Custom Software ROI: How to Get the Most out Your Investment Blog Feature

By: Dave Devitt on May 11th, 2018

Custom Software ROI: How to Get the Most out Your Investment

No matter what kind of software product you decide is right for your needs, you want to make sure that you get the highest return on investment. In this article, we'll discuss what steps you should take before purchasing custom software in order to make it a successful and valuable project.

Proper planning is key to generating ROI from your software. Our free checklist provides a clear path for you to set your project up for success.

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The ROI of Custom Software

When thinking about the ROI of a custom software application, you can split the benefits into two categories: tangible and intangible.

Tangible benefits are those that you can easily calculate and monitor over time in the form of metrics and key performance indicators (KPIs). These are generally of three types:

  • Sales metrics such as lead conversion.
  • HR metrics such as employee satisfaction and retention.
  • Operations metrics such as efficiency and uptime.
While you can observe tangible benefits with either custom or packaged software, using custom software will ensure that you can track all of the metrics that interest you within a single application. On the other hand, you might have to use multiple packaged software applications in order to get all the information you need. Intangible benefits are less obviously visible in the form of hard data, but still can bring major advantages to your business. Some examples are:
  • Reducing errors: Custom software can help automate your business processes, lowering the amount of human error.
  • Happier staff: Employees can spend less time on tedious manual tasks and more time on meaningful, higher-level activities.
  • Happier customers: The right software can help you better understand and communicate with your customer base.
  • Regulation and compliance: Laws such as HIPAA and the Sarbanes-Oxley Act require strict compliance to requirements that custom software can enforce.

Of course, when thinking about ROI you must consider the costs as well as the benefits. One major difference between custom and packaged software is often the choice between recurring and one-time costs.

If you're purchasing a pre-built enterprise resource planning (ERP) system, for example, then you likely have to pay recurring licensing and maintenance costs, often based on the number of users. The only major cost of a custom ERP system once it's been built, on the other hand, are any changes or new features that you'd like to add.

How to Get the Highest ROI From Custom Software

1. Do your homework

The right custom software development company can help bring your idea to life, but they don’t know your business as well as you do. Make sure you know all the ins and outs you could need beforehand, such as integrations and reporting requirements, so that you're 100 percent satisfied with the final product.

One activity that can help is to map out all of your current business processes to see how an automated solution can fit into it. Doing this will help you separate your "must have" features from those that are only "nice to have."

2. Involve your employees in the planning process

Your employees know many things about the company's day-to-day operations that you might not. They can often provide insight into how a new software solution can actually help increase efficiencies in the company.

Consulting with your employees before you start the project can also help boost morale when the software is actually released. When they see that their feedback was considered in the final solution, they'll be more excited and inclined to use it.

3. Think about your future needs

Unlike packaged software, custom software won't automatically receive updates at regular intervals with new features and bug fixes. The advantage of custom software, however, is that you have complete control over how the application looks and feels and what it does.

Because your custom software needs to be scalable and built to last, you should think at least into the medium term, several years in the future. Design the application for not just what you need now, but for what your business will look like down the line.

4. Train your staff appropriately

Your new custom software may be perfectly planned and developed, with just the right amount of input from employees. However, you aren't going to see a significant ROI if your staff isn't actually using the new software, or isn't using it to its highest potential.

During and after the new software's rollout, train and educate your staff about its capabilities so that they're familiar with all of its features. Consider creating a manual or knowledge base that employees can consult after the training is over.

5. Do the project in phases

With custom software, you have control not only over what the final product contains, but also how it's developed. Performing the project in several phases is often the more cost-effective and timely option.

Breaking development into several parts allows you to test items out and provide feedback as you move into the next phase with the company. This reduces the risk that you'll be dissatisfied with the final product.

6. Pick a partner you can trust

Choosing the right custom software development company may be the most important factor of all for your ROI. Do your research ahead of time and generate a list of questions to ask potential development partners.

Your partner should be reliable and easy to communicate with, demonstrating that they understand your situation. They should also have experience with building the type of software you need for clients in your industry.


The more work that you put in ahead of time, the more likely it is that you'll see a successful ROI from your custom software project. Make sure that you know exactly what you want and the benefits that your new software can bring to your business.


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