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TechnologyAdvice Guide to Custom Software Engineering Services


Are you having trouble finding the right software for your business?

You’ve laid out your requirements, narrowed down your options, compared and tested systems, but nothing seems to fit.

Are your expectations too high? Did you overlook a vendor?

Don’t worry — you’re not going mad.

But if you feel like you are, it’s likely the problem isn’t you or your business — it’s the lack of available options. Every organization is different, but commercial off-the-shelf (COTS) software treats them all the same.

If you can’t find software that suits your business needs out-of-the-box, then you have three options:

  • Change the way you work to accommodate new technology
  • Customize the software to meet your needs and processes
  • Invest in custom software development that’s tailor-made to support your company

In some cases, minor changes to business operations are a reasonable option. In fact, many vendors build software with industry best practices in mind, so tweaking your workflow may even be favorable. However, sometimes accommodating technology may lead to changes that are too radical, inconvenient, or would negatively impact your business.

If changing your processes to match new software is unacceptably disruptive, then the next step is to consider customizing an existing software solution. Of course, not all ready-made software can be customized. And even if it can, in many cases the cost of customizing COTS software to support your operations can quickly become untenable . Furthermore, the final product may be cumbersome, and ultimately, disappointing.

“If the new software system closely matches the way your business works, and the effort and cost of adapting and maintaining it is acceptable, then the off-the-shelf solution will probably be less expensive than commissioning a custom system. On the other hand, if your business must work the way you have designed it, and off-the-shelf software is incompatible with this, or there is no suitable off-the-shelf software in the first place, then a custom software solution may be the best option.” — Stephen Lowe, Principal Consultant Developer, Thoughtworks1

There are myriad software suites and applications available for even the most niche industries, but off-the-shelf software may not be for you, especially if you need technology to serve as a major strategic advantage over competitors. Custom software can become a business asset because it supports your specific organizational needs and produces the most efficient system.   

If it sounds like custom software might be for you, then your mind is probably racing right now:

  • Is custom software worth the investment?
  • When should I develop my own business software?
  • How do I decide what to build and who will build it?  

In this guide, we’ll answer those questions — and more. We’ll cover the custom software engineering services market, as well as types of custom software engineering services available and how to vet them for your business. We’ll also examine a custom software engineering case study so you know what to expect, and recommend leading custom software development firms.

By the time you’ve digested this guide, you’ll know if custom software engineering services are for you, and if so, how to move forward and navigate the market with confidence.

Does My Business Need Custom Software?

The decision to commission custom-engineered software will impact every aspect of your business, so before you commit, there are numerous factors to consider.

Industry and Purpose

Businesses need custom software applications for many processes. Nowadays, even traditionally non-digital businesses use digital channels and automate processes with technology. This trend is fueling custom software development — but don’t get caught up in the flame before weighing your options.

For example, invoicing, accounts payable, or accounting software is necessary for nearly all businesses. These workflows are standard across most industries and organizations. Inherently, there’s little strategic value in those processes, so standard software often works well. However, if you’re in the manufacturing industry, and your core business process differentiates you from your competitors, then custom-designed software that supports the execution of those processes can be immensely valuable.

The goal is not to simply own and use custom software. Custom software is a means to improve your business. If using Google Drive, Slack, or Salesforce helps your business run smoothly and leads to satisfied customers, then by all means continue using them — there’s no need to reinvent the wheel.

ROI of Custom Software Engineering Services

While evaluating available software, you may find a vendor who meets your list of must-have and nice to have requirements. However, if you find yourself struggling to identify potential suitors, don’t settle on a vendor out of frustration:

“We have seen, typically, that most software purchases meet only 60-65 percent of a company’s needs. The lesson is to be realistic and objective, and decide if you want to be in control of the architecture. And realize that even if you do end up buying, you may find that it still requires a surprising amount of development to get it to satisfy your company needs.

In the end though, it’s all about what brings in the most profit for your business. It is best to begin your evaluation and conceptual approach with a simple, but comprehensive, ROI and long-term spend analysis:

  • Will the 'out of the box' or 'off the shelf' mass produced software still be applicable as your business grows?  
  • Will said software set your business up for success long term?  
  • Does said software solution have the ability to adapt to changing conditions in your industry?

These are just a few questions an organization has to answer to decide the right path to go down, otherwise they find themselves in the same position just a few years down the road, ready to throw good money at a bad problem for the second time. — Paul O’Donnell, Business Development Manager, 4CTechnologies2

Custom Development Cost / Time / Scope

There are many factors to weigh when considering a turnkey versus bespoke software purchase. The three biggest are cost, time, and scope. Cost is generally at the forefront of a technology decision because you need to know what’s financially feasible. Be sure to conduct a thorough cost-benefit analysis of each system or vendor before making a choice. It’s important to consider upfront and ongoing costs, as well as the long-term value and impact a system will have on your business.

After cost, time concerns often drive businesses to make an investment in custom software — not just time-to-market or time-to-implement, but also the efficiency your company could gain with a tailored solution:

“For my tutoring business, we initially started with off-the-shelf software because it was fast and cheap, but we eventually found that the lack of customization relative to our day-to-day operations ultimately led to inefficient, manual processes.

As we grew, these challenges became more and more pronounced and scalability became harder to reach. Ultimately, we were forced to invest heavily in proprietary software so that we could scale effectively.

In retrospect, many of these tradeoffs could have been assessed far earlier in our company’s lifetime.” — Chuck Cohn, Founder and CEO, Varsity Tutors3

Cost and time must balanced against the scope of the project as well. Is it even possible to build a custom software solution that will do everything you need? How will you measure whether or not the new technology is successful? Do your needs call for a completely custom system, a COTS solution, or something in the middle of the spectrum? Weighing budget, timeline, and scope against potential competitive advantages will help you determine if you need custom software engineering services.

The Custom Software Engineering Services Market

Many claim custom software engineering is dead — that is to say, it’s fallen out of favor only to be replaced by packaged products.

But according to Forrester Research, this view is a myth.4

Enterprises spend about the same on custom-developed business applications (25.6 percent of software spending) as on packaged business software (25.8 percent). As Forrester analyst Stefan Ried puts it, there’s no need to purchase a major suite of package software “if you need only a small part of it — custom development can be better as long as the business logic isn't subject to legal or tax regulations, such as financial accounting software."

Reid isn’t alone in his technology beliefs. According to a 2015 survey released by Appian,5 Information technology (IT) decision-makers vastly prefer custom software applications built by their company’s internal IT team or through outsourced development:

  • 72 percent of IT professionals acknowledge that traditional solutions are too slow, which prevents them from infusing their companies with digital business innovation
  • 87 percent of respondents believe custom software engineering is driving technology innovation
  • 52 percent of respondents are more likely to use custom-designed software over prepackaged software
  • 97 percent expressed confidence in using custom-developed software, with 94 percent likely to recommend its use

Respondents cited the following benefits of custom software:

  • Increased efficiency of software - 53 percent
  • Designed to serve a unique need - 51 percent
  • Ability to make necessary software enhancements - 46 percent

Though numerous industries invest in custom-engineered software, verticals that can most benefit from it include:

  • Financial services - 48 percent
  • Manufacturing - 41 percent
  • Telecommunications - 39 percent
  • Healthcare/pharmaceutical sector - 38 percent

For IT professionals grappling with the technology demands of modern businesses, custom software engineering services can help enterprises swiftly meet their priorities.

Types of Custom Software Engineering Services

No two businesses are alike, which is why custom software engineering services are so varied and abundant. Whether you need to build a system from scratch, connect existing systems, rescue a failing in-house project, or augment your own development and engineering staff, there’s a custom software engineering service to meet your needs.

  • Software and app development can range from an on-premise, to a web, to a mobile solution for your business. Perhaps you need an iPhone, iPad, Windows, or Android application for your field service agents. Or maybe you want to develop that as SaaS solution to sell. Many custom software engineering firms build both internal business software, as well as test, prototype, and build products.
  • Enterprise solutions and integrations are complex, which is why custom ERP or CRM software may be necessary. In some cases, you may not need a solution built from scratch, but an system integration. A custom software engineering services firm can addresses both enterprise needs.
  • Project rescue is necessary when your software development project is in trouble. Software engineering firms can step in and analyze what went wrong, report the best methodology to reduce additional time expense and drive the project to completion. If run into unforeseen issues or encounter a nasty bug, consider consulting with a third party to get your project on track and finished.
  • Supplementary IT resources are often provided by software engineering firms. When you have a short term or one off project that requires high-skilled engineers, you can use these services to augment your own IT team. Getting outside help can decrease start-up time and increase both productivity and quality of work. Some examples of additional IT resources you may want to hire on an as-needed basis include:
    • Mobile developer (Android, iOS)
    • Game developer
    • Web developer
    • Database administrator
    • Business analysts
    • Scrum master
    • Internet marketing specialists
    • Cloud computing specialists
  • Ongoing support is sometimes needed after a project. These services include application lifecycle management (development, maintenance, management, migration) as well as support and maintenance.  
Choosing Custom Software Engineering Services

Choosing a custom software engineering firm is no easy task. Ideally, you will choose someone with whom you can form a long-term partnership in case any issues arise or you have additional needs in the future. When seeking out third-party software engineering services, the following differentiators will help you pinpoint what to look for when choosing your partner.

Language: In which programming language does your source code need to be written? PHP? Ruby? JavaScript? When choosing a service, you can select one with wide-ranging language experience, or rather a team that specializes in the particular code you need.

Purpose or Goal: If you’re building a game, you’ll need a very different team than if you’re building an enterprise CRM. If your project is industry-specific or extremely specialized, consider choosing a niche service provider. You’ll want a subject-matter expert on your side.

Cloud or On-premise: How will your software be deployed? What other applications do you need it to talk to? Knowing how you will implement your custom software will help you narrow the market of service providers.

Business vs. Consumer: Designing software for consumers requires different knowledge and skillsets than building a system for business users. Do you need a retail consumer application? Do you need an internal content management system? These two projects are vastly different, so it’s worth exploring your options until you find a vendor with relevant experience.

Add-on Services: In addition to custom software engineering, what else does the firm offer? Perhaps you want to couple your software development project with generalized IT consulting services to help you with security and risk management, or maybe you need data analysts and strategists to help you derive insights from your business data. Depending on the scope of your project and your own staff’s expertise, it may be beneficial to find custom software engineering service providers that also offer complementary IT services.

Once you know the type of IT services you need, as well as additional specialty differentiators required for the project, your list of service providers will be shortened significantly. You’ll need to put in your due diligence and check the track record of every service provider you’re considering.

To make sure they are a good fit, perform reference checks, read case studies, find unbiased third-party evaluations, and consider customer satisfaction ratings or reviews. After your options are narrowed down, then it’s time to meet the candidates face-to-face so you can discuss who you are, what you want to do, what type of software you’d like to set up, and the project’s timetable

You’ll want to know what development methodology they follow (Scrum, Agile, Waterfall, Test-Driven Development, etc.) to ensure it aligns with the way your company conducts business. Once you’ve had some one-on-one time with each firm or developer on your shortlist and confirmed that their approach leads to successful software, choosing which provider to partner with should be obvious.

Custom Software Engineering Services Case Study

Company: Newdea

Service: Product Development and Supplementary IT Resources

Challenge: Newdea needed a social impact platform that enabled them to design, manage, and track philanthropic giving from donors.

Service: Pilgrim Consulting6

Early in the process, the Newdea staffed the technical team lead, project manager and senior developer. Pilgrim provided staff augmentation. Pilgrim seamlessly integrated into the client’s Agile development process. As confidence grew, a majority of the technical management and architectural responsibility was moved to Pilgrim Consulting.

Technology Used:

  • Development Platform: Microsoft Visual Studio 2010 SP1
  • Development Framework: ASP.NET MVC 3.0 + Entity Framework 4.1
  • Data Platform: Microsoft SQL SERVER 2008 R2
  • Language: C#, VBScript (Job development), Javascript/jQuery
  • UX/UI: DIV + CSS


In addition to getting the comprehensive application they needed, Newdea enjoyed reliable, high-quality software engineering with a low total-cost-of-ownership, plus rapid time-to-market:

“Pilgrim cares as much about our products as we do. That is why we view Pilgrim as part of our company — not just outsourced vendors. We believe our business can change the world and they care about that as well.”

Newdea now offers their Pilgrim-designed, cloud-based social impact platform for results-based management of social sector programs to nonprofits, governments, and foundations. Their web-based program and grant management software provides on-demand solutions and a collaborative environment for individuals, businesses, and institutions to share information.

The end result is greater impact in the social sector:  

  • Donors and grantors can connect directly to the results of their grants, creating transparency efficiency and collaboration with the organizations they support.
  • On the same platform, recipients can successfully deliver program-level information, metrics and successes to donors and grantors, which results in a higher level of giving.
  • Newdea’s software helps companies increase philanthropic success and reduce resource requirements by equally focusing on impact and efficiency.
  • Their integrated software measures the performance and success of social investments, grants & programs.

In the world of philanthropy, the question most often asked by donors is “how will my donation be used, and how much good will it do?” Newdea provides the answer.

Other Leading Custom Software Engineering Service Providers

Pilgrim Consulting was the best choice for Newdea, but other custom software engineering  service companies may be a better fit for your industry, department, or unique use case. The following custom software engineering service companies are some of the best equipped firms in the industry, with extensive experience in software projects:

Ascendent, Open Sky Software, Crispy Codes, Hidden Brains, Centresource, Cyber Corp Software

Choosing the Right Custom Software Engineering Services

At TechnologyAdvice, our goal is to connect businesses with not only the best technology, but the best technology partners. We’ve compiled product information, reviews, case studies, features lists, video walkthroughs, and research articles on hundreds of leading IT solutions, all to make the buying process more straightforward for decision makers like you.

If you’d like more information about any of the services listed in this guide, we’d love to talk to you. Call one of our Technology Advisors, or use the Product Selection Tool on our site to get a list of recommendations based on your needs.

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  1. Lowe, Steven A. “Why Would Your Business Use Custom Software?” Object Mechanics. August 9, 2013. http://object-mechanics.com/why-would-your-business-use-custom-software/
  2. O’Donnel, Paul. “One Size Does NOT Fit All: My Custom Software Development Guide.” LinkedIn. May 6, 2015. https://www.linkedin.com/pulse/one-size-does-fit-all-my-custom-software-development-guide-o-donnell
  3. Cohn, Chuck. “Build vs. Buy: How to Know When You Should Build Custom Software Over Canned Solutions.” Forbes. September 14, 2014. http://www.forbes.com/sites/chuckcohn/2014/09/15/build-vs-buy-how-to-know-when-you-should-build-custom-software-over-canned-solutions/
  4. Kanaracus, Chris. “Forrester dispels 'myths' about software industry trends in 2013.” Computerworld. August 7, 2013.  http://www.computerworld.com/article/2484752/it-management/forrester-dispels--myths--about-software-industry-trends-in-2013.html
  5. “New Technology Sector Emerges from Boom in Custom Software Industry.” Appian. February 18, 2015. http://www.appian.com/about/news-item/new-technology-sector-emerges-boom-custom-software-industry/
  6. Newdea Case Study. Pilgrim Consulting. Accessed July 30, 2015. http://pilgrimconsulting.com/case-studies/newdea/


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