What are the Advantages and Disadvantages of Custom Software Development

Are you having a hard time deciding between custom software development and off-the-shelf software for one of the critical functions in your organization?

Choosing between the two options is, in fact, a very difficult decision to make for any manager or a leader.

Both custom software development and off-the-shelf software require a considerable investment in terms of time and cost, and also affects your company for many years to come.

You would not like to go wrong on this important decision.

You need to understand the advantages of custom software over readily built solutions and vice-versa, and evaluate all pros and cons to make a wise decision.

Custom software can be a viable solution if you chose the right kind of people who provide you with highly customized flexible solutions that are easy to use and maintain.

On the other hand, a ready built solution saves a lot of your time and initial investment.

There are various factors that can help you decide on the right option for your organization.

This includes complexities of your work, the size of your organization, your future plans for growth and of course the most important, financial viability of the solution.

Before you make a final decision, it is important to understand the advantages and disadvantages of each option in detail and cases where custom software may be better suited over off-the-shelf software and vice-versa.

Let’s first have a look at what are the advantages of custom software.

Advantages of Custom Software

Readily available solutions are built on the basis of generic requirements in the category for which it is built which may not fit the way your operations work.

Sometimes, businesses need unique solutions to solve problems specific to their organizations.

Custom Software Development is a popular option for all such companies.

Let’s look into some of the key benefits of Custom Software.

Tailor-made Solution

When you purchase off the shelf solutions, they may or may not be built around your business goals.

Developing a software solution specifically for your company ensures that it is tailored to suit your needs.

In fact, during the process of building custom software, you may find several opportunities to optimize your processes, which leads to higher productivity for your organization.

There are several outsourcing partners who would be willing to analyse the complete set of processes followed within the organization to give you highly optimized solutions for automation.

This will increase your productivity, which in turn makes it financially more rewarding in the long run.

Check out our portfolio page to find out what custom tailored solutions we have created for our customers.

Return on Investment

Custom software development may look like an expensive option at the beginning as a lot of investment is involved in software development but in the long run, they may get you higher returns.

On the other hand, readily built software packages also involve some cost.

At times you may need to purchase extra hardware, high-end servers (sometimes even with version updates) to run them effectively. The additional cost that you need to bear every year is annual license fees.

Custom software is high on investment at the beginning but the costs become almost negligible in the long run.

A detailed ROI needs to be done to find out paying huge sums for custom software development which will pay for itself in few years vis-à-vis license fees during the same period and other costs involved in buying off-the-shelf software.

Security Concerns

One of the benefits of custom written software is that security, as required by your organization, can be inbuilt in the software.

Hackers love the popular commercial off-the-shelf software (COTS) and are more likely to find ways through vulnerable portions of such tools to enter your systems.

With custom software, chances on intrusion are considerably reduced as you use your own tool which is predominately used by your own team.


Scalability can be built into custom software easily.

This will ensure that the software addresses any changing needs of your organization. On the other hand, features of an off-the-shelf application remain constant more or less and cannot be manipulated easily.

With off-the-shelf software, you will have to wait for some other company to enhance their features to make your life easier.

This is not the case with custom software, you have a team in hand who can take up all your requests at any time and enhance the features for you.

In case you are outsourcing development to another company, it is always better to ensure maintenance is built into your contracts and they are flexible enough to incorporate any changes that you may need at any point of time.

An agile and flexible team is what you need.


There may be several other tools that your organization may be using.

You may want that all the tools talk to each other and may need to build interfaces which makes it easy to transfer data from one application to other.

These functionalities are very difficult to obtain in an off-the-shelf tool.

This compatibility can, however, be built in a custom software. Off-the-shelf software may have some options to integrate with other software but this may not be too seamless as you may want it to be.

Easy to Operate

Another advantage of custom software is that they are easy to operate as they are not bulky and have just enough features required for your operations.

Off-the-shelf software may have a lot of functionalities based on a generic set of requirements.

You may not be needing many of these functionalities and may be using just some features. The tools become bulky and difficult to operate due to this.

The ease of use increases productivity and reduces costs by automating repetitive tasks. This will increase your profits and lower the cost involved further.

Long-term Risks

Many times, off- the- shelf companies release newer versions of their software and they stop all support for older versions.

Companies also go bankrupt and stop providing any support altogether.

You don’t run such risks if you go for custom software.

You can run your business without worrying about an off-the-shelf software that is being used to run your entire business or a critical function may be discontinued and no further updates or improvements can be received.

A custom software is always available and can be updated as many times as you may want.

Improved Software Support

You get better support from teams working on custom software than off-the-shelf software.

Most of the time, continuous support is built into your contracts with outsourcing partners which means there will be a dedicated team that they will provide you to maintain the software.

This provides better problem solving and defect fixing than the support provided by off-the-shelf software.

The response and resolution time are faster with custom software development and this can be ensured by building Service level agreements (SLAs) in your contracts.

The control of support that you will receive is in your hands and not the other way around.

Competitive Advantage

A custom software is made exclusively to suit the needs of your business.

You can get all kinds of unique features built into the system which your competition may not have.

You have a unique solution in hand which can become your USP (unique selling proposition) and gives a competitive advantage to you over your competitors. An off-the-shelf software is rigid and you need to align your processes against it.

With custom software, you have what you need and you can focus on your target audience better.

This can ensure higher customer satisfaction and more business for you in the long run.

Disadvantages of Using Custom Software

Now that numerous advantages of customized software are listed, let’s look at the flip-side of using custom software.

High Investment

As we discussed above, a huge investment is required to develop a custom-built software.

While it may pay in the long run, the initial investment may be a little overwhelming for some organizations.

A good ROI should be done before deciding on the custom software.

Time Involved

Apart from investment in terms of money, a huge time investment is required to complete the software development process.

While off-the-shelf solutions will give benefits quickly, it may take months or years to actually get the custom software delivered.

The organization need to invest a lot of their time in providing requirements to the outsourcing company or to your in-house software development team.

An off-the-shelf software has been tested for all defects, has gone through elaborate usability tests and is ready to use when it reaches your desk.

This may not be the case with custom software.

The custom software requires investment in terms of time to test the software from a user’s perspective and the process may go through several iterations before you get the desired results.

This whole time spent in various software development phases may be draining for you or the teams working with the outsourcing partner.

Deciding Between Custom Software and Off-the-shelf Software

Now that advantages and disadvantages are listed, let’s go back to our initial question on choosing between the two options.

Here’s is a small checklist for you which will help you decide.

Choose custom software when:

  • You need highly customized software that suits your business needs and gives you a competitive advantage and off-the-shelf software may not fit the bill.
  • You need it to be compatible with other systems, flexible to include any changes that you may need and easy to use.
  • You work with highly sensitive data and security is a concern.
  • You are looking to increase your efficiency by automating repetitive tasks, as well as efficiency in the processes obtained through custom software will significantly improve your productivity and reduce cost in future.
  • You can afford the cost of the software and ROI goes in favour of custom software due to a productivity improvement and reduced labour requirement.
  • You can devote time to custom software development.

Choose commercial off-the-shelf software when:

  • Investments are too high or ROI is not in favour of custom software.
  • You are a very small organization and there are no plans or opportunities to scale-up.
  • No integration requirements or security concerns.
  • You are in a hurry.

Custom software often cost much more than off-the-shelf software.

This makes custom software a very expensive option for a smaller business. These higher costs may be easily borne by larger or medium-sized businesses.

They may also benefit hugely from small efficiency increases in the process which may lead to large cost savings as labour requirement is reduced.

A small company which is planning to expand its footprints may also benefit from custom development as needs for highly efficient processes and a quick turnaround would lead to higher cost savings.

They can also benefit from scalability and flexibility offered by the custom software.

To cut the long story short, the best option depends on the circumstances your organization is in.

Advantages of custom software are numerous and they also provide you better control on how you want to run your business and changes that you may need later on, but the decision has to be taken after carefully evaluating the benefits that you will derive both in short-term and long-term.

Making wrong decisions may be very costly, choose the most effective solution through which you will be able to serve your customers better without compromising on the profits that you are getting.

We would like to hear your thoughts on this.

What is an advantage of custom software that really got you thinking more about custom software vs. off the shelf software?

Comment below or contact us if you have any other questions.

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