When To Use Custom Software To Solve Operational Problems

Most companies don’t start by asking when to use custom software to solve an operational problem… they start with something messier:

• “Why is this taking so long?”
• “Why do we keep dropping the ball?”
• “Why does it take three different logins and two spreadsheets to do this one task?”
  

That’s the real starting point: friction. Lag. Complexity. Some operational breakdown that’s slowing the business down or costing more than it should.

And when those problems stack up, leaders start looking for solutions… but they’re often looking in the wrong places.

They buy off-the-shelf software and then contort their processes to fit a tool that was built for someone else. Or they throw more people at the problem, which creates more handoffs and even more room for error. Or they build a one-off workaround that only one person understands… and then that person leaves and they’re hosed.

So let’s talk about a better approach. Let’s talk about when to use custom software to solve operational problems.

Because the truth is that it mostly doesn’t… but when it does… it’s an absolute game changer.

Not every problem is a software problem

Let’s start with the obvious: custom software is expensive. It takes time. It requires clarity, commitment, and real leadership to pull off successfully. So it only makes sense if the problem you’re solving is big enough and painful enough to justify the investment.

If you’re dealing with a minor inefficiency that costs you a few hours a month? That’s annoying, sure… but that’s not when to use custom software to solve for it.

But if you’ve got a process that’s:

• costing you millions in labor or delays,
• holding back customer experience or retention,
• creating major risk or compliance exposure,
• or blocking the business from scaling…
  

…then yeah, it might be time to think about a custom solution.

Not because software is “cool” or “transformational.” But because, in the right situations, it’s the most efficient way to eliminate waste, increase velocity, and unlock new revenue.

The key is knowing the difference.

When to use custom software? If and ONLY if the business case requires it 

Before you write a single line of code, you should be able to answer a few basic questions with confidence:

• What specific problem are we solving?
  
• Who experiences that problem, and when?
  
• What’s the impact if we solve it? (In cost savings, revenue lift, improved experience, etc.)
  

This is where most companies skip ahead. They see a demo of something shiny or hear “AI” and think, ‘We should build something like that too!’

Absolutely not. That’s not when to use custom software.

You never start with the software. You start with the business. Always.

You get painfully clear on the problem… and only then do you start evaluating whether custom software is the best tool to solve it. Because sometimes, it’s not. Sometimes a better process, a smarter off-the-shelf tool, or even just clearer accountability can fix the issue.

But when you’re staring down a truly systemic problem — one that cuts across teams, platforms, and departments — that’s when to use custom software. That’s when it starts to look like a smart investment. Because it can enforce consistency, automate handoffs, surface real-time data, and eliminate manual steps all at once.

But again, that’s only if and ONLY if the business case holds up.

Build software like you’d build a business

If the business case checks out, that’s when the real work begins. And here’s what non-software companies often get wrong: they treat it like a construction project.

They think, We’ll just tell a vendor what we want, they’ll go build it, and it’ll work.

That’s not how to use or build custom software (well, if you actually want it to work well, that is).

Building effective internal tools (or external ones, for that matter) takes just as much discipline and planning as building a product for paying customers. You need:

• User personas — who will use this tool, and what do they care about?
• User journeys — what’s the process they’re following, and where does the tool fit into it?
• Service design — which steps are on-platform, and which are off-platform?
• An MLP mindset — what’s the smallest version of this tool that’s still lovable and useful?
  

You also need early and frequent feedback from real users. Whether that’s internal team members or external customers, they need to see what you’re building, react to it, and help shape it before it’s anywhere close to finished.

And maybe most importantly, you need alignment. That means enrolling stakeholders early, building shared understanding of what you’re solving, and getting buy-in for the plan before you execute.

Because without alignment, all you’re doing is building another silo.

Prototypes, not promises

One of the best ways to build that alignment? A clickable design prototype.

Before you write code, show your stakeholders what the experience will feel like. Let them click through it. Let them ask questions, poke holes, and offer feedback.

That kind of visual clarity helps surface assumptions (and it’s a lot cheaper to fix those early than once you’re months into development).

In some cases, you can even go one step further and build a lightweight demo or proof of concept using AI or low-code tools. Just know: those are great for validation, but they’re usually not the final product. They’re test drives, not the production vehicle.

If your answer to ‘when to use custom software?’ is ‘right now’ — get ready for the vows

Let’s say you do all the right things: you identify a high-impact problem, validate the need, prototype it, and build an MLP.

You’re not done.

Because if the product works — if it really becomes a core part of your operations — then you’re on the hook for maintaining it. Supporting it. Improving it.

That means ongoing investment. Maybe that’s a fractional resource, maybe it’s a dedicated team, maybe it’s a partner on retainer. But the worst thing you can do is build a critical tool… and then starve it.

Custom software is not a one-time capital expense. It’s a living, breathing part of your business. Treat it like one.

What about AI?

Right now, a lot of companies are asking, ‘Could AI solve this for us?’

And sometimes it can. But not always, and definitely not yet end-to-end.

What AI does offer is an exciting new set of capabilities to automate, predict, and adapt faster than traditional software ever could. But the process for evaluating whether to use AI is the same as custom software: start with the business need.

If there’s a meaningful, high-impact problem to solve, AI might be part of the answer. And if you’re not sure, something like our Innovation Lab can help you explore that — quickly and without overcommitting.

Just don’t fall for the hype. Most problems don’t need “AI.” They need clarity, prioritization, and smart execution. AI is a tool — not a strategy.

So… when to use custom software?

When the problem is big, the process is messy, and the payoff is clear.

When you’ve tried every shortcut and workaround, and it’s still not working.

When solving the problem would save real money, improve real outcomes, and unlock real growth? That’s when it’s time to stop duct-taping spreadsheets and start thinking about custom software.

But don’t expect it to work by magic. It only works if you come in with a clear business case and the willingness to do the unsexy foundational work before a single line of code is written.

If you’re not sure where to start, or if a software solution even makes sense for your problem… that’s exactly the kind of question the Innovation Lab was built to help you answer.