Compare custom-written and off-the-shelf software

2. Hardware and Software

Objective – Compare custom‑written and off‑the‑shelf software (Cambridge IT 9626, Topic 2.4)

1. Definitions

• Custom‑written software (bespoke, tailor‑made) – software designed and developed to meet the specific requirements of a single individual or organisation.
• Off‑the‑shelf software (commercial, ready‑made, packaged) – software produced for a wide market and sold to many customers with little or no modification.

2. Typical Users

• Individuals
  • Photo‑editing programme – e.g. Adobe Photoshop
  • Personal finance manager – e.g. Quicken
  • Home‑budgeting app, games, language‑learning tools
• Organisations
  • Enterprise Resource Planning (ERP) system for a manufacturing firm
  • Hospital Information System (HIS) for a health‑care provider
  • Customer‑relationship management (CRM) software for a sales team

3. Proprietary vs. Open‑Source (licensing implications)

Proprietary software – owned by a vendor; source code is closed. Users accept a licence that usually restricts copying, modification and redistribution. Common licence types:

• Commercial licence – paid per user or per device, often with annual maintenance fees.
• Site licence – unlimited use within a single location.

Open‑source software – source code is publicly available under a licence that permits viewing, modification and sharing. Typical licences:

• GPL (GNU General Public Licence) – any derivative work must also be distributed under the GPL.
• MIT / BSD – permissive licences; few restrictions on reuse.
• Apache – permissive, with explicit patent‑grant clause.

Choosing a licence influences cost, support arrangements, the ability to customise, and the legal responsibilities for redistribution.

4. Key Characteristics (and life‑cycle implications)

• Development process – Custom software follows a project‑based life‑cycle (analysis → design → implementation → testing → maintenance). Off‑the‑shelf software follows a product life‑cycle managed by the vendor (product planning → release → upgrades → end‑of‑life).
• Target audience – One client (custom) vs. many unrelated clients (off‑the‑shelf).
• Source‑code access – Usually available for custom solutions; rarely for proprietary off‑the‑shelf products (open‑source off‑the‑shelf is an exception).
• Update frequency – Tailored updates when the client requests them (custom) vs. scheduled releases set by the vendor (off‑the‑shelf).
• Ownership & control – Full ownership of the source code in custom solutions; limited or no ownership in proprietary off‑the‑shelf solutions.
• Maintenance ownership – In custom software the client (or a contracted developer) is responsible for bug‑fixes, upgrades and eventual de‑commissioning. In off‑the‑shelf software the vendor supplies support and upgrades, subject to licence terms.
• Security & data‑privacy – Custom software can embed organisation‑specific security controls but may lack the rapid patching of popular off‑the‑shelf products. Off‑the‑shelf software often benefits from a large user base that discovers and patches vulnerabilities quickly, but the client must rely on the vendor’s patch schedule and may be exposed to undisclosed security flaws.

5. Advantages & Disadvantages (mapped to syllabus wording)

5.1 Custom‑Written Software

• Exact fit to business processes – can model unique workflows.
• Provides a core competitive advantage – functionality is unavailable to rivals.
• Highly flexible – can be altered or extended as requirements evolve.
• Full ownership of source code – organisation can modify it at any time.
• Security can be tailored to the organisation’s policies.
• Higher initial development cost (design + implementation) and ongoing maintenance expense.
• Longer time to market – development may take months or years.
• Project risk – cost overruns, requirement creep, loss of key developers.
• Responsibility for long‑term support, upgrades and de‑commissioning rests with the client.

5.2 Off‑the‑Shelf Software

• Lower initial cost – price spread over many users; usually sold per licence.
• Immediate availability; rapid deployment (days to weeks).
• Vendor provides support, documentation and regular product updates.
• Benefit from frequent security patches and a large community (for open‑source products).
• Limited customisation – may require work‑arounds or re‑engineering of processes.
• Licence restrictions and vendor lock‑in – dependence on the supplier for upgrades, bug‑fixes and future compatibility.
• Source code is usually not accessible (unless the product is open‑source).
• May not align perfectly with existing business processes, reducing efficiency.
• Total Cost of Ownership (TCO) includes licence fees, annual maintenance contracts, training and eventual upgrade or migration costs.

6. Comparison Table

7. When to Choose Each Type – Decision Checklist

1. Strategic importance – Does the software underpin a core competitive advantage?
   Yes → custom (or open‑source bespoke). No → consider off‑the‑shelf.
2. Budget & total cost of ownership – Are funds limited to an upfront licence purchase?
   Yes → off‑the‑shelf; evaluate ongoing licence & upgrade fees.
3. Time to market – Is a rapid deployment required?
   Yes → off‑the‑shelf; custom may miss the deadline.
4. Complexity & uniqueness of requirements – Are the processes highly specialised or not supported by existing products?
   Yes → custom development.
5. Internal IT capability – Can the organisation maintain and support a bespoke system?
   Yes → custom; No → rely on vendor support.
6. Risk tolerance – Is the organisation comfortable with project‑type risk (cost overruns, staff turnover) or prefers vendor‑type risk (lock‑in, licence compliance)?
   Project risk → custom; Vendor risk → off‑the‑shelf.
7. Licensing & control preferences – Is avoiding vendor lock‑in or needing source‑code access a priority?
   Yes → custom or open‑source off‑the‑shelf; No → proprietary off‑the‑shelf acceptable.

8. Case Study Example

A mid‑size logistics company needed a system to optimise route planning. The off‑the‑shelf routing package offered basic shortest‑path calculations but could not incorporate the company’s proprietary fuel‑efficiency algorithm. After a cost‑benefit analysis the firm commissioned a custom module that integrated with its existing ERP. The initial outlay was $150 000, with projected fuel‑cost savings of $45 000 per year, giving a pay‑back period of just over three years and a clear competitive edge in delivery pricing.

9. Evaluation / Analysis (AO3) – Suggested Exam Questions

1. Analyse the advantages and disadvantages of using off‑the‑shelf software for a small retail business that needs a point‑of‑sale system. In your answer consider cost, time to implement, vendor lock‑in, security patching and the impact on the business’s competitive position.
2. A hospital is deciding whether to develop a custom patient‑record system or to purchase an off‑the‑shelf solution. Evaluate the two options in terms of strategic advantage, data security, maintenance ownership, total cost of ownership and long‑term sustainability.

10. Summary

Both custom‑written and off‑the‑shelf software have distinct strengths and weaknesses. The choice depends on:

• Strategic value and need for a competitive advantage
• Budget and total cost of ownership
• Time pressure and market readiness
• Complexity and uniqueness of functional requirements
• Internal capability for maintenance and support
• Licensing preferences, security considerations and risk tolerance

In practice many organisations use off‑the‑shelf products for generic functions (e.g., word processing, accounting) and develop custom modules only where a clear strategic benefit can be demonstrated.