Custom Software: Expectations vs Reality for Businesses (pt. 1)

Deciding what software to run your business on is one of the most important technology decisions you will make. Sometimes during this process, it can feel like there are very few good options to pick from. Having custom software built for your business has its perks, though pitfalls can complicate things; however, this can be said of commercial software too. In this three-part series I will discuss:

  • The differences between Commercial and Custom Software
  • The differences between Configuration, Customization, & Integration
  • And finally Total Cost of Ownership

How to tell Commercial from Custom Software

Commercial Off the Shelf Software, or COTS, is a term that refers to software that has been developed and refined for resale. These commercial platforms are designed to accomplish specific tasks within their area of expertise and are often built to be somewhat generic. By generic, I mean that they can span many different industries and verticals of customers. As a result, these platforms can sometimes do many things that you do not require for your business, but they support other industries that also use the software. Some COTS platforms may allow customization through scripting or integrating while others may only allow configuration of predefined functionality. Some of the reason you would lean towards this approach include:
  • If you have seen a product that follows best practices and general market strategies to drive results
  • If you have a strict budget
  • If you have shorter timelines that cannot be extended
  • If you pre-built features direct from the vendor
COTS software comes in many different packages today. The most popular of which is Software as a Service or SaaS. SaaS platforms are web-based applications that you subscribe to, and which host your data on their servers.

What is Custom Developed Software?

Custom Software is software that was developed for your unique use case and specifications. It involves hiring developers/software engineers, architects, user experience (UX) analysts, project managers, and more, to build a solution from scratch. Some of the reasons you would lean towards this approach include:
  • If you have exhausted all COTS options and found nothing suits your business and user requirements
  • You have strict workflows that cannot be altered nor adapted to fit existing systems
  • You have found suitable COTS solutions, but the amount of “customization” required is cost prohibitive
  • You require complete control over customization
Depending on your business model and budget, you may decide that hiring a software development company with all these resources has a better ROI than hiring employees directly. Building a detailed design specification that explicitly outlines all the functionality, workflows, and the user interface is crucial to a successful project to ensure you get what you are asking for. While this will be much more time-intensive than most COTS solutions, the result will be tailor-made to your business.

Commercial Software Pros & Cons

  • Meets general needs of business
  • Shorter implementation timelines
  • Easier to research based on other user experiences
  • Sometimes requires changing business processes
  • Dependent on Software Vendor for enhancements/new features

Custom Software Pros & Cons

  • Meets exact needs of business
  • You own the source code
  • You can work with any developer/firm
  • Provides a competitive advantage due to uniqueness
  • Longer implementation timelines
  • Scope can easily creep and expand


In Part II, I will discuss the differences between Configuration, Customization, and Integration when talking about COTS and Custom Software.

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