We wrote previously about the benefits of customization and the importance of finding a system that is a perfect fit for your business, but the question remains: which is better, custom software or out-of-the-box ERP software?
There is rarely a straightforward answer for this question. In this post we will explore the benefits of each option and make some recommendations.
There is no question that a custom system should be able to accommodate your specific business processes better – after all it was designed specifically with you in mind – however, does that always make it a superior option? Not necessarily.
For instance, many businesses may discover that their unique processes are unique for a reason – they are not the most efficient or the best way to do things. Adapting business processes to a software package that works well for a given industry may introduce efficiencies that were not even considered to begin with. Conversely, though, changing good processes to fit the straight jacket of a software package can cause loss of competitive advantages.
A flexible out-of-the-box system can employ minor customization to existing robust features to accommodate business process variations without having to start from scratch with costly development.
Flexibility varies greatly from system to system. Some ERP software systems are very flexible while others are rigid. Custom software, by its very nature, should be quite flexible but be sure you are not putting yourself in the hands of a single developer.
We often hear from businesses who are desperate to find an off-the-shelf solution after their sole developer retires, passes away or ceases support for their custom system.
Support & Upgrades
Custom systems are typically built by a single individual or a small team as a one-off project, so support will vary. Because projects differ so greatly from client to client, each project is unlikely to be able to take advantage of development on other systems.
Out-of-the-box software, on the other hand, can pass advancements or customizations on to other customers via future upgrades and since the core functionality is common across customers, it is easier to support each customer.
Overall accounting, order entry and contact management features tend to be similar across businesses in a given industry – so finding a software package suited to that industry means the vast majority of your needs are covered without a single line of new code being written.
Custom software, on the other hand, will typically have fewer bells and whistles, and may be more expensive because most, or all, of the development is from scratch. For the sake of the evaluation, both solutions may be of comparable cost.
Time to Deploy
Out of the box ERP software can take anywhere from 2-6 months to install (data migration, training, installation etc.) whereas custom software has an indeterminate timeframe and will vary greatly from project to project.
It goes without saying, however, that custom software can be expected to take much longer to develop and implement.
For very unique businesses in unique industries, custom software may make sense. The average business, however, can almost certainly find a well-suited solution with out-of-the-box software, perhaps taking advantage of some mild or moderate customization for truly unique processes.