There is a constant war in the tech world over off-the-shelf vs. custom software options to manage business operations. Depending on the industry, some companies may opt for a readymade solution and be happy with the results that it provides, while other companies will want to go the extra mile. But is the latter really worth it?
Benefits of Custom-Built Software
Before we get into the downsides of building your own software, let’s cover some benefits of custom-built software, so you can weigh out the pros and cons and decide for yourself. The primary reason why logistics companies want to build their own custom transportation management software is that it can have all the features you want. Custom software gives you the freedom to add all the features that would satisfy everyone. Once you develop your software, you can then sell the software as a product along with your main offering(s). Since this software will be your own company’s software, you don’t have to pay a subscription fee.
All of this sounds like an attractive option right? But wait, let’s cover the cons of custom software and get a better understanding of just how much time and money this requires. You may find that you are not able to afford it, or it is just not worth it for the little return on investment.
The Complications of Custom Software
The main reason why you should steer clear of building your own software is cost. Thousands of dollars are required just to build the first version of your product. Many studies have shown that costs can soar up to 200% from initial costs. These costs can be up to 10x more than a simple subscription fee for off-the-shelf software.
On top of that, you have maintenance costs and extensive testing that must take place before finalizing, all of which require even more dollars and time. If you have an in-house team building the software, their intelligence is limited to only the needs of your company, not the entire supply chain environment. If you are utilizing an offshore team, the vision for the product may not be communicated well, and more hours put into development means soaring costs. Another risk is that if you choose a bad company to build your software, chances are you will have lots of glitches. A good off-the-shelf option that is used by thousands of companies is a lot more reliable.
Custom software is often not scalable. Off-the-shelf software typically has different tiers to use as your business grows, so you do not have to worry about custom-building more features to support your business growth. There’s no need for the hassle!
Why an Off-the-Shelf TMS is Ideal
Automation has to happen now, and any more delayed shipments and orders can significantly impact not only your company’s revenue but your brand’s image as well. Everyone wants to start from a clean slate, and there is no time to build new software in a supply chain world that is transforming so fast. Your tech stack needs to stay updated to keep up with changing demands. Some of these demands and pain points include:
- Settling dramatic changes in inventory levels, especially during peak season
- Keeping up with the speed and accuracy of order fulfillment
- Dealing with customer returns and complaints
- Struggling to meet KPIs
After examining both options for supply chain tech software, the winner is obvious. Logistics companies do not have the luxury of time, and it is a fallacy to think that a quick fix is harmful in the long run. We encourage you to schedule demos, ask questions, have an internal discussion, and go with the best off-the-shelf option for you and your team that will support your company in the long run.
Zara Raza is a Digital Marketing Specialist at Turvo Inc. She graduated from University of California – Irvine in 2019 and has written several blogs on topics such as technology and supply chain management.