Off-the-shelf is not always cheaper

I have had several clients who have asked me to carry out software architecture reviews to determine how to replace bespoke software developed in-house with a commercial off-the-shelf (COTS) solution.

What I’ve found with most of these clients has been that the COTS solution (even if customisable) only covers about 70-80% of the functionality of the bespoke solution that they wish to replace. It also covers a load of other areas and features that the client has no use for. In addition, they’re often not aware of the operational expenditure that the COTS solution will take and haven’t factored in the cost of customisations and maintenance so they’re not comparing like with like. They also tend to underestimate the cost and the timescale of the data migration work required to move to the replacement system (usually by a factor of 2.5).

Even when all this is taken into account a small cost difference in favour of the bespoke solution alone would not necessarily prevent me from recommending moving to an off-the-shelf solution as it can pay off in reduced opportunity cost due to freeing internal engineering capacity.

However, the biggest factor around how to progress is usually what makes your business unique. This is usually your value proposition and the reason you get the market share you do. This value proposition is often built into your bespoke solution but not something easily replicated in the off-the-shelf solution (as it’s unique!).

This is usually what leads me to recommend either not moving to the off-the-shelf solution or even taking a hybrid approach of replacing all but the unique value proposition and either keeping the bespoke solution or building a replacement for the value proposition only.

All of this can be summed up as don’t give away the Crown Jewels of your business to a vendor who can’t do it as well and can utilise your data to determine how to replicate it for your competitors.

Conversely, if the bespoke solution does not make your business unique then consider a commercial replacement (depending on the costs).

If you want to discuss how to determine how to migrate to new solutions please contact me through the comments, email or LinkedIn.

Photo by Tembela Bohle

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