is worth to them, they may or may not agree to do them.

Customized software development can certainly take time, including securing the right professionals for all the different roles needed; Business Analyst, UI/UX designer, Technical Architect, Project Manager, Developer, and QA Tester. One way to shortcut that recruitment process is to build a distributed team using a nearshore staff augmentation firm, where you still direct the project, but a dedicated team of developers is there, in line with your specifications.

The cost and delay of COTS customization can oftentimes exceed the expense of developing custom software, especially if you see it on an amortized basis.

With customized software there’s longer term value

Annually renewing subscriptions, maintenance and other fees will add a lot more to the cost of COTS over time. It’s like the difference between paying rent and paying a mortgage on an asset you own.

Another hidden expense to using COTS is that your own operations staff will require special training for off-the-shelf products, whereas custom software does not require as much formal training because it’s designed to be completely integrated in the processes you’re already running.

Even more to compare

In addition to annual subscription fees, COTS comes with upfront license costs which vary enormously, but sometimes run into the millions of dollars. Furthermore, the big software houses that release COTS products revamp their product very frequently. Thus  if you’ve had a particular customization done, it may need to be upgraded for compatibility every two to four years. Given the cost of customization, such upgrades also turn out to be expensive, as a dedicated product release cycle will have to be earmarked for them.

When you create your custom software, you only pay for the development of your own set of requirements. Even more importantly, you own all the assets including the source code, and you can add new features or modify existing functionality as you want. Whereas with packaged software, you purchase only the ability to use the functions provided by the software but not the source code.

So, the expensiveness of custom software is relative.

Learn what’s possible with customized software

A good custom software development team can come up with a great solution if you just share a basic idea with them. You don’t have to exactly know the technicalities or functionalities of the solution before consulting with a software house. This is the task of the software business analyst, to understand your needs and propose the best possible solution for it. Your ultimate job is just to find a capable company.

If you think Jobsity may be a good fit for your needs, contact us and let’s discuss what you’re trying to build for your company. If we’re not the right fit, we can refer you to another quality firm that does what you need.

Nov 05, 2018