Companies regularly feel the need for custom-built software, especially if they’re planning for growth. The software may be to untangle a bottleneck, collaborate more with clients and partners, or gain a competitive advantage in your market. Whatever the reason, you must be careful not to fall down the rabbit hole. Ever heard about a ‘software project from hell?’ It happens all too often—no matter how much you spend on the project, it never gets delivered.

Planning for Success

What’s the big problem you need to solve?

It may sound trivial, but a simple question may help you define the purpose of your software project: Is the goal of this custom-built software to make money or save money?

For example, a small car workshop decides to launch a mobile app so that clients are notified when their car is ready for pick-up. Why? Because they believe that if clients can pick up their car early, they would be able to serve more clients per day given the space limitations. That approach may be necessary, especially if a competitor has just implemented a similar product. After all, technology can make a big difference for any company, so it’s crucial that you embrace modern solutions—if your competitors are using custom-built software, your business could get left behind.

On the other hand, the right question to answer may be, “How do we best communicate to clients that their car is ready for pickup so that we could serve more cars per day?” The former is a solution that may or may not address a problem. The latter is a question that frames a potential business problem. Mobile technology may be a solution and even a leap forward, but in some situations, the answer may not even be a technological solution at all.

Nonetheless, the motivation behind creating custom-built software may not always be encapsulated into making or saving money. Sometimes the real driver for change is policy. For example, the government of Texas requires that all wheelchair providers at the airport must accept digital service requests from users. In this case, it’s the actual government that generates the need for the software. Why? Perhaps new federal laws are looking for more transparency in these types of services.

Understanding Value

How will you measure your ROI?

The next question is, “How do you know if the project will deliver a return on the investment?” A traditional way to answer this question is to find out the cost of continuing with business as usual versus the expected cost of operations after implementing the custom-built software.

Let’s explain it with simple math:

A digital marketing agency manages its clients’ projects using a complex Excel spreadsheet. Although it may have been a good way to manage projects when the business started, keeping up with spreadsheets has now become problematic.

Monthly hours wasted per individual marketing professional:

• 8+ hours to spot and remove unneeded records

• 12+ hours to review and fix information like duplicates and errors

• 2+ hours to consolidate updates with other team members

That’s 20 hours lost per individual, per month.

If the agency has a total of 10 marketing professionals using the Excel spreadsheet, the number of hours the agency loses is 200 per month, a number that could be drastically reduced with custom-built software.

In terms of costs, if the hourly wage for each of the 10 marketing professionals is $100 USD, the agency has a gross loss in productivity circa $20k USD per month ($240k per year).

Software that would cost $40k to build and is expected to save the agency 50% of the hours lost offers a value of $120k per year due to the reduction of wasted time. In other words, with an investment of $40k, the agency is expected to save $120k per year.

Are there other subjective measures that could affect the ROI of your custom-built software project?

In addition to traditional ROI measures, it’s important to consider more subjective measures, as well as competitive reasons to move forward with a new project. What do we mean by more subjective measures? Perhaps a new user-friendly internal system for documenting company policies and procedures puts them at the fingertips of every employee, from any device. There may not be any measurable productivity improvement initially, but employee satisfaction may eventually increase dramatically, and that may be measurable in several ways down the road. Sometimes taking a long-term approach to measuring value may be key in justifying something that intuitively is the right approach, but may not be justified in terms of short-term metrics.

Custom-Built Software Project Risks

Will your organization—or clients, suppliers, and partners—be ready for change?

Our experience has taught us that when software represents a real solution to any problem for the final user, the possibility of the software being adopted is intensified.

Over-excitement

Feeling too emotional may drive the project the wrong way. It may be an executive request to add more features or forcing a launch on a particular date. The reality is that the project velocity will vary depending on the budget and stage of the project, and features are reconsidered or replaced by other features as the custom-built software product begins to take shape.

Competitive risks

You may want to gain the competitive edge by releasing an innovative way to take orders on your online store; and to achieve it, you may need to drop some features from your first version.

Time and costs

Estimating what you know how to do is often hard to get right. Estimating what you don’t know how to do is especially difficult. Consequently, estimating what you don’t know that you don’t know—that’s often where most of the trouble lies. You can’t know all the answers to issues before you start a project. However, you can choose a custom-built software plan that has contingencies for the unknown.

Project Funding

Do you have a responsible, realistic budget?

Your budget can often be a huge factor in getting your project completed. Funding a long-term custom software project that spans multiple budget cycles may be tricky. Furthermore, custom software is expensive, and unfortunately, cost overruns are common in our industry. At Soluntech, we pride ourselves on being obsessively efficient with your budget. We work with you to agree on a scope of work upfront. We make sure there’s a responsible budget for the project before you do business with us.

Commitment Level

C-Level commitment

Custom-built software projects that are performed with the highest level of management commitment are more likely to succeed. A custom software project requires that c-level managers understand the value of the project to commit the needed organizational resources and funding. If they don’t understand it, the likelihood that the project is properly funded diminishes.