In 2021, enterprises alone are expected to spend about $492 billion on software. Now add to that personal computers, tablets, smartphones, and other devices used regularly by billions of people. That smells like huge profits for those who own that software.
Yet it is estimated that companies spend $15 billion a year to maintain software that is not used as intended because it doesn’t fit business purposes and needs. The answer to this problem is simple: create a custom software solution.
Here are the top 5 benefits that businesses of almost any caliber will enjoy if they choose to build custom software tailored to their unique needs.
Amid the COVID-19 pandemic, the economy is mired in recession. Some organizations may be inclined to abandon their digital transformation plans as part of a broader belt-tightening agenda.
The economic downturn triggered by the epidemic is enormous
While it may seem counterintuitive, the recession is the perfect time to double down on digital transformation efforts. On May 20, 2020, IDC released an updated forecast showing that global spending on the digital transformation of businesses, products, and organizations will continue to grow at a high rate despite the economic crisis and the COVID-19 pandemic. The analysts specified that in 2020, they estimate that digital transformation costs will reach $1.3 trillion, up 10.4 percent from 2019.
Instead of putting off digital transformation plans, organizations should go for it. And it doesn't have to be prohibitively expensive. Many businesses are understandably reluctant to loosen the purse strings in the current climate of uncertainty. While digital transformation is often seen as a massive initial investment in long-term results, it's not necessary. Some of the most successful transformation projects start with low-cost pilots and limited resources that expand once the results are proven. In the right direction, digital transformation can be self-sustaining, with each additional improvement paying off the next step of the journey. Custom software is extremely advantageous in this regard, because it is what allows you to develop solutions incrementally, building functionality as needed, and leveraging off-the-shelf AI and ML technologies for fast and relatively cheap improvements.
Custom software allows you to fully implement AI and ML into your solution. This is an advantage worth paying special attention to, as AI and machine learning (ML) will continue to disrupt the market more and more. Forrester predicts that in 2021, the most active companies will push AI to new frontiers, such as holographic meetings for remote and on-demand work and personalized manufacturing.
Before the pandemic, a Technology Vision survey showed that 73% of organizations were launching pilot projects or implementing artificial intelligence in one or more business units. According to the forecast, these numbers will only continue to increase.
Artificial intelligence technology has already been implemented in a variety of sectors such as mobility, education, manufacturing, e-commerce, communications, healthcare, insurance, finance, and many others.
These are just a few examples of AI applications in some industries:
Mobility: Autonomous cars that use AI to drive so you can take a nap during your commute. Isn't that a dream? Yes, a dream, and it will remain so for some time to come. In any case, AI apps are integrated into many new cars being released today. From voice assistants to semi-autonomous driving, AI is already an integral part of the mobility industry today.
Healthcare: Artificial intelligence plays a crucial role in technological advances in the healthcare sector, from autonomous surgical robots to virtual nurse assistants to automated imaging diagnostics. And there's still room for more applications as technology improves.
Manufacturing: This is probably one of the industries where robots and artificial intelligence technology are most in demand. High-performance robots can work faster for longer periods of time without stopping. In some cases, they can be much more efficient than humans.
There are many more possible applications of AI that could be used for automated cargo transportation, climate change, deep-sea and space exploration.
Let's face it: AI is poised to become a mass product in the coming years. The question today is who will be the first to implement it and beat the competition.
The way we live, work, and communicate has been greatly influenced by the proliferation of COVID-19. While there has been a steady, strong trend toward digitalization in many aspects of society, this year we have witnessed it. Amazon sales in the second quarter of 2020 were up 40 percent over the same period last year, as even those who had avoided online retailing until now were forced to reconsider their options.
The ability to sell a product or service face-to-face is currently declining significantly as social distancing remains in place. But with the gradual removal of the lockdown, new businesses will begin to open. Some firms may reopen their offices, while others may continue to operate online. In addition, many companies may have changed their hours of operation to adjust to lower staffing levels. In such a volatile environment, it's critical to keep customers informed of where, when, and how to find you.
Tools and platforms already exist to help businesses understand how their customers are adapting to the new reality. Organizations that used to lag behind in mastering digital channels for commerce and relationship development have realized the urgency of the situation and are quickly embracing concepts like behavioral analytics and personalization. Tools that give organizations access to these technologies will become more prevalent throughout 2021 as small and medium-sized businesses seeking to establish their competitive advantage.
Many firms have moved to e-commerce platforms with great success; this will be a new element of their offerings that they are happy to support. And for online companies, the so-called "hassle-free" customer journey is critical. In turn, custom software can be a great tool for attracting new target audience through digital channels. As many physical businesses close, consumers are turning to online shopping to meet their needs, even those who have historically been reluctant to do so. Physical-digital integration is more important now than ever, and custom software can be a great help for that.
Let's talk about what you can really save money on. Past economic downturns show that controlling costs by improving operational efficiency is a task for which custom digital solutions are ideal. For example, companies that primarily rely on workforce reductions to manage costs have only an 11 percent chance of emerging from a downturn, while companies that focus on operational efficiency rather than layoffs are more likely to experience a breakaway effect, according to a Harvard Business School study.
The biggest efficiency driver is automation. In automation projects, ROI is almost instant, offsetting the initial investment. Robotic process automation allows organizations to automate certain types of workflows to reduce time spent on costly manual tasks and reallocate resources elsewhere. Add to that advanced technology such as AI and ML and the recipe for success is there. The economics of automation is simple: the same work gets done faster and with fewer errors, while human resources can be reallocated to higher-value tasks or to fill critical gaps. Against the backdrop of having to work online, the advantage of software becomes even more apparent.
The list of benefits of custom software development will be incomplete without security. Malware and hacker attacks can cost your company a lot of money, especially if the software collects information about your employees, projects, and customers.
While commercial software can be just as secure as custom software, it's still a common target for cybercriminals. In most cases, hackers choose commercial software that is available online and used by thousands or even millions of users. Your company can only be attacked if the hackers are targeting the organization itself.
Additionally, cybercriminals have advanced knowledge of off-the-shelf products and are aware of their vulnerabilities. Despite regular updates, hackers find new and new vulnerabilities, so the fight never ends. It's harder for them to examine software and find vulnerabilities.
According to Forbes, 55% of business executives plan to increase their cybersecurity budgets in 2021, and 51% plan to add full-time cybersecurity experts in 2021. PwC found that the majority of executives plan to increase their cybersecurity spending in 2021, despite the fact that 64% expect business revenue to decline. Isn't that a reason to think about security in advance?
A big advantage of custom products is that they are tailored to your business needs and specifics. You can discuss with the developer company what tools the firm needs to protect its databases and systems. If you are lucky enough to meet a good developer company, you can protect your data and corporate secrets by signing an NDA, storing your information on trusted servers, and basically adding as many security measures as you want. Also, you can get a warranty on the developed software. With a boxed solution, you won't have all of the above.
To stay competitive in the industry, companies need to grow and develop. And even if commercial software is initially sufficient for business, it may not be able to meet tomorrow's challenges. When a company grows or changes direction, it's difficult to tailor off-the-shelf products to your needs or repeatedly train your team.
However, by working with software developers, you can create products that are constantly improving and adapting to your growth and can even self-learn with advanced technologies such as AI. Custom software gives you the opportunity to form of a scalable architecture that takes into account your business logic. In addition, the development and support team can maintain the software, ensure its effectiveness, and add new functionality as needed, and train your team to use it. Remember, software shouldn't keep your business from growing and being productive, which is almost inevitable if you're using commercial software.
Also, every company has several departments, from accounting up to marketing and human resources. In a sense, they all work independently of each other on separate tasks. However, there are still tasks that can only be accomplished together.
Fast communication and hands-on collaboration make a big difference in the success of a business. That's why it's so important to develop products that can be integrated with all departments. For example, an effective environment in which accountants and HR managers can calculate payroll, or developers and designers can work together on an interface.
This task is much easier with custom software tailored to the needs of a particular company and implemented across all departments.
***
There can be advantages and disadvantages to custom software development, but it's hard to deny that customized solutions go a long way toward increasing efficiency of the company as a whole. If you want to take the lead in the market, developing software with your goals and needs in mind is crucial. Make a list of the goals you want to achieve and hire a team of professional developers, and you're sure to obtain high-quality services while remaining competitive and profitable.
Andrii is a content manager at MassMedia Group software development company. He is an expert at business running processes and methodologies, software solutions and is in charge of most crazy creative ideas concerning the content and targeted marketing.