Business Intelligence (BI) Applications for manufacturing: build or buy?

Use our four key success factors to find your perfect fit

There comes a time in every manufacturer’s evolution when the management team is faced with this question: Do we build our own business intelligence (BI) applications, or do we buy them? 

It’s a tricky question. And the answer has huge repercussions. 

Future decision-making, infrastructure development, overall growth: these all hinge on which path the team decides to take.

As technology experts, we see organizations grapple with this question on a regular basis. We’re frequently called on to give our two cents. After 10+ years in the manufacturing space, we’ve homed in on four key success factors when deciding on whether to build or buy BI applications: cost, security, scalability, and data democracy. 

Here are the pros and cons for each solution in these areas.

How much will it cost? It’s often the first question on every manufacturing company’s mind. Yet the answer isn’t straightforward. There are issues that impact what the final spend will be. Determining your actual costs (and potential savings!) requires looking beyond the price tag. 

Cost of built Business Intelligence applications

The biggest pro for building BI applications is the ability to leverage in-house talent. You cash in on their experience and knowledge of your business and systems. They know what needs to be included and why. 

Unfortunately, custom applications could become costly later. Here are a few examples of where these added costs emerge:

• System rigidity: Built applications can be surprisingly robust. However, they aren’t always flexible when it comes to adapting to change. Your manufacturing line, business model, and current needs will change. Most organizations find themselves spending unexpected time and money adapting the custom application to their new needs. Needs may also vary plant by plant, making the need for custom, agile apps highly important for scalability. 

• Difficult maintenance: Many built applications can be easy to maintain—until the original tech team leaves and takes all the system knowledge with them. With the labor shortage in manufacturing, losing information and people can be costly. Again, time and money are spent bringing their successors up to speed. Cumbersome maintenance also results in a web of get-arounds, redundancies, and make-do’s as each generation of IT teams works with it. This adds diminished system performance, potential system failure, and a “dirty” system to incurred costs.

• Stretched resources: Building a custom BI solution can take a long time. This puts a strain on your in-house team as they’re tasked with the build and supplying daily support. Additionally, your team may not have the skills to build the application. This factor can potentially lead to costly mistakes, overrun budgets, and delayed timelines. 

Cost of bought Business Intelligence applications

It’s true that buying a business intelligence application may induce sticker shock at first. However, the pros that come with the price tag quickly outstrip this one con. 

Consider these basics:

• Buy solutions are usually flexible: They’re designed to be improved, upgraded, and customized. This gives you hassle-free adaptability capabilities as your business grows, especially if you can work with a vendor who will grow with you. 
• Installation is low lift: Today’s out-of-the-box solutions are plug-and-play. This significantly reduces the time and effort needed to get the application live. You spend more time racking up ROI instead of futzing with implementation. And with the rise of citizen data scientists, giving more teams access to the right applications can help fast-track success.
• There’s a known environment: Buy solution environments are standardized, documented, and consistent. This known landscape accommodates a wide range of skill sets. It makes maintenance, upgrades, adjustments, and customizations easy to perform. As containerization continues to take hold, finding interoperable apps and systems are a key factor in longevity. 

The takeaway: Built solutions are exciting but may not be the most cost-effective solution. Buy solutions take on maintenance, minimize downtime, and position your in-house team to succeed. In the long run, they may be the better bargain.

As more and more manufacturers lean on cloud computing, security is a prime concern. It’s also another area to consider when determining your best business intelligence application solution. Take a closer look. 

Security of built solutions

At first glance, a built solution appears as secure as a buy solution. After all, since you’ve built it yourself, it hasn’t been exposed to outside influences like a commercial product. It may also be an on-prem or private cloud application, making it appear impenetrable. Closer inspection brings significant factors to light. For instance:

• Relevance: Security technology changes quickly. Your built solution may start with the current advancements, but will your in-house team have the time and know-how to keep it current? A lapse in this area leaves your system exposed.

• Certifications and best practices: Most custom-built BI applications don’t incorporate industry best practices. Very few are certified by regulating organizations. These omissions put them—and your valuable data—at risk for costly breaches.

• Increased entry points: Cyber security threats rise with the number of entry points to your data from the cloud. As custom solutions are independent systems, they provide hackers with another door into your data. 

Security of bought solutions

As a commercial product, buy solutions deliver state-of-the-art security measures as a standard feature. Safety is built-in, making maintenance for these third-party applications a low lift for your team. 

Buy solution safety features are:

• Always up-to-date. Buy solutions continually improve their security measures. The improvements are delivered to your system via regular upgrades. Your system is kept current without any input from you.

• Third-party certified. Buy solutions adhere to industry best practices and earn third-party certifications. These validations prove that their products are safe, effective, and tested. 

• Limited entry points. Buy solutions are designed to interface with multiple business applications. This interconnectivity reduces the number of entry points needed for optimal functionality. For example, one multi-functional commercial application allows all your plants or lines to use its various tools while only requiring one internet access point. One access point is much easier to secure, monitor, and maintain than a system with multiple access points. 

The takeaway: Safeguarding your data is an ongoing effort. Buy solutions make this upkeep a low lift. Built solutions require more time and effort to keep your systems and data well protected.

The COVID-19 pandemic demonstrated the value of being able to pivot manufacturing production and processes on a dime. It’s made scalability a hot commodity—and one of our “build or buy” decision factors. 

Scalability of built solutions

As mentioned above, manufacturing BI applications that are built in-house can be very robust, but they may not accommodate change well. Build solutions tend to have a narrow scope. They often address current needs but don’t have much foresight for the future. 

As changes present themselves, time and money must be spent to develop new app variations. This delay impedes your ability to act on unexpected opportunities, address an emergency, or simply grow as you’d like. 

In short, your manufacturing company isn’t designed to pivot. It must make a long and lumbering course change every time. 

Scalability of bought solutions

Investing in a third-party BI application solution gives you an environment that supports pivoting. Whether you’re adding more equipment, reducing inventory, or incorporating a new process optimization protocol, these products have the inherent capacity to adapt quickly to your needs. 

The takeaway: Historically, built solutions are not as pivot-friendly as today’s buy solutions. 

First, what is democratized data and why is it important?

Data democracy is defined as the process of making digital information accessible to non-technical users without directly involving IT. It’s important because it facilitates data-driven business instead of relying on an individual’s intuition or “the way it has always been done.” 

Data democracy is why BI applications are a must-have for manufacturers. BI applications are the instruments through which data democracy comes to be. 

It’s also the litmus test for both “build” and “buy” solutions. 

Data Democracy with built solutions 

The primary attraction of building BI applications in-house is the personalization they afford. They incorporate insider insight and knowledge into your specialized manufacturing processes for a unique, one-of-a-kind output. Dashboards, reports, and metrics: all of these are tailored from the outset. 

However, this customized environment may struggle to interface with other productivity applications. This can hinder overall efficiency and productivity. C-suite users and other non-tech teams are burdened with a steep learning curve. This barrier to access sets the stage for limited data democracy. 

Data Democracy with bought solutions 

By contrast, bought solutions offer a tried-and-tested accessible environment. Invariably, your third-party vendor has solved the “interface-with-other-applications” issue, allowing for a more holistic landscape. 

Designing BI applications with dashboards, reports, and metric monitoring that is more universally intuitive and user-friendly minimizes learning curves and boosts useability. In the event that customizations are necessary, they can be incorporated to account for company-specific needs. 

In short, data democracy is built into these solutions because they are designed to be utilized by users of all skill levels. 

Summary

BI applications are only successful if your users use them. Take time to determine how your BI application fits into your manufacturing technology environment. How will it interact with other applications? Does it need to? Factor this information into your build-buy decision-making. 

As you can see, the build-buy decision has many moving parts. Although we feel buy solutions deliver the most value, we’re aware that choosing a vendor can be as mind-boggling and time-consuming as deciding whether to build or buy. 

When all is said and done, you need manufacturing business intelligence applications that pull their weight and are easy to use.