Incentives Out of the Box Solution vs. Custom Development


The majority of organizations globally are using Excel spreadsheets in some form to manage their sales commissions and incentive programs. As the administration starts to become complex and the number of disputes increases, business stakeholders' first thought is to automate the process somehow. They reach out to internal IT stakeholders to check what can be done. IT stakeholders, based on their years of experience in managing complex IT systems, review the problem with the same lens. They like to look at both the options of buying a software product or building something custom. They are constantly worried about managing long-term capital expenditure and, in turn, spend significant time managing unforeseen future changes without having complete knowledge of the business process. The time spent on managing these requests increases the overall complexity of requirements and significantly increases the operational challenges.

In short, you have the out-of-the-box solution, which is a commercial, ready-made product aimed at a broad market base. On the other hand, the customized solution is a specifically created solution designed to match a company's unique demands. It's a difficult decision to make. Let us explore the realm of OOBS and Custom software before jumping to any conclusions.

Out of the Box Solution

As the name implies, an Out of the Box Solution, sometimes called off-the-shelf, is basically conveniently manufactured and tailored for your business. It works quickly and should take a limited effort to set up. It can be configured for your specific incentive processing needs and requires minimal customization.

Because the solution was built to sell, OOTB solutions have a lower upfront cost and built-in process intelligence. As a result, they are cost-effective and typically have a lower total cost of ownership than custom solutions. A solution designed to be ready to go, enterprises may deploy and operate it promptly after quick installation and configuration. This solution has a wide client base and is supported by the software company's quality assurance and support teams. The product generally has a defined development roadmap, and updates with potential enhancements and features are available with timely upgrades. Customer success and delivery teams are also available to assist users with any concerns or inquiries they may have. The software may even assist you in improving your company procedures and overall operations by encouraging you to incorporate industry best practices.

In addition, no prior technical knowledge is necessary. You won't require a sophisticated IT staff to build up the system, with business users able to make changes and manage exceptions. OOTB systems are quite popular due to their high availability. They are primarily designed to satisfy the needs of the industry. Finding the appropriate one for your business is dependent on several parameters but is possible with the right selection framework.

Custom Development

A custom software solution is created specifically for enterprises tailored to their current business needs. The solution built by the IT team is one-of-a-kind and tailored to the demands of the business. The software development business will examine an organization's internal processes in order to deliver a highly efficient solution that meets their immediate requirements without necessarily having the underlying knowledge of the business process.

There are several drawbacks to consider while going ahead with the custom approach. Depending on the developer and the amount of time spent on the project, custom software can be expensive. Creating a custom solution necessitates a thorough understanding of coding, programming, and best practices. As a result, finding the right software developer for your company may be more expensive. Now that you know how much bespoke software costs, you should also know that it is often unstable and easily broken due to a lack of synergy between business and IT teams. The truth is that custom solutions might go awry due to custom or modified code misalignment. Customizations are frequently overridden by updates or modifications to packaged software. Therefore, they must be validated and changed with each upgrade.

Customer service can also differ significantly depending on who built the software. Making a custom component for every aspect is tempting, but overbuilding leads to overly complicated systems that are difficult to use and manage. The time it takes to construct one varies depending on a number of factors. A custom solution will take longer to create and deploy than an off-the-shelf solution.

What's the Right Fit For Your Business?

Following are some of the key things to consider when making a decision about an out-of-the-box solution vs. custom solution development. It's advisable not to do certain things to ensure the long-term usability and success of the project.

1. Time to Market

Consider how quickly you require the solution. Custom software is a totally new solution that must be researched, planned, and developed, and it will take a long time to develop and install. If you're short on time, an out-of-the-box solution will be a better match because it's already packaged and ready to use.

2. Change Management

Changes are inevitable, and trying to control them at the start of the project can be disastrous. Better don't do it because there can be future complexities/challenges that your IT may not know completely about. Rather the focus should be on getting an incentive platform that simplifies the change management process while continuing to control the time to market.

3. Process Administration

The process should be easy for internal operations teams to manage. The management of day-to-day sales commissions and incentive operations should be simplified as much as possible so that key business stakeholders are less reluctant to change. Incentive calculations are a periodic process, and it becomes important that the platform supports the distinction between processing time and actual payout time.

4. Integrations

You have a brilliant solution for other core tasks, but if those two solutions could communicate with one another, your productivity would skyrocket. Third-party developers write custom integrations between applications when software providers provide APIs for their apps to third-party developers. This implies you can connect almost any piece of software to another.

5. Cost of Ownership

Initial capital expenditure should be less so as to keep the risk minimum in case the rolled-out incentive system doesn't meet exact business requirements. The focus should be on operating expenses so that costs can be cut down in case of any business-related changes. Building a custom solution necessitates a thorough understanding of coding and programming. As a result, finding the right development team for your company will be much more time-consuming and expensive.

6. Experienced Team

The team managing your system development/process should not only have significant experience with the technology, but it is also important for them to understand incentives business processes. This ensures the alignment of business needs with data/process flow.


Even with these recommendations, choosing software for your company would be difficult. You don't want to waste money, and you certainly don't want to wind up with software that genuinely assists you. The most crucial part is understanding the business problem you're trying to address and how you envision it evolving soon.

Out-of-the-box incentive solutions generally tick all the above boxes while minimizing risk for various stakeholders. Their advantages may be observed in a wide range of businesses, including incentive process management. Talk with us if you're facing a challenging decision while devising your future incentive automation strategy.

About Author

Amit Jain

Sales Compensation Expert, Founder, Mentor - Helping organizations transform their sales incentive programs into growth engines