Customized vs. Configurable Software Solutions: Which Should You Choose?

As we evolve into a society that increasingly relies on software to manage everything from personal communications to banking needs, the debate over the pros and cons of configurable vs. customized solutions is a part of every software evaluation.

While configurable solutions and customized solutions are often used interchangeably, there are significant differences that you should understand before you make a new software investment.

What is the Difference Between Customized and Configured Software?

Let’s start by defining each type of solution, respectively, in the context of grants management software.

A configurable system is an out-of-the-box solution that allows the owner to easily personalize certain aspects of the system themselves, without the help of experienced software developers. You can rename fields to align with the terms you use or remove fields that don’t apply to your organization. You can pull in different report metrics and filters to get the information you need to make decisions. Configurable software is flexible, scalable, and can be continually shaped to meet an organization’s industry-specific and organization-specific needs.

A customized system is developed specifically and only for one customer. It is tailor-made for that organization and does everything the customer needs it to do in the way that works best for that team at that point in time. It locks that organization into a static workflow that can only be changed by hiring cost-prohibitive engineers to make updates to the system’s code.

The question on many people’s minds is: which one is the best choice for my organization? I have a strong opinion on the matter: configurable solutions are easier to scale with you, have a lower lifetime cost, and are the option that you should lean towards when selecting a software system. Below I’ll break down my reasoning for you.

The Benefits of Configurable Solutions

Here are the reasons why I think a configured software solution is better for grantmakers:

• Implementation time is greatly reduced. Because you’re purchasing a system whose underlying structure is the same for all users, implementation can take less than a month. And that typically includes an implementation specialist working with you to configure the system the way you want it from the start.
• Volume of usage keeps the solution at the cutting edge of technology. With thousands of organizations using the same core system, the software provider receives constant feedback and is able to identify and incorporate the updates that will benefit the most users possible.
• Updates to the system are typically free. Whereas a customized solution requires you to hire a software developer to make any changes or updates, providers of configurable systems constantly install updates to your system for you, without the need for any work or resources spent on your end. Plus, those updates are normally included in your subscription cost—so no additional hits to your balance sheet.
• A large peer community is right at your fingertips. Most reputable providers of configurable solutions offer online communities of peers with whom you can exchange best practices and read about new and innovative ways others are using or configuring their system.
• Configurable solutions carry a much lower total cost of ownership. You don’t pay for updates. Your provider likely makes free resources available to you such as user guides and training because they are relevant to all their thousands of customers. Because customized solutions are one-offs, those types of resources and free updates simply are not available in the same way.
• You avoid a bloated technology stack. With a configurable system, it will grow with you. Functionality you didn’t need when you were smaller can be easily turned on or integrated into the system you know. No need to duct tape on a separate piece of software to manage your outside reviewers or get more in-depth reporting.
• As new needs emerge, you don’t feel stifled. A configurable solution often offers an array of application partners that extend from your core solution with a similar interface and seamless integration. The right configurable solution should also provide low-code options for you to build your own extensions.

The Problem with Customized Solutions

Here are my concerns with a customized solution for grantmaking organizations:

• Implementation is drawn-out and expensive. You’re having something built from scratch that only you are going to use. That takes a lot more time to complete, meaning you’ll be left in limbo while it’s being created—or using a system that you’ve already outgrown—and will likely pay vastly more due to the development hours involved.
• Your system is static and does not evolve with your industry. As trends inevitably change the face of the giving community, you’re left stuck with the workflow you implemented years ago, including features that could be obsolete by now.
• When you do update, it’s time consuming and costly. You pay a developer to make your updates, the need and nature of which you often determine yourself. With a configurable system, updates are based on widely accepted industry best practices and are installed for you remotely, quickly, and at no additional cost.
• To put off updating, you tack on extra software. Avoiding the big cost of updating your customized software, you add on a small $10 per month software subscription here, and a $25 per month subscription here. The costs add up and you end up with a bloated technology stack.
• You’re a peer group of one. No one else is using the same software as you, meaning you have no peers with whom to discuss system-related questions or ideas.
• Much higher total cost of ownership. While it sounds alluring to have something tailor-built just for you, doing so incurs continual and unexpected costs, most of which are mentioned above. At the end of the day, you spend much more on a system that’s holding you back from embracing the latest industry trends and best practices.

Understanding What Truly Matters to Your Organization

Having a software solution that is tailored exactly to the way you work is nice—until that’s not how you work anymore. Before you decide on any technology solution—configurable or customizable—you need to decide what is important to your organization.

You can work with a designer to create a mobile app that will count how many times you jump rope. But if what you ultimately need to know is your heart rate and how many calories you burn, you can use a standard app that does those things, does them well, seamlessly integrates with your fitness tracker, and doesn’t cost you extra when the app breaks.

Understanding what really matters helps you stay mission-focused, instead of focused on individual processes. If you are ready to find a grant management system that grows with you, check out our Grant Management System Buyer’s Guide and Functionality Checklist.

This blog was updated from its original version published in June 2023.