When you need to improve your business processes or your productivity, there’s pretty much always a software solution that can help. You have your manual processes defined and refined and maybe you’ve started to implement a software solution but have run into barriers.
You know you need software to optimize, but you’re not sure of the best solution.
Here’s the big starting question—one we get from clients all the time: Should you opt for custom software or for a software as a service (SaaS) solution?
At Far Reach, we create custom software solutions to meet our clients’ needs, so you’d expect us to say that custom is always the way to go. But that would be a disservice.
The truth is that there is no universal truth and no one-size-fits-all solution. Much like any other solution, custom software has its own pros and cons. And so do SaaS solutions.Let’s explore them both so you’ll be better equipped to make
a decision that best fits your software strategy.
There Are Hundreds of Off-the-shelf Solutions. Why Should I Bother with Custom Software?
That’s 100% true! Whatever niche you’re in, you’ll find off-the-shelf software solutions at the ready. One rule of thumb you can use to quickly rule out the need for custom software is to ask yourself: Will a SaaS solution meet 80% of
our defined needs?
If it will, then your decision is easy. Go off-the-shelf.
In practice, 80% is tough to reach, and it’s usually closer to 60%. When you choose an off-the-shelf product, you make a series of compromises. It’s about balancing the costs and the benefits.
SaaS software typically costs less at the beginning, and can usually be implemented relatively quickly. But a poor product fit and the need to implement workarounds or buy additional software can add up quite quickly.
If you’re evaluating an off-the-shelf solution, or have already implemented one, here are a few things to look for that may indicate SaaS is not the best solution for you:
It doesn’t fit your processes. Oftentimes, you’ll find that you have to change your internal processes to match how an off-the-shelf software solution works. Small changes can be worth the cost savings of an off-the-shelf solution, but a major
overhaul is time-consuming and costly. Not to mention, if your processes are already optimized and work well for you, adapting them to a mass-market standard could have unintended consequences.
The solution is bloated with extra features that you’ll never use. Most SaaS solutions come with a plethora of features so they can match the needs of as many customers as possible. You may not use them, but you’ll still pay for them. Even
worse, sometimes they get in the way.
Training is hard. Ask anyone who’s implemented a new SaaS solution and they’ll tell you how hard it was to learn all of its ins and outs. And just when everything seems a bit easier, the software gets an update, and you can’t make sense
of anything anymore.
You’d like control over how the solution evolves and changes. The makers of the SaaS solution you implement will make changes to their software based on what’s best for them and most of their customers. They won’t consider your needs
individually. And more drastic changes to the provider’s business—like if they merge, sell, or close—will leave you with a huge problem that needs a quick fix.
Your business needs room to grow. If your company grows, you may need to pay additional per-user fees. But that’s the least of your concerns. What happens when you need new features that your SaaS software doesn’t support? Well, nothing really;
you’ll have to make do without.
What Are the Advantages of Custom Software?
As the name suggests, custom software is created specifically for you. This means it’s built to meet your needs and your vision from the very beginning.
Custom software comes with a whole host of advantages:
Bespoke software can evolve along with your needs. In an agile development environment, software solutions evolve constantly to meet changing markets and needs. In other words: They grow and change along with you. Add new features, change existing features,
and retire old features as needed.
Custom software brings you a competitive advantage. You know for a fact that your competitors aren’t using the same software you are. When your software helps you offer better service to clients, more efficiently, you gain an edge that isn’t
easy to replicate.
It’s a long-term investment. Custom software systems are a business investment. Just like buildings, hardware, your team, and other investments you make, custom systems generally pay off in the long run. You may see a direct return on investment
(ROI), like an increase in sales attributable to the system. And/or you may see indirect benefits like increased productivity, reduction in 3rd party software subscription costs, a happier team, or more satisfied customers.
Data security is in your hands. When you’re working with sensitive customer data, whether or not you’re in a regulated industry, you need to know what security measures are in place. With custom software, you control the level of protections
all the way from the hosting environment and encryption to user access. With off-the-shelf solutions, you’re trusting your data to an unknown entity with little visibility into security practices.
You’re in complete control of the solution. You get to decide the priorities and roadmap for your custom software. You’re not at the mercy of an entry level SaaS company trying to meet the needs of everyone or of an enterprise software focused
only on its highest-paying customers.
What Are the Cons of Custom Software?
As you might expect, the biggest drawback of custom software is cost. Creating something from scratch takes more time and a larger budget than implementing an off-the-shelf software that already exists.
Custom software requires a large initial investment, with ongoing, long-term investments budgeted for maintenance and enhancements. The good news is that you have control over prioritization for the costs and get to make decisions about adding to, removing from, or shifting the budget.
Another often-overlooked downside of custom software is time, which comes into play in a few ways.
Custom software inherently takes longer to get to implementation. SaaS software can be implemented relatively quickly, even at large organizations. Sometimes, you can even start using an off-the-shelf system right away. With custom software, there will
be a time gap between when you decide to build it and when a minimum viable product (MVP) is
As the client, an investment of your time is required. Many clients underestimate the amount of time required on their part to make a custom software project successful. Between demo meetings, sprint planning, prioritization, and reviewing
completed work, the time investment adds up. Make sure you, or someone on your team you trust, can set aside the time to do what’s required to make the project a success. You’ll be glad you did.
Custom software isn’t the right solution for every business. Here’s how to decide if it might be right for you.
How Do I Make the Choice between SaaS and Custom Software?
The first step in making the right choice is knowing what you need. Understanding your goals and requirements is vital, regardless of your choice.
You can start with a list of wants and needs, categorized by priority:
- Must have - Non-negotiable features and functionality
- Should have - Items that aren't required but that add significant value
- Nice to have - Dream functionality that would be valuable but isn’t urgent or as high-priority
Compare your list to the features offered by SaaS vendors in a simplified buy vs. build analysis.
If you can find something that matches 90% of your needs (go for a higher percentage here, because not everything will work as expected), then your decision is easy: Go with off-the-shelf.
See the signs your business might need custom software.
If vendors aren’t meeting your high-level needs, it’s time to look for a custom software development partner that can help you bring your system into reality.
Want to chat more about choosing between SaaS and custom software development
(and even options in between)? Reach out