Regardless of what software a business intends to adopt, be it BPM, ERP, or any other system, it will inevitably face a fundamental choice: purchasing a packaged solution or building one from scratch. Packaged software is attractive to many enterprises, as it is quicker to implement and generally involves lower initial investments. However, it also has certain limitations in terms of functionality and usability among other aspects.
Therefore, software solutions built from scratch can become a more practical and cost-efficient alternative in the long run. This article covers the major constraints associated with using packaged software and explains why opting for custom enterprise software development helps overcome them.
Functionality
As packaged software is created to serve a broad range of customers, it usually provides standard sets of functionalities to companies operating across industries. Therefore, such a solution is unlikely to cover 100% of the functional requirements of an individual business, especially if its processes are non-trivial.
Suppose a cardiology hospital needs a HIPAA-compliant ERP system that uses AI and ML to analyze patient records and predict intensive care unit readmissions in the coming months. In addition, this ERP must be compatible with the hospital’s existing IT infrastructure, including legacy EHR and telehealth software systems.
Given such specific requirements, it will be difficult for the company to find a packaged solution on the market that will cover their requirements out-of-the-box. In that case, an institution would have to significantly customize a platform solution, which requires solid tech expertise and is rather costly.
However, customization alone does not guarantee a 100% functional fit. The company would probably have to integrate a packaged solution with multiple stand-alone tools, which again requires solid financial investments and bears risks associated with data flow stability.
Why consider a custom solution
When it comes to custom software, a project team runs comprehensive business analysis procedures to gather the unique requirements of an organization and transform these requirements into a tailored solution. As a result, an enterprise gets a solution that does not have functionality gaps. If its requirements evolve or change later on, almost any functional modifications become possible.
UX/UI design
Even if a packaged solution perfectly fits an enterprise in terms of functionality, companies can only ensure high software adoption among users if it offers a visually appealing user interface and an intuitive user experience. Although it is possible to fine-tune and improve the UX/UI of packaged software (tailor page layouts, create custom fields, etc.), these modifications are generally limited.
Why consider a custom solution
UX/UI design is an integral element of any custom development project. During the requirements elicitation stage, designers conduct interviews and run focus groups to discuss user needs regarding interface and user experience design. Designers also can study user behavior when they interact with other corporate tools or an app’s prototype to uncover common pain points and preferences that were not articulated.
Insights generated during user research form the basis for the UX/UI specification, which defines how the software looks and feels to cater to user expectations.
Integrations
If an enterprise aims to operate efficiently, it should enable seamless data exchange between a new solution and other business apps and systems. However, integrating packaged software into a company’s IT infrastructure can be challenging, as it can be incompatible with existing corporate tools and systems, especially legacy ones.
Why consider a custom solution
Custom software is initially built to fit an existing corporate IT environment, which ensures seamless integration between existing tools and a new software solution. To facilitate future integrations, companies can choose a microservices architecture for their custom solution. Such an architectural approach allows easy integrations via APIs with other services, even third-party ones.
Security
Cybersecurity is a top priority for software vendors, as their business reputation depends on it. Therefore, software providers invest much effort in protecting their platforms against cyber threats. However, the security of packaged software still cannot be considered ultimate. Malefactors can exploit already known vulnerabilities in packaged software that have not been eliminated yet or discover new ones in order to steal or compromise corporate data.
Additionally, being much more popular than custom software, packaged solutions often become targeted by hackers. For instance, Egress, an email security platform provider, reported that Salesforce phishing attacks have grown by 109% in 2024.
Why consider a custom solution
Custom software is a one-of-a-kind solution, so it is like a black box for malefactors. Custom software simply has no known vulnerabilities, which could otherwise serve as an entry point for hackers. In addition, since the owner has complete control over its software, they can equip the custom solution with any powerful security mechanisms typically not present in packaged software, such as quantum-resistant encryption or biometrics.
Costs
Many packaged solutions today are deployed in the cloud and distributed on a subscription basis. As an enterprise grows, the number of users also goes up, which can increase license costs exponentially.
According to Nexthink’s 2023 survey, enterprises on average waste more than $44 million on software licenses monthly. The same study shows that 95% of IT executives do not have full visibility into all the license costs their businesses incur.
Why consider a custom solution
Although custom software development requires significant initial investments, it can be more cost-effective in the long run. After all, an enterprise does not have to purchase user licenses, as it operates its own software. Additionally, since custom software is tailored to an enterprise’s unique processes, it can provide better ROI than packaged software and thus be more cost-beneficial.
Three tips for successful custom software development
Prepare accurate TCO estimations
To run a comprehensive and clear TCO calculations, a business should consider the following cost factors:
- Size and expertise of the development team
- Cost of IT infrastructure (servers, data centers, etc.)
- Software licenses fees
- Volume of migrated data
- Configuration and customization scope
- Number of integrations
- Complexity of cybersecurity controls
- Type of user training
- Cost of ongoing maintenance and support
Develop an MVP
If an enterprise plans custom software development, we recommend starting with a solution’s MVP. A minimum viable product (MVP) is a software version with limited functionality that covers basic user needs.
MVP development enables an enterprise to check if its solution addresses end-user needs efficiently without investing in a full-fledged software product. If needed, an enterprise can upgrade an MVP anytime later on.
Invest in user training and support
Even if a bespoke solution perfectly fits an enterprise’s requirements, user training should not be neglected, as it can drive user adoption and consequently increase technology ROI. A large enterprise can ensure efficient training using a learning management system (LMS). This system helps centralize training content management and simplifies learning material delivery to users.
Final thoughts
Any enterprise that implements business software faces the custom-vs-platform dilemma. And even though developing a software solution from scratch is complex, it can be more advantageous compared to packaged software adoption. After all, custom solutions have fewer functional and interoperability limitations, as they are built from scratch, and can be less costly in the long run.
To ensure cost-effective and smooth custom software adoption, an enterprise can resort to a third-party IT consultant. A professional technology partner can analyze your business requirements, define an optimal development strategy, perform front-end and back-end development, and provide software maintenance services.