Software package vs. software developer

With thousands of software packages available on shelves and online, you might think the right software for your business problem is out there waiting to be discovered. Likewise, with hundreds of custom software developers in the Boulder Valley alone, you might find the right developer is just around the corner.

But all these potential solutions can lead to paralysis, making the task of deciding which route to go – off-the-shelf or custom – difficult indeed.

The first thing to do when embarking on this journey, experts say, is define your problem.

“It’s a search for a problem rather than a search for a solution,” says Robert Nagler, president of Boulder-based bivio Software Inc. “If you don’t find out what the problem is, you end up finding the wrong solution.”

Nagler uses the example of groupware, or software that allows individuals to share thoughts and documents, which ranges from blogs and message boards to shared white boards and Internet chat. These are all solutions, he says, but without identifying the problem first, it doesn’t make sense to adopt any of them.

“In reality, most business is done by e-mail, and the result is a lot of things happen between the cracks. This is commonly called business process or work flow. But you have to understand the process to help, and there are no canned solutions.”

One bivio client – a large nonprofit run by a lot of volunteers – was in the practice of updating its database via e-mail. Using its open-source platform called bOP, bivio created a custom solution to the nonprofit’s problem, which it helped the organization define as needing a lot of different people to update the same database.

Once the problem is defined, solving it “all comes down to requirements,” says Alexis Lee, president of Boulder-based Lextek LLC.

Like bivio’s nonprofit client, a major movie studio had been using e-mail to update Excel spreadsheets that kept track of prerelease movie screening schedules. It came to Lextek, and Lee helped identify the problem as many people having to update and be aware of these schedules. She built a software package based on Lotus Notes that can be accessed over the Internet.

“This software manages everything,” Lee says. “That’s an example where customized software makes sense, and it allows them to track their entire work flow end to end.”

But just because these two developers suggested custom solutions doesn’t mean that’s all they sell their clients.
“My recommendation is nearly always to use off-the-shelf software if it meets most of your needs,” Lee says. “But don’t change your business to match the software.”

Boulder-based Flatirons Solutions Corp. recently had a client come in believing it needed a custom solution. “The users were very adamant and didn’t want to budge on any of their requirements, and thought the only way to solve it was to build from scratch,” says John Pritchard, chief executive.

Pritchard advised the company to think into the future, including the expense of keeping a full-blown custom solution up-to-date. “I may have the best system day one, but day one and a year, I have an old, out-of-date system.”

The client decided to buy a base system from a vendor and have Flatirons customize it. “Up until that time they were keen on a custom product, but now they will get a great product because they will get a great core product and some great customizations,” Pritchard says. “It’s an illusion that custom is better. That’s sometimes the case but not always.”

As far as developers are concerned, they get paid whether all they do is help determine the problem and recommend solutions or build something from the ground up. “We’re a services company and get paid hourly,” Pritchard said. “So we present them with the costs of both options including other costs like risk, time, schedule.”

Lisa Calkins, president of Amadeus Consulting Group Inc. in Boulder, believes the decision to build or buy comes down to a what value a business owner sees the software adding to the company – growth, cost savings or making the business more valuable.

One of her clients, Boulder-based The Booth Company, which develops 360-degree feedback surveys, was looking for survey software. After looking at the many packages available in the market, some very affordable, Booth hired Amadeus to build a custom application.

The reason it chose this path, Calkins says, was to increase its value. “Their businesses processes are their intellectual property,” she says. It didn’t make sense to purchase software if it would mean changing the business process to work with the software. “In their case the value they add to their customers required them to create a custom package because it was their intellectual property.”

Another client, Personnel Profiles Inc., also of Boulder, wanted to improve work flow so it could grow.
PPI, as the company is known, is a secret shopper service for the home-building industry. In the past the shoppers would communicate with PPI with faxes and e-mail, “but work flow was hindered,” Calkins said. “When you get constrained by manual processes you can’t grow. We built them a custom software package that does work flow over the Internet.”

Having the tool also increased the company’s value, Calkins said.

But, like the other developers, Calkins said custom isn’t always the right way to go. “Custom software is risky. We clean up a lot of projects gone wrong.”

If a software package will solve the problem, that’s absolutely what to buy, Calkins says. “Write down what you need and what you can’t live without and go search on Google and make sure you see what your options are,” she says. “Spend the time to search. Look at more than just what the cost of the software is because of the hidden costs. Is the business going to be around next year when you need upgrades? After doing the spreadsheet, figure out if you can afford what you need.”

Calkins points out that you can always try out packaged software as well.

Contact Caron Schwartz Ellis at 303-440-4950 or csellis@bcbr.com.

When you absolutely need custom software

Mark Richtermeyer, president and chief executive office of Longmont-based The Spitfire Group, says there are times when custom software is your only choice. He lists them as follows: