Why Your PLC Code Is Your Most Undervalued Asset

A medium-sized production plant runs 15 machines. Each machine has a PLC program written over 10–20 years by engineers who are no longer available. The programs contain the accumulated knowledge of how to make the product — cycle times, sequences, safety logic, quality parameters, exception handling for hundreds of edge cases. Replacing that knowledge from scratch would cost €50,000–200,000 per machine in engineering time alone.

Yet this code appears nowhere on the company's balance sheet. It is not inventoried. It is often not even backed up. And in many plants, no one alive can fully explain what it does.

What Your PLC Code Actually Contains#

PLC code is not just "a program." It is the encoded knowledge of your production process:

Process sequencing: The exact order and timing of every valve, motor, and sensor in your machine. This sequence was developed through months of commissioning, years of fine-tuning, and decades of corrections for real-world edge cases that no specification document ever captured.

Quality parameters: The temperature curves, pressure setpoints, speed ramps, and timing tolerances that make the difference between good product and scrap. These values were often determined empirically — an operator noticed that reducing conveyor speed by 3% at step 7 eliminated a defect. That fix lives in the PLC as KT 015.2 on Timer 14. Nobody documented why.

Safety logic: The interlocks, guard monitoring, and emergency stop chains that keep people safe. These were designed (and often modified) to meet the specific risk assessment of your machine configuration. Recreating them requires not just programming skill but a complete understanding of the machine's hazards.

Exception handling: What happens when a sensor fails? When material runs out? When an operator presses a button at the wrong time? Mature PLC programs handle hundreds of these scenarios. A new program handles none — every edge case must be discovered and fixed again, often through production problems.

The Replacement Cost Test#

To understand the value of your PLC code, ask: What would it cost to recreate it from zero?

A typical medium-complexity machine program (S7-300, 50 blocks, 128 I/O):

• Specification and design: 40–80 hours × €120/h = €4,800–9,600
• Programming: 80–200 hours × €120/h = €9,600–24,000
• Commissioning and debugging: 40–120 hours × €150/h (on-site) = €6,000–18,000
• Fine-tuning during production: 20–80 hours over months = €2,400–9,600
• Total per machine: €23,000–61,000

For a plant with 15 machines: €345,000–915,000 in PLC code value.

This does not include the production losses during commissioning (weeks of reduced output) or the quality problems during the fine-tuning period (months of elevated scrap rate).

Why It Is Treated as Worthless#

Despite this value, PLC code is typically treated with less care than the company coffee machine:

It is invisible. Managers see machines, conveyors, and robots. They do not see the code inside the PLC that makes everything work. The code has no physical presence and no budget line.

It was not purchased. The code was created gradually over decades — an hour here, a day there. No single invoice captures its creation cost. Because it was never "bought," it feels free.

It is not understood. The people who wrote it are gone. The people who maintain the machines interact with it through HMI screens, not through the programming environment. Code that nobody reads feels like it does not exist.

Accounting standards ignore it. Internally developed software is typically expensed (not capitalized) under IFRS and GAAP. It literally has zero book value. The IP valuation methods used for patents and trademarks — income approach, cost approach, market approach — are never applied to PLC code, even though the cost approach alone would yield significant values.

What Happens When You Lose It#

The three ways PLC code is lost:

1. Hardware failure without backup. The CPU's flash memory corrupts. The backup battery on the SRAM is dead. The program is gone. If no backup exists on a PC, the machine is a paperweight until someone rewrites the entire program.

2. The expert leaves. The engineer who understands the code retires, changes jobs, or becomes unavailable. The code still exists in the PLC, but it is now effectively encrypted — nobody can read, modify, or troubleshoot it. See our detailed guide on knowledge loss.

3. Uncontrolled modifications. Multiple people modify the code over years without version control, documentation, or backups. The online program diverges from the offline backup. Nobody knows which version is correct. When a problem occurs, troubleshooting becomes guesswork.

How to Start Treating Code as an Asset#

You do not need a full IP valuation program. Start with three practical steps:

Step 1: Inventory#

Create a list of every PLC in your plant. For each one, record: CPU type, program size (number of blocks), last backup date, backup location, and the name of the person who can modify it. If any cell in this table is empty, you have identified a risk.

Step 2: Back Up Everything#

Every PLC program should have a verified backup stored in at least two locations (server + offline media). "Verified" means: someone has confirmed the backup matches the online program. An old backup of a modified program is worse than no backup — it creates a false sense of security.

Step 3: Document the Critical Programs#

You do not need to document every line of code. Focus on the 20% of programs that represent 80% of your production risk:

• The machines that run 24/7
• The machines with the most complex logic
• The machines whose programmer has left or will leave soon

PLCcheck Pro makes this step dramatically faster — upload the code, get documentation in minutes instead of days. But even manual documentation is better than none.

The Strategic Perspective#

Companies that treat PLC code as an asset gain three advantages:

1. Negotiation power. When hiring a system integrator for a migration project, documented code means accurate quotes. Undocumented code means the integrator adds 30–50% risk margin to their price.

2. Business continuity. When an expert leaves, documented code means the replacement can get up to speed in weeks instead of months.

3. M&A readiness. When your company is acquired or acquires another, PLC code documentation is part of the due diligence. Undocumented automation systems are a red flag that depresses valuation.

PLCcheck Pro: From Invisible to Understood#

PLCcheck Pro exists because we believe PLC code should be understood, not feared. Upload any S5 or S7 program and get:

• Plain-language explanation of every block and network
• Complete variable documentation with suggested names
• Cross-reference of all addresses
• Migration complexity assessment
• Exportable documentation for your asset register

The first step to treating code as an asset is knowing what it does.

Upload your code and see what you have →

Frequently Asked Questions#

How do I calculate the value of my PLC code for management?

Use the replacement cost approach: estimate the engineering hours to recreate each program from zero (specification, programming, commissioning, fine-tuning). Multiply by your engineering rate. For a rough estimate: €500–1,000 per block for simple programs, €1,000–3,000 per block for complex programs.

Should I put PLC code on the balance sheet?

Under current accounting standards (IFRS, GAAP), internally developed software is typically expensed. However, knowing the replacement value is useful for insurance purposes, business continuity planning, and M&A due diligence — even if it does not appear in the financial statements.

What is the minimum I should do right now?

Back up every PLC program today. Verify the backups. Store them in two locations. This costs nothing and eliminates the catastrophic risk of total code loss. Everything else — documentation, migration, optimization — builds on this foundation.

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Maintained by PLCcheck.ai. Last update: March 2026. Not affiliated with Siemens AG.