Are you considering ready-to-use finance software? This is what you should know

Dmitry Dolgorukov is co-founder and CRO of HES FinTechleader in providing financial institutions with smart lending platforms.

Customization has long been considered the gold standard for software development. It gives your business complete control over your product, it adapts to (almost) your every whim, and can be designed to do exactly what you want it to do. But as the saying goes, “with great power comes great responsibility.” Custom software often carries significant costs associated with creating, maintaining, and upgrading a solution.

For many companies, out-of-the-box use, also known as OOTB, offers a more efficient alternative. OOTB software is considered a standardized solution that can be easily adapted to a company’s processes, leaving maintenance on the vendor’s side, and may be a more suitable option than software creation for many companies.

What are the differences between OOTB and custom software for financial companies?

OOTB solutions are pre-packaged software tools that perform specific or complete functionality. These can be integrated into existing software or business processes to form a solution to one challenge or another. OTB:

  • It is ready to use directly from the provider.
  • It can be implemented and used by non-IT personnel.
  • It has built-in and out-of-the-box functionalities or tools, as the name says, out-of-the-box.

Meanwhile, custom software is a more personalized solution. It is typically used by companies with complex requirements or specific regulatory concerns (although this is not a hard and fast rule). Often custom software:

  • It is built in-house or specifically designed by an outsourced team.
  • It requires that the company itself integrate the tools or functionalities.
  • Requires technical knowledge on the part of the company or an additional investment commitment.

What factors favor OOTB software?

• Price: Custom software is expensive. The average salary for a software developer in the US is around $120,000, as of this writing. Your team will likely include several full or part-time people to ensure that your product is built correctly and maintained. By contrast, OOTB solutions can be used by your existing unit, often come with a subscription fee or flat fee, and all development costs remain with the third party.

• Speed ​​of implementation: Custom software programs are often very time consuming. The planning, design, development, and release cycle typically lasts months. Meanwhile, OOTB tools can be more quickly deployed, integrated, and customized. For example, even complex OOTB financial software can be implemented in a matter of weeks.

• Maintenance and updates – With OOTB solutions, any issues with the software are typically handled by the partner, so their primary concern is how it best integrates within their own systems.

• Compliance – In the financial industry, staying compliant is vital. While custom software development is one option for this, it does present some challenges when trying to comply with each region’s rules. OOTB software is often fit for purpose and follows market best practices as standard, as long as you go with a reputable vendor.

• Speed ​​of scaling: OOTB software often allows its users to upgrade their solutions (add more users, level up the package, etc.), which can allow for faster scaling.

When would it be better to go custom?

Although OOTB software can be an effective tool for business needs, it is not for everyone. Those who operate in a very specific industry or with complex requirements or systems should think twice before investing in OOTB. In such cases, a good option is a custom solution that can help:

  • Cover any technology debt or integration issues that may delay an OOTB process.
  • Fill in the gaps that appear when it comes to specific needs.
  • Avoid potential additional costs, such as when you only need part of a system and end up buying the whole thing.
  • Cover training needs, especially if you are introducing your team to new or complex technology.

Is there a middle ground?

Even once a company has decided to define its next steps, the discussion between the innovative and the personalized often arises. However, it doesn’t have to be a black and white problem anymore. Advances in technology provide options, rather than eliminate them, when deciding how solutions should be approached. For example, even with OOTB software, plugins, adaptations, and integrations help make the original tool better and more tailored to user needs, making it a much more valuable piece of software in the long run.

Forbes Finance Council is an invitation-only organization for executives of successful accounting, financial planning and wealth management firms. Do I qualify?

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button