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The Software Customization Pyramid

        posted by , April 04, 2011

Businesses tend to over-customize software. Ideally, businesses should only customize software that represents a competitive advantage.

software customization

Competitive Advantage

Software that represents a competitive advantage:

- improves revenue or cuts costs
- is more advanced than any COTS package with comparable functionality
- is a core competency of the business

It is a sign of healthy IT planning when a business spends most of its software customization budget in areas of competitive advantage.

Examples: Algorithmic trading systems (investment banking)

Tactical Solutions

Tactical solutions — software that is recognized as non-strategic but is necessary to keep the business going.

Tactical solutions are a waste of money and are a sign that IT planning has gone wrong. Nevertheless, customization is often warranted to avoid business problems.

Examples: legacy software that would be too expensive to replace but requires constant customization to keep up with business change.

Standard Solutions

Areas where highly optimized COTS packages are available — packages that would be tough to beat with a custom solution.

Businesses should endeavour to leverage COTS packages for standard solutions when possible. The only exception to this rule is when the software is so expensive that it is unlikely to have a reasonable payback.

Customization of standard solutions should be kept to a bare minimum.

Examples: ERP, CRM, Billing, ESB, BPM etc....

Vanilla Tools

Vanilla tools implement such generic functionality that it would be foolish to customize them.

Examples: office productivity, wikis, blog software, unified communications, web servers etc...

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