Why More Companies Chose Configurable Over Customizable Solutions

Over a decade ago, Gartner published that “25% of IT spending was on unnecessary and redundant customization . . . and that when enterprises seek highly customized implementation. This situation is unsustainable.”

So fast forward to today and it’s not so surprising that a SaaS company like Salesforce, which offers configurable cloud solutions—as opposed to customizable ones—is enjoying 25% year over year growth.

A simple but significant difference between “customizable and configurable” software solutions is that configuration requires no changes to the software source code; this one distinction has powerful business ramifications that have driven many companies to move far away from customizable tool kits. Here’s a short list of reasons why:

• Customized solutions often fit a single business need for a moment in time, thus eliminating the agility to move or scale to address a future strategic need.
• Customizations require long-implementation times with subsequent delays spent on modifications.
• The component costs often outweigh the original licensing costs.
• When upgrading the customizations will need to be completely re-implemented as no migration path from one version to the next exists.
• Ultimately the business simply does not upgrade because of the associated costs – causing technology lag.

In fact, the more complex the customization is, the higher the operational cost will be. Software customization is also one of the most widely-cited causes of failed software operation. System failure prevents value gain from the solution, thus becomes a cost rather than an asset.

Time is money, so cost-per-call metrics will often rise, rather than fall, as a result of customization. The pursuit of the perfect solution can, in fact, destroy value rather than create it.

Therefore, the two questions that organizations should be asking are ‘how much do we need this feature?’ and ‘is there a risk that this functionality will cost more than it’s worth?’ If it does cost more than it is worth, what was intended as a strategic asset will instead become a drain on resources, effectively wasting valuable resources that could be better invested elsewhere.

Customers that crave customization forget to consider the total cost of ownership (TCO) of their on-premise investment, including hardware, network, backup, and development systems. The TCO includes the cost of human capital, such as project management, database, server, firewall, security, backup, and help desk resources — not to mention the overtime pay for weekend work to install emergency hotfixes, hardware repairs, or security issues.

On-premises vendors often promote the concept that you can customize their solutions. However, Arena, the market leader in cloud-based Product Lifecycle Management (PLM) solutions, found that many former on-premises software customers were unhappy with the fatal flaws stemming from old client/server applications.  Once they had customized the software, they became rev-locked into that version and were not able to benefit from future software enhancements. If they wanted the new upgrade, they had no choice but to rip out the old software and rebuild the systems from scratch.

On-premises concerns continue to plague customers who want to easily upgrade and avoid security and firewall-related issues. If you’re looking for software that is easy to configure, deploy, and grow with your evolving needs, check out Arena PLM.