Off-the-shelf package or custom software: how to decide

Some of the organisations that come to us do not actually need custom software. A properly configured off-the-shelf product does the job. For a software company, saying so means losing a piece of work in the short term. In the long term it is far cheaper than starting the wrong project.

In this post I explain how we decide between an off-the-shelf package and custom software.

First question: how standard is your work?

Accounting, payroll, email, office documents. This work runs much the same way in every organisation, and regulation makes it even more alike. There are mature, widely used products in these areas. Writing them from scratch rarely makes sense.

The workflow that sets an organisation apart is another matter. The way a hospital links device data to its clinical flow, an education provider’s assessment method, a production process a company has developed itself. An off-the-shelf product fits these workflows only if the organisation bends itself to fit the product.

The rule is simple. If your work is standard, use an off-the-shelf product. If what makes your work different lives inside the software, go for custom software.

Work out the cost over five years

The first year of an off-the-shelf package usually looks cheap. Setup is quick and the first invoice is small. Stopping the comparison there is misleading.

Over five years, other items become visible. Licence fees that rise as the number of users grows. Customisations for work that does not fit the package. Redoing customisations that break in the next release. The second, informal process set up for work the package cannot handle, which is usually an Excel file.

Custom software has a five-year cost too. Initial development, hosting and maintenance. The difference is that this cost is more predictable and under the organisation’s control. We look at these items separately in our post on cost.

Where does the data sit?

Most cloud-based off-the-shelf products have their servers outside Türkiye. For an organisation processing personal data, in legal terms this means transferring data abroad. There is a way to do this, but the decision should be made knowingly.

Then there is the question of access to the data. When you want to leave the product, in what format, how quickly and how completely can you get your data back? Ask this before signing the contract. A product with a vague answer has already locked you in.

Lock-in works both ways

With an off-the-shelf package, you are tied to the product. You do not decide on price rises, on features being removed or on where the product is heading.

Custom software has lock-in too, this time to the company that built it. If you do not have the source code, if no documentation was written and if another team cannot read the code, changing company becomes almost impossible. That is why, with custom software, you should ask for the source code, the documentation and the deployment steps to be handed over to the organisation.

Often the answer is both

The healthiest setups we see are mixed. Standard work runs on off-the-shelf products. The workflow that sets the organisation apart runs on custom software. Between them there is a clean integration, so the same data is not entered twice.

In this setup the scope of the custom software shrinks and it is delivered faster. The off-the-shelf products are also freed from the work they struggle with.

When we say let’s not build it

When an organisation comes to us and we see that the need can be met by a widely used product, we say so. If needed, we help connect that product to the existing systems. We recommend custom software where it genuinely makes a difference.

In short

Off-the-shelf products for standard work, custom software for the work that makes the organisation different. Compare on five years of cost, not the first year. Also take into account where the data sits and how you will get it back when you leave.