Digital Transformation in Enterprises: Off-the-Shelf vs. Custom Software

November 24, 2022by MIHAELA BÎNZARI

More and more businesses choose digital transformation as a solution to grow, reduce costs, and answer to changing markets. According to Gartner, 2023 technology trends are going to impact companies’ strategic development for the coming three years. They are also going to keep them focused on four key priorities – optimization, scaling, pioneering, and sustainable technology. But why is digital transformation so important and how significant are software products in supporting companies to upscale? Let’s take a look.

What is digital transformation?

Digital transformation is the implementation of digital technologies or software to build new, or to improve the already running, business processes, and strategies. Through digital approaches, companies tend to boost customer experience, technology infrastructure, processes’ efficiency, data management, company culture, and employee experience – as revealed in this study published by the Harvard Business School.

What are the advantages of digital transformation within an enterprise?

In the technology era, digital transformation brings multiple key benefits to companies in terms of business growth processes, enabling to escalate the time-to-market, fasten the customer response time, grow the customer satisfaction, and maintain a competitive advantage in the market.

It comes also with enhanced possibilities for the internal workflows of organizations, speeding up processes related to the improvement of employees’ productivity, ensuring transparency and communication across departments and teams, increasing agility and operational efficiency, and generating centralized data-driven insights.

Off-the-shelf and custom software are the two enterprise software products chosen by companies in their path to digital transformation. Either used individually, or in tandem – if implemented, they both bring value to organizations.

What is off-the-shelf enterprise software?

Off-the-shelf software for enterprises describes commercial applications and technologies developed for the mass market and used by organizations to optimize their day-to-day operations and processes.

Also known as packaged software, this kind of enterprise software supports the standardization of business processes and the improvement of employees’ productivity and workflow. It comes with a package of features, usually available for any of the platforms your organization is using. You can customize some of them, but your options are limited, and sometimes, you must adapt or even modify your internal processes and procedures to make it fit in. If you don’t have any special requirements, then this is a convenient solution to go for.

As off-the-shelf enterprise software is developed for a large audience, it is easy to train teams to use it on a daily basis. Also, it allows you to scan the products through accessing feedbacks and understand if it is going to work for your organization or not.

The costs it involves include the annual fee, that corresponds to the size of your company (the largest you are, the more expensive is the fee). Take into consideration that you are possibly going to pay for more features than you need.

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What is custom software?

Custom software is a solution that answers to the specific needs of companies. It comes as a tailored approach in the organizations’ way to innovate and keep the pace with the dynamic environment of their industries.

Custom software development involves the process of software product development with unique features and requirements, including application customization, application modernization, and application management. It gives you ownership to the code and it gives you the freedom to update it or adapt continuously at any time.

In the matter of availability, the tailor-made features offered by custom software product development take a longer time to be deployed. You can choose to build them in-house, or to outsource to a software development company. The decision made to this effect is going to define the way of working, estimate the delivery time, and the launching process – in iterations or in a single release.

Custom software products usually involve higher upfront costs, but you can always optimize them by choosing thoroughly the provider of software development services. The good news is that in the long term, the investment translates into increased efficiency and productivity, more precise and reliable processes, and competitive advantages in the market.

Where to start when developing a custom software?

Here are 3 steps to apply for a smooth start of the custom software product development process.

Set clear business goals
Start with identifying the business growth and internal processes goals that you are expecting to reach. It will help you to define the features of the software product to be developed.
List pain points and define processes
Determine your customers’ expectations and the pain points that didn’t let you meet them. Address all these needs when defining the functionalities that you are going to discuss with the custom software development team or company.
Look for a software development partner with expertise in your industry
Target a provider that had already worked on similar projects and that understands your industry’s market and trends. They will come with important insights about the best solutions that fit your business goals.

Off-the-shelf Software

Custom Software

Flexibility

  • It involves some customizable features, but the options are limited.
  • Possible difficulties during integration. Sometimes, you have to change internal processes, and adapt to the software features.
  • You have to wait for the provider to launch updates.
  • It allows to customize and develop all the features organizations need and scale them with the business.
  • Easy to integrate. You can adapt it to your already existing internal processes.
  • You can update it when you feel it necessary.

Costs

  • Annual fees – the size depends on organizations’ size (the largest, the more expensive).
  • You have to pay for more features than you usually need.
  • Involves higher upfront costs, but there are no annual expenses for licenses.
  • You develop just the features your organization needs.

Availability

  • Immediately after purchasing the license.
  • You can get the full product when you need it.
  • It takes time to be developed.
  • You have the choice to release it in iterations or in a single release.
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