Buy Standart Software or Get Custom Software?

Buy Standart Software or Get Custom Software?

Software is an indispensable part of modern business activities. No matter what industry software plays an essential role. Internally, software relieves employees, for example in enterprise resource planning (ERP) tasks. Externally deployed software can look very different and play an important factor in generating growth

Before introducing a new software into the business, it should be weighed whether an existing software should be purchased or the development of an own software is more reasonable.

In this article we will discuss different factors that companies should consider before making this important decision, in order to make the right choice for their next investment in software solution.

Maximizing Performance of Everyday Work Processes

The main task of business software is always to take over, or simplify, processes through digitization. So the top priority is to ensure that software and processes are perfectly aligned to ensure the greatest effectiveness.

If the required software is intended for the application of ERP processes, such as accounting, invoicing, or other recurring tasks, this can easily be taken over by existing software. The processes are usually processed in the same way regardless of the company.

If a standard software does not match the required processes 100%, it is the users who have to adapt their processes and behaviors to it. This is frustrating and can lead to rejection. The company may suffer from reduced performance or even lose customers to competitors. 

It is especially important with standardized software that business owners allocate more time for acceptance and familiarization of employees with the new software. After getting used to the system, standart software can still lead to an increase in performance.

Unique Processes Require Customized Solutions

Of course, employees can get used to any software after some time, but there are work processes that must not be changed under any circumstances. To maintain and digitize these processes, individual software solutions are required.

For interdisciplinary collaboration in projects, the use of standard software is usually not suitable. The various departments work with different processes.These must be linked with each other in order to work effectively. These individual adjustments are only possible with customized software.

Individual software allows each company to improve its own work processes. This distinguishes them from competitors and can lead to a competitive advantage.

Restrictions and Licenses

In terms of usage licensing, the two software models differ significantly from each other. When purchasing software, the inheritor only acquires the right to use it. This becomes an obstacle, since no adjustments can be made. If there are changes in the environment, such as legal amendments, social trends or technical progress, the buyer is dependent on the action of the provider.
If the vendor does not adapt the software to the changes, the company may suffer severe performance losses.

Depending on the company developing the custom software, buyers either have exclusive rights to use the software, which differentiates them from their competitors, or they receive complete ownership of the software. This allows them to make any changes they need to be effective and perform well.

Cost analysis

If you only compare the purchase price of standard software and individual software, the standard variant initially appears to be cheaper.

However, standart software is now often sold on a subscription basis. This means that you have to pay monthly or annually for the use of the software.

In the long run, this can be very expensive. Due to the lack of flexibility, no modifications can be made, and after a short period of time, new software must be purchased. Individual software, on the other hand, can be easily customized and is therefore more sustainable.

What to Consider with the Costs?

It has already been discussed that companies are dependent on software providers when it comes to modifications. Another vendor lock-in is that the transition to a new system is not supported by many standard software programs. Data cannot be transferred completely. In the worst case, the data remains stored on the external clouds and cannot be accessed or secured. Companies with custom software do not experience these problems. All data is stored on their own servers and can only be accessed by those in authority.

Criteria Must Be Prioritized

First of all, it should be determined what the goal of the new software should be. what is it supposed to do and which functions are important? Criteria for this are costs, time, availability, quality and risks. If these were considered they must be divided into priorities. This can look as follows:  

Must Have – Function is absolutely necessary

Should Have – The function should ideally be included

Could Have – The function can be included if the budget is sufficient

Key Questions for Decision-Making

For the decision, whether a software should be bought or individually developed, the following questions should be answered and weighed.

Costs and Time 

Like any commercial application, software incurs costs. Costs to set up, secure, monitor and update.

How much money does it cost to develop my software from scratch? ans what is the cost of purchasing existing software? In this case, the long term should be included if required.

When does the software need to be ready for use and how much time does the development take to provide the desired functions?

Availability and Flexibility

Which of the required functions does a standard software contain? Which functions are missing or lead to an adaptation of the processes by the users?

How flexible should the software be? Are there any predictable environmental changes?

Quality and Risks

There is a special security demand for software to prevent hacker attacks. Therefore, there must be an ongoing security concept that is continuously updated.

Are the security and quality checks performed often enough for my purposes, or can they be adjusted?

Where is the company data stored? 

Is it possible to transfer the data completely after a change in the software system, or does data even remain on the external servers?

Buy or Create?

In summary, the following can be said:

To decide whether to buy or develop software, depends on many factors. In general, standard software is very suitable for recurring processes in everyday work. In addition, it is quickly available and inexpensive to purchase. However, standard software often comes in a subscription model, which can become very costly in the long run. Furthermore, no modifications can be made and entrepreneurs may encounter difficulties when switching to a new system.

Customized software is often more sustainable despite the expense and time involved. This is because it can be individually tailored to enterprises and processes. Security gaps can be closed more easily and security and auditing systems can be adapted to the company’s requirements. These factors lead to maximum effectiveness Performance enhancement through business software.

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