What Every Agency Will Tell You About
Custom Software Development

Custom software development refers to all the processes and activities that contribute to the creation, testing, and deployment of a brand-new software solution.

When choosing between custom-made or off-the-rack, every software solution starts with a process of development. It starts from an idea or need and then follows a process that brings a solution to action through information technology.

Some of the people who participate in custom software development and contribute to the final project include software developers, software engineers, and computer programmers. These roles overlap and create harmony across production and departments.

Many companies and organizations start with off-the-rack software—that is, pre-developed software that anyone can buy or access for a licensing fee. However, to support their own operations or to bring a new product to the market, many organizations choose to go the custom route at some point.

These companies will either assign their in-house IT team to develop the custom software solution, or they will hire a third-party software development agency to do it for them.

Custom Software Development: An Agency’s Perspective

Custom software is tailored to the business needs of the organization and its timeline. This could be to streamline its own operations or to offer custom software as a product or service to its customers and user base.

When an organization considers custom software development, it enters the next stage in an organization’s technology stack. It’s the moment they graduate from cookie-cutter solutions and invest in a more personalized user experience.

Standard software development may involve the customization of an existing software solution or an open-source software solution. Custom software development usually involves building a whole new solution from scratch. However, a software developer may use existing software modules, like open-source APIs, to build a new solution from the pieces of existing solutions.

Who Needs Custom Software Development?

Custom software development may seem like a stretch for many organizations. How do you make something completely new? For every business need, isn’t there already be a software solution that solves it?

Not necessarily. Organizations may consider custom software development when they want to streamline operations by designing a back-end software solution built specifically for their needs. They could be burning significant resources trying to fit their operations into an existing software solution that doesn’t do the exact job. The resources saved by customizing software to their needs could more than justify the investment.

Custom software development may also be called for when an organization has outgrown its current software solution and needs to scale, without the confines on scalability that come with most off-the-shelf software solutions.

Custom software development may also be needed to deliver the product or service itself, either by introducing something entirely new to the marketplace or by doing the job better than existing software solutions or targeting a solution to a specific niche.

Here are some examples of organizations that routinely reap significant value from custom software development:

B2B Organizations

Business-to-business organizations often require a customized, enterprise-grade software solution to fulfill a multitude of different business needs.

A custom software solution for a B2B organization might unify marketing, customer relationship management, accounting, payroll, and analytics under the same software solution. The software solution might also act as a B2B outfit’s eCommerce store and might even be the product or service that the B2B organization offers.

B2B companies tend to be highly specific, to the point of being unique. Off-the-shelf software seldom works. To build an enterprise-level solution and scale it effectively, custom software development is the way to go.

B2C Companies

Business-to-consumer companies have different needs than B2B companies. When a B2C organization considers a custom software solution, the consumer is often the intended end-user, and they are designing a software solution to sell as the product or service or to supplement that product or service.

These companies not only need a strong value proposition and a great user experience (UX) to entice users but also marketing capabilities and a robust back-end that can scale to meet the growing demand. Special emphasis needs to be placed on the planning and analysis phase to validate the need for a B2C software solution.

Organizations in Finance, Healthcare, Education, etc.

Finance, healthcare, education, and other tech-forward industries have a high bar to clear in devising their custom software solutions. Consumers expect providers in these industries to be on the cutting edge. You can expect competitors to stay up to trend. A software solution that falls short will never succeed. Consumers will jump ship to a competitor whose software solution lives up to their expectations.

Consumers expect great things from software solutions in this industry and they place a great deal of trust in them. These software solutions may store sensitive information like medical records, bank account numbers, and educational information. If this information falls into the wrong hands, it can be devastating for the user.

Organizations in these industries need to be extra-scrupulous about security in their custom software architecture. They also require robust reporting architecture so they can validate regulatory compliance to various oversight agencies they may have to report to.

Innovative Startups

Startups in innovative fields often aspire to be “industry disruptors”—companies like Uber or PayPal that change everything about the way consumers operate. A software solution doesn’t achieve this kind of influence with lackluster software. Custom software development is almost a requirement. Start planning now to get ahead of future competitors.

This doesn’t mean the app has to be built completely from scratch for the highest price possible, either. Many of the most game-changing apps are built from open-source components and APIs. Custom software development must serve the idea while offering a smooth interface making usability simple.

Any Business

We mentioned businesses that face high expectations—regulated industries, and aspiring disruptors, but that doesn’t mean other organizations should be left out of the fun. In a competitive business landscape, a world-class custom software solution represents a significant advantage. Businesses can build their way into a more premium status of the market share with the right software solution.

Most businesses that succeed beyond all expectations do so with a profound commitment to quality—in both the products and services they offer and in how they run their operations behind the scenes. In both of these areas, a great custom software solution can make a difference.

What goes into custom software development? Our Agency checklist

Designing a software solution from scratch, or at least from a vision, is a multi-step process that requires extensive expertise. Software development is a branch of computer science. It’s not the kind of career you can easily learn on the job, as experts have years of schooling to prepare for this industry.

While the process can be complex, custom development agencies succeed by systematizing the process—establishing a checklist of benchmarks that all projects, however unique, must satisfy.

No two software solutions will appear the same as they advance through the development lifecycle, because every business has unique needs. But all software development passes through a series of predictable steps. Here is our agency checklist for the stages of the custom software development lifecycle:

Planning and analysis

  1. Custom software development starts with planning and analysis. Developers usually start by brainstorming features and functions, forming a working understanding of what the software solution will “do.”
  2. Then they move on to needs identification, a kind of market analysis that seeks to determine whether or not the software solution is viable. Is there an audience eager to consume this solution? Is the niche already filled? Can a new solution add functions or perform old functions better? How will those improvements affect the market viability of the software solution?
  3. The next form of analysis is requirement analysis. In this phase, the development team lists the technical and user requirements that must be met for the vision of the solution to be made a reality. The result is a list of phases, tasks, components, and parameters that form a roadmap to the finished software solution known as the Software Requirement Specifications.
  4. Users, project managers, quality assurance experts, and other stakeholders may join the conversation during the requirement analysis phase. They may also select a methodology for development, like waterfall, agile, or V model.

Software Design/Architecture

  1. The design phase is distinct from the planning and analysis phase. Whereas the Software Requirement Specifications talk about what the software will do and what technologies are needed to get it done, it tells you nothing about what it will look like and exactly how it will get done.
  2. Custom software design involves determining what the software will look like and how the user will interact with it. The user experience (UX) is paramount.
  3. Every design element should be viewed through the lens of UX. WIll the user find a design element intuitive and easy to follow? Will the user progress sequentially from function to function? Does the design help users interact with the software as intended, or will they become lost and fail to use the software to its maximum advantage?
  4. During this phase, the architecture of the software solution begins to take shape. Just as building architects devise blueprints of structures, software architecture involves building a blueprint of the software solution. A 2D model is created that maps the user experience, one screen and one interaction at a time. The software architecture begins to map out the user journey—their experience of the software from desire to fulfillment.


  1. With the requirements and the design parameters in place, the team can move on to the development phase. Now the rubber meets the road as the development team begins writing code, piecing together modules, and customizing existing code to follow the requirements outlined in the earlier phases.
  2. Development typically involves front-end development and database administration. Front-end developers build the user interface and the administrative back-end of the software. Database administrators build the databases that the software solution will draw from.
  3. The result of the development phase is a prototype, MVP (minimum viable product), or pilot version of the software solution, which can then carry the project into the testing phase.


  1. Before a custom software solution can make its grand debut for users, it must be subjected to a thorough marathon of tests. Most importantly, the software solution must be tested for security.
  2. A data breach can expose sensitive user data and business assets, devastate the parent company’s reputation, and even cost millions of dollars to remedy. Data breaches are so costly in money and brand assets, that some companies end up closing their doors forever. They may be subject to lawsuits, as well as fines or shut down by regulators.
  3. Security testing requires a thorough check of the new code. Much of this can be done with automated tools, which will produce a list of potential vulnerabilities that must then be checked. A conscientious company may hire a third-party “ethical hacker” to perform a penetration test—an attempt by the ethical hacker to breach the software just like a cybercriminal might, in an attempt to expose other vulnerabilities.
  4. Security testing isn’t the only important test you should consider. The software’s functionality must be validated by the people whose opinion matters the most—the users themselves. One of the final hurdles for the software solution to clear is user acceptance testing.
  5. This phase puts the software solution in the hands of actual users to unearth undiscovered bugs, problems in the UX, and the users’ qualitative opinion as to whether or not this solution represents an improvement on earlier solutions or a solution they would readily use themselves.
  6. The goal of the testing phase, overall, is to identify problems and then fix them. This helps ensure that the software solution that proceeds to deployment is the best, safest iteration possible.


  1. Once the software solution passes its battery of tests, it is ready for deployment into the hands of users—not in a testing environment, but the real world. Even after launch, the work of custom software development isn’t done.
  2. The owner of the brand-new software solution must continuously monitor the performance of the software and respond to reports of bugs. New security vulnerabilities must give rise to patches for those vulnerabilities.
  3. Continued user feedback plays a role as well. User experiences will give the development or IT team ideas on how to make the software solution better, increasing adoption and building word-of-mouth brand loyalty.
  4. If the solution is an MVP, there may be a laundry list of supplementary features to develop, pushing new functions to the software to make users even more satisfied and tempt new users.
  5. Finally, security is always an issue. New automated code tests, penetration tests, and quality assurance validation may be required to maintain public trust and compliance with data security regulations.

Why should companies know about custom software development?

Why even bother? After all, custom software development is an investment and a commitment. You don’t develop a brand-new software solution just because. Do you even need to go custom? Is off-the-shelf truly that bad?

Custom software solutions have advantages that many organizations need, especially once they make it past the startup phase and begin to look at the big picture. For companies that want a software solution to carry them into that future, here are some important things to know about custom software development.

Custom software is scalable

  1. “Scalability” is thrown around so easily that it is practically a buzzword. Everyone wants their business to be “scalable,” but what does that mean? It means that if you have 100,000 customers and 1 million more walks through the door, you can handle the influx of customers.
  2. Many business models won’t be able to do that. Even ready-made software solutions tend to bottleneck or require escalating to a higher tier if they suddenly have to accommodate an extra raft of customers or users.
  3. Custom software solutions, by contrast, can be designed with scalability in mind. You are not constrained by tiers or shared server bandwidth. If your software is edge-enabled, housed on a dedicated server, and designed with growth in mind, you can handle those extra million users, to the benefit of your company. If your software solution is a service or product, it represents one of the most scalable classes of products or services available. You will never run out of inventory. At worst, you just have to purchase more server bandwidth to accommodate an influx of users. With software, you are only limited by the user interest you can generate.

Custom software is flexible and unique

  1. Looking for an off-the-shelf software solution? You are limited by what is currently on the market. Maybe it does everything you need it to do, but chances are it does not. You may have to supplement your would-be one-and-done solution with extra software solutions to add key features, resulting in a tech stack that is more costly and complicated than it needs to be.
  2. Moreover, your software solution may include features that you don’t need. This burdens your IT infrastructure with assets you have no use for. Over time, this waste adds up.
  3. Custom software solutions, on the other hand, are as unique as your fingerprint. They can be designed to do everything you need them to do—nothing more, nothing less, no extra burdens on your infrastructure, and a greatly simplified tech stack. Don’t worry about whether or not you might need more features in the future. You custom-built the software solution, and it is yours to customize further with more features as needed.

Custom software is cost-friendly

  1. Custom suits are more expensive than storebought suits. Custom software solutions work in much the same way.
  2. In the short- and long-term, no. Just as custom suits are made to perfectly fit the client, so are custom software solutions. Upfront costs may seem higher, but the ongoing costs and inefficiencies introduced by less-than-perfect software solutions add up. Over the life of an organization, a custom software solution tends to pay for itself.
    1. Moreover, custom software development projects can be tailored to budgets. The existence of open source code and APIs makes the affordable development of custom software a reality.

Custom software is highly tailored to a business’s needs

  1. Every software, whether adopted off-the-shelf or commissioned from scratch, must serve a business need of some sort. Whether it’s to tighten up the ship behind the scenes or to sell to consumers, it must have a place in the overall goals of the business.
    1. Choosing custom software is a chance to customize that software solution to the specific business needs of your company. There’s no need to try to shoehorn someone else’s solution into your mould. You can start with the business need and devise a software solution that addresses exactly that need, for exactly your organization. It can even be adapted to fulfill other business needs in the future.

How companies build effective custom software

If you decide to hire a third-party custom software development agency, much of the burden for the project will be on them. And rightly so—they’re the experts. But stakeholders in the hiring agency have a role to play as well. Here are some of the ways in which you, as the owner of the software solution, will contribute to the success of the development process, even if someone else writes the code.

Define your IT goals

        1. Your IT team will have to manage the software after it is delivered and deployed to the hands of users. What do they need in terms of infrastructure and support? What role will the software solution fulfill within your current tech stack—or is the goal to replace your current tech stack? Consult with your IT team to make sure you understand the outcomes they need.

Map them to your business goals

        1. When it comes to custom software, your IT goals don’t exist in a vacuum. They have to correlate with your business goals. Refer back to the stage in the process where we defined the business need for the software. Make sure that the IT goals can coexist with the business goals. Don’t take on so much extra IT burden that it undermines the business goal or creates new problems where none existed before.

List the requirements for your product

        1. What does success look like? What does the software solution need to be able to do for it to fulfill the role you envision it? Map out all your requirements for the business application of your software. Don’t worry if you don’t know how to do it—that’s the development team’s job. But you need to be on the same page about what must be done.

Shortlist the technologies best suited to meet your goals

        1. What platforms, engines, APIs, and open-source modules are available that will help you piece together a custom software solution to meet the business and IT goals you have mapped out? What hardware do you need? Do you already have it, or do you need to upgrade? Your development partner can help you with this, but you have final say about what components make up your finished software solution.

Create an architecture that takes these technologies into account

        1. Make sure your software architecture accounts for the technologies you have on hand, the technologies you will need going forward and can handle the finished software solution once it reaches the deployment phase.


        1. Participate in the development of a prototype, MVP, or beta version of the software solution. The implementation will most likely involve user acceptance testing, beta testing, and plans for launch.


        1. Stakeholders need to actively participate in the testing phase. After all, this is “go time,” the chance to prove that your software solution is ready for a complete roll-out. Monitor the results of beta tests, user acceptance testing, and security testing.


    1. Use technical and user feedback to continue to make the solution better—more features, fewer bugs, more secure, better marketing, streamlined UX. Optimization is an ongoing process—it’s never really “done.” Embrace it—your solution will grow and improve over time, forming a more and more integral part of your business.

Should I try doing it by myself or do I need a custom software development agency?

If you have decided that custom software development is the way to go, the next natural question to ask is “Can I do it in-house?” It might seem like you will save resources—especially money—if you delegate your custom software development project to an in-house team.

The answer to that question is “Yes”—but only if your in-house IT team can get the job done right. Custom software development is a complex endeavor with an ever-changing landscape of best practices.

Most organizations don’t keep full-time, up-to-speed software developers on their teams. If your in-house team isn’t up to the task, you could end up buying more resources in the form of employee time, diverted from their usual and essential tasks. If your IT team doesn’t consist of seasoned custom software developers, think hard about assigning such a project to them.

Why should I hire a custom software development agency?

If you have considered using your in-house IT team and have decided that their time is better spent on their current duties rather than diverting to develop a software solution for which they may not be qualified, it may be time to look outward.

You may find yourself on the market for a third-party developer who specializes in designing custom software solutions for companies like yours. Fortunately, there are many reasons why this could be a desirable approach. Here are some reasons a custom software development agency may be the right way to go.

They know how to tailor software according to a business’s needs

  1. Off-the-shelf software has to be somewhat general by definition. Even niche software has to try and be everything to that niche. For an organization in the financial or healthcare niche, for example, even the top off-the-shelf financial or healthcare software might not be suitable for their specific business needs. Custom software development agencies know how to dig deep and discover the underlying business needs a custom software solution needs to fill. Be prepared—it may not even be the business need that you, as the stakeholder, initially expected. But it’s the developer’s job to peel back the onion and figure out what the organization needs from their software.

They have deep experience helping businesses like yours

  1. Not only do many custom software developers know how to zero in on an organization’s specific business need, they may have specialized knowledge for businesses in your industry. If you carefully survey your options, you may be able to find a developer who has produced a similar software solution for another organization in your industry. Pay special consideration to these kinds of organizations. Their past success producing a solution similar to yours is an excellent indication that they may know how to produce similar results for you. There’s no reason for a software developer to “learn” how to work with an organization like yours. You have sufficient options to choose wisely. Look for a custom software development agency that has experience helping businesses like yours.

Deliver more at a lower cost to your business vs. doing it in-house

  1. The investment involved in custom software development scares some organizations off. However, the cost of a custom software agency can be less than you think when you consider they can work faster and with more precision than most in-house IT teams. Operational IT is very different from custom software development. In short, you will be paying your in-house IT team for many employee hours spent in an inefficient development process—because they are not experts. The employee time you are paying for, which diverts them from their other responsibilities, may add up to far more than you would pay to a custom software developer to produce a superior result.

The ROI can be seen much faster

  1. One of the best reasons to choose a custom software development agency overdoing it in-house is that it saves time. An IT team that lacks expertise in custom development could end up taking twice or three times as long, or more.
  2. In contrast, an expert agency could bring your custom software solution from a vision to the marketplace faster than you ever thought possible. If the solution is a product or service to be monetized, this means a quicker time to market and publish. Not only is hiring an agency often less costly over the long run compared to using your in-house team, but it starts producing ROI, in the form of revenue and/or increased efficiency, much sooner.

You get more overall control

While it may seem like you would have less overall control over your custom software development process by handing the process execution over to a third-party custom software development agency, this isn’t the case. The right custom development agency will treat you as a managing partner, with the final say over the shape that your solution takes.

Moreover, their expertise is at your service. If your in-house team doesn’t have the depth of knowledge required to create the kind of software solution you envision, you are limited by their skills and abilities. Choosing an experienced development agency removes those restrictions. The design and direction of your software solution are limited only by your imagination.

Low risk and high reward

As with any investment, there is always the fear of loss. However, investment in a custom software solution with a third-party agency carries little risk. That agency provides you with both intent listeners for your needs and a fresh eye on how to develop software to meet those needs. They can pivot quickly to ensure viable and future-proof solutions.

The potential rewards are high—a scalable asset to drive revenue, streamline your operations, and build your brand. It also represents intellectual property that increases the overall asset value of your organization. The risks are low, but the rewards add up.