In-house vs Agency Is the Wrong Question

When organisations explore digital initiatives (new or scaling existing), one response comes up time and again:

“We we need to build this in-house.” Or “We need more internal resources to deliver this.”

Introduction

The idea that in-house is always the right answer has become a default position rather than a considered decision. And that’s where problems start.

It’s a reasonable instinct. In-house teams offer control, continuity, and long-term ownership. For many businesses, they are absolutely the right answer.

The more useful question is not in-house or agency, but what is the right delivery model for this stage, this initiative, and this level of uncertainty?

It’s cheaper hiring/using inhouse teams

The biggest thing we find, is the cost comparison is often misunderstood

Agency costs are often compared directly to salary figures. This is an incomplete comparison.

In-house delivery includes recruitment fees, benefits, tax, training, management time, tooling, downtime, and the cost of mis-hires. Once fully loaded, internal costs are rarely as simple or predictable as they appear.

Agencies convert these fixed and variable costs into a clear operational spend tied directly to delivery.

Why in-house feels like the safe choice

For established businesses in particular, in-house teams feel familiar and controllable:

• Costs appear predictable
• Capability feels owned
• Knowledge stays inside the organisation
• There is less perceived dependency on third parties

In the right circumstances, this works extremely well. Especially where requirements are stable, the roadmap is clear, and strong product and technical leadership already exists internally.

Early-stage or transformational digital work tends to share a few characteristics, which can lead to in house teams struggling early on;

• Requirements are incomplete or evolving
• Stakeholder alignment is still forming
• Delivery pace matters
• Specialist capability is neededi ntermittently, not permanently

In these situations, building an in-house team often introduces friction rather than removing it.

Where agencies objectively add value:

- Agencies are not a shortcut. They are a different operating model.

- Used correctly, they solve specific problems that in-house teams are not designed to address early on.

Faster time to value

Agencies operate with established delivery frameworks, tooling, and cross-functional teams. This allows work to start quickly and progress without waiting for recruitment cycles to complete.

Access to complete capability, not individual roles

Most products require more than developers alone. UX, QA, delivery management, and technical leadership are all critical to success. Agencies provide these as a unit rather than as a series of individual hires.

Flexibility without long-term commitment

Digital initiatives rarely move at a steady pace. Agencies scale capacity up or down as needed, without the organisation alimpact of changing head count.

Clear accountability

Agency engagements are defined by scope, milestones, and outcomes. Progress and performance are visible and measurable, which can be harder to achieve within internal structures.

External perspective

Agencies work across industries, platforms, and organisational models. This exposure helps challenge assumptions and avoid problems that internal teams encounter for the first time.

Reduced operational overhead

Agencies absorb the cost and complexity of team management, training, churn, and performance management. Clients focus on outcomes rather than internal delivery mechanics.

Choosing the right model at the righttime

In-house teams are invaluable when the work is well understood, stable, and central to the business’s long-term operation, plus, internal teams have the capacity for the new ‘thing’.

Agencies are valuable when speed, flexibility, experience, and reduced risk matter most.

Treating this as a binary choice oversimplifies a much more nuanced decision.

The organisations that deliver best are not the ones that choose sides. They are the ones who choose the right model for the work in front of them.

In practice, most successful organisations adopt a hybrid approach:

• Agencies support discovery, acceleration, and specialist delivery
• Internal teams take long-term ownership once the foundations are proven
• Capability is built deliberately rather than prematurely

This is not outsourcing responsibility. It is sequencing it.