When your business has a software need, your options can basically be boiled down to three possibilities: You can 1) buy it “off the shelf,” 2) have a developer build it made-to-order, or 3) do a blend of both.
Kind of like pizza when you think about it. You can grab a frozen one, or order one specifying a crazy number of preferences, or tear open that frozen version and jazz it up so it’s more to your liking.
Of course, the stakes are a lot higher for your software. But the pizza analogy is still helpful. In fact, we’ll break down these three “pizzas” below, and in the process give you a better way to decide whether to buy, build, or blend your next software application.
Buy: Off the shelf and into the oven
Sometimes a frozen pizza hits the spot for everyone in your family. And, wow, that pizza aisle has an ever-expanding plethora of choices! Not only is the frozen pizza easy to make, it also gives you the time you need to finish the laundry and that report due the next day for work.
Similarly, off-the-shelf software could meet a business need without a lot of upfront engineering effort. Just be aware that you or a developer will likely still need to do some integration work, typically with historical data from existing systems like your ERP. Also, installing the software may require subtle configurations so it fits with your business as well as possible.
Sure, every business is unique to an extent, which can make it challenging to bring home the perfect frozen pizza, er, software.
On the other hand, the abundance of niche enterprise software available is mind-blowing. There may indeed be a pre-made software solution waiting for you. Here are just a few examples of what’s out there:
- ALMobile, a time tracking and payroll software for construction companies
- Mindbody, a booking software for health, wellness, and beauty professionals
- IBM Maximo, an enterprise asset management software
- Jira Software, a tool specifically made for software developers
But there are trade-offs with the convenience of off-the-shelf software. The simple fact is that buying software isn’t ideal for picky eaters. You might need to modify some of your most beloved business processes to benefit from a solution where all you need to do is “preheat oven.”
Buying might be right for you if:
- You know there’s an industry standard software that can seamlessly meet your business requirements.
- You want to establish or improve a business process but aren’t ready for the higher initial cost of a custom solution.
- You can make an off-the-shelf software work for you with a few modifications or add-ons.
Build: Made to order for the choosiest
Now imagine a gourmet pizza baked outdoors in a Naples-style oven with ingredients grown right on the premises. Even better, you have an attentive waiter and an extra-accommodating chef working hard to deliver a culinary experience fulfilling all your idiosyncratic pizza desires.
Think of custom-built software as that pizza. Your organization can keep its processes in place while your made-to-order software delivers super-precise capabilities.
Just to be clear, custom software is rarely 100% from scratch anymore. Existing frameworks and libraries enable developers to efficiently establish a foundation. Then the customization efforts really kick in as the developer builds functions just for you.
Yes, custom software lets you control the software features you have with an incredible level of specificity. But be aware that it can be a big commitment and requires working with a developer with exceptional technical chops. The last thing you want is to lose capabilities and have your performance suffer with a drawn-out project that hurts more than it helps.
Consider the build option if:
- You want complete control of the features provided because they’re so specific.
- You’re beginning to resent your subscription costs because you’re consistently disappointed in the software’s performance.
- You realize you just can’t find a pre-built solution that does all you want it to.
- Your usual software has been acquired and the new terms are not a good fit for your business.
A build success story
Liquid Freight is a brokerage company that solves logistics challenges for the liquid food-grade community. Always pushing the boundaries for how to better serve its users, the company gradually began to realize a problem: The well-known (and pricey) transportation management software (TMS) it was using was starting to hold it back.
Staff could see they were trying to get the TMS to do things it simply wasn’t designed to do. That’s when they decided on a custom-built software solution.
This kind of story isn’t uncommon on the path to custom software. As company needs evolve, you might find your off-the-shelf software just doesn’t cut it any longer.
For Liquid Freight, custom was the right move. Having its own proprietary software platform has yielded results like these:
- The company saves nearly six figures a year by no longer paying for the off-the-shelf TMS subscription.
- The custom software is paying for itself through increased efficiencies—and new revenue thanks to making the software a commercially available SaaS.
- The carrier community has welcomed that SaaS because it’s a much-needed affordable alternative to options beyond their price range.
For more details on this custom software story, read the full case study here.
Blend: Quirky tastes layered on the tried and true
Let’s grab another frozen pizza, but this time we’re going to make it just for you by, say, doctoring it up with pineapple or another layer of cheese and throwing a handful of fresh herbs on it before eating.
When you take the blend option for your software, you’re doing something similar. You’re not going completely custom. Instead, you’re maintaining what you might consider tried-and-true functionality while also adding modifications that help you meet some newly emerging need.
For instance, think of improving a user portal on your website. Your off-the-shelf tool still works, but it just needs to do some specific processes better. Augmenting it with the help of custom add-ons and integrations—your pineapple and fresh herbs—could do the trick.
The blend option could work well if:
- You have good results with your current off-the-shelf solution but just need more capabilities.
- You figure out that a custom modification and an ongoing software subscription is the sweet spot for your needs and budget.
- You don’t want to lose the efficiencies you’ve worked hard to establish with an off-the-shelf software.
A blended software success story
Filene Research Institute provides its member credit unions cutting-edge research, incubation programs, and advisory services so they can help their own members become financially stronger.
As the organization’s resources grew increasingly vast, Filene staff realized they needed to improve how credit union employees could access those resources. Part of the solution came in the form of a custom authentication system that reflected the specific needs of Filene.
However, what that solution didn’t need was new-fangled email and marketing outreach tools.
That’s because Salesforce and Pardot are well-established services that provided just the right ingredients to complete the solution. By integrating these services with the custom system, Filene is now able to:
- Maintain the value of their research by ensuring members-only access on the Filene website—thanks in part to Salesforce’s email automation.
- Lead a new user through the whole suite of Filene membership benefits with Pardot’s marketing automation tools.
- Leverage custom integration coding to get more from the off-the-shelf tools and provide a more personalized experience for each Filene user.
Check out this deep dive for more details on Filene’s story.
Clearing the air on costs
You may be salivating by now, but you’re also probably thinking about an inevitable concern: Which scenario will end up costing you the most?
We may need to depart from our analogy at this point because, not surprisingly, software scenarios are a lot more complicated than pizza when it comes to pricing. Consider the following table.
KEY COST CONSIDERATIONS
BUY (off-the-shelf, subscription-based software with possible licensing fees as well)
Could be cost-effective if it means lower cost of entry compared to custom.
Even expensive off-the-shelf software could be worth it if it’s really nailing it for you.
Part of your subscription costs can be a team of experts constantly working to keep you satisfied.
It simply isn’t worth it if it’s not really doing what you need it to do.
Having to adapt to the software could hold you back from growth and innovation.
If you subscribe to lots of pricey software or have a bunch of users that require licensing agreements, the long-term expenses can really drain your dollars.
There can be upfront onboarding or installation costs for a system.
BUILD (custom-made software)
A custom software project done right can result in significant long-term savings (like the company mentioned above that’s saving almost six figures a year).
Adding features in the future (if needed) can be done more cost-effectively and can be considered routine capital expenditures.
Working with a developer means larger upfront costs, which will look (and feel) a lot different from scheduled subscription payments and licensing fees.
Estimating the costs will depend on the complexity of your needs and could be challenging to budget for.
BLEND (mix of off-the-shelf and custom-built)
The add-ons or integrations a developer builds may not carry the upfront costs of a full-blown custom project.
You can maintain software subscriptions that are well worth it, while you pay an upfront fee for the custom tweaks—and little to no follow-up costs down the road.
You keep off-the-shelf software because your staff fears change and the custom blend you opt for is more of a band-aid than an innovation.
You maintain a subscription when a fully custom solution could, in the long-run, be much more cost-effective.
What’s the moral here? Whether to buy, build, or blend shouldn’t be driven by a short-sighted focus on price points. You should decide based on your business model and your long-term goals.
Expert insights can be helpful for any pizza
There’s a time and a place for each type of pizza described above. But where do you even begin?
A good developer can help with any and all of these scenarios. Look for one that can provide a preliminary strategy and evaluation project. That’s basically a needs assessment to help determine the best software path for you.
This can involve critical steps like:
- Confirming if buying off-the-shelf software, the simplest option, could meet your needs.
- Identifying significant knowledge gaps prior to, say, a full-blown custom project, thereby saving time and money up front.
- Conducting research to not only make recommendations but also validate those recommendations.
- Clarifying the process and explaining the benefits of a given path in non-technical terms to decision makers.
- Speaking directly with users to understand what’s working great right now and what’s not.
- Reaching a more accurate scope of work for the build or blend option, which reduces your risk and increases stakeholder confidence.