I have to say, I was very interested in the conclusion this article came to: custom software is better for business than COTS (commercial off the shelf) software. A quick Google search of the author’s name explained my puzzlement: he works for a custom software development house. But let’s look at some of his premises:
Forty to Sixty Percent Fit?
“The majority of commercial off-the-shelf software (COTS) products have the ability to meet forty to sixty percent of the business needs it was initially purchased to fulfill.”
The actual number is somewhere around 87%. That is, the average company implementing business software is able to find software that meets 87% or more of its needs. For some companies, the percentage is higher. But the fact that Intuit’s QuickBooks product is so popular reveals the real issue: faced with 100% fit or inexpensive 80% fit, businesses often choose the lower investment.
Lowest Common Denominator?
“These software packages are constructed with the lowest common denominator of a target market in mind…”
Uh, actually, not at all. The packages often include features that only high-end businesses need. Over the 30 years I’ve been doing ERP and accounting system implementation, I’ve often heard companies say of their current software: “This is just too big…we don’t need it all.” So if your child is growing, do you buy shoes that are a little big or just right?
Cost Competitive with Off-the-shelf?
“The cost of building a custom software solution is in today’s market is very competitive with COTS options, especially when you take into account all the additional licensing costs.”
Let’s face it, if this were true, every business would have custom software. Apples to apples in terms of features, COTS solutions offer much more bang for the buck. For $300 bucks, the features you get in QuickBooks Pro or Premier would cost thousands and thousands to develop custom.
What’s the Answer?
Just like the author of this article, I work for a company that does custom development. And we do custom work for clients all the time. But the best answer is often a combination of off-the-shelf and custom. I don’t think I’ll ever write another GL package…there are plenty of good GL products on the market. There are many clients that need just a bit more than they can get from off-the-shelf. We provide that as well. Really, there are three choices: off-the-shelf, tailored software, and custom software. They should be evaluated in that order.