Business is constantly changing, and it is almost impossible for an IT leader in a large organisation to avoid facing the dilemma of buying or building software. The circumstances will tell you the best option. This article examines a range of criteria and explains when custom software delivers companies a significant competitive advantage.
1: Functional fit
If you can find a commercial off-the-shelf (COTS) solution that meets 80% or more of your company’s exact needs and has some flexibility to adapt to future situations, that might be a good option. It’s important to analyse how much the solution applies to your use case to avoid paying for additional functionalities your company won’t use or having to customise heavily to get what you want. Be aware that systems produced for a mass market might inadvertently add to the complexity of your business processes rather than simplify them.
Generally, opting for a custom software solution is advisable if you need to customise a COTS system by more than 20 percent.
Custom software solutions offer a perfect functional fit for your business needs. Each solution is built with a focus on your company’s specific requirements, challenges, and goals from the start.
2: Customisation considerations
While the appeal of extending an existing core system is strong, the practical implications often reveal hidden complexities. COTS customisations can inflate costs, both upfront and over time. Creating, scaling, modifying, and maintaining these customisations usually requires significant resources, and the work involved can lead to technical debt—especially as the system evolves and needs updates. Some promises made by COTS solutions can be misleading, as significant manual coding and development work might still be necessary to achieve desired outcomes.
Moreover, these customisations can introduce challenges in maintaining system integrity and performance. The more you customise, the more difficult it can become to apply vendor-provided updates or patches, leading to potential security risks or system instability.
The issues extend to user experience and integrations as well. Creating a seamless experience across systems often requires intricate development work, and integrations between the COTS solution and other systems can be complex and costly to implement and maintain.
3: Time-to-value analysis
COTS solutions boast rapid deployment, yet this is not necessarily the case when customisations are involved. Since COTS solutions were created for a generic mass market, they were not intended to be heavily customised, which makes them challenging to scale, enhance, and extend. This can lead to security and performance issues and lengthy customisation projects.
In practice, deploying COTS customisations, integrations, and configurations can take longer than deploying custom software solutions built with an AI-powered low-code platform like OutSystems. We have deployed applications in weeks—less time than it took our customers to assess the market and check whether a suitable COTS was available.
4: Control and Ownership
Off-the-shelf solutions rely on updates and support handled by the vendor on their timetable rather than yours. You can lose control of your company’s digital roadmap and get locked into the vendor’s strategy. In addition, you must wait for the vendor to introduce the capabilities you need to customise the package, plus face the risk of the product becoming unsupported or discontinued.
When you invest in custom software, you own the product, giving you complete control over its development, deployment, and future enhancements. You’re not tied to a single vendor’s roadmap or support policies, allowing you to make changes as needed. Further, custom software development enables you to retain intellectual property ownership, which can be a valuable asset, point of differentiation, and competitive advantage for your business.
5: Tech Skills
Off-the-shelf software is said to require minimal tech skills, and this is often touted as a key benefit. Yet this is only partially true, as you still need to hire a team of consultants to implement it. When complex customisations are necessary, you also need help from a multitude of tech specialists.
While building custom software requires development work, OutSystems’ visual programming approach means small teams can rapidly deliver high-quality enterprise-grade solutions.
6: Total Cost of Ownership (TCO)
Many IT Leaders find the lower price tag of COTS solutions and the ability to avoid building software appealing. However, while off-the-shelf software usually requires a lower initial investment, the hidden costs—such as additional licensing fees for extra users, customisations, and integration work—can quickly add up and make TCO harder to control.
While custom software may require a higher upfront investment, the total cost of ownership (TCO) of custom software development platforms is likely to be lower when you consider all the direct and indirect expenses involved in the entire lifecycle of your software. Find out more about the cost of custom software development.
Custom Software Solutions built with AI-powered low-code platforms such as OutSystems come out ahead on cost and value
While COTS solutions offer advantages like a potentially lower initial investment, custom software solutions built using OutSystems’ AI-powered low-code platform are worth considering due to their ability to minimise cost and maximise value over the software’s entire lifetime.
The many benefits of building custom solutions with OutSystems include:
- Providing a perfect functional fit that a generic COTS product cannot match
- Building from the ground up to align with your specific processes, goals, and challenges.
- Quickly and easily adapting, scaling and evolving solutions to meet future business needs
- Preserving the system integrity of your core solutions
- Complementing your core systems through unified front-end applications
- Supporting easy integrations with other systems out-of-the-box
- Offering seamless, pixel-perfect user experiences on any device
- Deploying custom software quicker than complex COTS customisations
- Providing greater control and ownership, allowing businesses to steer their digital strategies without depending on a vendor’s roadmap
- Using fewer tech skills than those needed for complex COTS customisations
- Achieving a lower total cost of ownership (TCO) by eliminating the hidden costs associated with COTS, such as extensive customisation, integration, ongoing licensing fees and additional fees for large numbers of users.
Ultimately, custom OutSystems low-code solutions provide the flexibility, scalability, and competitive edge needed to adapt to the ever-changing business landscape, making them a better choice for organisations looking to innovate and grow over the long term.
Investing in OutSystems software ensures that your technology supports your business goals rather than dictating them as COTS solutions can do.
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