What it's about
In this blog post, we look at the advantages and disadvantages of a standardized solution versus a custom-developed solution.
How does standard software differ from individual software?
Custom software is a solution developed specifically for a company and its processes. A distinction can be made here between in-house development and outsourced programming, because companies can have these solutions developed internally by their own IT department or commission an external service provider such as system houses or agencies to develop them.
Standard software, on the other hand, is an existing solution that a specialized provider has developed for a large number of customers. It is used to implement processes and tasks that occur in different companies and run in a similar way.
Individual software – the highly individual and time-consuming solution
The advantages of individual software are already clear from the term designation, because individual software can be implemented according to your own requirements. You can adapt the software to your existing processes and make individual adjustments. However, the complexity of an individual solution is often underestimated. In addition, companies face disadvantages such as high effort and costs.
In the case of in-house development, a lack of expertise can become a problem, because software programming is usually not the core competence of the own company. As a result, efforts and costs cannot be clearly estimated at the beginning. Regular maintenance and continuous further development take up a lot of time and may not be efficient for the internal IT department. In addition, IT departments are notoriously overworked. After all, a slot has to be found again when a function extension is required. Thus, development can drag on enormously.
Those who opt for outsourced programming have to contend with other disadvantages. Programming by an external service provider may sound like a good option at first, but this is also associated with sometimes high expenses: Gathering one’s own requirements and coordinating with the service provider can take a lot of time under certain circumstances. In addition, there is usually no continuous further development of the software by the service provider. Additional costs are then incurred for adaptations or the development of new functions with each further development request.
In addition to the higher development costs, which a user company must bear alone, there is also no future-oriented product roadmap. This roadmap can make a significant contribution to ensuring that not only the status quo of a process can be mapped, but that the user company benefits from technological innovations and that companies can possibly even optimize their processes on the basis of the software possibilities.
Standard software – the efficient and future-proof solution
Those who opt for the standardized solution benefit from much faster deployment. The software is already developed and can often be used immediately. It has already been tested by other customers and is therefore more mature in terms of interface and functions and less prone to errors than a newly developed solution. The standard solution also scores points in terms of cost efficiency and cost transparency, because the high development costs are shared among all customers and the amount of the costs is already fixed in advance.
Standard solutions develop from the requirements of several companies. Thus, software providers know the requirements of different companies on the market and develop future-proof software based on best practices. Standard software usually evolves continuously and grows steadily in functionality and quality. However, you should consider which provider you choose. If you purchase software, you may only make a one-time payment, but may have to pay separately for updates. Another option is to rent a software in the “Software as a Service” model, which means additional flexibility and lower investment for the user company.
Standard software therefore has many advantages that custom software cannot offer. In terms of individualization and integration, too, compromises only have to be made at first glance. Due to the increasing trend to develop software in a microservice approach with high integration capability, the apparent disadvantage of standard software is increasingly eliminated. New software can be integrated more easily via standardized interfaces (e.g., REST API) and the desired functionality can often be found at one of the dominant software companies.
The decision: standard software vs. individual software
The high effort and costs of an individual solution are only worthwhile if there is no standardized solution on the market for the desired use case. So before you make a high investment for an individual solution, it is advisable to take a close look at existing standard software. Often, you have the opportunity to perform test runs with the software on a small scale to determine whether the software meets your requirements.
The question as to which solution is suitable cannot be answered in a blanket manner for all use cases. In most cases, however, standard software is the safe choice. To make the decision easier for you, we have summarized the comparison of both solutions for you:
Easily scalable standard solution for operational processes
Especially for employee-centric processes on the shopfloor, standard software is clearly superior to custom programming. Typically, documents such as work instructions, checklists or protocols form the basis for process management for any assembly activities, inspections, maintenance tasks and much more. These operational processes are what make smooth production operations possible in the first place. In this context, these processes are often complex and thus require explanation and must be robust in order to be carried out in an error-free manner.
In such a shopfloor context, standard software shows its strengths in three aspects in particular:
Due to the complexity of the processes, an intuitively understandable and proven user interface (UI) is enormously important. This can only be ensured by software companies that have their software widely in use.
In order to ensure the robustness and scalability of the processes, an enormous development effort “under the hood” is necessary to enable aspects such as a modular design, versioning, systematically anchored multilingualism or structurally performant analytics. This is often underestimated in custom developments and user companies quickly reach their limits.
The future viability of processes is guaranteed. The way people work on the production floor will continue to evolve in the coming years. Through increasingly simple integration concepts and open interfaces, users of standard software in the microservice approach can benefit from adjacent technology innovations and continuously develop their processes.
Although the question of standard software vs. individual software cannot be answered categorically, the advantages of a standard solution outweigh the disadvantages for most use cases. Especially in areas that are as important for the performance of companies as those operational, employee-managed processes on the store floor, a specialized software provider should be selected with whom the digital transformation can be designed in partnership.
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About the author
Moritz Stern is head of strategy and marketing at Operations1. Before joining Operations1, Moritz worked at Strategy&, PwC’s strategy consultancy. Here he advised clients from the operations environment around the globe on strategic issues. Previously, Moritz worked for Alstom Power, Merck KGaA and Arthur D. Little. Moritz holds a degree in industrial engineering (M. Sc.).
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