Why Successful Businesses Build Custom Software Over Off-the-Shelf

custom software vs. off-the-shelf

In today’s ever more interconnected and online world, it is sometimes the smallest of margins that provides a business with the competitive edge it needs to succeed. One factor that many companies fail to account for is the benefits available to them through the creation of customized software.

Businesses around the world require enterprise software after facing issues that might be unique to their business. In some cases, it could include compiling lengthy reports, poor management of resources, little to no return on investment or other similar problems.

To put it into context, consider the problem facing James E. Fulton & Sons – one of Southwest Michigan’s most trusted construction and excavation companies. They had a problem of misaligned processes for updating and automating workflow and administrative procedures.

Business processes can typically include workflow, approvals, time scheduling, work orders, product dispatch, employee management and even preparing and disseminating invoices. While there are many similarities in process from one business to the next, no two businesses are exactly alike. How each company handles their operations including the efficiency of their processes can be a key differentiator between businesses that succeed or fail.

How SPARK Business Works Helped Solve the Problem

At James E. Fulton & Sons, staff had to organize, reconcile and file thousands of papers per week. Reports included multiple different timesheets as well manual generation of client reports. The impact to the business was significant not only regarding effort and resources but perhaps more importantly time.

The solution that SPARK Business Works created for James E. Fulton & Sons came in the form of a custom web-enabled application that automated all back-end processes. The application cut down the time taken to reconcile papers from days to just a few hours per week.

An employee mobile application was also part of the package that was built and this was a welcome addition for the team. Employees were excited to have a mobile app that they could use to manage individual tasks and reduce the time taken on repetitive processes. The combination of automated back-end processes and highly motivated employees worked in favor of James E. Fulton & Sons which started witnessing positive changes to their business bottom-line.

To Buy or Build?

Many companies find themselves in the same predicament as James E. Fulton & Sons where problematic or time-consuming processes force the company to look for a solution.

Companies are then caught making a decision – fix the short-term needs or invest in a long-term solution. Startup companies are the most affected by this predicament since short-term results, and long-term growth are often intertwined. At this point, companies have to decide whether to build (get a custom software) or buy a packaged (off-the-shelf) software. The latter is often useful for precise short-term fixes, but it doesn’t often have the desired longer-term impact.

Choosing to Buy Packaged Enterprise Software

Buying packaged software is an example of a fast and “cheap” solution, a solution that doesn’t guarantee long-term efficiency. Some of the problems with this approach include lack of customization where one cannot alter the software to match an individual company’s actual daily tasks.


Image: cultofmac.com

Since customization is hard to achieve, off-the-shelf software tends to increase the complexity of manual processes in the long run. Another issue tied to packaged software is that scaling the software is very cumbersome. It doesn’t help that scaling is a process that is necessary as the company grows. Every enterprise expects to grow in time as it becomes more profitable and gets extra revenue to broaden their investment portfolio.

Growing companies that use off-the-shelf software often find that the earlier customization problems become even more pronounced as the enterprise grows. These companies end up purchasing proprietary software at exorbitantly high fees in order to scale the software in a manageable way.

While many businesses share certain characteristics and departments – sales, operations, service and management for example – each business is unique in how it provides those services. Off-the-shelf software works if your business is exactly the same as every other business out there but no two businesses are exactly the same. The “easy” solution might work, but it’s important to realize that this solution often includes compromises and workarounds, not to mention employee dissatisfaction and other adverse effects. As such, you should expect to pay for customization as a packaged off-the-shelf solution will simply not do everything you need.

Unfortunately, many off-the-shelf solutions are difficult if not impossible to customize in addition to the fact that they may not be compatible with other applications within your organization.

What About Custom Software?

The other option is to procure a custom-built software that has all your processes, tasks and records for management. Going this route definitely has benefits for organizations, but it comes at a cost.

As a measurement of suitability Return on Investment (ROI) is probably the best measurement to use when it comes to custom software. Many businesses that choose to invest in custom software realize that off-the-shelf packages simply will not serve their business, but despite this fit, businesses want to see a net benefit from the money they’ve spent on the transaction. Custom software is often more expensive than standard off-the-shelf software. Pricing begins at $40,000, and depending on the size and scope of the project, will be higher.

Factors affecting the price include the complexity of the software (does it use complicated or straightforward code and logic), migration of data and integration with other systems.

Building custom software involves a heavy use of resources and time but the price is definitely worth the investment as custom software is a tool that is specific to your company’s needs, you can change it (customization) whenever you like and make it truly unique. Its ability to interface with other systems within your organization can often increase your efficiencies ten-fold with many SPARK clients reporting an ROI within twelve months.

The Process of Building a Customized Solution

The team at SPARK Business Works has developed a tried and tested process for creating solutions that work. As you can see from the stages outlined below, building a customized solution is not a simple process, but the subsequent rewards afterward are worth the effort.

Stage 1: Discovery & Scope Definition

This is the first step taken when developing new software for clients. It involves sourcing input from all stakeholders including top executives, customers, industry experts, sales personnel, and developers.

Problems are identified in this stage, and the scope of the project is defined. If there is an existing system in place, it is analyzed to determine problems and also acts as a reference point for the new software.

Stage 2: Wireframe Presentation & Approval

Also referred to as the design phase, this step comes after the formulation of system requirements and conception of a plan. The design framework (wireframe) is an abstract view of how the system will look with components listed in a particular order. The design specification document is presented to the stakeholders, and after approval, development can commence.

Stage 3: Architecture & Database Design

Following the approval of the design document, the system architecture is designed to act as a guideline for the development team. The architecture involves listing the various modules of the company and how they are interconnected.

At this stage, the database design is also formulated and indicates where data will be stored and how it will be passed between modules.

Stage 4: Development

This is the actual writing of code that will run the program. It only happens after the system requirements, architecture and wireframe have been defined. When these are well defined, development takes a relatively short period.

Stage 5: Testing & QA

After the software has been developed, the next stage is testing and quality assurance. Testing is done against the project requirements outlined in stage one to ensure the software works as expected. End users are also involved in this stage to test the final package.

Stage 6: Training & Deployment

In the final stage, the application has already been tested and is ready for deployment. Users are trained on how to use the software after it is installed in the company computers or integrated with existing systems.

Benefits of a Custom Application

To get a better grasp of the advantages that a custom application offers to a company, consider the case of CSM Group, a construction management firm with national experience managing projects of all sizes, that witnessed tremendous results after working with SPARK. CSM Group came to SPARK with a unique problem. The company has a large workforce that works in remote sites, and they wanted to foster a strong corporate culture. In addition, they also wanted to expand their employee experience, culture, and support model across the board.

SPARK Business Works tackled CSM Group’s issues by creating a custom application that boosted the employee productivity and efficiency of business processes. This was made possible by the app being designed to increase employee engagement, communicate HR benefits and create better workflow automation and utilization. In addition to the custom application, the SPARK Business Works team was also able to provide CSM Group with customized dashboards. These dashboards not only improved the project flow, it provided the management team with a simplified view of the KPIs that were important to the business. Other benefits of custom software include the following:

Financial

Contrary to popular belief, custom software can save you money. When compared to buying an off-the-shelf solution, getting custom software built has a high initial cost. However, buying a packaged software often means that you’ll be forced to fit your business inside the software instead of the other way around. The hidden costs of adapting to the new system, integrating with existing systems and ultimately upgrading the software to allow scalability are quite significant.

As an example, let’s look at Tesla, which after much analysis and balancing of pros and cons, decided to go with a custom package. According to the CIO, Jay Vijayan, Tesla would have had to spend “millions of dollars” and a full year to implement a Customer Relationship Management (CRM) system based on a proprietary off-the-shelf tool, which would require even more work to integrate with already existing internal systems. Tesla took the custom application route and achieved the same level of functionality in 4 months and at a much lower budget.

In addition to the cost savings, the actual development costs are often not as high as people think. The cost of custom software will depend on your requirements, number of users and the software complexity.

Custom Applications Have a Better ROI

Return on investment (ROI) is a touchy issue since most executives know that they have a problem and need a software solution but aren’t sure how they’ll earn their money back.

In order to get a concrete number of the expected ROI, one has to consider what they hope to achieve with the software. Custom CRM software, for instance, offers some of the highest ROI (average of $8.71 for $1 spent) because the metrics can be easily quantified.

In a study by Nucleus Research, sales representatives had a 26.4% increase in productivity when social networks and mobile access were added to the enterprise software. When you clearly outline the desired result, it is easier to get a sense of the software’s ROI. SPARK clients report a full return on investment within 12 months of having a custom application designed for them.

About SPARK Business Works

Michigan based SPARK Business Works helps clients across the nation improve their businesses by streamlining processes, automating tasks, and positioning data for strategic decision makers. SPARK’s team of multi-disciplined professionals comprehensively assess and guides organizations of any size through technology and software improvements. SPARK offers affordable and practical custom software solutions that increase business productivity with a visible return on investment. Our team executes projects in practical steps that make sense and reduce risk.

Areas of expertise include custom business solutions, custom ERP solutions, mobile applications, reporting, dashboards, and more. For more information, visit www.SparkBusinessWorks.com or email info@sparkbusinessworks.com.

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