Running a business is hard work. One of the many challenges for any company is choosing what kind of software they need or want to use. This guide will answer the most common “build vs buy” software questions and help you decide whether custom or off-the-shelf software would be best for your business goals.

Choosing between building and buying software

There are a number of key factors that need to be considered when choosing between custom and off-the-shelf software. These include budgets, timelines, technical skill levels, expertise in your business domain, level of control over the new solution desired, team capacity and project planning needed.

One deciding factor is whether you would like to have a unique product for your company or if you would prefer a standardized solution that may already exist for your industry. For example an insurance company may not want a standard quote taking tool but rather a specific quoting system for their own internal use. Whereas an online retailer such as Amazon might want this type of quote-taking functionality from an off-the-shelf product so they can focus elsewhere on aspects customized to their brand.

How can the pros and cons of custom and off-the-shelf software be weighted?

When considering the advantages and disadvantages of each solution it is important to weigh them against budget, time constraints as well as your team’s capacity. A company may choose a custom product because they need extra functionality that an off-the-shelf software solution may not provide. But, this could delay the project if there is no internal expertise available to build their customized solution.

By choosing a prebuilt application you may lose some control over how it looks or functions. But, if the timeline is tight then this might be more expedient than building it from scratch. It is important to understand what business needs are being met by choosing a custom or off-the-shelf product and then to build the solution that is most appropriate for your current situation.

What are the costs of building software? Will this cause additional expenses in the future?

• Costs include hiring an in-house development team according to project size or using outsourcing services.
• Implementation costs, including training and time spent by employees who will be using the software will need to be estimated.
• There will be ongoing maintenance costs to keep up with technology changes and updates.
• Potential for a lack of compatibility with other systems within your company or industry can create additional implementation costs down the line.

Custom software will typically cost more than off-the-shelf solutions. Unless you have a large budget for your computer system, this option may not be realistic for most companies.

What are the costs of purchasing off-the-shelf software?

• The initial purchase price is typically higher because it must cover all development costs instead of only covering ongoing operating expenses. In addition, customization of a specific feature often incurs an extra charge.
• Implementation costs are typically lower when purchasing, because it already includes training and ongoing support, which can range from minimal to extensive depending on the product you purchase.
• The long-term costs for off-the-shelf software depend on the product you choose. Some products have lower upfront costs, but higher maintenance costs over time. Others have a higher upfront cost, but lower maintenance costs over time. It is important to carefully compare products and read the fine print before making a purchase.

Ask yourself a question: How much maintenance will I need?

Some software is never touched, like the code that runs the server that serves web pages for instance. Others, such as data analysis tools or games, often need to be updated and maintained.
The more maintenance required, the greater your risk – you will need experts who can maintain it and make sure they don’t break anything vital. With custom solutions, this expertise is yours already (since you had to build it) and with off-the-shelf software you pay extra for updates and fixes when problems arise.
What about security?

Reliability means how long a system keeps working before something goes wrong. Perhaps an update no longer works correctly or your hardware fails in some way. If there’s a problem, how easy is it to fix?

Standard software updates can sometimes cause problems. You might have a great working system then learning the new version is going to take time, or your support contract may no longer cover errors caused by out-of-date libraries. For that reason alone, off-the-shelf solutions are not always ideal. – you’re tied into using whatever they provide. If this fails you’re potentially up a creek without a paddle unless there’s money in the bank for an emergency upgrade. With custom software solutions, you make sure everything works as it should before going live because bugs will never be added at a later date.

That said, if your needs change and your software can’t adapt to suit them, developing software on your own will always be the only option.

Is off-the-shelf software scalable? How does this scale with my business’s needs and overall budget?

Off-the-shelf software is generally not scalable. It is often created for a specific purpose or set of users, and it may not be able to grow with your business’s needs. Building your own software, on the other hand, can be scaled to fit your exact needs. This makes it a more cost-effective option in the long run, as you will not need to upgrade or change your software as your business grows.

What are the risks associated with custom software development?

• Risks associated with any software solution, such as cost overruns, missed deadlines, and poor quality.
• An additional risk that arises from custom development is that it may not meet user requirements or be compatible with existing systems.
• There is also a risk that the company does not have the expertise in-house to develop and maintain custom software.

And the risks associated with purchasing software

When you purchase custom software instead of building your own, there is no requirement that your needs be met or that you will receive what you expect. Additionally, because this type of work typically involves working with independent contractors rather than full-time employees, there may be difficulty in ensuring quality control. Finally, even if the product meets your expectations today, it may not meet your future requirements as they change over time. This can leave you stuck using outdated technology.

• Loss of future development flexibility due to high reliance on one product can lead to higher upgrade costs if upgrades are needed in the future
• Lack of integration with other software may limit data sharing and collaboration.
• Inability to customize off-the-shelf software to fit specific business needs
• Vendor lock-in, which can make it difficult or impossible to switch to a different vendor’s product in the future

What additional training will my staff need if I choose custom software?

If you decide to create custom software, employees will likely need extensive training to learn how to use this new system. They may also require assistance from outside sources if they have not worked with similar products. If you choose off-the-shelf software, your team members already know how to use these types of tools and won’t need any special training before using them for their everyday work duties. Also the off-the-shelf product already may include training (as stated above)

Will custom and off-the-shelf software be compatible with my current set of business tools? Or does it require an entirely new suite of tools?

This depends on the type of software you are using. Generally, custom software is more compatible with other systems because it is specifically designed to meet your needs. Off-the-shelf software may require you to purchase new tools or to make significant changes to your existing infrastructure.

3 considerations you should make before deciding whether to “build vs. buy” software

Determine the scope of your project

Software that is specific to your business and its needs can be more costly and time-consuming to build than off-the-shelf software. But, it will also likely be more tailored to your specific needs. If you have a smaller project or if you need software that is not overly complex, buying an off-the-shelf solution may be the better option.

Consider your budget

Building software from scratch can be expensive, especially if you need custom features or if you need to hire a developer or team of developers to build it for you. Off-the-shelf software is typically much more affordable, and in some cases, you may even be able to find free software options.

Evaluate your needs

If you have a complex or unique need that is not met by off-the-shelf software, then building software may be the best option. However, if your needs are relatively simple, buying off-the-shelf software may be a better choice. Ultimately, the decision comes down to what is most important to you – cost, complexity, or customization.

When making the “build vs buy software” decision, you need to weigh all of the potential impacts it will have on your business‘s long-term growth. Custom software development will require more time and resources upfront, but can provide a number of benefits, such as increased flexibility, better fit to your specific needs, and easier integration with existing systems. However, off-the-shelf software is typically much cheaper and easier to deploy, and may already include additional features that meet your needs. You’ll need to carefully consider all of your business requirements before making a decision.