When custom software makes sense, and when it doesn't

Most businesses should buy software before they build it. Off-the-shelf tools are cheaper to start with, someone else maintains them, and they benefit from what thousands of other customers have asked for. Custom software earns its place in a smaller set of situations.

Is this process part of your advantage?

If a process is ordinary, such as payroll or email, buy a tool. If the way you do something is a reason customers choose you, adapting your business to a generic product can erase the difference. That's where custom software tends to pay off.

How much manual work surrounds the current tool?

Look at what your team does around the software. Exports, spreadsheets and retyping are signs that a tool doesn't fit. Sometimes a simple integration fixes this. Sometimes the workarounds have become the real system.

What will it cost to own?

The first build is only part of the cost. Software needs hosting, security updates and changes as your business evolves. Compare several years of ownership against several years of subscriptions, not the build cost against one year of fees.

Can you start small?

A good custom project doesn't have to replace everything at once. Choose the part that causes the most pain, build that and connect it to what you already have. You'll learn more from one working release than from a long specification.

If you answered yes to the first two questions and you can fund the upkeep, custom software is worth a serious look. If not, a well-configured existing product is probably the better business decision.