Is Bespoke Software More Expensive than Ready-made?

Is Bespoke Business Software More Expensive than Ready-made?

When our clients approach us, they have normally done their own research and come to the conclusion that bespoke software is the correct and most cost-effective solution for them. So, I thought it would be a good idea to explore this topic in more depth, for those who are still unsure.

So, is bespoke business software more expensive than ready-made? The short answer to this is yes it can be, especially in the short-term. However, over the long-term this is often not the case, as the cost of ready-made software often accumulates over time. Other factors also have influence over the cost of bespoke software such as: how large the company is; what industry sector the company is in and what they require their software to accomplish.

Although the upfront cost of bespoke business software can seem high compared to the initial cost of ready-made, many businesses find that this is not the case. Below I explain why.

The True Cost of ‘Ready-made’ Software

Ready-made software, also known as ‘off-the-shelf’ or SAAS (Software as a Service) is normally charged on a monthly license fee per user basis. Initially, with ready-made software paying for the first month license fees per user, will seem low compared to paying a lump sum for a whole bespoke software system.

However, the true cost of ready-made software is hidden and starts to add up over time. Each year the accumulation of license fees increases the total cost of the software, as does expansion of the business as more employees means more license fees. On top of this, license fees themselves may rise if the developers increase their prices.

After a few years, many companies find that the total of all the license fees they’ve paid so far has already surpassed the cost of a bespoke software system. The ready-made software is also a continuous ongoing cost and by now the bespoke software system would have been owned and fully paid for.

The Need for More than One Software Package

Another pitfall that a business can fall into, is the need to buy more than one software package, in order to fulfil all their software requirements. Apart, from the fact that more software packages, means the costs rise due to having to purchase more licenses, staff time can also be wasted due to duplicating data between different software packages. This can also lead to duplication errors, which will also waste more staff time rectifying these errors, a common problem when using more than one software package to run your business.

An Example of Rising Costs for Ready-Made Business Software

Our fictional company decided to purchase ‘software as a service’ as this appeared to be the most cost-effective option, initially. Their first few payments were low because they only needed to purchase one software product and pay two monthly license fees, to cover both their current staff members.

In time, they realized their first software product did not cover all they required, so an additional software package was needed to provide the missing functionality. By this time, they had also employed two more staff members, so their monthly software outlay increased from two to eight license fees.

Now, imagine what would happen if the company increased its’ staff members by two more and found that their existing software was still not fulfilling their needs and that another additional package was required. The monthly license fees would skyrocket.

Related Questions

Bespoke Software or Ready-Made, which should I choose for my Business? I won’t answer this question in any detail here, as we already have a dedicated page that lists the pro and cons of both. Find out the advantages and disadvantages of custom (bespoke) vs off-the-shelf (ready-made) software here.

How can I found out how much bespoke software will cost for my business?We offer a free software consultation service, with the aim of finding efficiency gains through software for your business. We will visit you onsite or you can visit us if you prefer, to discuss all your business software needs. From this meeting, we can normally give you a ball-park figure for the software system you require.

If you’re happy with the ball-park figure and wish to proceed we will have a follow up meeting with you and then create a Software Requirements Specification (SR) document, which will outline in detail the software solution we propose. Once all parties agree that the SRS represents what is required, we can then provide you with an official quotation.