When is a custom app the right choice?
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The document discusses the considerations for choosing between custom applications and off-the-shelf (OTS) solutions for business software. It outlines the risks, rewards, and potential pitfalls of relying on OTS products, the importance of ensuring software aligns with business needs, and the long-term implications of software investments. Additionally, it highlights the advantages of custom software tailored to specific business processes, emphasizing the need for careful planning and adaptive methodologies to maximize return on investment.
When is a custom app the right choice?
- 1. When is a Custom App The Right Choice? Refuse to Fail
- 2. Off The Shelf – The Default • OTS – Default solution for business automation • Even when it is not as efficient or focused as it should be • How many SMB’s start with MS Office suite to manage their business • ”Graduating” to apps like Salesforce or Zoho Office • How many continue with these solutions long after they no longer “fit?”
- 3. Off The Shelf – The Default • What opportunities are you missing? • What are the downsides, risks and rewards in business software investment • Custom & OTS?
- 4. It Starts with a Simple Need… • We need to bring together items or costs for a sale • We grab Excel • We need to share the punch list with our team • So we add a little detail and email a copy to each member • We ask for an update on progress • Copies of the spreadsheet come back. Some have additional columns for hours, status & issues. Some don’t • Eventually the chain of casual spreadsheets becomes a process • Bound together with customer, job and version numbers Our Process
- 5. It Starts with a Simple Need… • For a while – it works. • We add and modify templates • Versions break into different types for different situations • Then we wake up • We’re wasting a lot of time managing our services • Consolidated reports have to be manually generated from many versions of sheets across several jobs • We want to change but… • We have a process and it works (sorta…) • Our data is all over the place and not a simple, structured set • Knowing what we do and what we need are two different things Our Process
- 6. We Graduate to Market-Driven Solutions • Getting past the first hurdle – • a bunch of ad-hoc adaptions using an OTS office productivity apps to a SaaS or OTS app that is more of a fit is just one step of many
- 7. We Graduate to Market-Driven Solutions • Broad market apps have many compromises to navigate • A process step may be critical for one group but hard to add in ways that don’t confuse or burden the majority of users • More choices and features may be good for some but feature bloat for others • The feature that was advocated by a small, vocal group can end up being forgotten – rarely updated or maintained
- 8. We Graduate to Market-Driven Solutions • On the buyer side – selecting the right application is a balancing act • Address critical (but not all your needs) • Adapt to a big, we-do-it-all solution that gives us an overwhelming set of choices and decisions at every turn • We might select an app for a specific need – but when we do we’re often faced with integration issues. How do we pass data to other apps?
- 9. We Graduate to Market-Driven Solutions • If we select an app that we need to adapt for consolidated reporting or that doesn’t quite fit our process… • We find ourselves using workarounds – spreadsheets, handwritten notes, emails, etc. • If we’re not careful, we end up right back where we started but with more confusion, process overhead and costs
- 10. We Graduate to Market-Driven Solutions • But – it doesn’t always end up this way. • A standard OTS solution can be a perfect fit for accounting & HR needs • Companies handling inventory and shipping can find many alternatives, some specific to their industry or easily adaptable • And there can be side benefits to adopting industry standard solutions – like recruiting. You could have a pool of proven, skilled users to select from…
- 11. So – How Do We Know? When is it time to consider a custom application? • All software is an investment at some level • A widely used SaaS or packaged solution is an investment in a specific set of features, processes and data management • It may be a recognized expense for accounting purposes, but your business still needs to adapt processes and procedures to match the assumptions in the app • Once you have implemented, you need to continue to invest in training, refining processes and standards to maintain a fit with the application • Your data and integration possibilities are “locked” in the application solution, even when you can extract and hold data locally • If the application addresses a lot of situations beyond your needs – you may be paying for more value than you can justify over the long run • As your business and the market evolves over time – the application may or may not continue to meet your needs. Your business changes and so does the market the application addresses…
- 12. So – How Do We Know? A checklist of considerations for your investment • If every application you adopt is an investment, what are some of the key points to consider? • Long term vs short term • Beyond initial costs • Strategic fit & competitive advantage
- 13. Market Solutions May Be Cheaper… • At least initially • Often cited, but rarely examined over the lifetime of the solution • What will the lifetime costs be considering licenses and seats (consider growth)? • There are often breaking points that can push you into enterprise pricing and costs beyond your reach • What are the costs of implementation, training, adaption, integration, and maintenance? • What will be the cost to migrate to another solution if you need to?
- 14. You Can Buy & Use in the Same Day… • This is a lot less likely than it once was • Market-driven solutions conquer markets two ways • Add features to capture more markets and “edge” cases • Become more focused and targeted to reach deeper into niche situations (generally higher license costs) • Either path requires more from users • More training and adaption to fit the application • Longer implementation projects and more effort to maintain internal adaption without adding workarounds • If your driver for a selection is quick implementation & low training costs – it may be a lost cause from the beginning. • Time from technical implementation to full production is generally longer than you imagine
- 15. An Existing Solution May Meet the Majority of Your Needs • Certainly true in many situations and for some business areas – this is enough to make the choice • Do you really want to try to manage accounting or personnel issues across many jurisdictions and changes in regulations?
- 16. An Existing Solution May Meet the Majority of Your Needs • But – in other situations • A solution that fits today might not scale or continue to evolve in the same direction as your business • Most companies do not have enough influence to change the direction of a packaged solution • Your size and business maturity are important issues to consider. • You may not fully understand your needs. If that is a consideration, how much you invest now is a serious concern
- 17. Data Portability and Integration • May not be an issue now – what about the future? • If you have one or two core apps this may not be an issue • As your business scales and/or you bring in additional apps • Moving data between apps may be possible with APIs and webservices • But – integration has a cost and if your apps are proprietary, they may require vendor professional services (with higher costs)
- 18. Data Portability and Integration • If you outgrow a solution • If you need to move to another system, can your data move with you? • If you can extract your data – what will it cost to transform it to the structure of the new application? • There can be may (unpleasant) surprises in data migration between proprietary solutions • Data lock-in can be a nasty animal to contend with
- 19. Reporting May Be Good Enough Initially • Can it continue to grow with you? • A commercial app will usually have a reasonable reporting package for the app itself • As your business grows and you add additional applications and systems – will it continue to meet your needs? • In most cases the integration & rationalization of data between applications will require custom development or manual processes to extract useful reports • The larger and more complex a business becomes, the more of a burden this will be
- 20. Custom Software is Often More Expensive Initially • And development isn’t an end to your costs… • All software is an investment - and not a one-time cost • Custom apps have a built in advantage however • They address your needs directly and generally require less adaption • They can evolve over time to continue to meet your needs
- 21. Custom Software is Often More Expensive Initially • But – if you don’t budget for maintenance, updates and evolutionary change • Custom apps will eventually become restrictive and not cost- effective to retain • All automation projects have a lifetime cost and need to continue to evolve with your business – without holding you back • ROI is always a consideration
- 22. Integration & Extensibility • Under your control in custom applications • Seldom discussed but can be a significant time and cost factor in custom apps • Key is deciding what is core and necessary in your app • Do you need a custom payment solution? • Or can you integrate an existing service that can handle transactions transparently?
- 23. Integration & Extensibility • Integration with 3rd party solutions can allow custom apps to only need to provide the proprietary glue, process and data to provide necessary functionality • Mapping, shipping & delivery, supply chain management, etc. • Can greatly reduce initial costs and flexibility – now and in the future
- 24. Unfair Advantage? • Every businessman wants one. • A custom app can embody your business value and competitive advantage if it addresses your core processes and customer services • Requires careful planning and thought – • A full scale development project to solve all your problems isn’t a guaranteed success • Building functionality incrementally and gaining a better understanding by leveraging feedback – using agile and lean methodologies – is a better way to insure custom app ROI and competitive advantage
- 25. A More Natural Fit? • A custom app can account for your processes and assumptions – requiring less rethinking and realignment • But, it is also an opportunity to streamline and rethink your assumptions instead of simply automating a process of tunnels and dead ends
- 26. A More Natural Fit? • And – assuming you cannot know everything the day development commences... • Custom apps can (and should) be extensible and flexible over time • Your customers need more reports, direct access to inventory levels (etc.) – it is your software. The need can be addressed. • And it is an opportunity to leave some “nice to have” features on the table • Allow users to try a more streamlined version and learn what they really need.
- 27. Custom Software is an Important Opportunity • But it isn’t necessary for every situation • It can be an important business advantage • But only if you address your core business value and avoid features better addressed by third parties or outside services • Some will say you need in-house technical expertise to make the effort successful • But if you have a clear understanding of your business and market - a technical development partner can help you avoid the distraction and time required to acquire and manage resources • If you decide to move forward with a custom project • Use Agile & Lean methodologies – build incrementally and evolve • Understand software is an investment – but if done right – the ROI can be quite high
- 28. We’d Like to Help • Scio provides end-to-end engineering services • A collaborative partnership to ensure your team is an integral part of solutions • We’re flexible • From assessing your needs to developing, implementing, maintaining solutions – we can offer as much or as little help as you need • Our teams can work virtually or on your site – or a blend of the two
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