Why develop a custom application?
Many small and mid-sized businesses believe that it makes more sense to buy a pre-packaged piece of software off the shelf, and then either customize the software or change the business processes to fit the software.
The problem with this approach is that customizing an off the shelf package can be as expensive as building from scratch and in some cases actually more expensive. The reason is that those processes you are changing are usually pretty darn good. Business processes are developed over years and they are the way they are for good reason; they work.
Custom development gives you the freedom to objectively evaluate your processes and remove the constraints imposed with off the shelf software.