There are many small businesses whose first purchase of software is a commercial off-the-shelf product. Whilst this may work for many companies with common business processes, the first clue that the fit is less than perfect will come if you find yourself performing manual interventions or workarounds to support the commercial software.
So what criteria should you use to determine whether a custom software solution, or an out of the box product, is the right choice for your small business?
Here’s my top ten list of warning signs that you need to look out for when making a ‘build’ versus ‘buy’ software decision!
1. Your employees avoid using it
Poor adoption is a clear sign that the software isn’t working for your business. People will tend to do tasks themselves if they can do it quicker manually, or prefer to stick to the old way of doing things.
2. No one knows how to use it at the level of expertise required
This could be a problem in training, or it could be that too many steps are needed to execute the task using COTS (custom-off-the-shelf) software, therefore needlessly complicating the process for your employees.
3. When you can’t do what you want with your sales leads
For example, your customer relationship management (CRM) software does not fully support the sales process – such as special pricing, or a custom workflow to go through a specific rules-based process.
4. Manual workarounds
If staff complain about the negatives of the COTS system or use manual workarounds to accompany routine tasks that custom software for your small business could fix.
5. Using a patchwork of software to accomplish the task
The need for customisation becomes apparent when you need a patchwork of software solutions running across different departments that rely on data from each other to progress customer orders or create management reports. Without integration, inefficiencies develop.
6. Automation needed to improve efficiency
One of the consequences of having a successful small business is a busy order book. If you need to tie together several different sales processes which automation could streamline, then it’s time to consider custom software for your small business. In particular, look at how you currently reconcile payroll, timesheets, accounting, inventory, purchasing, supply chain management and forecasting.
7. Business expansion is being inhibited
There are a lot of successful businesses that started out from very humble beginnings, perhaps working out of a bedroom or garage. Early on, it’s not unusual to find an out-of-the-box product that does the job. But as a small business grows, it begins gathering complexity, which COTS may lack the flexibility or scalability to handle. If your existing system is inhibiting growth, look at a custom solution that can add different functionalities and user groups incrementally over time.
8. Data migration to new system
If your business needs have changed and it’s time to migrate to a new software system, remember moving data from one system to another can be a difficult task requiring the skills of a developer. If that’s the case, then it might be prudent to look at what else the developer can do – such as build a new system tailored to your needs.
9. Branding becomes a priority
Personalisation can be pivotal to the success of your small business, especially if you have an app to connect with your customers. While a COTS solution might suffice when its only seen internally, any software that is seen by the customer – such as an online ordering system – would benefit greatly from custom branding or design to differentiate itself from competitors. If you’re at a point where you’re looking at using apps, get a custom design!
10. Growing licensing fees
Off-the-shelf software is essentially rented, not bought – especially with the trend towards software being made available through the cloud. Licensing fees can be very expensive, which can make custom software less costly in the long-term by comparison. If you have plans to eventually expand the software system across many workstations or networks, then remember you would own a custom-made software program entirely and could use it as needed, without restriction.
Custom Software for Small Business – Summary
Work out your ROI (return on investment) before you decide on which route to go down to ensure you can make your money back through improved efficiencies or greater economies of scale. First, vet the most likely out-of-the-box software to see if it satisfies your requirements, and if it doesn’t, then look at custom software options. Remember, a four-figure budget may be all that’s needed to build a custom software solution that you own outright, whilst the costs of a COTS solution will continue to re-occur for the life of the product.