The Case for Custom Software

I’ve seen a lot of conversation online about companies trying to replace existing subscriptions with a custom tool built in-house with the help of AI. The usual conclusion is that yes, they saved on the $20/month subscription, but now it’s someone’s job to fix and upkeep the new tool, resulting in, at best, a net-neutral outcome.

In this article I’ll make the case for how and when a custom tool makes sense, especially in a small business context. I’ll pull from my own experience creating these tools and what I’ve seen work for my clients.

What Are the Criteria?

Right off the bat, custom software isn’t for every company. If standard, off-the-shelf subscription software already gives you everything you need, then stick with it. However, if your business runs on a process no software seems to handle well, so you're juggling subscriptions that don't fit, are still doing things on paper, or paying for a system you bought over a decade ago, there's likely an opportunity for you to save both time and money.

No Off-the-Shelf Fit

A lot of modern subscription tools like Monday.com can be a great fit for many businesses. But for small businesses with specific business rules, complex product offerings, or deep reporting needs, these solutions are often lacking. It’s common for these small businesses to start piecemealing together several different subscriptions and spreadsheets, resulting in data being siloed and difficulty in getting visibility across the business. That business ends up with a large monthly subscription bill for a solution that is less than ideal.

Paper Processes

Another common problem I’ve seen is businesses still running paper processes because they haven’t been able to automate that process or no software exists for it. Take a front office printing off a bill of materials to bring to the shop floor as an example. This obviously introduces potential for loss, increased risk, and slowed communication, all of which could cost a business. Still, small businesses can find themselves stuck using these error-prone processes because no software exists that solves this problem while addressing all the other needs within the company.

Still Running Outdated Systems

Finally, small businesses can often find themselves stuck on a system they purchased years ago that may fit their needs more closely than standard modern software, but they end up paying a bill that increases annually and having to do things like pay to access their own data.

These older systems are often missing features that no modern software would think twice about having, or are charging for things that most software stopped charging for years ago. This leaves a small business in a tough place of not seeing a solution out there that fits them, and feeling stuck with a mediocre solution that costs them more every year without getting better.

If your business fits one (or more) of these criteria, you likely would benefit from a custom solution. A custom build gives you full control and software that bends to your needs instead of the other way around.

It also means ownership. No monthly subscription that you pay for eternity, or annual re-up with a company holding your data hostage. Instead you get a tool built for you, and once it’s built, the only ongoing cost is hosting. In my experience, that monthly cost is usually less than 1 seat at an off-the-shelf provider, and I’ve seen that for businesses with up to 100 users. While the up-front investment is more expensive, it’s often comparable to somewhere between 1-3 years of the cost of an old system, and again, with custom, you own it outright.

Build Custom with an Outside Company

While I think the general discourse around replacing subscriptions with custom-built tools lacks nuance and often only considers larger companies, I do still think some of the arguments are valid.

I already addressed above how a custom tool doesn’t make sense for everyone, and who should consider it. Another common argument against custom software built in-house is that you end up with an internal tool that becomes someone’s job to maintain. This is an argument I actually agree with, and is why I recommend having a custom solution built by an outside company.

Now that AI can write code, a lot of people have tried building things that they wouldn’t have before. While that’s great for experimenting, there’s just a different standard that’s required for business software.

You have to consider several stakeholders, different users, and all of the use cases, and no matter how good AI models get, just like with human-written code, no software will be without bugs. Especially early on, this means a lot of work fixing specific use cases, getting on calls, tracking down issues, and solving all sorts of problems.

If the employee building it already has a day job, all of this will compound and be too much to handle. From an owner’s perspective, using software built by an employee internally introduces all sorts of complications and means that you are now reliant on that employee in a different way.

Hiring an outside company to build software for you solves all of these pain points, and lets a fresh set of eyes look at your business and how it operates while bringing in experience from other projects. That often leads to ideas you hadn’t considered before. It also moves maintenance to the vendor and means you get post-launch support and the ability to come back for more as your business grows.

Done this way, custom software isn’t net-neutral. I think correctly applied, it’s a net-positive for a small business. Software that works exactly the way you want becomes a cost-saver. Once custom software starts working with your business, instead of having a tool you work around, it starts feeling like a natural extension of your company. This can enable you to grow or start experimenting with new ways to run your business.