ROI Analysis: Custom Software vs Off-the-Shelf Solutions for Enterprises

• The decision between custom software and off-the-shelf solutions is one of the most critical technology choices enterprises face. Let's break down the real costs and benefits.

Initial Investment Reality Check

Off-the-Shelf Solutions:** - Software licenses: ₹2-10L annually - Implementation costs: ₹5-20L - Training: ₹1-3L - **Total Year 1: ₹8-33L

Custom Software:** - Development: ₹15-50L (one-time) - Implementation: ₹2-5L - Training: ₹1-2L - **Total Year 1: ₹18-57L

• *At first glance, off-the-shelf seems cheaper. But this is where most analyses go wrong.*

The Hidden Costs of Off-the-Shelf

• Year 2-5 Recurring Costs:
• Annual license fees: ₹2-10L per year
• Customization for your processes: ₹3-8L per year
• Integration costs: ₹2-5L per year
• Upgrade fees: ₹1-3L every 2-3 years

5-Year Total: ₹50L-₹1.5Cr+

The Custom Software Advantage

• Year 2-5 Costs:
• Hosting and maintenance: ₹2-4L per year
• Feature additions: ₹3-6L per year (optional)
• No license fees, no upgrade costs

5-Year Total: ₹30L-₹80L

Real-World Case Study: Manufacturing Company

Our client initially considered SAP (₹1.2Cr over 5 years) vs our custom solution (₹65L total).

• The Results:
• Faster Implementation:** 4 months vs 18 months for SAP
• Perfect Fit:** Built exactly for their processes
• Total Savings:** ₹55L over 5 years
• Additional Benefits:** 40% faster operations, real-time visibility

When to Choose Custom Software

• Your processes are unique or complex
• You need tight integration with existing systems
• Long-term cost control is important
• You want competitive advantage through technology
• Your team size is 50+ users

When Off-the-Shelf Makes Sense

• Standard business processes
• Quick deployment needed (under 3 months)
• Limited budget for initial investment
• Small team (under 20 users)

Making the Right Decision

The key is understanding your true total cost of ownership and the strategic value of perfectly fitted software.

Our Assessment Process

• We provide a detailed ROI analysis comparing custom development vs off-the-shelf options specific to your business. Our ₹5,000 assessment includes:

• Current system cost analysis
• Custom development cost estimate
• 5-year ROI projection
• Risk assessment for both approaches

The Bottom Line

• For most enterprises, custom software delivers better ROI within 2-3 years while providing competitive advantages that off-the-shelf solutions simply cannot match.