Total Cost Comparison (Honest Numbers)
Agency engagement (6-month project):
- Development cost: $80K-150K
- Management overhead: 5-10 hours/week internal
- Knowledge transfer: 2-3 weeks at end
- Total effective cost: $90K-170K
In-house team (3 engineers, 6 months):
- Salaries: $180K-300K (including benefits)
- Recruiting cost: $30K-60K
- Onboarding time: 4-8 weeks to productivity
- Management: 20+ hours/week
- Total effective cost: $250K-400K
The math is clear: For bounded projects, agencies cost 40-60% less. For ongoing, undefined work, in-house wins.
When Agency Makes Sense
Defined, time-bounded projects. Clear scope, clear end date. MVP development, platform migrations, specific feature sets.
Specialized expertise you don't need permanently. Machine learning, mobile development, DevOps — hire for the duration, not forever.
Surge capacity. Product launches, seasonal peaks, acquisition integrations. Temporary needs shouldn't drive permanent headcount.
Speed over long-term team building. When shipping in Q1 matters more than building an engineering culture.
Explore our dedicated developer teams to see how we structure external engagements.
When In-House Is Non-Negotiable
Core differentiating technology. If your technology IS your competitive advantage, you need internal ownership. You can't outsource your moat.
Ongoing, undefined scope. When the work is never "done" and evolves continuously with your business.
Deep domain expertise required. Some domains require years to understand. You can't outsource that learning.
Team-building phase. If you're building a lasting engineering culture, you need internal people who grow with the company.
The Hybrid Model: Best of Both
Most sophisticated companies use both. The pattern that works:
- Internal team owns: Architecture decisions, code review, product direction
- External team provides: Capacity, specialized skills, accelerated delivery
- Clear protocols for: Knowledge transfer, documentation, handover
This gives flexibility without losing control. Learn more about how we approach architecture in hybrid engagements.
