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AdexinBlogCustom vs Off-the-Shelf software for logistics

Custom vs Off-the-Shelf software for logistics

Dec 8, 2023
5 min

Summary

COTS software is composed of the most popular options that support transportation, logistics, and supply chain operations. COTS software providers emphasize accessibility and quick downloads from app stores. While COTS software provides easy access, it needs a fully customized interface, often serving a single purpose with limited configuration and integration. On the other hand, custom software development integrates all functions in both mobile and desktop versions. You can improve the quality of work in transportation, logistics, and supply chain operations with a more personalized and integrated solution.

What is an off-the-shelf software?

Moving through the extensive market of software providers, we can find the two most common approaches. One is custom software development, where transportation, logistics, and supply chain companies can rely on a fully tailored solution to their business needs. The second solution is commercial off-the-shelf (COTS), which enables customers to use a ready-made software solution.

COTS presents a fully integrated system, facilitating efficient data utilization throughout the organization. It promotes the standardization of functionalities and user interfaces. While this standardized approach may impose some limitations for users seeking more tailored solutions, it mitigates the systems management issues that can arise over time with non-integrated solutions. [1]

Off-the-shelf software integration

Commercial off-the-shelf software (COTS) requires development only in the very early stage when the software provider wants to offer its solution as a Service (SaaS) model. In this case, development considers various components that should be embedded into the software. COTS solutions often cannot cope with all market complexities, as these solutions include mostly generic features and functionalities.

COTS software primarily focuses on an integration engine to enable connectivity with some existing systems and side software solutions already deployed within an organization. All that to provide a seamless connection with the COTS solution. This is why for the companies in transportation, logistics, and supply chain that want to purchase COTS solutions, it is most important to go through the procurement process. This process can help them validate actual business needs versus COTS.

Procurement process for COTS:

Initial phases for COTS

Companies prioritize selecting a widely used COTS product and the most experienced supplier in the transportation, logistics, or supply chain industry. The emphasis is put on a supplier with a successful track record of implementations. Supplier references provide evidence of these qualities and are crucial for this phase.

Final phase for COTS

The primary selection factor shifts to the overall price in this phase. In fact, that is constituting 40% of the final decision-making process effort. Here, COTS deliverability projects and usability also play a significant role. This process results in a usability review integrated into the tender scoring process. [1]

Custom software development for supply chain, logistics and transportation   

COTS solutions can have the same number of advantages and disadvantages. When we're talking about the supply chain, logistics, or transportation, it's easy to focus on several of the most common processes that require automation within the Software. This is how COTS really works. Software providers focus on the significant processes standard for each industry, with the mind to provide them to the broadest number of users. Customization, in that case, is often omitted.

We can commit that developing a COTS solution for transportation, logistics, or supply chain will cover processes that require constantly repeatable actions and can replace manual work to some extent. Here are the most common areas in transportation and logistics support within the COTS software for transportation, logistics, and supply chain:

  • Support for financial operations by providing an invoicing system.

  • Data collection for analytics from transportation and warehousing.

  • Supporting autonomous transportation and delivery management.

  • Shipping and carrier traceability.

  • Automation technologies for other parts of the supply chain, such as intermodal transportation. [2]

These are the functions built into the COTS software and are the most easy to commercialize. It is also worth noticing that support for these processes may vary based on the level of technology involved. We can say that one software provider can offer traceability support within the COTS. Still, there will be limited access to the maps in all regions of certain countries, or the maps will only be updated occasionally to provide 100% support for truck drivers. This boils down to choosing COTS, which may be more costly than devoting your solution to a custom software development provider.

Mobile COTS application for transportation

Similar to COTS software itself, there are several mobile applications on the market that can support transportation, logistics, or supply chains. The best benefit of using COTS mobile apps for transportation is accessibility. You can most likely download the mobile app from the App Store or Google Play Store within just a few seconds, and you can start working with it. The most popular solution for transportation apps includes:

  • Shipping tracking 

  • Document management and scanning  

  • Dock planning 

  • Route planning 

  • Truck driver planning

Accessibility is a significant advantage, but along with this comes disadvantages where you cannot benefit from a fully customized interface. Moreover, these apps propose a single solution with limited configuration and no integration. Most probably, your people will still need to use traditional emails to share data across departments.

A different way is using a custom software development service. Such a software provider can integrate all separate functions and enable you with a mobile and desktop version of the same application. This definitely improves work quality within transportation, logistics, and supply chain.

What are the costs of custom vs. off-the-shelf software?

Companies can consider two ways of software implementationS within the supply chain, logistics and transportation. They may choose between COTS and custom software. Many companies, small and medium-sized businesses, are facing the challenge of choice between those.

In the first instance, it is easy to look at COTS as a ready-made solution that is easy to use because there is easy access to documentation, and most probably, these companies can provide some track record of customers using the same solution. Nevertheless, customer satisfaction from using these COTS solutions is often questionable.

However, custom software development is still perceived as more expensive, and there may also be some problems with deadlines for deliverability. Naught could be further from the truth. This is because custom software development focused on a particular market niche is far more effective than COTS. They may also provide out-of-the-box solutions by using, for example, a software environment that accumulates industrial and technical expertise in the form of a ready-made codebase.

Here are the common areas that involve the costs of custom development:

  • Project management 

  • Quality control and test with functional design 

  • Technical design 

  • Software construction

  • Final test

  • Roll out

Here are the common areas that involve the costs of COTS software:

  • Installation

  • Subscription/annual licensing fees (monthly/yearly)

  • Number of users

  • Data transfer

  • Hosting

  • Updates/upgrades

  • Additional features (unavailable in the basic subscription model)

Benefits of ready-made COTS system

Popular off-the-shelf software is more vulnerable to hackers. COTS software features remain the same and are less susceptible to manipulation. Off-the-shelf solutions may not align with business goals and may have limited integration capabilities. Nevertheless, it can still be beneficial for some reasons. Here is how you can benefit from using a ready-made COTS system:

Availability

Commercial off-the-shelf solutions are readily available because they are mass-produced for more or less specialized customers.

Multifunctionality

Most off-the-shelf Software provides a broad spectrum of essential functions to meet virtually any business or consumer need.

Easy installation

This Software is not custom-built for a specific organization, so it can be easily installed without customization.

Assistance

Unlike freeware, COTS offers customer support. Users can contact the support team with any questions or problems and if errors occur.

Lower cost

A COTS product's relative price is much lower than customized Software.

Testing versions

Another advantage is the ability to test the Software before purchase. Company users can familiarize themselves with a limited or trial version.

In both cases, whether it is a custom or COTS software solution, your business can be enabled with much higher capabilities for transit management. These are transportation management solutions that can elevate your business operations.

Benefits of custom software development

As you may already see, custom software development can provide you with some initial cost savings. Here are the other benefits you can take advantage of by making a choice on custom software development 

A customized solution

Customized solutions align much more than COTS with business goals, leaving more space for process optimization. 

Return on investment

Custom Software involves a higher initial investment but lower long-term costs.

Lower security issues

Custom Software provides built-in security according to organizational requirements. Custom software reduces the risk of hacking with an internal tool.

Flexibility

Custom Software enables easy scalability. Custom Software offers flexibility for enhancements and changes.

Compatibility

Custom Software can be designed to integrate seamlessly with other tools.

Ease of use

Custom Software is designed for ease of use, and it is tailored to specific user needs.

No long-term risk

Custom Software ensures continuous availability and updates. 

Competitive advantage

Custom Software provides unique features and a competitive advantage. Custom Software lets you focus on your target audience and increase customer satisfaction.

Final outlook

Looking through industries such as transportation, logistics, and supply chain, we can see a lot of room for deploying digital solutions to help automate complex and repetitive processes. This always helps keep your business costs low and maintain an error-less work environment, which is, in fact, also cost-effective.

The matter of fact is to choose between COTS or custom software, which is not an easy task. However, you may consider the benefits and disadvantages and make the most suitable choice. 

At Adexin, we can help you make the optimal choice for your business by implementing a software solution that copes with your business requirements in the long run. Here, our code base can be used to support your business with solutions for transportation, logistics, or supply chain. Contact us today, and let's look closely at your business needs.

References:

[1] Introducing a Commercial Off-The-Shelf Software Solution; Retrieved from: https://www.oecd.org/tax/forum-on-tax-administration/publications-and-products/introducing-a-commercial-off-the-shelf-software-solution.pdf

[2] Automation in logistics: Big opportunity, bigger uncertainty (McKinsey & Company); Retrieved from: https://www.sipotra.it/wp-content/uploads/2019/04/Automation-in-logistics-Big-opportunity-bigger-uncertainty.pdf

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FAQ

What differentiates customized software from off-the-shelf (COTS) software in logistics?

Custom software is tailored to specific business needs, offering a personalized solution, while COTS provides off-the-shelf solutions with standard features.

How is the process of purchasing COTS software in logistics?

Companies prioritize commonly used products and experienced vendors. The final phase considers overall price, deliverability projects and usability.

What are the cost areas in developing custom software for logistics?

Costs include project management, quality control, design, construction, testing and implementation, with a higher initial investment but lower long-term costs.

What benefits does custom software offer in logistics?

Custom software provides a tailored, integrated solution with benefits such as alignment with business objectives, higher return on investment, lower security risk, flexibility, compatibility, ease of use and no long-term risk.

How do companies use off-the-shelf COTS systems in logistics?

COTS offers accessibility, multi-functionality, easy installation, support, lower costs and the ability to test before purchase. However, it may lack full personalization and customization for specific business purposes.

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