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Custom Software vs. Packaged Solutions — What Will Reign in 2021?

Business

Feb 3, 2021 - 3 minutes read

1416 Custom Software Vs. Packaged Solutions 416X300
Grzegorz Strzelecki Chief Technology Officer

He has been working for Objectivity since 2010 – first as a Technical Architect and today as the Head of Development. In the past, he has held positions at Microsoft and a SharePoint Partner company. He’s passionate about technology – web, cloud, DevOps, cognitive services – and readily follows market trends and opportunities. At Objectivity, he is currently focused on embracing the growing relevance of Azure and AWS practices, which he sees as key enablers in client projects. Privately, Father and Ironman.

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I’ve been in this business since 2005 and, over the years, I’ve seen many IT leaders struggle to decide whether they’d like to address their business needs with a product or custom-written software.

My observation is that packages have become more popular during the last few years. On the other hand, I also feel as though I’ve seen a similar trend before, and it turned out to be just a specific moment in a cycle. In time, the trend reversed. I believe that the same thing will happen in 2021 — the popularity of packages will decrease.

The Current IT Solutions Landscape

Let’s imagine that the IT solutions landscape is a surface of industries and technologies. An implication of my earlier observation is that the space left for custom software is shrinking, at least in certain industries, as packages have become better and smarter.

Packaged solution providers have reduced maintenance costs by hosting their solutions in the SaaS model. They have also made their products easily customisable and extensible by employing low-code and began embedding them with simple AI capabilities.

All these characteristics make packages an attractive choice for organisations — but there’s still a case to be made for bespoke software development.

 

Where Does Demand Come From?

Demand is created by various incidents and events. These events may be technological — e.g., infrastructure democratisation in the Cloud, AI democratisation via ML platforms, currency democratisation on blockchain, etc., — or business-related, such as Brexit or the COVID-19 pandemic.

How do products perform in light of demand-generating events? They usually have their own inertia and come with a need to commoditise the solution. This process usually takes from 2 to 5 years until the novelty hits its “plateau of productivity” phase on Gartner’s hype cycle or starts climbing again and echoing the initial phase, this time through commoditisation.

Waiting so long usually means that you’re risking losing the opportunity to build something unique as well as to gain a competitive advantage and become a leader. This lengthy product adaptation process is why custom software solutions still have an important space to occupy in the IT landscape.

 

What Differentiates 2021?

How does all of the above relate to the current technology landscape though? Well, many of last year’s events indicate that 2021 will be a unique moment in history. The post COVID-19 economy will require that we adapt to a certain kind of ‘new normal’. We’re already seeing strong trends around eCommerce, remote work, location independence, communication, vision recognition, and hyperautomation just to name a few.

As such, survival mode will evolve into competition mode as soon as social and operational restrictions are lifted — and then, the speed of innovation adoption will be greater than ever before. This shift will be a clear call to action for software houses, start-ups, and scientific institutes, which will be competing for funding and opportunities in the new landscape.

Conclusion

At the end of the day, organisations will have to consider their short- and long-term goals in order to select the type of technology partnership that will best suit their business needs. Knowing that packaged solutions might not be agile and versatile enough, what should you focus on when choosing a software partner?

My experience tells me that software providers who are likely to be the most successful in 2021 and beyond all have specific qualities. They’re open to innovation by driving ongoing R&D efforts, they’re organised in a Community of Practices, and inspired by grassroots initiatives. They’re the ones who will adopt innovation in customers’ industries early on but with full awareness, thanks to having domain knowledge and market-savvy consultants on board. These providers will be able to build unique outcomes with custom-written software supported by reusable components and smart design tactics, while understanding that speed requires process standardisation and automation. And they’ll also embrace rock-solid and scalable delivery disciplines.

Of course, other characteristics not listed above can also constitute a great software provider, as every organisation’s goals are different. As such, if you’d like to discuss your project needs, don’t hesitate to get in touch.

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Grzegorz Strzelecki Chief Technology Officer

He has been working for Objectivity since 2010 – first as a Technical Architect and today as the Head of Development. In the past, he has held positions at Microsoft and a SharePoint Partner company. He’s passionate about technology – web, cloud, DevOps, cognitive services – and readily follows market trends and opportunities. At Objectivity, he is currently focused on embracing the growing relevance of Azure and AWS practices, which he sees as key enablers in client projects. Privately, Father and Ironman.

See all Grzegorz's posts

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