Custom Mobile App or Off-the-Shelf for Your Utility? [A GUIDE]
Now that you’ve decided a native mobile app is the perfect tool for maximizing the efficiency of each customer touchpoint, the next question is: Do you build a customized mobile app or utilize an off-the-shelf option?
The right mobile interface can lead to remarkable benefits for your utility company, including improved customer experience, increased customer retention, simplified transactions, and a reduced call center volume.
Let’s start by defining your options. A customized (or bespoke) app is created from scratch. Each feature of the app is developed to fit the needs of your company and your customers. An off-the-shelf (or “out-of-the-box”) app is a pre-packaged solution - all of the software features have been selected for you, allowing you to deploy quickly.
To help guide you towards the right decision, we’ve compiled a list of the advantages and disadvantages of each potential solution.
Off-the-shelf application: advantages
- Quicker deployment
If a quick launch is your top priority, an off-the-shelf app will take the least amount of time to deploy. Because off-the-shelf apps are mass-produced and offer fewer opportunities for customization, you’ll spend little to no time developing features or making decisions about functionality. If you want to deliver an app to your utility customers as quickly as possible, off-the-shelf is the way to go.
- Lower initial development costs
Out-of-the-box apps are often cheaper to deploy up front. Rather than paying for design, engineering, testing, and integration with your existing systems, your upfront costs are usually limited to the cost of the initial purchase, the process of white labeling the solution with your visual branding elements, and systems integration on the back end.
- More predictable costs
With fewer options for customization, off-the-shelf software companies can have a well-defined pricing structure. You will likely pay one upfront cost and then a fixed monthly subscription fee to maintain access. Monthly fees are based on the package you select, but content limits, analytics, social integrations, and support, among other things, will ultimately affect the total cost.
- Rich initial feature set
Because off-the-shelf applications are built ahead of time, all the features are in place at the point of purchase. You won’t spend time waiting for new elements to be developed, tested, and implemented (like you would if you built a custom application). Instead, you have a wide selection of ready-made features, ripe for the picking from day one.
Off-the-shelf application: disadvantages
- Ongoing fees add up
Those monthly fees add up surprisingly fast. You’ll also have to pay extra for any maintenance or support. Other factors that increase monthly fees include the amount of content, analytics features, social engagement options, number of active developer accounts, data integration and management (e.g., your user database), and design. These fees can easily accumulate to the point that the cost is actually higher than that of a custom app if you consider the average lifespan of a software product.
- Limited customization
Off-the-shelf software is challenging to modify. Seemingly extensive at first, the number of features offered are rarely customizable, and you likely won’t have the ability to add additional features to the base product yourself.
As a utility company, it’s important to be able to modify your app’s features to your customers’ needs. If one region experiences more weather-related outages in one season versus another, you’ll want to build up the infrastructure around your outage reporting during that particular season. An off-the-shelf app may not provide for this kind of flexibility.
If you decide later on that you want to add a new element to your app like smart home monitoring, you may find that your off-the-shelf application cannot accommodate elements outside of their initial offering. If you are able to include new features, it will come with a cost.
- Lack of ownership over the code
You won’t be in control of the code that makes up your mobile app, and therefore you don’t own your app outright. This means that if you ever wanted to bring the app in-house, you would have to start from scratch with a new mobile app. Additionally, it will be harder, if not impossible, to fix any bugs on your own or with the help of another vendor. Instead, you will rely on the third-party off-the-shelf provider to resolve any issues that may arise.
- Third-party security vulnerabilities
Without ownership of the code, can you be confident about the safety of your data? Lack of ownership translates to lack of control over the security of the app and the preventative measures taken to protect your utility customers’ information. You don’t want to risk sensitive information about your utility customers falling into the wrong hands, and then not being able to immediately address the issue yourself.
Off-the-shelf applications are available to anyone - even your competitors. If you’re using the same application as your competition, you’re missing out on the opportunity to build a strategic advantage with user-tested features.
- Predetermined tech stack
Your off-the-shelf app provider will likely require you to use their toolset for billing, outage reporting, and more. This locks you into a sole supplier of administrative systems, which may not be best for your business in terms of cost, scalability, and feature offerings. It may also necessitate an expensive migration from one enterprise system to the next.
Custom application: advantages
- Full customization based on both user and business needs
With a completely custom mobile app, you can pick and choose features based on the unique aspects of your business, the regions you serve, and the needs of your particular utility customers.
For instance, you’ll be able to build out your outage reporting tool for the geographic area that loses power seasonally and add smart home monitoring, if that’s what’s important to your customer base. Or, if you find that a large segment of your customer base struggles to pay their bills on time, they may benefit more from flexible payment options. With a custom application, every detail can be personalized to fit the needs of your unique customer.
This customization expands to security measures as well. You can select state-of-the-art security measures and adapt them to fit the specific needs of your utility.
- Code is fully owned
You are in control of the code and have total ownership of the app, its content, design, and features. You’ll be able to exercise full control over the security of your data, and it allows you to easily transfer application support to an in-house team at any time. Because you don’t have to pay licensing fees, this results in long-term cost savings over the life of the product.
- Ability to identify as a capital expense (potentially!)
Here’s something your accounting team will appreciate: Monthly software licenses are typically considered an operating expense, which means they’re deducted in the current tax year and directly affect your bottom line. With custom software development, however, the application itself can be considered a depreciating asset; a purchase that can be accounted for over its lifespan (beyond the tax year in which the purchase was made).
Capitalizing some of the costs of development and customization help defray the impact of the large initial investment and lower the risk of causing concern among investors.
- Unlimited scalability
As your number of users grows, you’ll find it easy to scale your application accordingly. You’ll have the ability to plug and play different service providers to better meet evolving service needs. If you need to add more support for one feature or increase the amount of traffic your app can handle, your app development team will be able to help you scale, and scale efficiently - without added monthly fees.
- Allows for endless innovation
With a custom application, you aren’t limited by the frameworks or integrations that come with off-the-shelf offerings. You can implement an unlimited number of features, ranging from basic must-haves to ground-breaking, innovative functionality based on feedback from your users and changing best practices.
Custom application: disadvantages
- Longer timeline
Custom applications will take longer to deploy than off-the-shelf versions, but by being fully involved in the development process, you’ll find that the learning curve after the software is released is significantly lower than that when implementing an out-of-the-box solution.
- Higher initial development cost
You’ll be paying a higher price up front to create, design, and develop a fully-customized app. However, once the app is created, you won’t have to pay monthly subscription fees, and if you decide to establish an in-house support team, you can save costs on ongoing maintenance, as well.
- Hands-on process
To create a customized app that your customers will love, you (as the product owner) will need to be intimately involved in the process. With off-the-shelf, you aren’t able to offer any input during the creative process. With a custom app, you’re building something from scratch. You’ll need to work closely with your app development team and share the insights you have about your customers in order to create an app that works well for your utility and appeals to users.
Which should you choose?
Take a look at the leaders in the industry: Companies like Exelon, DTE Energy, and NextEra Energy have all selected custom mobile applications over off-the-shelf alternatives.
While off-the-shelf software solutions may seem attractive initially, a custom solution allows you to provide your utility customers with a best-in-class experience that is uniquely yours, oftentimes at a lower overall cost.
It’s worth mentioning again that customers using their utility provider’s mobile app had increased measures of loyalty by 15%. Loyal customers are more likely to recommend their utility company, spend more, cost less to support, and have a higher lifetime value.
Now that you know the benefits and potential challenges inherent in either path to digital transformation, you'll be better able to make the right decision for your utility company.
Eager to harness the power of a mobile app for your utility? Give us a call, we’re ready to help.