Off-the-Shelf vs Custom Software: The Real Three-Year Cost

Every owner who has outgrown their software asks the same question: is a custom system worth it, or is it just an expensive way to get what a subscription already does?

The honest answer depends on a number most businesses never add up - what the current setup really costs, once you count everything you pay to keep working around it. This post shows how to add it up, with a worked example, so you can make the call on numbers rather than on a sales pitch.

Why the first invoice misleads

A subscription is priced to look small: a fee per user per month, and a free trial that makes switching feel cheap. A custom build is the opposite: one larger number up front.

Put side by side in month one, the subscription always wins. But you do not run a business for a month. The right comparison is what each costs over three years, which is roughly how long a business system lasts before it needs a serious rethink either way.

What off-the-shelf really costs

Add these four lines for the next 36 months.

1. Subscriptions

Users x the fee per user x 36. Remember that the user count grows as you hire, and that the feature you actually need is often one plan higher than the one you are on.

2. Add-ons and connectors

The pieces that make it work in Kenya: an M-PESA connector, an eTIMS integration, WhatsApp messaging, extra storage, an extra app for the one thing the main product does not do. Each is small. Together they are often a second subscription.

3. Workaround hours

This is the line nobody writes down, and usually the biggest. Count the hours each week that people spend on:

• retyping between the software and a spreadsheet
• matching M-PESA payments to invoices from the statement
• rebuilding the same reports in Excel every month
• chasing approvals on WhatsApp because the software has nowhere to put them

Multiply by what those hours cost you, then by 156 weeks.

4. Mistakes

Harder to count, but real: a payment that was never matched and never chased, an expense disallowed because the supplier's invoice never went through eTIMS, an order shipped twice because two people worked from two sheets.

A worked example

Take a distributor with 15 staff using an off-the-shelf system plus spreadsheets. The figures below are illustrative - replace them with your own.

| Line | Working | Three years | |---|---|---| | Subscriptions | 15 users x KES 3,500 a month x 36 | KES 1,890,000 | | Add-ons and connectors | KES 10,000 a month x 36 | KES 360,000 | | Workaround hours | 2 people x 6 hours a week x KES 500 an hour x 156 | KES 936,000 | | Total, before mistakes | | KES 3,186,000 |

That total is the budget a custom system has to beat over the same three years - including its own hosting and maintenance. If it does, and it also removes the mistakes, the case makes itself. If it does not, stay where you are and fix the workarounds instead.

Two things change the picture as you grow:

• The off-the-shelf total rises with headcount. Hire ten more people and the subscription line grows by two thirds.
• The custom total mostly does not. You own the system, so more staff means no more licence fees - only hosting that grows slowly with use.

When off-the-shelf is the right answer

Custom is not always the answer, and anyone who says it is should worry you. Stay off-the-shelf when:

• your process is genuinely standard, and the software fits it well
• you have a handful of users and little bridging work
• the problem is how the tool is set up, not the tool itself
• the books are the issue - good accounting software is hard to beat, so keep it and build around it

Often the best answer is in between: keep the accounting package and anything that works, and build only the part that is costing you.

How to run your own numbers

1. Count users today and in two years.
2. List every add-on and connector you pay for.
3. Ask each team how many hours a week they spend working around the software. Be honest - it is usually more than anyone thinks.
4. Add it all up over 36 months.
5. Compare it with a fixed quote for a system that removes the workarounds, plus three years of hosting and maintenance.

Where we come in

If your numbers point towards custom, our custom systems service builds around how you work, at one fixed price agreed before we start, with a first working version in weeks and the code and data yours to keep.

Coming from something specific? See what changes when you have outgrown spreadsheets, outgrown QuickBooks, or found that Odoo or Zoho does not fit.

For a figure on your side of the comparison, the estimator gives a realistic range in two minutes. Or book a free tools review and we will run the numbers with you - including telling you when staying put is cheaper.