Big Data

Buying vs. Building Software: An Overview For Manufacturers

Automation Alley
January 20, 2023
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Photo by Kevin Ku on Unsplash

Photo by Kevin Ku on Unsplash


Industry 4.0 calls for a greater emphasis on software adoption for all manufacturers. This informative breakdown on buying vs. building software tackles the pros and cons of each.

Software is the heartbeat of modern business, and this will only become more so as technology advances. Industry 4.0 and the greater digitization of manufacturing calls for companies to make pivotal investments in software to stay competitive and improve their operations.

When it comes to implementing software, all businesses have two main options: buying it or building it. In this article, we’ll explore the pros and cons of both approaches, so manufacturers can make an informed decision about which one is best for their needs.

Why Focus On Software Investments?

When it comes to things like software, most companies are guilty of the same practice — starting out with a system in place and failing to update it with the times. Many decision makers use the “if it ain't broke, don’t fix it” mentality when it comes to the systems they currently run on, and while this is thought to be cost effective, it will cost the company in the long run when their competition implements the necessary changes.  

As we barrel into an era of digital transformation, companies that fail to keep up with the times will soon find themselves out of the game. The global digital manufacturing market hit a value of $341.8 billion in 2021, and is expected to more than double in size to $967.6 billion by 2027 at a Compound Annual Growth Rate of 18.96%.

This, along with a growing chorus of industry leaders, has convinced many companies to switch from a status-quo mindset to a “software first” one. By investing in software and tools that are designed specifically to fit their business needs, they can stay ahead of the competition and capitalize on emerging opportunities.

Buying Software vs Building Software: What's the Difference?

When it comes to implementing software into business operations, there is generally two options: buying or building.

The first is very straightforward, and a common choice among companies looking for an easy solution. All it requires is a bit of market searching and diligence to ensure the product is fit for purpose.

The second option, building software, is a much lengthier and more involved process. It involves creating software from scratch, or customizing existing software to meet the needs of a business.

The following sections will explain the processes behind each of these choices, what they require, as well as their pros and cons.

Buying Software

Buying is generally considered the fastest and most accessible way to get software for a business. It means shopping around for existing solutions that work straight out of the box, or with minimal customization.

Pre-made software is created by vendors to solve a specific problem. They are usually geared towards an end-user in the business and require no additional coding from developers after purchase.

Point solutions are one of the most commonly bought types of software — these tools are built to improve a singular function within a business, such as accounting or CRM. They often don't interact with existing software and can be adopted quickly by users.


Choosing to buy manufacturing software comes with a number of advantages, most notably the following.

Quick and easy adoption:  When you buy software, you don’t have to wait for developers to create a solution from scratch. You can choose an existing product that is tailored to your needs and start using it almost immediately.

Cost savings: Pre-made solutions take the hassle out of procuring, testing, and customizing software. Companies save money by not having to pay for development, maintenance and support costs associated with building from scratch.


It's worth mentioning that buying software for a business also comes with a few drawbacks that you should consider before investing.

Less flexibility: Out-of-the-box solutions are great for providing quick fixes, but they don't have the same level of customization and scalability as custom-made software. Companies may have to adapt their processes to fit the software, instead of the other way around.  

Security risks: While established software vendors have robust security protocols and measures in place, there is always the risk of outside forces accessing sensitive information. Companies should make sure the software they are buying is secure and up to date.

Building Software

The other option for implementing software into business operations is to build it from scratch. This entails a much more involved process but can be beneficial for companies looking for something tailored to their unique needs.

When building software, companies need to work with a development team to create a solution from the ground up. This includes defining the problem, planning out a solution, and coding it so that it works as expected.

It's a process that can take months, if not years, depending on the complexity of the project. It also requires ongoing maintenance and support for when things go wrong, or new features need to be added.


Creating software from scratch comes with its own set of advantages, such as the following.

Customized solution: When you build your own software, you have full control over the design and functionality. This allows companies to create a solution that fits their exact needs and processes, giving them an edge over competitors.

Flexibility: Custom-made software allows businesses to add features or make changes according to their own standards. This can save time and money, as businesses don’t have to rely on third-party vendors for updates.


It's also important to consider the drawbacks of building software before deciding to invest in this option.

Time consuming: Developing custom software requires a lot of time and effort from both the development team and the business. This can be a costly and lengthy process that requires ongoing support.

Resource-intensive: Not every manufacturer will have the resources or capital necessary to create their own software solution. It can be expensive to hire and retain developers, as well as manage the project long-term.

Whether you choose to buy or build it, there's no doubt about the fact that software will be an integral part of manufacturing in the decades ahead. With the right solution, businesses can streamline operations, reduce costs and stay competitive in an ever-changing landscape.

Automation Alley
Automation Alley

Automation Alley is a World Economic Forum Advanced Manufacturing Hub (AMHUB) for North America and a nonprofit Industry 4.0 knowledge center with a global outlook and a regional focus. We facilitate public-private partnerships by connecting industry, education and government to fuel Michigan's economy.

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