Custom Development vs. COTS: Which is Better for Business Growth?


Whether to purchase commercial off-the-shelf (COTS) software or build a custom solution is one of the most common dilemmas organizations — and specifically IT leaders — face.

COTS had its moment in the spotlight when custom development was more costly and businesses often did not have the expertise in-house to develop their own software solutions.

Why spend time having your best people architect a solution that already exists — and has been proven in the market — when a vendor has solved the same problem hundreds of times? Or so went the prevailing view.

But the growing pressure for differentiated customer experiences and highly efficient business operations has led many companies to prefer custom solutions that can fully adapt to their modern organization — and help them stand out from the competition.

Thankfully, the notion that developing your own software to support specialized businesses is costly and inefficient is based on old development models. Modern app development technologies like high-performance low-code have changed that.

Why Is Custom Development Gaining Momentum Over COTS?

There are two trends to consider when examining why custom solutions have gained momentum and why, more often than before, cookie-cutter applications are no longer enough:

  • The post-pandemic push to digitize customer-facing operations and experiences
  • The quest to provide differentiated experiences, both for customers and employees.

Your applications and software are critical to achieving this, particularly as competitive pressure ramps up. But can you really leapfrog your competition if you’re tethered to pre-packaged solutions that look like everyone else?

What’s more, the philosophy of tweaking only the front-end — because it’s what impacts customers directly — but keeping the back-end systems slow and disconnected simply doesn’t work anymore because those operations greatly affect the customer experience. Everything is integrated. If something in the back office doesn’t work well, the app experience breaks down fast, and adoption fails.

In today’s fast-changing world, even the most internal system has to be adaptable and flexible enough to keep up with whatever disruption or opportunity comes next.

Standard SaaS or COTS systems don’t change easily — even if they’re the best in class — because they weren’t made with the peculiarities and pace of your business in mind.

The Benefits of Low-Code for Custom Development

Organizations are replacing or extending their COTS solutions with alternative development approaches like low-code because it gives them the freedom to create applications that directly align with their business objectives from the beginning — and do it faster.

More and more companies are turning to low-code for custom development, but not all low-code platforms deliver the same performance capabilities.

A high-performance low-code platform — unlike no-code or ‘regular’ low-code — combines the agility and speed of low-code with the robustness of traditional full-stack development to build core and mission-critical systems — which, in turn, gives teams the flexibility to build exactly what they want for internal users and external customers.

Let’s look at three key functional areas to examine why custom development with high-performance low-code is better for business growth:

  • Customer apps and portals
    These digital gateways not only strengthen customer relationships, but also help you stand out in a crowded marketplace, acquire new customers, and even streamline your customer service operations. Success requires the ability to design a stand-out customer experience and to respond to customer needs and market changes faster than ever before.

    High-performance low-code gives businesses the ability to keep up with changing customer preferences and to customize and differentiate your customer-facing products at every touchpoint.

  • Internal business apps
    Employees have high expectations for the digital tools they need to do their day-to-day work. Additionally, organizations should be looking for opportunities to help their employees be more productive and efficient. Dated tools and legacy applications that are difficult to maintain and unable to update no longer have a place in an employee-focused digital reality that is transforming rapidly.

    The advent of SaaS and software purchases decentralized from IT contributed to the proliferation of apps inside organizations. Multiple apps can create friction and app fatigue, which negatively impacts employee engagement and productivity.

    With high-performance low-code, you can build new or integrate and extend an existing portfolio of internal business apps — tailored to your business processes — alleviating redundant, manual tasks and consolidating the employee experience.

  • Core systems
    Your business is different from your competitors, so it makes sense that your core systems should be tailored precisely to your business — instead of making your business fit someone else's software.

    You can avoid vendor lock-in and outdated, legacy software solutions by building your own systems tailored exactly to your business needs.

    From customized ERPs that deliver complex data and back-end integrations to unique CRM or supply chain systems, you can build powerful systems faster and at less expense with high-performance low-code.

    But if you’re not ready to go all in, you don't have to. Companies unable to replace their legacy systems completely can still modernize by extending their apps with high-performance low-code to deliver the desired outcome.

Case Study: How Green Cargo Brought IT Innovation In-House to Speed Up Development and Improve Agility

Logistics firm Green Cargo is an example of the innovation boost and cost-saving benefits of bringing IT innovation in-house with the help of high-performance low-code.

The company’s COTS system was not agile or able to innovate, and its heavily outsourced IT needed a legacy escape plan for its logistics and ERP systems. But replacing the whole thing at once would cost millions and bring its prized innovation goals to a standstill.

Instead, the company decided to take a custom approach using high-performance low-code, replacing key functions one at a time. In just one year, the company gained a newfound agile capacity for hybrid-cloud application development – launching several significant applications into production, including a mobile app, a predictive maintenance app, and a customer portal.

Read the full story.

High-Performance Low-Code: Build for Business Growth

Organizations no longer need to choose between the convenience and speed of pre-packaged solutions with the flexibility of traditional coding.

With a modern high-performance low-code platform like OutSystems, you can have the best of both worlds. High-performance low-code gives businesses the capabilities required to rapidly develop and continuously evolve strategic applications across all areas of the enterprise — from customer portals and apps to automating and connecting processes via internal business apps to building highly resilient and tailored core systems.

Learn how your existing team can deliver unique, high-value, complex apps faster than traditional development without compromising on quality, security, or scalability.