Founded in 1986, Nucleus Software Exports Ltd. (NSE: NUCLEUS) is a provider of lending and transaction banking products to the global financial services industry. Headquartered in Noida, the company has a market cap of INR 8.77 billion.

Humans generally try to make complex, sophisticated issues simpler, often by means of an analogy. When it comes to using computer software to solve business problems the concept of ‘bespoke’ or ‘custom built’ solutions versus off-the-shelf packages is a popular one. The analogy compares buying a bespoke or tailored suit versus an ‘off-the-peg’ suit. At first glance the analogy is useful, however as we’ll see it soon breaks down.

In the early days of the computer software industry virtually every solution was created specifically for each customer because there were no off-the-shelf solutions. Today, most organizations don’t prefer creating its own database management software or office automation software. However, as the IT industry developed and technology advanced, more standardized solutions were created. As in many other areas, the number of packaged software solutions increased as business processes became more standardized. However what happens when there are a number of ways to do a particular activity? Proponents of packaged software address such situations through parameterization, which detractors will suggest can require significant work and even inefficient workarounds.

What’s the reality?

A structured approach should be taken, considering a number of factors including:

• Speed of deployment –the installation of packaged software is usually much quicker than the creation, testing and installation of a bespoke solution.

• Best practices – do you wish to get access to best practices from around the world or do you believe that your organization’s approach to all areas of your business represents the best in the industry.

• Upgrade – Bespoke solutions are built to meet a specific need at a specific time, and are rarely built with change in mind.

• Availability of expertise– will you be able to access a deep pool of skilled resources in the marketplace to maintain and further develop your solution, or will your choices be constrained by non-standard tools and approaches.

• Core competency – will your organization be distracted from your core competency by the need to develop deep skills in software application development?

• Cost – typically the cost of a bespoke solution is higher than the cost of packaged software.

Specifying Your Needs

Business experts must describe what their business processes are in a language that the software development team can use to create the solution. The process can be extremely difficult. And who are the people who provide the business expertise? They are the same people that run your business every day, so time spent specifying is time taken away from serving customers.

Countless development projects have floundered in this crucial phase but when they are successful there is a final hurdle.

You Get What You Spec?

Mission critical IT systems are usually changed because they no longer meet the needs of the business. For example, they may not be able to handle the products that the customer demands.

One of the biggest challenges with strategy changes is around the shared understanding of the new vision for the organization. The leadership team usually shares the same vision for change, and tries to communicate it to all levels of the company. When it reaches the team involved in specifying what the new system must do, any gaps in understanding turn from problems into serious challenges. What usually happens in these situations is that the team designs the new system to do exactly the same thing as the old system. Even if the team does specify a system that meets the needs of the new strategic direction, its ability to handle different business processes is likely to be very limited. So as soon as the strategic direction changes, a major re-coding exercise is needed.

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