Packaged Software vs. Custom Software: 7 Problems With Packaged Software Blog Feature

By: Dave Devitt on January 10th, 2018

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Packaged Software vs. Custom Software: 7 Problems With Packaged Software

Process Improvement | Business Management

Out-of-the-box software is an appealing option for many companies, which are attracted to its convenience and ease of use. While these benefits are real, it's also true that packaged software comes with its own set of downsides that you may not realize before you purchase it.

Before making the final decision between using a pre-built or a custom software solution, you should be aware of the seven problems discussed below.

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1. Cost

Although you might assume that packaged software is more cost-effective than a custom-built solution, the right answer might surprise you. Calculating the return on investment of custom software involves both the tangible improvements to business metrics and KPIs, as well as "soft" factors such as happier employees and customers.

In general, custom software development becomes more cost-effective the longer that you use it. The winner for this category depends on whether you're more comfortable with making an up-front capital expenditure, as you would with custom software development, or paying recurring operating expenses.

2. Time

The time you spend on a custom or a pre-built software application doesn't just mean the effort required to install it. Even seemingly innocuous software can quickly become a black hole that needs more and more of your IT team's time just to keep it running.

In terms of time spent on packaged software, the biggest red flag should be having to adjust your business processes to the software rather than having the software adjust to you. If you find yourself adding workarounds just to make the software function, or doing manual tasks such as transferring data that you wouldn't have to do otherwise, then the initial convenience of installation may not be worth having to constantly tweak the application further down the line.

3. Integrations

In order to save yourself this manual effort, another major concern should be how out-of-the-box software integrates with your other applications and systems. It's likely that the software will automatically connect with some, but not all, of your applications — and as luck would have it, it's probably the applications that are most important to you that are lacking this connection.

Fortunately, there are steps that you can take to mitigate this problem. If your chosen out-of-the-box solution works extremely well except for these integration issues, then you can partner with a third party to build a custom connector on top of the packaged software, so that you can get the best of both worlds.

This solution is a nice compromise if you're mostly happy with your out-of-the-box software but you don't want to perform a lot of duplicate manual work. SYDCON has written a great deal of middleware for a number of different companies in order to perform integrations between, for example, an e-commerce website and a customer relationship management system.

4. Support and Product Updates

Using a packaged software solution puts you entirely at the whim of the company that provides that solution. If there's a feature that you want or need, for example, then you're stuck waiting for the company to provide it according to their product roadmap — if they ever plan to implement it at all. You'll also be powerless to fix any bugs or security flaws until the company releases a new update.

Of course, updates might create issues of their own for your business. For example, Microsoft's Office 365 software is automatically updated at regular intervals. Unfortunately, these upgrades can conflict with the rest of your workflow, which will unexpectedly slow down or even shut down your business processes temporarily. Not only do you have to wait for packaged software to be updated, then, you also have to acknowledge that these updates may backfire and create further problems.

Custom software gives you the certainty of getting exactly what you want, when you want it. If you encounter an issue, then you'll almost certainly have an easier and faster turnaround time fixing it. Whereas out-of-the-box products will likely have a big, impersonal support department with multiple levels of bureaucracy, using a custom-built solution lets you speak directly with the person who knows how to resolve your problem.

5. Customizability

As mentioned above, you shouldn't have to adapt your business processes to the tools you use. Rather, you should choose the tools that best match your existing processes. Being able to customize the software that you use will go a long way in making it fit with your business processes — and extensive customization is something that nearly all out-of-the-box solutions can't offer.

For example, if you have clients who want their invoices formatted in a specific way that includes certain information, then out-of-the-box financial software such as QuickBooks may not be able to accommodate these requests. Using custom-built software allows your business to adapt to your clients and interact with them in the ways that are most agreeable to them. This is especially important if your clients are large companies that are used to getting what they want, and that might look elsewhere if you aren't able to provide it.

6. Security

When it comes to packaged software, the old axiom of "security through obscurity" holds very true. The more popular that an out-of-the-box solution is, the more appealing of a target it is for hackers and other malicious actors, who can find holes and vulnerabilities and use them to breach potentially thousands of targets. For example, you're much more likely to fall victim to a security flaw when using WordPress than you are by building your own website.

Problems with security also relate to the issues with support and updates mentioned above. Even if you discover a security issue with your pre-built software yourself, you have to wait for the company to fix it — all while your systems are potentially exposed.

7. Extra Features

One final issue with packaged software, tying into the first question of cost, is purchasing more features than you need. "One size fits all" software sounds great when you're listening to a sales pitch. However, this inflexibility can become a problem once you realize that you're overpaying for too much functionality, or that you have to purchase the next level of subscription just to gain access to one crucial feature.

Custom software, of course, doesn't suffer from the same issues. You can build the software exactly according to your specifications, and add or subtract features as your business requires them.

Final Thoughts

Salespeople for out-of-the-box software love to use the metaphor that the application is a "puzzle piece" that will fit right into your organization. Unfortunately, this is rarely the case in practice. Packaged software won't always mesh cleanly with your existing IT environment or business processes. In addition, out-of-the-box software comes with several major disadvantages:

  • The software features may be insufficient for your client requirements, or you may be overpaying for features you don't use.
  • You almost certainly can't customize the software beyond a few tweaks and changes. Because its scalability is limited, it's harder to use as your business grows and evolves.
  • The software could be susceptible to security flaws and vulnerabilities.

Custom software, on the other hand, solves each of the problems above. Rather than being tied to a different company's plans and visions, custom software enables you to achieve exactly what you intend, with exactly the features you need to get there.