Custom vs off-the-shelf software: which should you pick?

What's the difference between custom and off-the-shelf software?

Off-the-shelf software is made for a large group of customers. Think of an accounting package, a CRM or a planning tool you rent by the month. This is also called SaaS: software as a service, which you use in the browser. You get what the vendor builds, for everyone at once.

Custom software is built for your business. It does exactly what you need, with your steps, your fields and your terms. You pay for the build and then for hosting and maintenance, not per user.

Pros and cons of an off-the-shelf package

An off-the-shelf package has clear strengths:

• You can often start the same day.
• The upfront cost is low; you pay monthly.
• The vendor takes care of updates and security.
• There's often a helpdesk, manual and user community.

But there are also downsides that only show after a while:

• You adapt your way of working to the package, instead of the other way round.
• You pay for features you don't use, and miss features you do need.
• Per-user costs add up as you grow.
• The vendor can raise prices, drop features or shut down.
• Connecting to other systems is limited to what the vendor allows.
• Your data sits with someone else, sometimes outside the EU.

Pros and cons of custom software

Custom software has different strengths:

• It fits your process exactly. No workarounds, no unnecessary screens.
• You can connect it to the systems you already have.
• You don't pay per user, so growth doesn't cost more in licence fees.
• You decide what gets added and when.
• It can give you an edge over competitors: a customer experience others don't offer.

The downsides are real too:

• The initial investment is higher.
• It takes weeks to months before it's ready.
• You depend on a good developer for maintenance.
• You have to think through what you need yourself. That takes time, but it also brings insight.

Custom software cost: how to compare fairly

An off-the-shelf package often looks cheaper because you pay monthly. So compare over three to five years. For the package, count: subscription times number of users, extra modules, integrations and the time staff lose on workarounds. For custom software, count: the build, hosting and maintenance.

Include the hidden costs too. How many hours a week go into retyping data between systems? How many mistakes come from manual work? And how many customers drop out because something can't be done online? Those hours and missed chances are money.

At Violexa, a custom web application starts from €1,799 excl. VAT (€2,177 incl. VAT) per project. Larger projects get a fixed price in writing up front. You'll find a detailed explanation of how the price is built up in how much does a web application cost.

When should you choose custom or off-the-shelf?

A simple rule of thumb: use off-the-shelf software for what everyone does the same way, and custom software for what makes you unique. Try a package for a few weeks first, with real data and real colleagues. You'll soon notice whether it fits, or whether everyone starts working around it with their own lists.

• Choose off-the-shelf for bookkeeping, email, payroll and general office software.
• Choose off-the-shelf if you're just starting out and your process isn't settled yet.
• Choose custom if your process differs from what packages offer, and that difference matters to your customers.
• Choose custom if you currently work with large spreadsheets and loose lists. Also read replacing Excel with software.
• Choose custom if you want to give customers their own environment, such as a customer portal.

The smart middle ground: connect instead of replace

Often the best solution is a combination. You keep your accounting package, but have your own tool built that handles quotes, scheduling or customer data and sends it to your accounts automatically. That way you use the strength of a proven package and fill the gap with custom software.

That connection happens through an API, a fixed way for systems to exchange data. Many modern packages have one. You can also make existing tools work together more cleverly this way; see automating processes for SMEs.

An example. An installation company currently schedules engineers in a shared calendar, writes quotes in a word processor and then retypes everything into its accounting package. Instead of buying three new packages, it has one tool built for quotes and scheduling. A signed quote automatically becomes a job in the schedule, and after the work the invoice goes to the accounts by itself. The accounting package simply stays in use.

A middle ground like this is often quicker and cheaper than replacing everything. And you can always take another step later if it works well.

Five questions to help you decide

• How much of the package do you really use, and what's missing?
• How much time a week goes into working around the package?
• What will the package cost over five years, given the growth you expect?
• How important is this process to your customers and to what sets you apart?
• What happens if the vendor shuts down or doubles the price?

If the answers mostly point to 'the package works fine', stick with it. If they point to frustration, workarounds and rising costs, custom software is worth looking into.

How we help you choose

At Violexa we build custom web applications and software, but we don't always recommend custom work. Sometimes a well-configured off-the-shelf package with a few integrations is the best choice, and then we say so. Read more about how we work in web applications and software.

Want to know what's wisest for you? Book the free quickscan: a 30-minute conversation, online or on site. Afterwards you get short written advice with a price indication, with no obligation.

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