What Are the Advantages and Disadvantages of Building Custom Software?

If you’ve made it here, you probably want to know more about custom software, and you might have some of the same questions we’ve heard from others over the years. What is custom software? What are its advantages and disadvantages? What are the alternatives and when is custom software the obvious choice?

As head of our software solutions team, I speak to hundreds of clients every year who are considering a custom software solution for the first time, and here are some of the things I tell them.

What Do We Mean by Custom Software?

Like all software, custom software is built to perform a task. Custom software differs from off-the-shelf software because it’s been specifically designed, developed and tested to perform your task in the way that you do it. With custom software, the software adapts to you, versus you having to adapt your business process to how the software functions.

When you’re entering the market for custom software, you might be replacing a turnkey solution that your organization has outgrown, developing a new application to take to market, or replacing an aging legacy system. No matter what your reason, you should know your options.

What Are the Alternatives?

When you need software, you will typically find yourself evaluating solutions that fall within the following three categories:

• Turnkey Software Products. With turnkey products, you buy and setup the product and it’s ready to use almost immediately with minimal configuration or customization. You learn the software, then map and adapt your processes to work with the out-of-the-box solution. When you find functional or feature gaps in the software, you supplement with manual processes, spreadsheets, or additional software to take care of the rest.
• Platforms. Platforms differ from Turnkey Products in that they offer moderate to significant customization capabilities. Due to the time and effort needed to explore, configure and customize the solution for use, platforms typically have higher upfront costs than turnkey solutions. They take longer to get up-and-running, but their flexibility may mean a better fit for your business and can grow and evolve with your needs.
• Custom Software. Custom software is designed, engineered and constructed specifically to your specifications. This gives you complete control over its functionality, configurability, look & feel, and overall user experience so that it fits your unique business or personal requirements. Custom software minimizes the need for manual processing, spreadsheets and other workarounds since it can be modified and extended as new requirements arise.

Is Custom Software Right for You?

Custom software might be right for you if what you are looking for doesn’t seem to exist or if you’ve tried and failed with turnkey software products. Additionally, if you are looking to bring a new software product to market, then you’re going to want to design and own the software yourself. Whatever your reason, custom software offers some real benefits like:

• Lower ongoing costs/no per-user licensing fees
• No limitations on design, functionality, or extensibility
• Ability to market or license the product
• Creates a unique and proprietary asset if you plan to sell your business
• Provides the ultimate flexibility and control that comes with ownership

Potential Disadvantages of Custom Software

Custom software isn’t for everyone. That’s why it’s important to find the right development firm to support you with design and implementation. Smaller organizations with tighter budgets may find the per-user licensing rates of turnkey or platform solutions easier to pay than the upfront costs or time required to develop custom software.

Custom software may not be right for you if:

• You can’t make a large upfront financial commitment to build the software.
• You aren’t prepared to maintain and upkeep the custom software after its built
• You can’t wait three to six months for the software to be

We often suggest clients consider the 80/20 Rule when evaluating options. If a turnkey product or platform solution can support 80%+ of your needed features, then it may be difficult to justify the need for custom software. In these scenarios, a hybrid solution may be the right fit where you use a product or platform to cover the majority of your features and build custom software extensions or integrations to cover the gaps.

What’s Next?

Like everything in life, custom software presents both pros and cons. How they weigh in the software decisions for your business and its needs will be determined by your goals and resources.

In our downloadable checklist, What to Consider When Creating Great Software, we lay out some questions you’ll encounter when you’re deciding whether to pursue custom software. Our objective is to help you make an informed decision that’s right for you.