User-developed software is, as its name suggests, software that is developed by users rather than by specialist developers. It includes spreadsheets, parameter driven financial models, personal databases, VB code, and so on.
Caution: user-developed systems may be hazardous to your organization
User-developed software has many advantages, and can really leverage the expertise of those users. You, the users, maintain control over the system being developed; you hope for rapid turnaround on modifications; and a whole layer of communication is removed from between the concepts being modelled and the people doing the implementation.
However, the expertise of the user is unlikely to included extensive software engineering experience. Many systems developed by users end up being very large and complex, and are not as easy to maintain and enhance as they should be. Moreover, as they are often not subject to rigorous quality controls, they may contain significant bugs, be hard to use and lack robustness.