COTS vs custom software

Authored by John Sarantakes

It’s a long-time dilemma for many IT organizations: whether to devote resources to custom software application development or look for a commercial off-the-shelf (COTS) solution. More concisely, whether to build or buy. While there’s no denying the potential cost benefits of a ready-made COTS application, there are certain situations where bespoke software is the clear winner. Here are five compelling signs that it’s time for an IT organization to go custom when analyzing COTS vs custom software solutions for enterprise applications.

Your key “must haves” aren’t available

The 80/20 rule is a guideline used by many organizations when considering an off-the-shelf software solution. According to the rule, if you can’t find a product that satisfies at least 80% of your requirements, you’re likely to end up with a solution that falls short and needs to be replaced. Even if you do find an 80% solution, you may find that you don’t want to sacrifice the remaining 20% of your needs.

Difficult to customize

It’s reasonable to expect to be able to customize a COTS application for your organization. Many off-the-shelf systems claim they can be customized, but it’s important to evaluate the degree of customization required to satisfy your organization’s needs. You may find that the customization you need is difficult or impossible to implement, or that the required effort is too great compared to developing a custom solution.

Paying for unwanted features

Since COTS systems typically target the widest possible audience, you may find that you’re paying for a lot of features you never use. Depending on the number of unwanted features provided, this could mean additional training requirements and process workarounds for your organization. Most organizations are wary of extensive process workarounds since their total effect can be difficult to predict. If you’re working with a software consultancy , on the other hand, will do a cost-benefit analysis and implement only the features that make good business sense.

Lack of extensibility

A software investment should address both your current and future business needs, so you’ll want to make sure that your off-the-shelf solution is scalable enough to grow with your business.  Buying a COTS system that lacks extensibility could mean you’ll be in the market for software again in just a few years.

COTS ongoing expenses vs. initial layout for custom

There’s a common perception that custom solutions always cost more, but this is not the case. Factoring in ongoing COTS expenses like licenses and downtime for upgrades may balance or outweigh the upfront cost difference between COTS and custom.

If you’re facing a choice whether to build or buy, our software consultants are here to help you understand the pros and cons of custom enterprise applications vs. off-the-shelf in terms of your organization’s requirements. We have expertise in field management software, business process analysis software, database application development and a wide range of custom applications.

Looking for more on the COTS vs custom software debate? Read Pt 1 of: Build vs Buy: Why custom software systems are not a cost of doing business

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