Don Otno has been researching software options but cannot decide among three alternatives. Don started his search at Computers Made Easy (CME) and almost wished he had looked no further

Steve Young, the manager of CME, appeared knowledgeable and listened attentively to Don's problems, needs, and concerns. Steve had software and hardware that would, with a few exceptions, meet Don's needs. Don could start using the system almost immediately. The system's price was unexpectedly reasonable.
After three hours at Custom Designed Software (CDS), Don left convinced that they could produce exactly what he needed. Cost and time estimates were not established, but CDS assured him that the cost would be reasonable and that the software would be complete in a few months.
At Modified Software Unlimited (MSU), the owner said that customized software was very good but expensive and that canned software was inexpensive but rarely met more than a few needs. The best of both worlds could be achieved by having MSU modify the package that came closest to meeting Don's needs.
Don returned to CME and asked Steve about customized and modified software. Steve expressed enough concerns about both that Don came full circle—to thinking canned software was best. That night, Don realized he could not make an objective decision. He was swayed by whichever vendor he was talking with at the time. The next morning he called you for hel

• Lower cost of development. Some estimates indicate a software package may cost between 1/20 and 1/5 of the estimated cost of in-house development.
• Software is more reliable. Other users have used the system, providing more "testing" in a live environment.
• Lower cost of maintenance as the software supplier performs the maintenance.
• Faster implementation - hence the organization can begin receiving the benefits sooner.
• Staff is freed up to do other work.
• Better documentation, as it must meet the needs of multiple users.
• Software can be "test driven" and evaluated before it is purchased.
• It may offer unique capabilities that are difficult to duplicate.
Disadvantages of canned (packaged software)
• It may not be possible to find a package that meets the users' unique and specific needs.
• Operating procedures and practices constraints may require business process changes.
• If the software is to be part of a larger system, it may put constraints on the overall system.
• Inflexibility, as it may not be possible to suppress unneeded files, processing, or outputs.
• Possible inefficiency. Generalized systems (are not written for particular circumstances or requirements) may be inefficient.
• It takes time to evaluate all the available software.
• There may not be anyone in-house sufficiently knowledgeable to fix the software if it fails.
Advantages of Custom Software
• Software that exactly meets (at least theoretically) the user's needs.
• Easier to modify than canned software.
• Often more efficient than canned software.

Disadvantages of Custom Software
• Most costly software development approach.
• Quality programmers may be expensive, hard to find, etc.
• Program development is time consuming; users have to wait for the software to be written.
• There may not be any guarantee of product quality.
• Involves significant supervision and control.
• It is more likely to contain errors or "bugs" than packaged software.
• If developed in-house, the user may have to wait an extended period for the software.
• If developed externally, there is a risk of selecting an inexperienced or poor quality developer. The developer may "low ball" the price and take improper short cuts or try and increase the price later.
Advantages of Modified Software
• Software that is more likely to meet user's needs than canned software.
• Usually less expensive than custom software.
• Can be implemented faster than custom software.
Disadvantages of Modified Software
• May be hard to find programmers willing to modify code.
• May be illegal to modify the software.
• Modifying the software may invalidate the manufacturer's warranty and support.
• Changes may not be properly documented, resulting in out-of-date documentation.
• May cause control problems and introduce errors into the program.
• May make program less efficient, more costly to maintain.
• May be more costly than a custom program, especially if modifications are significant.