Business Software: Rent or Buy?

Introduction

When acquiring software for your business, one key question arises: Should you rent or buy? Like with other assets—cars, homes, or office spaces—the choice depends on your goals, budget, and long-term needs. But the real question is: What do you want from the software, and how will it bring value to your business?

While cars and homes offer functional benefits, their value often lies in how they appreciate over time. Similarly, software solves immediate problems but should also drive long-term growth, ROI, and efficiency.

This article will help you navigate the “Rent or Buy” question as it applies to software so you can make an informed choice for your business.

Find the Right Balance

When it comes to choosing software, the decision is rarely straightforward. Should you buy off-the-shelf (OTS) software, or is a custom-built solution the wiser investment? The key to answering this question is understanding your unique business challenges and knowing when each option makes the most sense. In the following sections, we’ll guide you through a step-by-step process to help you understand when off-the-shelf software might be the right choice and when custom software could better fit your unique needs.

Step 1: Identifying the Problem

The first step is always to identify the core problem you’re trying to solve. Is it something most businesses deal with, or is it specific to your operations?

For example, if you need project management software, plenty of existing tools like Asana, Monday, or ClickUp can likely meet your needs without heavy customization. However, custom software might be the better choice if your business requires a solution that integrates with niche systems or workflows.

At its heart, the decision revolves around this simple question: Does the problem require a unique solution, or can it be solved with existing software?

Here are some key points to keep in mind

Not all issues are unique

Not all problems justify a solution

Not all problems justify unique solutions

Step 2: Quantifying the Problem

Once you correctly identify the problem(s), it’s time to understand its impact on your business. Putting a dollar value on inefficiencies, missed opportunities, or bottlenecks helps you determine whether or not to move forward.

Ask yourself these questions:

• How much is the problem costing me right now?

  • For example, if employees spend 5 hours a week on manual tasks that could be automated, calculate that time in dollars. If this issue affects multiple employees or departments, the costs quickly multiply.

• What revenue or growth opportunities do you need to include?

  • Sometimes, the cost isn’t just wasted time or inefficiency but lost revenue. If your current system is limiting your ability to take on more customers, how much potential revenue are you leaving on the table?

• How much will the solution save or generate over time?

  • Whether you choose an off-the-shelf or custom solution, calculate the amount you expect to save in operational costs or the amount of new revenue it could unlock. This figure helps determine whether the upfront investment is worth it.

Whether you choose off-the-shelf or custom software, the cost should align with how well the solution addresses your problem. Off-the-shelf software often shines here, offering quick solutions at lower costs, but its limitations can also become apparent here, especially when long-term scalability is at stake.

Step 3: When Off-the-Shelf Software Fits

Off-the-shelf software (OTS) is often the quickest and most cost-effective solution for well-defined business problems, but it comes with trade-offs.

Here’s when OTS software might be your best bet

• Cost-Effective
  • OTS software provides a more affordable way for businesses operating within a budget to get up and running quickly. With lower upfront costs and regular vendor support, it’s often the preferred option for standard business functions.
• Fast Deployment
  • If time is of the essence, OTS software can be deployed almost immediately, allowing you to solve the problem immediately without a lengthy development process.
• Vendor Support and Updates
  • Regular updates and support make maintaining OTS software much easier. This allows your team to focus on what they do best without worrying about upkeep.

Critical Limitations of OTS Software

You have no control over OTS software. When your business grows, your problem(s) grow with it. When using OTS software, this can sometimes become problematic.

• Business Requirements Change
  • As your problems grow, they will also change in various ways. When you are using OTS software, you do not have the control to change your software solution to fit the new requirements the problem presents.
• Rising Costs
  • As the business grows, you will likely acquire more resources, facilities, people, etc., which almost always increases your monthly OTS software bill.
• App Overload
  • A common problem we see with businesses is that they use 37 different apps to operate. Having multiple apps is okay, but having too many can be a bottleneck. Not to mention, there are security concerns when you spread an organization across many applications.

Businesses often invest heavily in “industry-standard” software only to use a fraction of its features. If you’re paying for 100% of the features but only using 10%, building a custom solution tailored specifically to your needs may be wiser.

Step 4: When to Build Custom Solutions

While OTS software works for many businesses, there are times when it simply doesn’t fit. That’s when custom software comes in.

Consider custom software if:

• You Have Unique Requirements
  • Custom software is the way to go if your business has specific needs that off-the-shelf solutions can’t meet. Custom software fits your workflows and integrates seamlessly with your existing systems.
• You Want a Competitive Edge
  • Custom software can differentiate your business from competitors, giving you tools that work as needed—something your competition may not have.
• Expect Scalability
  • As your business grows, custom software can scale with you. Unlike OTS software, which may hit limitations, custom-built software adapts and evolves with your business over time.
• You want a real asset
  • Custom software can be a long-term asset, solving immediate problems while extending into other areas of your business as needed.

How We Help

At Gamut Technologies, we believe the decision between OTS and custom software isn’t one-size-fits-all. It’s about finding what works best for your business’s unique needs. Here’s how we help:

We take a balanced approach to software development:

1. Identify Problems: We work closely with you to understand the exact challenges your business faces from start to finish and why those problems exist. From there, we can determine whether you need something custom or whether an existing solution is better.
2. Build Custom Solutions: When custom software is the right choice, we take you through designing and developing a solution tailored to your specific needs, ensuring it integrates smoothly into your business and scales as you grow.
3. Find the Best Off-the-Shelf Options: If an OTS software can do the job, we’ll help you find the best option that fits your budget and requirements without unnecessary complexity.

Choosing the right software doesn’t have to be overwhelming. With the proper guidance, you can make informed decisions that add value to your business—whether you build custom or leverage off-the-shelf solutions.