Benefits, Risks and Costs of Custom Software

The following will help guide you in determining the scope of effort which may be required to meet your needs.  DISCLAIMER: this is a very general guide and set of recommendations.  Please contact us for a free consultation. 

Start here: What types of custom software are there?

Imagine you are a buyer of custom software and you are trying to get an idea of costs and the related risks for your project.  The project could be a SaaS product you want to launch, or internal company software to automate your business.  First of all, this will depend on the scope of the type of software that is needed.  At BDC, there are three categories we see most often:

  • Software Tools-You need a tool to perform or automate one or a few particular functions in your business.
  • Data Integration-You have several existing systems that need to talk which each other.
  • Business Applications-A larger software system which automates key parts of your business which may have many integrated parts.
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Assessing Risks and Costs of Developing Software Tools:

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Unlike a Swiss Army knife, which has many generic functions, a good software tool is a specialized chef’s knife for your business, sharp and precise.  It is designed to perform specific functions or automate particular tasks which can really transform one or more roles in the organization.  Here are some key points to consider: 

  • Functionality: Software tools focus on solving specific problems. Whether it’s inventory management, simple customer relationship management (CRM), or project tracking, these tools streamline processes.
  • Cost Estimation: The cost for a software tool depends on its complexity, features, and customization. Off-the-shelf tools might be more affordable, while custom-built ones can be tailored precisely to your needs.
  • Risk Assessment: Risks are relatively low for software tools. Since they address specific functions, the scope is well-defined. However, compatibility with existing systems and user adoption can still pose challenges. 

Assessing Risks and Costs of Developing Data Integration Applications:

Data integration bridges the gap between disparate systems within your organization.  Combined data is often much more than the sum of its parts.  The insights gained can expose fatal weakness or uncover hidden opportunities. Here’s what you need to know: 

  • Purpose: When you have multiple systems (like CRM, accounting, and inventory), they often operate in silos. Data integration ensures seamless communication between them.
  • Cost Estimation: Integrating existing systems can be cost-effective compared to building from scratch. However, complexities arise when dealing with different data formats, APIs, and security protocols.
  • Risk Assessment: Risks involve data consistency, security breaches, and potential disruptions during integration. Proper planning and testing are essential to mitigate these risks.
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Assessing Risks and Costs of Developing Business Applications:

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A business application is the heavyweight champion of software solutions. It encompasses critical aspects of your business.  This type of software touches every part of an organization or department.  It has the broad power to affect and transform the whole company.  Let’s explore further: 

  • Scope: Business applications automate core processes—think ERP (Enterprise Resource Planning), HR management, or e-commerce platforms. They involve multiple modules and extensive functionality.
  • Cost Estimation: These projects require significant investment. Customization, scalability, and ongoing maintenance contribute to the cost. However, the long-term benefits can be substantial.
  • Risk Assessment: Business applications carry higher risks due to their complexity. Project delays, budget overruns, and user resistance are common pitfalls. Robust project management and stakeholder alignment are crucial.