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With the price of oil flirting around the $40/barrel mark, Calgary-based companies are increasingly looking for ways to cut costs to manage the downturn.
Business owners and executives sometimes fail to recognize the cost-cutting potential with custom business applications. Conventional wisdom suggests “custom is really expensive” and licensing software is inexpensive. While this notion held true 5- 10 years ago, advances in programming languages and methodologies have drastically reduced development costs for faster payback periods with custom projects.
And for some third party software, all the costs to consult, implement, train and support clients have risen, not to mention licensing fees which have spiked. We were examining a third party ERP solution for small and mid-sized service-based businesses. 7 years ago they charged $25/user/month. The cost has almost quadrupled today to $95/user/month.
The right solution can streamline business processes and reduce time spent by employees on tasks. But consider other ways custom software can improve your financial picture beyond efficiency.
- Reduce licensing fees: We see some clients spending too much on third party solutions. One client could have built a custom app that equaled the cost of 6 months of fees with no licensing fees thereafter (not to mention that 3rd party app didn’t work exactly the way they needed it to). Yes there are support requirements thereafter but these can pale in comparison to monthly licensing fees (also keep in mind that some licensing structures also penalize you when you start to grow as per user or per transaction fees increase).
- Reduce IT support and training costs: Poorly performing software programs require more IT support and more time and effort to train your staff to use. If you pay fees to software providers, or use a 3rd party IT provider to handle support calls and/or work with staff to help them understand the software; these “hidden” costs are chewing into your bottom line.
- Generate Unique Data To Make Better Decisions: Third party software can have reporting limitations, weak dashboards or do not capture data you need to make better business decisions to find cost savings. With a custom app you design the system to capture data you want and generate the reports you need; all in a format you desire.
- Win more business: We are talking about cost savings but have you ever thought about a custom app as a revenue generator? A custom app may allow you to deliver better or more innovative services to customers. Perhaps the app allows you to offer a value proposition that enables your client to improve their profits in some way. Any advantage you can claim to be “better, faster or cheaper” can win business in good and especially hard times. Or it might be the difference to retain your current customers.
When you add it all up – going custom can in fact be a better deal. We hope this post spurs you to evaluate your software choices to determine if you should start exploring custom business apps. Check out If you need some support in your evaluation feel free to contact us.