Cost-Benefit Analysis for Custom Software

While custom software can bring a lot of benefits to your business, it may not be

the right solution in every situation. Understanding the business case for custom

Software is important.

Benefits of Custom Software 

Automate Business Processes

By automating business processes you can improve profitability by lowering the cost of doing business. Automating business processes allows employees to accomplish more each day, which can make a custom software solution pay for itself quickly through saving man hours. Mistakes are a common source of extra man hours. Mistakes happen in every business and many can be eliminated through automation. A simple example would be form validation. If your business is doing data entry with pen and paper, automating this task with digital forms can eliminate data entry errors. Sometimes mistakes come with greater consequences and you need to take extra care. In situations where you have to comply with industry regulations, such as those set by OSHA or CCOHS, a mistake can make your business liable for fines and possible civil action. Furthermore, custom software that automates compliance creates a digital paper trail to help you gain and keep certifications like those established by ISO or CSA. This saves your organization time and keeps everything centralized and accessible.

Accelerate Sales Cycles

Custom software can help you decrease the time and cost required to make a sale, which increases cash flow. For example, if part of your sales process involves sales quotations, long quotation lead times can lead to missed opportunities SA Armstrong, a global commercial HVAC manufacturer, came to us with this problem. One of the services most appreciated by Armstrong’s customers is its ability to design custom solutions. These custom solutions make use of both off the shelf parts and components designed specifically for the solution.  

Preparing quotations for complex systems like these was a long and expensive process for Armstrong. It required both sales and engineering talent. This resulted in the account’s sales representative being heavily involved in conveying customer requirements to the engineers, and then presenting the suggested solution to the client. The end result was that engineers spent time on tasks not related to their job function, and salespeople wasting time being the go-between. Konverge created a custom software solution for SA Armstrong that automated the steps that the engineers used to create a custom solution. This made it possible for salespeople to cut quotation times from weeks to minutes. The result: SA Armstrong won 35% more business, thus increasing its market share and profitability significantly.

Minimum Viable Product Route

The idea of a Minimum Viable Product (MVP) is to develop only the core features that are sufficient to launch the software into the marketplace. Gathering insights from an MVP can save money on developing a product with more features that are unnecessary and are often the result of incorrect assumptions. The more features a product has, the higher the costs and risk if the product fails. With this route it is possible to recognize revenue more quickly and then use that revenue to add features that will capture more revenue. An MVP works better for most companies than spending money on a fully polished feature-loaded solution and can increase the likelihood of your project’s success.

Cut Costs Spent on 3rd Party Software

Another factor when looking at the cost-benefit of a custom software solution is to identify costs that can be cut from money spent on 3rd party service providers that come with monthly, annual, or per usage fees. With 3rd party solutions, your business is at risk of the vendor increasing its rates or closing shop and leaving your company in the lurch. A custom software solution means your application will have more customized functionality and the software itself could serve as valuable intellectual property. Konverge worked with CentreCorp to build a property viewing application so that sales representatives could show prospective clients property leasing information. Prior to working with Konverge, whenever updates to the application were required, CentreCorp had to hire a third party service provider to conduct changes to the application. This resulted in long wait times for the application to be updated which was time consuming and costly for CentreCorp. Konverge redesigned the application with additional features, updated user interface, and added the functionality for CentreCorp to have full administrative powers of their application so that an expensive 3rd party provider was no longer needed.

Capture Market Share

If you can improve the experience for your customers and increase their satisfaction, you will be ahead of the competition by not only retaining customers, but acquiring new ones. Custom software can create revenue by making it easier to retain and attract customers by offering a new way to access your products or services. Consider Starbucks mobile application which offers a convenient way to pay for purchases and collect reward points, or HBO Go which gives unlimited access to HBO’s movies and shows online on any device. With a custom software solution, both these companies improved their service to their customers, putting them ahead of their competitors. It is important not to wait for your competitor to come out with a new service before creating something for your customers yourself.