The Real Cost of ‘We’ll Build It In-House’: Comparing Agencies vs Local Teams for Construction Software

When deciding how to develop construction software, you face two main options: build an in-house team or hire an external agency. Each approach has its own costs, timelines, and expertise requirements. Here’s the key takeaway:

• In-house development gives you full control but comes with hidden costs, longer timelines, and challenges in finding specialized talent. For a small team, costs can exceed $600,000 annually, including salaries, benefits, and infrastructure. Recruiting alone can take 40–59 days or more.
• Agencies offer flexibility, faster delivery, and pre-vetted expertise. While hourly rates range from $150–$250, agencies often complete projects for 30–70% less than in-house teams. They’re ideal for companies needing specialized skills or quick results.

Quick Comparison

Bottom line: If speed, flexibility, and cost efficiency matter, agencies are often the better choice. For projects requiring long-term control or proprietary knowledge, in-house development might make sense. A hybrid approach can balance both options.

Cost Breakdown: Hidden Expenses vs Clear Pricing

When construction companies assess software development options, the initial price tag often doesn’t reveal the full picture. In-house teams come with fixed costs that remain constant, regardless of workload, while agencies typically charge only for active work. Grasping these differences is essential for making a financially sound choice.

The Real Cost of In-House Development

Taking a deeper dive into in-house expenses, it’s clear that costs go far beyond base salaries. A backend developer who also acts as a software architect earns roughly $140,000 per year, while a mobile developer makes about $130,000 annually. Add a UI/UX designer at $100,000 and a project manager or product owner at $120,000, and the total base salary for a small team quickly hits $490,000^[4].

But that’s just the beginning. Benefits, payroll taxes, and insurance tack on an additional 25–30% to these salaries^[4][5]. For this $490,000 team, that means an extra $122,500 to $147,000, bringing the total personnel costs to $612,500 to $637,000 per year. And this doesn’t include software licenses or hardware.

Infrastructure costs add up fast. Licenses for tools like Adobe Creative Cloud, Figma, Asana, and Ahrefs range from $5,000 to $10,000 annually^[5]. Hardware investments start at $5,000 to $10,000, and if you’re providing office space, expect to spend another $20,000 to $30,000 per year^[7]. Recruitment and training costs (~$6,000 annually) add to the tally, and turnover can be a major expense – replacing a role can cost 50–75% of the position’s salary^[5].

Agency Pricing Models

Agencies, on the other hand, offer flexible pricing structures. Hourly rates for senior-level talent typically range from $150 to $250 per hour^[5]. For construction-focused projects, such as those involving jobsite tracking or equipment management, you’re only paying for productive development time – no idle hours or unrelated meetings.

For projects with a clearly defined scope, fixed rates can provide budget clarity. For example, a mid-sized software redesign might cost $80,000 to $150,000, with all deliverables and timelines laid out upfront^[5]. This approach works well for companies with specific feature requirements or integration needs.

For ongoing development, monthly retainers – ranging from $5,000 to $15,000 – offer consistent access to a development team without the overhead of full-time employees^[5]. Large-scale projects requiring continuous work might cost $8,000 to $15,000 per week, totaling $400,000 to $750,000 annually^[4]. While this is comparable to in-house costs, agencies provide added flexibility.

The Financial Comparison

When comparing in-house teams to agency-driven projects, the financial differences are striking. For a mid-sized redesign over a year, an in-house team costs about $453,600. This includes $320,000 in salaries, $89,600 for benefits and payroll taxes, $8,000 for tools and software, $6,000 for training, and $30,000 for turnover risk^[5]. An agency, by contrast, might handle the same project for around $180,000, including a $120,000 project fee and $60,000 for a support retainer^[5]. That’s a savings of $273,600, or roughly 60% less than the in-house option.

For larger, more complex software platforms requiring senior expertise, in-house teams cost about $765,000 annually. This includes $590,000 in salaries for five senior roles, plus 25–30% in benefits and employer costs^[4]. Agencies, on the other hand, charge $400,000 to $750,000 annually^[4], offering similar costs at the high end but with the added benefit of scalability.

What You’re Paying For

Agencies bundle a range of resources – enterprise tools, QA processes, project management expertise, and multidisciplinary specialists like UX researchers and SEO strategists – into their rates. This means you avoid separate costs for software licenses or hiring additional staff^[5]. You’re also paying only for productive hours, sidestepping the inefficiencies of internal meetings or administrative tasks.

Recruitment is another area where agencies shine. Finding developers with expertise in construction-specific software – like those skilled in jobsite tracking or equipment management – can be a lengthy, resource-heavy process. Agencies maintain pre-vetted talent pools, allowing them to scale teams up or down as project needs evolve^[6].

The financial takeaway is clear: in-house development locks you into fixed costs, regardless of whether you’re actively building new features or simply maintaining existing ones. Agencies, however, align costs with your actual needs, offering specialized expertise without the long-term financial burden of full-time employees. For construction companies evaluating their software development options, understanding these cost structures is key to balancing immediate goals with long-term financial health.

Development Speed and Time-to-Market

For construction companies, getting software up and running quickly is a game-changer. Whether it’s for field crews, project managers, or subcontractors, the speed at which a solution is delivered can directly impact operations and profitability. This is where the choice between building software in-house or working with an agency becomes pivotal.

The In-House Timeline Challenge

Building an in-house team takes time – often months. From recruiting to hiring and onboarding, the process is anything but quick. And until the team is fully assembled and ready, development can’t even begin. These delays not only slow down deployment but also push back the potential return on investment (ROI). In industries like construction, where timing is everything, these lags can be costly.

Why Agencies Move Faster

This is where agencies have the upper hand. They come with pre-assembled, experienced teams that are ready to hit the ground running. These professionals often have prior experience dealing with construction-specific challenges, allowing them to start development immediately – no lengthy onboarding or training required. For construction projects, where timing can make or break efficiency and seasonal opportunities, this quick mobilization can make all the difference.

The Cost of Delays

Every delay comes with a price. Missed opportunities can directly affect both profitability and operational flow. By delivering solutions faster, agencies help businesses avoid these setbacks. Their ability to deploy technology when it’s needed most ensures that companies stay competitive and efficient, reducing the risks tied to slower in-house timelines. This speed-to-market advantage is yet another factor to weigh when deciding between control and cost.

Technical Expertise and Scalability

When it comes to construction software, technical expertise and scalability are just as crucial as cost considerations. Building effective solutions for this industry demands a deep understanding of its unique workflows, compliance requirements, and on-site realities. This goes far beyond general software development skills. Let’s break down how in-house teams and agencies approach these challenges and what that means for your business.

The Expertise Gap in In-House Teams

As discussed earlier, creating an in-house team comes with cost and time hurdles. But technical expertise adds another layer of difficulty. Developers in an in-house setup often start from square one when it comes to understanding construction-specific needs. They need to learn how to handle change orders, manage subcontractor workflows, integrate with existing project management tools, and ensure compliance with safety regulations. This learning curve can take months, slowing progress as the team works to grasp the industry’s nuances.

Then there’s the issue of specialized skills. Modern construction software often requires expertise in areas like mobile app development for field crews, real-time data synchronization for jobsite updates, and integration with accounting platforms like QuickBooks or Sage. Finding developers who excel in all these areas – and who also understand construction – is a tall order. Building and retaining such a team can be both expensive and time-consuming, leaving your project vulnerable to delays and skill gaps.

Why Agencies Bring Domain Knowledge

Agencies, on the other hand, come equipped with a wealth of construction-specific experience. They’ve tackled similar challenges for various clients, from designing interfaces that work seamlessly with gloves to structuring databases for complex project hierarchies. They also understand the realities of unreliable connectivity on jobsites and know how to build solutions that work around these issues.

By leveraging their accumulated knowledge, agencies avoid the trial-and-error phase that in-house teams often face. They know what features construction companies actually use versus those that sound good on paper but end up ignored. This expertise not only reduces risk but also speeds up development, ensuring you’re not paying for someone to learn on the job.

Scalability: Growing Without the Growing Pains

Scaling an in-house team can be a slow and cumbersome process. When your software needs grow, you’ll need to hire more developers, which means going through recruiting, interviewing, onboarding, and waiting for new team members to get up to speed. Each growth phase brings delays and added costs.

Agencies, however, offer flexibility. Need a mobile developer for a few months to build an iOS app? Done. Require a DevOps specialist to optimize your infrastructure? They can bring one in right away. This ability to adjust resources based on project needs means you’re not stuck with fixed headcount or paying for skills you only need temporarily.

Agencies also come with ready-to-use technical infrastructure. They’ve already established development processes, testing frameworks, security protocols, and deployment pipelines. In contrast, an in-house team would need to build all of this from scratch, which adds time and risk to the project.

Comparing Technical Capabilities

The Hidden Cost of Knowledge Loss

One major risk with in-house teams is losing institutional knowledge when key developers leave. For construction companies, where software development isn’t a core focus, retaining top technical talent can be a challenge. When someone departs, they take with them critical insights – why certain decisions were made, how systems are connected, and where technical debt exists. Replacing that knowledge is both costly and disruptive.

Agencies address this issue through team-based knowledge sharing and thorough documentation. No single individual holds all the critical information, so the departure of a team member doesn’t create a crisis. Service continuity is maintained, even as team members rotate.

Making Technical Expertise Work for You

The decision ultimately comes down to whether you want to build technical expertise internally or access it through a partnership. For most construction companies, software development isn’t the main focus – building projects is. Partnering with an agency allows you to tap into seasoned developers who understand the construction industry and can scale with your needs. This approach eliminates the risks and delays associated with assembling expertise from scratch, making it a practical choice for many organizations.

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Pros and Cons

Here’s a detailed breakdown of the pros and cons for each approach, focusing on the critical factors of control, cost, speed, and expertise.

The Full Comparison

What the Numbers Tell Us

Outsourcing can drastically lower overhead and reduce hourly costs by over 50%. However, cost savings aren’t the only consideration. For companies handling proprietary technology or sensitive data, the control and security of an in-house team might justify the added expense. The decision ultimately hinges on whether the software is a key competitive advantage requiring tight internal control or a functional tool that can be efficiently developed with external expertise.

When In-House Makes Sense

An internal team is ideal when software development is central to your business strategy. If the software provides a competitive edge or involves proprietary technology that’s difficult to replicate, then building in-house is often the better option. This approach also suits projects with strict regulatory requirements or when maintaining full control over data is essential. While in-house development involves higher costs – up to 2.7x the base salary – and longer setup times, it can deliver long-term benefits for companies that prioritize control and specialized knowledge.

When Agencies Are the Better Choice

For most construction companies, agencies offer a faster and more cost-effective path to results. Whether launching an MVP to test the waters or a full-scale application to stay competitive, agencies deliver results 30–50% faster ^[2]. They’re particularly valuable when specialized skills are needed, such as mobile app development for field crews, integration with existing systems, or advanced analytics. Agencies also excel in handling fluctuating project needs, providing flexible resource allocation that aligns costs with business demands. This flexibility and expertise make agencies a strong choice for companies aiming to move quickly without the burden of building internal teams.

The Hybrid Approach

Some companies strike a balance by maintaining a small in-house team for strategic oversight while relying on agencies for specialized tasks. This approach combines the control of an internal team with the flexibility and expertise of external partners.

Making Your Decision

Choosing between in-house and agency development comes down to aligning the approach with your company’s specific needs, budget, and timeline. Construction companies primarily focused on physical projects often find that agencies provide the quickest and most economical route to quality software. On the other hand, businesses with unique requirements or long-term development goals may find the investment in an in-house team worthwhile.

Conclusion

Choosing between in-house software development and working with an agency comes down to your company’s specific needs and priorities. Agencies often deliver quicker results and eliminate the hidden fixed costs tied to maintaining an internal team.

On the other hand, building in-house is a better fit if your software directly impacts your competitive edge or if you require strict control over sensitive data and frequent updates. This ties back to earlier discussions on expertise gaps and the challenges of scaling internal teams.

A middle-ground option is a hybrid model – maintaining a small internal strategy team while outsourcing specialized tasks. This approach can offer a balance of control and efficiency.

To make the right call, consider whether your software provides a competitive edge, whether you can handle the higher upfront costs, and if your timeline allows for a slower start. If not, collaborating with an agency might be the more practical route.

FAQs

What are some unexpected costs of building construction software in-house?

Building construction software internally might seem like a cost-effective choice at first, but it often comes with hidden expenses that can catch you off guard. For instance, as your company grows, the cost of scaling infrastructure can quickly add up. Then there’s the issue of technical debt – those shortcuts taken during development can lead to bigger problems down the line. And let’s not forget the challenge of staying compliant with constantly evolving industry regulations, which requires ongoing effort and resources.

On top of that, maintaining the software over the long term can be a real hurdle. Regular updates and support are essential, and without a dedicated team, these tasks can become time-consuming and expensive. If these factors aren’t carefully accounted for from the start, they can derail both your budget and your timeline.

How do agencies deliver high-quality, construction-specific software solutions?

Agencies ensure top-notch quality and sector-specific expertise by utilizing teams of specialists who bring a mix of technical skills and in-depth understanding of the construction industry. They rely on established development methods and prioritize continuous training to keep up with emerging technologies and industry advancements.

Partnering with an agency gives you access to a flexible team that can adjust to your project’s requirements. This approach helps deliver solutions more efficiently, provides reliable long-term support, and addresses the distinct demands of construction software development.

When is it a good idea for construction companies to combine in-house teams with agency partnerships for software development?

A hybrid approach is often the ideal solution for construction companies looking to combine specialized expertise with in-house control. Agencies bring advanced technical skills and the ability to scale quickly for complex tasks, while in-house teams ensure the software remains aligned with the company’s specific workflows and long-term objectives.

This strategy proves especially effective for projects with tight deadlines, where agencies can speed up development, or when companies need to keep close control over sensitive data or proprietary processes. By leveraging both resources, construction companies can deliver faster results while tailoring the final product to their unique requirements.

Related Blog Posts

• The Hidden Costs of DIY vs. Outsourced Development – and How to Avoid Them
• Outsourcing vs. In-House Development for AEC Software Startups
• Why Construction Software Takes 2x Longer to Build Than Regular SaaS
• Why Construction Software Development Costs 3x More Than Regular SaaS