Standard software or custom development? How to make the right decision
5 min read
Short answer
Standard software is the better choice when your process is typical for your industry and an established solution covers most of it. Custom development pays off when the process is your competitive advantage, standard solutions only fit with many customisations, or several systems need connecting. A combination of both is often the most economical.
What does this mean for your company? Book an intro call
Buy or build? This question comes up in almost every digitalisation project. Both routes have their place, and the right answer depends less on technology than on how specific your process is.
When is standard software the right choice?
For processes that work similarly in most companies: accounting, payroll, email, file storage, basic customer management. Vendors have years of experience here, legal changes are built in, and introduction is quick. Custom development would almost always be a waste here.
A good rule of thumb: if an established solution covers most of your process, and the rest can be solved by small adjustments to how you work, take the standard solution.
When does custom development pay off?
- The process is your competitive advantage: if you do something differently and better than others, the software should reflect that instead of forcing you towards the average.
- Standard software only fits with many customisations: extensive customisation is expensive and complicates every update.
- Systems need to be connected: a lean application that mediates between existing programs is often the best solution. More in Typing data in twice?
- Customer portals and special processes: for example portals where your customers order, submit documents or check their status.
How do you compare costs fairly?
Look at least five years ahead. A simplified example:
- Standard software: 25 users at 40 euros a month each comes to 60,000 euros over five years, plus setup and customisation.
- Custom development: 40,000 euros of development plus 7,000 euros a year for hosting and maintenance comes to 75,000 euros over five years.
In this example the standard solution is cheaper, as long as it fits without major customisation. If customisation costs 20,000 euros, the calculation tips. And if the team grows to 50 users, licence costs double while the custom solution barely gets more expensive.
And no-code?
No-code platforms sit in between: faster than custom development, more flexible than many standard solutions. For manageable applications they are a good choice. Pay attention to per-user costs, data export and where data is stored.
Which questions should you settle beforehand?
- Who owns the source code and the data?
- Can the data be fully exported at any time?
- Is it hosted in the EU?
- Is the solution documented well enough for another supplier to continue it?
Before committing, a small prototype often helps. The reasons are in Prototype instead of specification. If a spreadsheet solution that has grown over years carries the process today, When spreadsheets reach their limits is also worth a read.
Julius Launhardt advises small and mid-sized companies on software selection independently of any vendor, and builds solutions himself where standard software does not fit. More on the digitalisation page.
Frequently asked questions
Is custom development not always more expensive?
Not necessarily. With many users, licence costs add up considerably over the years, and extensive customisation of standard software is often more expensive than lean custom development. A fair comparison looks at least five years ahead.
What happens if the developer is no longer available?
The risk can be limited: with widely used technologies, clean documentation, source code you own and a maintenance contract. Then another developer can take over the application.
Are no-code platforms a good middle ground?
For manageable requirements, often yes. As complexity grows they reach their limits, and you are tied to the platform. Check data export, hosting and per-user costs beforehand.
How high are the ongoing costs of custom development?
As a rough guide, about fifteen to twenty percent of the original development cost per year, for hosting, maintenance, security updates and minor adjustments.