Jim was frustrated. He’d signed a year commitment with a Customer Relationship Management (CRM) software tool. It was a large financial investment, but he hoped that the tool would be the key to taking his company to the next stage of growth.
After starting to use the software, Jim continued to be plagued with problems. Many of his employees wouldn’t even touch the tool. Those that were trying to use it kept running into problems and needing help. Jim didn’t have anyone on staff with the expertise to help, so employees were continually contacting the CRM company for support. Those hours were adding up.
But the biggest problem? The niggling fear that the software wasn’t really doing what Jim needed it to do in the first place. He couldn’t find any way to integrate it with his financial software. And combining it with his sales software was an extra expense each month.
Now Jim is wondering if he should’ve gotten a quote for custom software prior to committing to a year with the CRM. But he just doesn’t know much about custom software. How does he know if he needs it?
Are you asking the same question? Here are the questions to ask yourself that will help you think through whether you need custom software:
1. Can I speed up my business processes with automation? If so, software can definitely help. But whether you need off-the-shelf or custom, well, it depends.
There are a LOT of options that are already out there – and one or more of them will solve many automation problems. Before starting down a path of custom software, see if anything that’s already written will meet your automation needs. Here’s a list of several options. But you can find more customized options just by searching for them online.
If none of the off-the-shelf options will work for you, custom software is your best bet. The push-back we usually get is expense: “I can’t afford custom software!” It’s true that custom software can be expensive (read more about that here: How Much Should My Custom Software Cost?), but over time, automation is a huge money-saver. Remember, time is money. If custom software automation would free up 50% of an employee’s time, that’s a big benefit. (Check out this article about why you should automate more business processes.)
2. If I have existing software, are employees using it? If they aren’t, there’s probably a reason. Several are easy to overcome:
Resistance to change.
Fear that software will make their jobs obsolete.
Insufficient or nonexistent training.
Training can be a huge problem with off-the-shelf software, because training support is usually a per-hour cost. From HR Gazette: “Face it, their goal is to make you just good enough that you think it’s your fault. It’s the ultimate con-man trick, this way they keep you coming back for more help. I have literally seen a small biz software training where the buyer never even touched the mouse. No wonder your employees hate the software (and you for buying it!) They cannot use it because they weren’t trained effectively, but you think it’s their fault.”
If nothing else, maybe your employees aren’t using the software because it just isn’t meeting their needs. The easiest solution? Interview those that should be using the software to find out why they aren’t. And if it’s feature-based, get a list of specific needs together. You can use that list to get a quote for custom software.
3. Would custom software give me a strategic advantage over competitors? This is where custom software shines.
If you have an idea that’s in your wheelhouse, but you can’t quite pull it off with your current technology, custom software is a great place to look. Make a list of exactly what you would want your software to do (dream big!). You could even draw up some pictures of what you think your software screens could look like. Take your ideas to a custom software shop, ask them to complete an ROI (return on investment) analysis, and make a cost comparison. Would the idea possibly pay for itself?
“When you rely on the same off-the-shelf software as your rival does, it is that much more difficult to outperform them. By designing your own technology that is ideally suited for your specific business operations, you can garner a competitive advantage relative to your competitors. That advantage grows as you invest more heavily in your proprietary systems.”
Right now, EduSource is in a beta phase of just such a project for internal use. We are creating a data aggregating model that takes information such as how many hours developers have spent on a project and how many tasks on the project are complete, and pulls that information automatically into a graphical display. Each morning, our teams meet to look at the numbers and monitor whether each project is on-track and in-budget. Since it’s unusual for a custom software company to complete projects on time and within budget, this data aggregation is giving EduSource a competitive advantage.
4. Would custom software actually save me money over off-the-shelf software? Using off-the-shelf software that charges a per-month, per-user licensing fee is like leasing a car rather than buying. Sometimes, it makes a ton of sense. Maybe you aren’t sure what you need, or you want to divide the cost across months. But all too often, extra fees will add up to a price tag that’s higher than buying the car. It’s the same with custom software.
Though custom software is expensive, off-the-shelf can add up, too. There are hidden costs that add up in purchased software. Here’s an example using Salesforce, a popular CRM tool:
License fees. The very basic Salesforce version costs $75 per user per month. Not too bad when you’re a company of seven, but if you grow quickly, those costs can add up. Per-user costs go up from there.
Training costs. As mentioned above, some software companies will charge for support. If support and training is not built in, any time you call with questions, there will be a fee associated. For Salesforce, it’s recommended that companies budget at least double what they pay monthly for licensing to cover support costs. Double!
Implementation fee. They don’t advertise one on their website, but the Internet world seems to agree that Salesforce always charges an implementation fee, starting at $5,000 on the low end and going up from there.
Add-on functionality. At Salesforce, for instance, things like “mobile” add up to $50 per user per month.
Storage costs. If you need more storage capacity than comes with a streamlined version of Salesforce, costs for additional storage are exorbitant and much higher than you could get elsewhere.
This is just an example, but many software services will have these kinds of hidden fees (though Salesforce is notorious for them). Make sure to ask about them upfront.
5. Are we running the whole business from one over-burdened, shared spreadsheet? If the answer to this question is yes, don’t worry, you’re not alone.
EduSource recently worked with a company that was managing a huge amount of information, including daily logistics of several semi rigs, mileage counts, addresses of stops, and optimal routes, all from one Excel workbook. This document was passed between several team members. They knew it was a recipe for disaster, but didn’t know what to do about it. They couldn’t find software that would meet their needs, so we built them something custom. We were able to add in a lot of bells and whistles, but the one basic thing that made a huge difference? Instead of only one person being able to access the spreadsheet at a time, now anyone could update the web app.
A spreadsheet can be an effective way to keep track of information, but it’s basically limited to one user at a time. (There are ways to get around this, but it’s not flawless.) On a basic level, moving to a web app allows multiple people to access the same data simultaneously. Of course, that’s only the very beginning of the benefits of a custom web app over a spreadsheet. Other benefits could fill a whole post (or a white paper, and we’re actually writing one now. Watch for it in the future!), but they have a lot to do with the usability of your data.
6. Do I have plenty of data but struggle to get information from it? This builds on the last answer. Again, if the answer is a resounding “yes,” you’re not alone.
In the spring, we started using Jira to track exactly how long it was taking us to finish each task on a project. After really watching our deadlines, we started consistently completing projects completed on time. Victory!
But somehow, we were still underestimating our costs on projects and not hitting our targeted profit margins. What was the problem? We couldn’t solve it, because our financial software wasn’t seamlessly compatible with Jira. We just couldn’t get to the data we needed.
That’s where custom software came in. We wrote our own to help us keep track of where we are on our budget compared to where we are on the project timeline. Now we’re able to start working on solving the budget problem—and we can see daily where we are on budget and on delivery.
What about you? Are you collecting data that should be useful, but you’re not sure how to make it useful? Are your various software solutions having compatibility issues that are keeping you from collecting data? If so, custom software can help.
7. Do I have staff with the technical expertise necessary to help me use off-the-shelf software to its full capacity? This goes hand-in-hand with the high training costs. Some off-the-shelf software takes a lot of technical expertise to use effectively—especially for certain features. If you have someone who can figure those kinds of things out, no problem. But if your staff is generally not technical, or if you can’t spare the technical people’s time to help figure out how to install the fix or even follow the instructions from the help center, you may have a problem.
Most custom software shops will include hands-on training in the cost of the application. We can’t speak for everyone, but with EduSource, you have confidence that we’ll always take the time to answer your questions or help you figure out how to use software that we’ve built.
8. Do I manually input the same data into two or more systems? This is pretty self-explanatory. If you have to input your day’s profit into finance software AND a system you use to keep track of inventory, that’s wasted time. Sometimes custom software is less about making something brand new, and more about connecting the software you’re already using.
This can also come into play with businesses that have multiple locations. If you have multiple people entering information at several different locations, there might be a way to automate that across the whole company.
9. Would I benefit from owning the rights to the software we use? What if you sold your software to competitors?
We once consulted with a local catering company in Indy. The owner needed software that would keep track of lead management. “We have a really specific set of needs,” he said, “and there’s just nothing like that available commercially.” According to the owner, the catering community is very close-knit. His goal was to pay to get the custom software made for his company, then resell to others in the industry.
Could you do something similar?
10. What percentage of my current software’s features am I actually using? Some off-the-shelf software options are very targeted, but others will come with a multitude of features. It’s worth determining how many of the features you’ll actually use before committing to licensing fees. Or look at your current software: are you paying for features that don’t make sense for your business?
From another perspective, maybe a feature is close, but not quite how you need it to be. According to Forbes: “The vast majority of off-the-shelf software will not allow you to modify its functionality in a meaningful way. It may be difficult to add or subtract built-in features, leading to either too many or too few functions for your company.
So what’s right for you: off-the-shelf or custom? If you’ve walked this road, would you share your decision-making process?
And of course, if custom is the way to go, we’d love to have a chance to talk to you about your ideas! Email firstname.lastname@example.org to set up a free consultation.