The eternal IT dilemma: custom-made software development or commercial software product?

It's the burden of all enterprises at one point or another; we often meet with business prospects which have very precise business needs and requirements, and that are confronted with multiple options as much in terms of technology as finance, and this story unfolds itself on a landscape of functionalities and satisfaction. Let's put things out just the way they are: contrary to commercial software products, custom-made development frightens a lot of people, because commercial software products are concrete to start with which is both more appealing and securing for a decision-maker. But when you take a closer look at it, you'll see that reality is not that simple.


We will try in this post, and as much as we can, to identify the pros and cons of both IT options: custom-made software development or commercial software product.


The Pros and Cons of Both Worlds

Commercial Software Product

PROS
CONS

Very short implementation cycle

Less risky for the decision-maker since the software product is concrete

Immediate productivity gains

Low initial buying cost

Software product price is known and set once and for all (or almost…)

No software product answers 100% of clients' needs

Annual license fees… forever

Modification cost very often under-estimated

Difficult choice: from which % of needs answered does a software product get interesting? 50%, 60% or 75%?

Commercial software product technology is almost always outdated, event at purchase

The IT environment must adapt to the product; this brings added pressure to the IT department to support this new technology in the environment (Oracle vs SQL, .Net vs Java, Windows vs Linux, etc.)

Organisational processes must adapt to the product, not the other way around (in terms de security, for example)

Commercial software product updates can be very tricky and treacherous considering home-made developments done upon implementation and over time

Foreign commercial software product contract cost can be much costly than originally planned

A license is never more than a usage right, it'll never turn into a proprietary right

Custom-made Software Development

PROS
CONS

Possibility of step-by-step implementation

Possibility of negotiating the intellectual property

Possibility of negotiating the intellectual propertyCustom-made Software Development meets all business requirements; no missing functionalities and no extra not-required functionalities complexifying the product and its usage

Impact of Custom-made Software product on the enterprise very often come along with a major competitive advantage that only the organization has because of the software

Supplier choice will go according to the organization's technology environment requirements or constraints

Enabling the organization to force / dictate its business rules in compliance with its security requirements

Updates and maintenance more easily controlled

Integrating the most recent technologies

Custom-made Software product integrates organizational processes and not the other way around

Flexibility of deliverables à Web, Windows, Mobile…

Long implementation cycle

Higher initial development cost

Mid and long-term productivity gains

Higher risk for the organization if the selected firm

Requirements must be very well described and detailed; otherwise, the project can seriously go off road

Supplier choice is crucial and directly correlated with the client's satisfaction and the deliverables' level of adequacy is the client's responsibility as well

Durability of the selected firm

Supplier's level of experience in the light of requirements. Does he have true experience into this specific type of software

Agile Methodology, good; Agile-SCRUM, even better and if the supplier is CMMI certified; well then, it's excellent since this is the US Army software development ISO standard


Conclusion

If a commercial software product « TRUELY » meets 70% of your business requirements or more and it doesn't put much pressure on your IT environment and business processes; well, you should seriously consider it.

If a Custom-made Software Developer proposes a platform already containing 50% of required functionalities with experience in your field of activities; then you should consider this proposal even more seriously!