What is Custom Software Development?

July 2nd 2024
Maksym Lypivskyi
Head of Product Engineering
What is Custom Software Development?

Have you ever used a piece of software within your business and felt frustrated that it couldn’t do everything you wanted it to do? Or felt that it was a good solution generally but not very well suited to the specifics of your organization? If so, you aren’t alone - and the good news is that there’s a solution at hand. 

If your current software doesn’t tick all your boxes, then you can get your own tailor-made alternative instead. The demand for custom software development solutions is growing, and the global market for it is expected to reach $120 billion by 2026. All over the world, more and more businesses are turning to custom software to differentiate their processes and services in a competitive landscape.

This blog tells you all you need to know about custom software development: how it works, why it might be right for your business, and the scale of the benefits it can deliver.

Custom Software vs Off-the-Shelf Software

The biggest differences between custom and off-the-shelf software applications are focused around how they’re sourced and applied.

Off-the-shelf solutions provide an element of simplicity, in that they can be sourced more or less ‘ready to go’, and only require registration and/or installation. Examples of good off-the-shelf solutions include Salesforce Service Cloud, a unified customer service agent console, and Asana, an AI-supported work management platform.

However, this more rigid approach doesn’t leave much scope for flexibility in terms of updating the software, scaling it upwards as business demands require, or meeting specific user needs rather than just generic ones. SAP does provide some level of flexibility, although limited, businesses can learn from the failed cases of these adoptions where rigidity may have been a challenge.

Custom Software vs Off-the-Shelf Software

Applications of Custom Software Development Across Industries

Just about every industry you can think of is being transformed by the potential and creativity of custom software development. Here is just a selection of the innovations already in use:

Icon1_healthcare (1) Healthcare

Solutions that connect electronic health records across multiple care providers are enabling more integrated and coordinated care, and therefore better patient outcomes. Patients are also enjoying better access to health-related services through telemedicine software which enables virtual appointments, along with secure messaging for sensitive medical information.

Icon2_finance Finance

Custom banking apps have given customers a new level of functionality, enabling more convenient access to their bank accounts, financial management and a host of other financial services. In the investment world, the integration of AI into portfolio management is allowing professionals and the public alike to make more informed decisions about what to invest in and when.

Icon3_retail Retail

At a time when customers expect more personalized shopping experiences, custom eCommerce platforms allow retailers to tailor online buying journeys to the desires of individual users. Behind the scenes, the retail industry has also thrived with bespoke inventory management systems that suit the specifics of their supply chains.

Icon4_manufacturing (1) Manufacturing

Custom software is proving instrumental in bringing disparate elements of production and supply chains together into single platforms, enabling easier and more efficient monitoring and management. The same principle also extends to quality control, ensuring that the risk of defective or poor-quality products reaching customers is further reduced.

Icon5_travel Travel

Many of the delivery and tracking apps that all of us use every day are the products of custom software development, enabling new levels of information and convenience for end-users. Behind the scenes, fleet management gives travel businesses full visibility of all its vehicles, from location and routing to fuel consumption and maintenance.

Major Benefits of Custom Software Development 

With the right development team in place, custom software development solutions have the power to be truly transformative for your business:

Personalization and user experience

Custom software development is the ideal opportunity for adding unique designs and personalized features that can set a business apart from its competitors. A good development team will be able to match specific functions and capabilities to demands and processes, and work closely with the business to hone and optimize them. This is especially important at a time when more and more end-users expect personalized experiences, engineered towards their specific wants and needs. 


Any custom software that’s commissioned will be developed solely for the use of the business asking for it. This means that any key features or differentiators will be out of reach of competitors, unless the business gives them express permission to use it or buy access to it.


It’s easier to adapt and evolve custom software to changing business needs than it is to replace off-the-shelf software with an alternative option. Given the fast-paced nature of the modern business world, it’s harder than ever to predict what’s coming down the line in the next few years. Having custom software enables a faster, smoother and more cost-effective response to whatever the future holds.

Efficient development

Businesses are able to play a more active role in custom software development if they want to. They can work closely with their software development partner to scope out key requirements, and get regular updates on progress. It’s also relatively easy to feed through information around changes of scope, and have full confidence that the software being produced will tick all the boxes.

Return on investment

While custom software development is often more expensive than buying an off-the-shelf solution, it has far greater potential to deliver a strong return on investment. This demonstrates that in the long-term it’s usually worth the effort. 

The Custom Software Development Process

There are lots of different elements that come together to make custom software development a success. In our extensive experience, the best projects go through this five-step process:

1. Planning

By conducting requirement gathering and working out the overarching objectives, all application development work can remain aligned to core needs from start to finish. There will already be some recognition of the problem that the software can solve before the project begins, but defining it in detail is ideal for putting everything on the right track. This stage should result in a Software Requirement Specification (SRE) agreement being formalized between all stakeholders, detailing the expectations and goals for the project, estimating costs and outlining an execution plan. 

2. Design

With a timeframe for implementation agreed within the SRE, the custom software development partner can analyze the project requirements to decide on the best way forward. They can then get to work on the initial design tasks such as developing tool and technology requirements and investigating pre-existing modules for integration possibilities. 

3. Implementation

With the design phase complete, the code creation can begin, and should be fairly straightforward if the first two steps have been done properly. How this works in practice varies, depending on the methodologies used (see below), but a business should receive regular progress updates so that the project can be kept on track and on schedule.

4. Testing

Like any piece of software, it’s vital that custom software applications are tested extensively, both on a technical level and for user experience. Functional testing will run through all the capabilities of the application, using a range of automated and manual tools. Non-functional testing, meanwhile, takes a more holistic view of areas like performance, security, reliability and user-friendliness. All these strands come together to minimize, and ideally eliminate, all of the bugs and issues that can seriously affect users and workflows.

5. Deployment

The completed application can then be moved from the build environment into production; going through a number of phases from packaging, to configuration, to finally being released to its intended user base. Having these two separate environments means maintenance and upgrades can be continually worked on without impacting the end user experience. 

6. Maintenance

During this time, the custom software development partner will keep a close eye out for any unexpected issues, and put some quick fixes into effect where necessary. This monitoring will continue into the long-term, providing opportunities for upgrades and new features as well as fixing problems.

Custom Software Development Process

Best Practices for Custom Software Development

There’s no single catch-all approach to custom software development. Every project is different, and development teams will naturally approach things in different ways. However, there are three main methodologies that most development partners will follow:


A Kanban board is a way of visualizing workflows, and splitting work into different groups and categories, according to what has been completed, what is in progress and what is coming up in the near future. This is ideal for giving clarity to levels of workload over time, and for pinpointing bottlenecks in processes that can be addressed along the way.


XP stands for ‘extreme programming’ and refers to software development based around short development cycles and regular releases. Built-in checkpoints during the process mean that new customer expectations and requests can easily be accommodated. The overall objective is that complex coding and development journeys are made as quick and as simple as possible.


Agile - and the scaled SAFe 6.0 framework built from it - is based around the idea that processes and progress are reviewed by all relevant stakeholders on a regular basis. There’s a constant drive to check what is working, what isn’t, and suggest changes and improvements on the back of that collaboration. This can be much better suited to custom software development, because any changes or issues that crop up along the way can easily be accommodated.

Common Mistakes to Avoid in Custom Software Development

It’s easy for a custom software development project to go wrong - but none of the common issues are unavoidable. As long as due care and time is devoted to the project, and the development partner stays aligned with goals throughout, the software has the best chance possible of meeting all its requirements. However, there are a few tricky pitfalls to watch out for, including:

Icon6_bad planing Bad planning

This can be solved by engaging all stakeholders right from the start, and formulating a clear and coherent plan around the problems that the new solutions will solve. Every requirement and feature within the custom software solution should fit in with that overarching objective.

Icon7_Overrunning-costs-and-scope-creep Overrunning costs and scope creep:

A good way to prevent costs spiraling out of control is to establish the specification of a ‘minimum viable software product’, which features all the essential parts of the software and nothing more. This helps establish which areas are the ‘extras’ that would be good to add, but can be cut if it raises costs to an unacceptably high level.

Icon8_Inadequate testing Inadequate testing:

It’s essential to use the right skills and technologies, and leave no stone unturned in a testing process. Working with a development partner that has a strong focus on Quality Assurance can help in this regard.

Icon9_Poor communication Poor communication:

Every stakeholder should be fully engaged with what’s going on throughout, and this is something that a development partner should proactively encourage. Regular progress meetings and open channels of communication are vital to supporting visibility and transparency.

Icon10_No focus on maintenance No focus on maintenance:

Many custom software projects fall at the final hurdle, when ongoing support post-release isn’t considered. This should be factored in at the initial planning stage, and a good partner will incorporate fixes and upgrades into the wider development process.

Advanced Technologies in Custom Software Development

Custom software is proving to be an excellent opportunity for businesses to embrace the latest technologies and innovations, and to do so in ways that work best for them. These include:

Leveraging AI and Machine Learning

Amid the rush to adopt AI, many organizations are still struggling to work out how best to deploy it for their needs. Custom software development can give much-needed focus to AI deployments, whether it’s for improving efficiency, supporting better decision-making, automating repetitive and complex tasks, or uncovering new levels of insights.

Integrating IoT for Enhanced Connectivity

Custom software allows the performance and reliability of IoT devices and applications to be improved, as solutions can be designed from the outset with the demands of IoT in mind. This enables faster connectivity and better processing, which in turn leads to greater efficiency and productivity.

Utilizing Blockchain for Security

Employing the principles of the blockchain can add an extra layer of vital security protection, and keep data, existing systems and applications safe at a time of increased data regulation around the world.

Future Trends in Custom Software Development

Many of the advanced technologies listed above will form the cornerstones of custom software development over the next few years. Artificial intelligence, machine learning, cloud computing and the Internet of Things will all remain prevalent, but alongside this, other trends are likely to emerge. For example, low-code and no-code platforms are gaining traction as they allow easy and fast creation of innovative software without the need for expensive and scarce coding expertise.

There is also likely to be extra focus on security, especially with the likes of AI changing how data is generated and used. We expect more robust security measures, such as multi-factor authentication and end-to-end encryption, to become the norm in custom software solutions over the next few years.

The Cost of Custom Software Development

A custom software development project is a significant undertaking, and so will therefore come with major cost implications. That makes it all the more important to manage costs effectively and ensure that there aren’t any unnecessary overruns. 

Key areas that can influence overall project costs include the size, scope and complexity of a project; the size and geographical location of the development team (i.e. an outsourced team from abroad can be cheaper); how quickly the project needs to be completed; and whether or not savings can be made by using open-source technologies.

A good development partner will work closely with a business in order to maximize cost efficiency and visibility from start to finish.

How to Choose the Right Custom Software Development Company

The custom software development marketplace is an extremely busy one: there are a multitude of companies all offering similar services, and it can be hard to know which way to go. But there are a few indicators to look out for that point to a development team that stands out from the crowd:

  • Experience and expertise: not only should a development partner be able to demonstrate a good level of expertise in custom software, but they should ideally be able to point to successful projects in specific and relevant industries.
  • Strong tech stack: the partner’s tech stack should closely align with yours, in terms of the software development process, scalability needs, and ease of maintenance in the future. This means investigating programming languages, frameworks, databases and libraries in detail.
  • Methodology and communication: the partner should have a deep commitment to a particular methodology (preferably Agile or Scrum), and should be able to explain how they will keep you regularly updated on progress. They should also be open to your stakeholders taking a hands-on role and working closely with them throughout the development process.

  • Resources and support: any good partner will offer ongoing support after go-live, and be able to show how they have sufficient resources and headcount in the right places to complete the project efficiently.

Why Choose Ciklum as your Bespoke Software Development Company?

Ciklum has years of experience and a proven track record in custom software development and product engineering, covering a range of industries from finance and retail, to iGaming, manufacturing and healthcare. Our global team of software engineers use tried-and-trusted methodologies, in conjunction with cutting edge innovations and technologies, to turn your concepts into practical, cost-effective reality. 

We’ve put custom software architecture into the hands of countless businesses all over the world, many of whom thought that such a level of customization was out of their reach. Get in touch with us today to find out how we can do the same for you.



Share |

You may also like

Subscribe to receive our exclusive newsletter with the latest news and trends