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Custom Software • Build vs Buy
By Envision 360 • • Quick read

Custom Software vs Off-the-Shelf: How to Decide

Most businesses should buy most of their software. The skill is knowing which one or two things to build.

Start by assuming you should buy

Off-the-shelf software is cheaper to start, faster to turn on, and someone else maintains it. For payroll, email, accounting and most of what a business runs on, that is the right call. Nobody wins customers because of their payroll system.

The question is not whether custom is better. It is which parts of your business are worth owning.

Buy the work that is the same everywhere

If thousands of companies do a task the same way you do, a product already exists that does it well. Martin Fowler describes this as utility work: it has to function, but doing it better than your competitors earns you nothing.

Signs you should buy:

  • You could describe the process to a stranger in your industry and they would nod.
  • You are willing to change how you work to fit the tool.
  • The data does not need to connect tightly to anything unusual.

Build the work that sets you apart

Some of your processes are the reason customers pick you. How you quote. How you schedule crews. How you handle an order that does not fit the standard path. Forcing those into a generic tool usually means spreadsheets on the side and staff working around the system.

A commercial kitchen equipment maker we worked with had a quoting process no product handled. A sales rep needed two to three days to turn a site visit into a quote. A custom configure, price and quote app brought that under an hour within three months. That is strategic work, and it was worth owning. Read the case study.

Start here:

  • List the three processes customers would notice if you did them badly.
  • For each one, ask if your current software fits it or if people work around it.
  • The ones with workarounds are your candidates to build.

Watch for the real cost of buying

The subscription is not the whole price. The United States government's own technology guide warns that off-the-shelf products often need heavy customization to fit, and that the customization can cost more than the product.

Four costs to check before you sign:

  • Per-user pricing. It is small at 10 users and large at 200.
  • Customization. Consultants configuring a platform is still a software project.
  • Workarounds. Time your staff spend moving data between tools by hand.
  • Leaving. How you get your data out if the product stops fitting.
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Watch for the real cost of building

Custom software has its own bill. You pay for the build, and then you own it: hosting, security updates, fixes and improvements. It also takes longer. A focused first release is typically 6 to 12 weeks, where a subscription is live this afternoon.

Build only when the process is important enough to keep paying attention to.

The middle path most businesses take

It is rarely all one or all the other. The common pattern is to buy the standard systems and build a thin layer on top that does the one thing those systems cannot.

A family-owned retailer with 12 stores kept its core systems and added a unified platform across point of sale and ERP, plus a loyalty app. Inventory accuracy rose to 97.2 percent. Read the case study.

A five-minute test

  1. Is this process a reason customers choose you? If no, buy.
  2. Does an existing product fit it without workarounds? If yes, buy.
  3. Will per-user fees or customization outgrow the cost of building within a few years? If yes, look at building.
  4. Can you commit to owning it after launch? If no, buy.

Next step: if one process keeps coming up as the exception, talk it through with us. We will tell you plainly if a product already solves it.

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References

  1. 18F De-risking Guide: custom versus off-the-shelf software trade-offs: Link
  2. Martin Fowler: utility versus strategic software: Link
  3. Envision 360 case study: sales spec app for a commercial kitchen equipment manufacturer: Link
  4. Envision 360 case study: unified retail platform: Link