Major software decisions branch off early in one of two directions: a ready-made platform, or a custom-made system. The challenge of custom software—working with developers, for example—is familiar to many owners and directors. And “developing custom software” just sounds like work. Instant functionality and prefab communities of lookalike users are other key selling points for more than 5,000 sales and marketing platforms currently available to license.
In this platform-happy landscape, why does anyone choose custom software? One big reason trending now is the staggering cost, both in dollars and productivity, of unused features and functions of ready-made, cloud-based platforms. For its benchmark study, The Real Cost of Unused Software, endpoint management firm 1E analyzed the usage patterns of 1,800 software titles and 3.6 million licensed seats in 129 companies across four major industries.
The results weren’t encouraging.
According to the 1E report, “On average, companies are wasting 37% of their software spend —a proportion that would be deemed unacceptable in any other part of the business,” adding that, “…in the US alone it amounts to $30 billion in wasted IT dollars.” 1E found that the level of software waste stayed constant during the four-year survey. This indicates a pervasive problem that is either ignored or undiagnosed in many companies—including lean, agile firms.
Transparency through a multi-role view of the organization is one of the ways that custom software totally avoids this waste. The most efficient, effective software reflects your company culture, its processes and policies. Custom software reduces waste by design, creating views and toolsets that align perfectly with user roles. This is unlike the platform model, where your organization is “trained” (retrained, actually) to work according to third-party rules. When that setup works, it works well. But this study is one of several finding that sales and marketing stacks are loaded with programs that add no value. In many cases, overlapping platforms are also impeding productivity. It’s a serious drain on revenue and resources.
We can all agree that waste is bad. But when a “turnkey solution” turns out to be anything but, it’s even worse. “We settled on a software vendor that sold us a dream and delivered a nightmare. Implementation was a disaster. Data migration alone took 9 months. I worked 80 to 100-hour weeks just trying to make it work.” That was Talent Rover co-founder and President Brandon Metcalf speaking with Inc.com in 2017. Building his own red-hot staffing and recruiting software actually began with the frustrating, costly lesson that prefab platforms are neither cheap nor easy. It confronts private owners and senior directors with a question: if you have a successful business that requires a software purchase, do you:
- Rent a third-party methodology for running your business and adapt to it, or,
- Build a system that reflects your unique attributes and corporate strengths?
There’s a growing body of support for the custom software option. Dan Pupius, founder of software firm Range, told management journal Quartz at Work, “An organization’s culture is defined by how people interact with each other and is governed through processes, social norms, and reward systems.” More and more of these interactions are facilitated by software. And if we want to ensure our culture evolves in a direction we like, leaders, managers, and workers need to intentionally consider how we’re using software.”
Cloud-based platforms are licensed to automate aspects of lead gen, sales, account management, content creation and so on. It’s the prevailing trend, and hope is the true human reason most companies turn to these platforms. They hope to get maximum value eventually, but that’s fairly rare. Mass automation is a revolution, but not everyone benefits equally. Platforms alter the way companies work; extraneous features cause waste; oversight is difficult. In the custom model, employees are given the exact functionality they need, while management retains a clear view.
By Denver Gibbs