The (Real) Pros and Cons of Custom Software Development

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When looking for new business capabilities, people usually start by searching for a ready-made software solution to address their business needs. Custom software development is rarely considered a viable option because it seems overly complicated, too expensive, and people don’t know where to start. With no background in or experience with custom software development, perhaps a custom solution feels out of reach and overwhelming. 

The problem with shelf software solutions is that they can’t address your business’s specific needs. Do you find your employees have to invent workarounds for your software to accommodate edge cases? Unfortunately, having to hack the system adds unnecessary and time-consuming steps to your business processes, usually resulting in frustrated employees and loss of technology adoption.

The all-too-common sentiment that technology doesn’t solve problems, but rather creates them comes from this exact issue — software products that aren’t tailor-made to your company’s needs.

Savvy business leaders who realize their company has unique needs invest in customizing a productized solution anyway. And that ends up costing as much or more than a fully customized solution to begin with.

Custom software development can help you create solutions tailored to your specific business and team. It can span a wide range of applications and platforms, so you get exactly what you need to keep your business going. You can stop letting software dictate how you run your business operations and start designing software to support the processes you’ve already spent years optimizing. 

Benefits of Custom Software Development

There are many benefits to bespoke software and advantages of custom software development. Below we’ll discuss four of the major benefits that come from the custom software development process. 

Flexible and Adaptable

A huge advantage to custom software is that you aren’t stuck in a preprogrammed box. You can make the program exactly what you need it to be and make changes whenever necessary. Even better, you aren’t at the mercy of a company you don’t control to add the feature you need. Feature requests are usually put on the bottom of a long queue and they aren’t implemented unless a significant number of people (your competitors!) also need that feature. 

Additionally, you don’t have to buy a new product every time your business operations change. 

For example, imagine you have a pricing optimization software for your retail products. If your business leaders change their pricing strategy, it’s possible the use case isn’t included in your existing price optimization software. If that software is custom built and supported by a software development team, you can adjust rather quickly. If you have a product, you’d have to find a workaround or purchase something  entirely new.

Although custom software changes do require time and troubleshooting, they tend to be better than the alternative. The time it takes for your dedicated team of developers — whether in-house or outsourced — to add a new feature usually takes significantly less time than implementing a totally new software product or submitting a feature request for an existing product.


Custom software seems expensive because it’s a larger initial investment but can certainly be more cost-effective than a shelf solution in the long run. Here are three  main reasons why:

  1. The return on investment for custom software development is typically much higher. Because custom applications are perfectly compatible with your business workflows, the ROI on a custom solution is typically higher than the ROI for shelf software. 
  2. Many product software solutions will still need to be customized to your unique business needs. The listed price of a productized solution is sometimes misleading because you’ll need several additional features to make the product work with your existing systems and business processes. Customizing a shelf solution may end up costing just as much or more than a customized one. 
  3. With products, you’ll pay annual subscription fees into perpetuity. Custom software solutions may have a high initial cost, but they provide long-term value with reasonable ongoing maintenance costs. The application becomes an asset to your business instead of just another yearly expense.

Fits Your Business Perfectly

If you purchase a ready-made product, then you have to take it how it comes. You might have the option to choose one or two features over others, but you don’t have significant control over how the system works or integrates with your other software.

Custom software development solves that problem because you have a seat at the table during the development process. You can ensure compatibility with your other business systems and add specific workflows and capabilities to support your operations. You have a voice throughout the development of your software, so you can bake in these custom features instead of trying to make changes to an already finished product. 

Although there are similarities across businesses within the same industry, just like people, no two businesses are exactly alike. Shelf software, by nature, must be “suitable for a mass audience” and doesn’t always give you the specialties you need. 

The custom software you build is usually only as good as the knowledge your development team has of your business needs. If you use an outsourced custom software development company, make sure to find a partner who takes a consultative approach to holistically understand your business processes before they begin building the software. 

According to Arkbauer, the process of building custom software is a great opportunity to find places where you can optimize your processes. The right partner will not only build great software, but also help you streamline for the most efficient business processes possible. 

Competitive Advantage

One of the most common reasons businesses invest in software is to enable new capabilities and gain an advantage over their competitors. If you and your competitors all use the same productized shelf software solution, you’ll have the exact same capabilities. 

With custom software, you can grow far beyond your competitors instead of just leveling the playing field. Custom software enables new capabilities that give you a competitive edge. What’s better is you now own proprietary software that’s a key ingredient for your future success. With software solutions built specifically to fit your business, you can solve problems that your competitors are still struggling to work around.

Imagine if your business was working with twice the efficiency of your competitors. That’s the competitive advantage that custom solutions can offer. Custom applications and software can help you increase efficiencies in your business, which often translates into growth for your top and bottom line.

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Drawbacks of Custom Software Development

While there are numerous benefits to building custom software, it’s not necessarily for every business at every stage. Here are a few things to consider that might make you and the current state of your business incompatible with a custom development process. 

Upfront Investment

Although in many instances custom software is cheaper than existing products in the long run, it does require a larger upfront investment.

If you’re cash-strapped or underfunded, it may make sense to use a productized solution until you grow to a point that you need and can afford a custom solution. Many software products are suitable for teams with smaller budgets, and your processes might not be unique enough to justify the investment in custom software. 

However, as you grow beyond the capabilities of the product solution, it may become apparent that custom software is the only path forward to continue growing and outpace your competitors. Remember: Your business is unique, therefore you need unique solutions. It’s just a matter of when to make the investment.

Extended Timeline

It’s no secret that the software development lifecycle takes time. If you need a new solution in the next few days or weeks, custom software is not the right option for you. 

Building tailor-made software that fits your business, whether with an outsourcing partner or internally, requires a consultation and analysis phase to take a deep dive into your business processes and understand the added capabilities you want to enable. Following consultation and analysis, the application's functionality needs to be designed. Finally, the application is developed and tested. 

Additionally, unlike an existing software application, you can’t sign up online, create credentials, and test out the functionality immediately. There aren’t always demos or trials to look at or play around with; you only get to experience the software as each feature is developed. You must deeply trust your IT team or your third-party development partner to build what you need. Look for partners that use agile project management to help mitigate the “wait and see” risk. 

In a recent Velvetech article, they point out that you could create a minimal viable product to validate your idea, then develop the full-fledged product once you’re happy with the functionality. This is another great option for avoiding the “wait and see” risk.

If you’re working with a contracted, third-party partner (which we highly recommend if you lack available internal resources), they will map out the whole process for you. That way, you have a firm understanding of the timeline and the exact functionality of the application you’ll receive. The right partner will work hard to earn your trust and will deliver software on time, on budget, and fit perfectly for your business.

Responsibility for Maintenance and Upgrades

Technology, just like houses or cars, requires upkeep. Additionally, if your business is frequently changing, your technology will need to adjust with you. 

If you pursue custom software development, you’ll own the software rather than licensing it. The software asset will need to be maintained to ensure top performance.  Be prepared with a plan to provide continuous support to get the most out of your investment. 

Maintenance can come through an internal IT team or your external custom application development partner. A benefit to working with a partner is that they usually offer technical support packages to help you maintain your application for the long-term.

Are Custom Solutions Right for You?

After reading through the pros and cons of custom software development, is a custom solution the right path for you?

If you’re underfunded, not willing to invest in long term support and maintenance, or don’t have a good development partner or IT team that you trust, you might want to go with a productized solution for now. 

If you think you’re ready to try a fully customized solution, your organization would be a perfect fit if you: 

  • Need new capabilities to advance your business
  • Are looking for a competitive edge in your market
  • Are constantly frustrated with your software
  • Are always needing to find workarounds with your product solutions
  • Find that your software solution is dictating how you run your business

If you need more help deciding if a custom solution is right for your business, reach out to us. We’d be happy to help you work through your options and choose the best path forward.

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