The Measurable and Ethereal Benefits of Custom Software Development Solutions
A common question companies ask themselves on a regular basis is whether an investment in custom development software solutions is worth it. Will it produce a nice return on investment? There are a few options when it comes to software and oftentimes, buying something off the shelf appears to be the easiest and fastest route. While there are definite pros to prepackaged software products, they rarely are effective as a well-built custom software solution.
ROI can be measured after the purchase has been made and implemented. While some benefits are intangible and difficult to calculate, many of the benefits are measurable using basic math. What’s not so simple is trying to predict whether an investment will generate ROI before the acquisition. Guesswork, assumptions and predictions are about as good as anyone can do without actually allowing the solution to marinate for a while. This ambiguity presents problems for procurement, CIOs and other business leaders who are on the hook for making wise investment decisions.
How Investments in Technology Produce Return on Investment
Technology investments are the largest spend in most companies and it’s growing by as much as six percent since last year. They can also be the biggest losses so companies have to be skeptical, selective and thoughtful. Choosing a custom software development solution that will drive a high rate of return can be summed up in three ways:
1. Will It Increase Revenue?
Your custom software has the potential to increase revenue by providing a new source of income, such as the launch of a new e-commerce website. By enabling customers to make purchases online, you have just opened up a new revenue stream that is easily measured by increased sales volume.
In the same sense, investing in a mobile application can produce long-term benefits to revenue, such as increased customer satisfaction and loyalty where they purchase more items or purchase more frequently because of the ease of sale via the mobile app.
2. Will It Improve Productivity?
At first glance, productivity may seem more intangible than revenue, but measurement isn’t always elusive. The right custom software solution can be a shot in the arm for a services-based company. It can empower sales, customer service and marketing teams to be more productive and efficient.
With budgets and resources continually shrinking, companies are pushing their teams to do more with less. A well-developed software solution may be the ticket to automating processes, integrating systems, consolidating data and presenting it in real-time to speed work, engagement and decisions.
3. Will It Reduce Costs?
Many custom software development solutions are built specifically to reduce costs, often by eliminating the need for third-party software services. For instance, a company will greatly decrease credit card processing fees with a custom software solution that Integrates key systems, such as a payment processing system with a merchant payment provider.
Related: Corepoint Health Case Study
Similarly, upgrading a billing system with custom software that electronically generates and emails invoices will reduce the cost and time of manual efforts as well as postage. Costs such as these are easy to measure and provide an instant return on investment that can often improve customer satisfaction as well.
Ask your stakeholders these three questions to determine whether a custom software development solution is worth the investment. If your new solution would impact revenue, productivity and/or costs, it’s time to choose the right custom software developer to partner to make it happen.