In the modern world, various companies can hardly exist without dedicated software applications created for their business needs. To gain and retain the customers’ attention, entrepreneurs must deliver the best products or services by differentiating them from competitors. When it comes to choosing the market strategy and software type deployment, there is some difference between custom software and off-the-shelf software which we are going to discover further.
Elaborate programs such as CRM systems or ERP packages optimize core processes like client interactions or resource management. But they are effective only when their functions meet the company’s requirements. Simply put, fresh e-commerce startups will be confused with complex ERP apps created for transcontinental enterprises and packed with multilayer catalogs or advanced accounting tools. Simultaneously, large companies such as Apple or Microsoft certainly do need such software.
In the article, we want to unveil ready-made and custom software development differences, what are the pros and cons of these programs, and which type will suit your needs.
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Custom Software VS Packaged Software Ideas
First of all, let’s read through definitions and key features of both examples. Without a proper understanding of terms, it will be difficult to realize the difference between custom software and off-the-shelf software or get pros and cons. Thus, be sure to look at our simple yet comprehensive explanations!
What Is Custom Software?
This type is also known as bespoke soft, tailored or tailor-made app as it represents the most personalized development approach. To order a customized project, businessmen should contact one of the dedicated teams which are able to create an app according to their needs and wishes exclusively. During the planning stage, the company’s stakeholders can list the most demanded features while developers will analyze the brand and the market to find the best implementation way. Surely, prices are fully quote-base for such projects.
Hence, the key principles of bespoke applications are:
- Fully customizable.
- Include only the features you need.
- Come with lifelong support.
- Costs are different for each client.
What Is Off-the-Shelf Software?
Instead, off-the-shelf (prepackaged, out-of-the-box, ready-made or simply COTS – Commercial Off-the-Shelf) software comes as a finalized sets of functions which customers can start using instantly. Vendors of these applications have certain ready solutions which they sell to all clients directly or with minor customization. Prepackaged solutions are based on best practices, i.e. general market strategies which efficiency and results are proven by various users. However, off-the-shelf apps often don’t fulfill all the requirements of a given project.
Thus, the basic things you should remember about packaged apps are as follows:
- Feature best practices.
- Not always meet needs.
- Have low customization level.
- Prices are fixed.
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Comparing Two Approaches
So far as ideas are more understandable now, let’s begin the battle of custom software VS packaged software. In this section, we will look at principal differences between the mentioned systems as well as their pros and cons. The following info should help if you are unsure about which software it’s better to order for your business.
Distinguish Between Proprietary Software and Off-the-Shelf Software
Here, we will review the major differences between the two software types. As you already know, they feature unequal development approaches which result in different suitability and potential profitability. Basically, if implemented properly, any app can boost your brand but you definitely want to get the maximum possible results. Thus, read what the main difference between pre-written and custom products is plus check minor contrasts.
The most important unlikeness relates to the development process itself. To get things for sure, relax and imagine a regular Starbucks store. Surely, you love it! But today you don’t know what coffee to purchase, so here are two options:
- Get a classic item from the menu. All these old-fashion but still so tasty drunks like Latte, Cappuccino or Macchiato are wonderful if you don’t need extra stuff. Just ask a barista to make the chosen beverage, pay, and enjoy sitting near the window.
- Customize your own beverage. However, if you want something unique, be ready to mix things. You can select milk, add pumps or syrups, try a sweetener, ask for making the coffee less whip etc. Obviously, the ordering process will be a bit longer but you will get exactly what you want, finally.
What’s the catch, you may ask? Well, software is extremely similar to coffee in this case. Customers have an option to choose from ready receipts of applications or contact a developer to add, remove or replace certain functions. It should be clear now that prepackaged software is like a ready-made Frappuccino in Starbucks when a custom app is your unique combination.
But what are other differences? There are five of them.
As we’ve mentioned earlier, bespoke solutions feature a great range of functionality because they can be tailored to almost any tasks. It’s enough to list the wishes so developers can integrate them into the product being created.
Traditional prepared applications feature worse customization. You rarely can ask for adding extra modules or removing unnecessary ones, so be ready to use the platform as it is. Thus, the functionality of ready-made software is less adapted to unique needs.
When it comes to launching the app and reconciling it with the existing products, customized ones win, again. Thanks to real-time interaction with developers and perfect feedback, you can install new applications seamlessly without running current processes or losing core data. And because of high scalability, it will be easier to change software functions as your company grows and expands to new markets.
Off-the-shelf programs are a bit controversial when it comes to integration. On the one hand, they feature intuitive interfaces with pretty high simplicity (especially, if you order a SaaS solution). Nevertheless, such applications are much worse adapted to the unusual needs of businesses. It means that you still have to deploy software which isn’t fully adapted to your processes and can damage essential data or lead to expenses.
3. Support and Maintenance
Developers of tailor-made programs always offer the option of lifelong support and updating of the finished product. Order it, and you will never face costly bugs, system breakdowns or obsolete tools inefficient under new conditions. With bespoke apps, you will always have contact with a dedicated support team.
Out-of-the-box systems also come with solid maintenance/support options. So far as there are a lot of clients using the same product, the support centers have to work fine to keep the vendor’s reputation high. Still, it’s possible that developers will forget about regular updates or fail to fix something. Also, all further updates come for an extra price.
4. Time Expenses
Probably, this is the only point where off-the-shelf apps win. The problem with custom software is that it takes some time to be created and adapted to your wishes. Providers try to speed up processes using Agile iterations and MVP demo versions with which you can check the most basic functions. However, the final product still takes at least a few months to be deployed.
Prepackaged apps are way simpler. All you need to get a program is to open a vendor’s website and choose among listed options with different pricing and features. Deployment and training stages take several days, so you will get a fully functional system in less than a week. It’s impressive, huh?
5. Money Expenses
Here, it’s important to consider not only the initial price but the total cost of ownership. For bespoke apps which have pretty high starting costs and low operating expenses, the TCO is also lower. Simply, you only have to pay a high price for the product but then developers and engineers will handle a lot of costly issues like bugs or extensions.
Instead, packaged software features moderate initial costs with numerous extra paid services. These apps come with time/user subscriptions, so you must pay each month or year for each user. Moreover, further upgrades, support services, and customization options will feature extra costs, so the TCO will be higher.
In-House Software VS Off-the-Shelf Pros and Cons
While each manager or CEO defines the exact pros and cons of the chosen software independently, there are some universal points valid for most of the industries. Undoubtedly, each use case is different, so you always should make extra research in addition to our guides. Ensure that you and your stakeholders clearly realize the team’s needs, short-term and long-term goals, potential risks, and budget limits.
A complete picture of requirements facilitates the process of choosing and custom development because clients can find the best ready-made offer or share their ideas with dedicated authors. Strengths and weaknesses listed below should act as auxiliary points to entrepreneurs’ own visions.
Nonetheless, if you are beginning a completely new project or just aren’t sure in requirements, custom developers can help by conducting BI research. It’s wonderful for fresh businesses as analysis clarify the market conditions and even can provide insights on further strategies. Don’t neglect BI services if partners offer them.
Custom Apps Advantages
- Fully adapted to your needs. Right as the category’s name says, custom solutions come as unique packages where only you decide which modules and functions to integrate. Thus, you receive a perfectly tailored application for any needs.
- Can be easily scaled and upgraded. Moreover, this software is wonderful when it comes to the company’s growth. With custom apps, it’s possible to request additional updates regularly to keep the best functionality even with new requirements.
- Don’t disrupt existing processes. Thanks to constant communication with software vendors, managers can adapt the implementation process to current conditions. Good customized apps integrate into the working system without breaking core procedures.
- Have great instant support. Again, contact with developers helps getting in-time support. Despite this difference between pre-written and customized software is quite minor, custom vendors deliver lifelong support and maintenance with a more personalized approach.
- Provide total ownership. Ordering a product, you can choose the form of ownership. But even if developers create a SaaS app which isn’t fully controlled by your employees, you don’t have to pay license fees typical for out-of-the-box apps.
Custom Apps Drawbacks
- Feature high initial expenses. Usually, most of all costs are included in the first contract, so you should prepare huge investments at once. It’s important to note that they will pay off later because final versions of products don’t have fees or extra operation expenses.
- Creation takes some time. Because vendors create a piece of software exclusively, they require time. Exact frames vary between a few weeks to years as it all depends on the complexity and demanded tools.
- There are no proven results. The same reason from the previous point is responsible for uncertainty. When packaged apps utilize best practices, custom alternatives are unique. You have to test them to reveal the usefulness, so consider ordering MVP first.
Ready Apps Advantages
- Installation is quick and simple. Prepackaged solutions are ready to install from the very beginning. You can contact a vendor, order the desired feature set, wait a day or two, and get the app installed and ready to use.
- Easier and cheaper training. So far as developers sell their products for several clients, they have user guides and implementation plans which simplify and speed up training stages. Your employees will understand how things work faster.
- Community support. Big famous companies deliver solutions to hundreds of companies across the world, so there are a lot of users ready to help you with a certain issue. Look for topical forums or websites dedicated to the implemented app.
Ready Apps Drawbacks
- Come with redundant or insufficient functions. The most crucial difference between custom software and off-the-shelf software is in their functionality. The latter rarely meets all your needs because apps are designed for a wide number of customers from different industries.
- Often have compatibility issues. Packaged solutions must be integrated properly but their universality is a big problem for unusual businesses. Prepare to face existing processes’ breaks and extra money/time losses.
- Customization is impossible or expensive. To begin with, not all vendors allow modifying their products, so customers have to use exactly what they received. But even if customization is possible, it will come with great prices.
- May include hidden costs. Despite ready-made applications have lower initial costs, they add more and more over time. Training, support, maintenance, extensions, new modules – everything from this list multiplies the final price.
- No competitive advantage. Last but not least, off-the-shelf software examples are available for any company. Unlike bespoke apps which are delivered to a single client exclusively, these products can be already implemented by your market rivals.
Use Cases for Both Software Types
Finally, let’s look at how apps work. We will briefly cover the most famous examples of both types to check who is the winner in the battle of custom software VS packaged software. Of course, the next lists aren’t exhaustive, so you may want to find more use cases to decide which software category is the best.
Here, let’s look at some solutions developed and successfully implemented by our experts. So far as we specialize in commercial software for different market sectors, there are mostly CRM and ERP applications:
- BenefitNet and FSA. Powerful automated tools for insurers and employers to manage their employees’ benefits and insurance plans.
- InsuBiz. A similar platform which is focused on underwriters and end users who want to control their insurance schemes, choose and modify packages, and deliver better offers.
- Teambase. An elaborate HRMS for managers who want to empower their work related to payrolls management, data processing, benefits administration, recruitment, and training.
All projects were developed using an Agile approach with several iterations, MVP deployment, tests, and performance analysis. Clients were asked to pay a quote-based price without additional costs. As a result, we’ve built strong partner relations because of personal responsibility for quality and on-time delivery.
Off-the-Shelf Software Examples
Put simply, packaged applications surround us everywhere. This text is created thanks to Microsoft Word 2010 which is, you guessed it, a nice example of ready-made program. Precisely, the entire Microsoft Office set is an out-of-the-box example because it’s delivered to thousands and thousands of customers without modifications. Anybody can open the Microsoft website, purchase the package, and download it.
Commercial (COTS) and governmental (GOTS) software also often come as pre-written solutions. Already mentioned ERP and CRM systems created by Oracle, Sage or Salesforce feature several sets with different modules and prices but they’re still fixed and barely customizable. Moreover, nearly all games are prepackaged. Operating systems, antivirus programs, media players – a lot of everyday solutions come as off-the-shelf.
Thus, they’re wonderful for traditional tasks and daily usage but not as good for business tasks, especially, exotic ones.
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The Main Difference Between Pre-Written and Customized Software
Summarizing it all, let’s remind how apps differ and what’s important to know before ordering any given app. The main difference is focused on features. With customized tools, you can get almost anything you want in terms of functional modules plus a proper business analysis of your company. Ordering an off-the-shelf app, you will receive a predefined set of features with low customization level.
Hence, remember the key point of the whole article: you always have to learn everything about your business perfectly. It may happen that you don’t need any software at all or need an extremely simple solution. Probably, you work in a giant corporation which wants to get the most complex software possible. It’s always up to your needs. Respectively, you should a type of software based on these insights and plans.