Advantages & Disadvantages of Developing Bespoke Software – understanding the why
Embarking on a Digital Transformation journey and developing your own software solution can be a significant investment for any business, but one that offers the greatest long term Return-on-Investment potential (be it via profit-making, cost-saving, or growth) and ultimately can chart the course to your business becoming an industry leader, rather than a follower.
While finding the right development partner greatly mitigates the risks involved in developing a bespoke solution, there’s still questions to be asked around when should a business consider utilising off-the-shelf solutions over developing a solution for themselves.
Over the past 10-15 years, technological progress—especially as it pertains to both software availability and ubiquity—has transformed how the modern business operates. Chances are, for any given process or operation that a business undertakes, there’s a Software-as-a-Service (SaaS) solution that exists to cater for it in the form of CRMs, MRPs, and so forth. So why not just use them, why take the risk and make the investment to develop your own solution?
This is a huge topic – but in this article we’ll hopefully explain the advantages & disadvantages of developing your own software solution, and illustrate why it’s often worthwhile with a common category of software, ERPs.
ERPs – the ‘it can do anything’ platforms
ERPs, or Enterprise Resource Planning platforms, set out to be all encompassing platforms on which you can attempt to model your entire business. Platforms like SAP, Salesforce, Microsoft Dynamics et al say they can cater for nearly every potential business case, albeit with heavy, costly customisation being needed in almost every case.
And therein lies ‘the rub’ – these platforms are extremely powerful, they can do almost anything a business might require, to a point. Working within the confines of an off-the-shelf, mass market ERP will always be a tale of compromise and cost.
If you do decide to use an off-the-shelf ERP, you will nearly always have to bend your business to work within its contraints, rather than the other way round. Because to try and work for every business, the creators of those platforms have to enforce constraints, otherwise the software would become too unwieldy to manage and continue to develop.
So while your business might have an established business process that you believe sets you apart from the competition and delivers the ultimate customer experience, what if the chosen ERP has an enforced constraint that allows it to work for every business, and no amount of customisation can circumvent that constraint?
This is often the complaint we hear from new clients – as their business has grown from a fledgling startup to a more established business, they’ve adopted a platform like Dynamics and enjoyed some early success.
But fast forward a year or two, and they find themselves continually having to work around its constraints, adapt their own processes in ways that make life more difficult for their employees or indeed their customers, and ultimately leave them feeling like they’re not pioneers, but merely followers. Furthermore, they’ve often found the off-the-shelf platform has become the proverbial albatross around their necks which now risks their long-term profitability and growth.
And for some businesses, that’s fine! But for those that a looking for a solution that delivers on their unique vision for the future, finding a partner who understands your business and is capable of modelling that vision in software is critical. They need to be able to translate what your business needs, what your customers want, and what you ultimately recognise as the difference between you being a market leader and a market participant, in to a platform on which you can then grow your business and profitability.
Investing in your future vs. Spending on licensing and consultants
While developing a bespoke solution may well have a higher up-front cost, the real misconception is that the off-the-shelf solution will save the business more money over the long-term.
This simply isn’t true – while it is true that you might be able to get your business operating using an off-the-shelf ERP for £10s or hundreds of pounds or dollars per month initial outlay, you’ll then almost certainly need to hire expensive consultants to spend months or even years trying to customise the platform to work the way your business needs it to, or at least get as close as they’re able. And every time your team develops a new idea or innovation and want to deliver it in to the business, in come those consultants again to try and make it work within the constraints of the platform.
Over a longer timeframe, these ongoing licensing costs (that only grow as your business does) and ongoing consulting costs often far outweigh the investment needed to develop your own solution; a solution that works exactly as you want it, and makes you a pioneer in your industry that’s developed your own platform to automate and innovate exactly as your business needs it to.
Furthermore, by developing your own solution, you’re investing in your own business rather than another software company’s revenue figure via licensing fees. As you develop your own bespoke platform, it becomes an extraordinary asset of the business and directly contributes to your own valuation, whether that’s important to you right now or not.
At Yozu, we have worked with many clients who decided to invest rather than license, and that RoI curve has begun paying dividends within as little as 12 months – saving them £100s of thousands in licensing costs each and every year, and generating extra profits via efficiencies and improvements we’ve discovered and delivered. And no compromise was ever necessary — we modelled the platform on their exact requirements and unique business processes, delivered process improvements and automations along the way, and transformed their business in to their vision for their future.
Business Benefits: Understanding the nuance
It’s important we don’t underestimate or undersell the utility provided by off-the-shelf software. If you’re a logistics provider, it might make perfect sense for you to rely on Sage 500 or other such platform to handle your financial records and reporting, rather than try to develop your own within your bespoke ERP. That’s fine, we’re well acquainted with integrating with off-the-shelf software where there’s no business case to do otherwise.
As that logistics business, you care more about ensuring your customers and employees get an outstanding experience and operate at peak efficiency and profitability by managing your end-to-end consignment flow, and are happy to trust your financials to Sage.
So an ERP for that business might encompass quotes, orders, warehouse or hub management, staffing, route optimisation, traffic flow, and so forth—maybe even invoicing—but then rely on Sage to maintain accurate sales and purchase ledgers and manage your chart of accounts.
And therein lies the nuance – working with Yozu as a partner, we’ll continually provide expert, honest opinion on how best to handle any specific process or function – is it best brought in as part of the bespoke platform, or is there more benefit in leaving it outside? The most important consideration is what adds most value to your business, today and for the future.
So is developing your own solution always the answer? No, of course not — if you need software to handle a non-core element of your business that sits outside of what it is that you actually do for your customers, often using an off-the-shelf SaaS product can be exactly the right business decision.
But if you’ve built a unique business and realise that its your processes and exactly how you operate that you need to capture within the software that runs and manages your business, often developing a bespoke solution—whether that be an ERP, CRM, MRP, or just a key automation tool—is the only way to truly do that without having to compromise and bend your business to suit the will of the off-the-shelf solution.
As part of our Discovery Process we’ll work with you to understand the potential impact a solution might have on your profitability and/or growth, and ultimately the long-term RoI, in order to ensure the larger initial capital investment required will pay dividends in the long run.
Want to learn more or ready to discuss your options?Book a free consultation