What Percentage of Companies Use Custom Software?
According to KBV Research, the size of the global custom software development market is expected to increase by 20.3% between 2018 and 2028, reaching $85.9 billion. Their data also indicates that while the bulk of the market focused on larger enterprise businesses investing in custom software during the start of that decade, by 2028, the market will consist of more than 45% of small and medium-sized enterprises investing in custom software.
What Is Custom Software?
Custom software development is the creation of software that has been designed and built for one specific organization or client. Whereas commercial off-the-shelf (COTS) software is designed to perform a common function or set of functions that meet the needs of the masses, custom software is usually designed exclusively to support the unique needs of one entity.
Who Buys Custom Software?
Some business owners may think their company is way too small to invest in something like custom software, but that couldn’t be further from the truth.
Whether investing in COTS or custom software development, the size of your company is not as important as how the software will solve your business needs.
Everyone, from small to medium businesses (SMBs) and up to enterprise businesses, can benefit from leveraging software to solve business-critical problems. In fact, regardless of size, most companies face many of the same challenges, just at a different scale. Some of the most common technology challenges today include:
- Automating time-consuming tasks
- Cloud adoption and migration
- Digital transformation
- Managing data
- Upgrading and integrating systems
- Data security
- Supporting remote workers
As you can see, it’s not about the size of your business. It’s about the size of your problems and finding the right-fit software solutions to stop such issues from negatively impacting your bottom line. That's why such a sizable percentage of companies use custom software.
Additionally, for SMBs worried about custom software development affordability, many custom software companies can work within your budget.
Being budget-conscious could mean rightsizing a project to fit your immediate priorities and budgetary limits. It could also mean that instead of doing a huge software development project, you divide that project into smaller phases to build out over time. Doing so can be far more budget-friendly while still delivering significant long term ROI.
3 Ways Custom Software Development Boosts Productivity
#1: Focuses on Solving Your Top Priority Needs
Before you invest in any software, ideally you should prioritize which business needs you want to solve first. For example, your two biggest needs could be improving market position and increasing productivity.
When you buy COTS, the money you pay goes to upgrading software that all your competitors are also using. If you’re all using the same tech, then none of you are developing a competitive advantage through your software investments.
In contrast, when you purchase custom software to invest in your immediate software development needs (gaining market position), you give yourself a competitive advantage in the marketplace by leveraging software that no one else has. The custom software designed to optimize your business can increase your overall efficiency and make your business a far more desirable brand to customers and prospects, which will improve your market position.
Likewise, by choosing custom software that optimizes your business, not only can you improve your market position, but you can also increase productivity through that optimization process.
For instance, by upgrading your business workflows and automating manual tasks, employees can get through their workday faster and spend more time on higher-value projects. Additionally, by automating and upgrading data management throughout the company, employees can more easily access information to boost their productivity and do their jobs more successfully.
#2: Custom Software Bends to You, Not Vice Versa
If you choose to buy COTS software, you don’t often get the option to customize that software without spending extra money. In other words, you must sacrifice your unique business processes to fit within the COTS software framework. Doing so can negatively impact your productivity, as you may have to alter processes to fit the COTS software.
However, by investing in custom software development, you can have software solutions designed specifically to fit your employees' needs, your workflows, and your business processes.
Having custom software that works with how your employees already do business can reduce the learning curve of training on new software, which can get your team up to speed faster.
Additionally, if you bring your employees into the software development conversation early on, they can work with developers to examine current business processes and figure out practical optimization strategies that increase productivity. Doing so can also help ensure that the software works for those who will use it every day.
#3: Custom Software Updates Support Your Shifting Business Needs
Software changes, including updates and maintenance, are simple facts of life. That said, your control over those changes varies greatly between software types, and a loss of control could translate into a loss of productivity.
For instance, COTS software companies make decisions on updates and add-ons based on shifts in the market and requests from their highest-paying customers. If you are not one of those customers, your requests may be put at the bottom of the priority list, which does not help your business.
Additionally, for some businesses, COTS software updates can wreak havoc on your workflows and processes. It’s not uncommon for companies to have to go in and “fix” their systems to accommodate the COTS software updates. These fixes can slow down your company’s normal flow of business by hours or even weeks, depending on the issue.
If your team does not have the technical resources to address these issues, you may have to pay the COTS company to have their technicians provide the support and maintenance you need. Doing so will only add more time to solving the problem.
With custom software development, you own the software that you had built, so you choose what gets updated and when those updates occur.
Some companies have internal IT teams that manage those updates on a routine basis. But not all businesses have the right IT resources in place, and they may need to work with custom software development companies who can manage support and maintenance needs for them.
As your company’s needs change over time, your custom software can scale with you through the appropriate updates and changes. You can even work with a custom software development company to plan for those updates and changes that make the most sense for your business growth trajectory.
What to Expect from the Custom Software Development Process
When investing in custom software, you’ll usually work with a custom software development company that specializes in creating either the solutions you need and/or solutions for your particular industry. Each custom software development company has its own processes for working with clients and building software solutions.
For example, at AltSource, our “Go-Live Development Process” consists of four steps:
- Connect: You attend meetings with our team of software developers and business strategists to discuss what’s going on with your company and potential software solutions.
- Reimagine: Our Reimagine Discovery Process allows our team to dive deep into your business. We gather requirements and identify how software solutions could optimize your company.
- Build: Our Build Process involves working with you to help us iterate and test software. Doing so ensures the solution we create works for your needs.
- Launch: When everything is ready, we roll out the software live and support you through the deployment process.
Let AltSource Answer Your Custom Software Questions
Choosing to invest in any software development is a big decision. You can learn more about how to choose between COTS and custom software by reviewing this article.
At AltSource, we often recommend a buy-and-build approach. In other words, buy the COTS software that makes sense to be bought, but build the software solutions that you need to succeed. If you want to learn more about this approach or get any of your custom software questions answered, feel free to send us a message: email@example.com