When you build a custom home you hire a builder. You describe to the builder what you would like the home to be. The builder will create a blueprint and you go back and forth until the model is agreed upon. Then the home builder builds the home according to your vision.
Custom software development functions in a similar way, but results in an a software application rather than a home. Custom database application development produces a system with data entry forms, reports, workflow management and business process automation, that accommodates multiple concurrent users with role-based permissions. The user interface can be deployed over the web, mobile phone, tablet, and/or windows.