If you are buying some personal item, the answer to this question can be a matter of your personal preferences. You may enjoy comfort and certainty of the existing products or you prefer to be unique. However, when choosing new software, each company must ask itself a set of questions and give precise answers before making a final decision and continuing with the procurement.
Whether the company has just couple of employees or it is considered as market leader it’s realistic to assume that the two are using some kind of software. Since both external and internal circumstances are constantly changing, sooner or later a need for a new software solution will present itself. It can be a need for an application just for certain business functions, an integral solution that should support the entire business or a highly necessary update of an existing but outdated version of the system.
The setting of a plan is quite clear. On the one hand there is a need, on the other known number of trusted and prominent vendors. But the task is not as simple as it seems. There is one, first and most important question that proves aforesaid: An off the rack or customized product?
If you are buying some personal item, the answer to this question can be a matter of your personal preferences. You may enjoy comfort and certainty of the existing products or you prefer to be unique. However, when choosing new software, each company must ask itself a set of questions and give precise answers before making a final decision and continuing with the procurement:
- What are our needs and possibilities for choosing new software?
- What is the current volume of the business?
- What are the deadlines for implementation?
- What is our budget and how much can we deviate from it?
- Do we have significant growth plans?
- In which areas we want to grow and will it change the business structure?
- Does the success of the company depend on the use of the latest technologies?
If, after analyzing all the answers, the company concludes that the best choice is an existing, off the rack product there are certain advantages and disadvantages to account on.
The existing product is a brand and it is surely already implemented with several different clients.
That’s why it’s usually cheaper. Since it does not imply a new development, there is no waiting for its introduction and this generally shortens the set up time.
Because it is used by larger number of companies, existing product is a guarantee of stability. In several cycles of implementation some bugs were surely spotted and there was sufficient time for them to be fixed.
You may ask yourself now: Why would someone, faced with all these obvious advantages, want to go and develop a brand new product? Despite all this there are some shortcomings that should not be overlooked.
During the implementation, hidden costs may occur. In the beginning companies are aware only of the initial price. If they do not anticipate their needs well then buying new modules and functionalities becomes necessary. This will cause additional costs that can often lead to a price significantly higher than the price of a customized product.
With existing products, changes of the system and integration with other applications can become a big obstacle. If there is a need for an interface that cannot be properly executed the company can suffer additional losses. If, for example, the existing accounting software cannot be adequately connected to the core business system, the company may have a problem in the future with missing or wrong data and poor quality reports, all of which will disrupt the business and have additional financial implications.
Another important drawback to be kept in mind is limited scalability. If the company expands its operations in new areas or significantly increases the volume of business the software may not be able to properly respond to the new level of needs. We faced this situation working with one renowned domestic clinic. After the acquisition of additional clinics the existing software became too slow and was unable to adequately handle increased volume of data. Since they did not suitably plan future growth on time, they found themselves in a situation where the performance of the main activity was slowed down due to the insufficient capacity of the software.
Because of all the above mentioned the right answer may be to purchase completely new product.
Customized software is made to be maximally scalable from the very beginning. With increased business volume it can be upgraded and adapted to changing needs and conditions. It enables seamless integration with other systems which makes operational work easier and eliminates the need for manual entries or data transfer.
When choosing the existing products one is consciously accepting certain shortages in exchange for a lower price. On the other side, the price is the most important flaw of the customized product. As far as the new development is concerned that is another important thing to consider. Since it is made from scratch it will usually require employment of large development team and therefore induce higher costs. A completely new development also implies a considerable amount of time, so the implementation can lasts for quite long. For existing products it takes an average of couple of months while the customized product can consume period of one year and sometimes two years in order to be in full use.
After all said, what can be the right solution?
There is no single answer to this question nor quick conclusion. Before making a decision, each company should give answers to the questions from the beginning of the text. Even if they know which questions they should ask themselves it can happen very often that answers will be wrong because of inevitable subjectivity.
Therefore, the best option is to engage experts who will analyze the current situation, the set of necessary functionalities, the existence of products that meet all the needs or the necessity for new development if there is no appropriate product offered by the market. Although it is clear that there is no universal answer and that analysis is a key stage in selection and procurement, one thing is certain – there is a right solution for every company.