When it comes to developing new products, one of the most important strategic decisions business owners face is whether to build an internal design team – or to partner with an external product design consultancy (like us).
When budgets, timelines, and risk management are considered, the answer isn’t always obvious.
So, we thought we’d explore and compare the important decision making factors, such as, recruitment, support, licensing, equipment and of course financials – so you can weigh up which route makes most sense for your organisation.
Recruitment
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Internal: Building a permanent design team requires hiring experienced engineers, designers, and testers. Recruitment is time-consuming, competitive, and expensive. Retaining talent can be challenging, with staff churn leading to knowledge gaps.
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External: Partnering with specialists gives immediate access to a pool of skilled engineers without recruitment overheads. The consultancy takes on the risk of retention and turnover, ensuring continuity of expertise and product development timelines.
Conclusion: External partners reduce recruitment pain and allow scaling up or down without long-term HR commitments.
Product Development
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Internal: If product design is a core, ongoing requirement, an in-house team can pay off. High development volumes spread the cost of staff salaries over many projects.
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External: For companies with occasional, “lumpy”, or cyclical development needs, external support is more cost-efficient. It avoids underutilised staff during quieter periods.
Conclusion: Internal teams suit continual pipelines; external partners fit seasonal or project-based development.
Product Support
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Internal: Can provide ongoing support for products once released, but often diverting focus from new development and innovation.
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External: Offer tailored support packages, freeing internal staff to focus on business strategy or core competencies. They can also step in at any stage of a project, from concept through compliance.
Conclusion: External consultancies give businesses flexibility to scale support without compromising innovation.
Licensing / Compliance
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Internal: Your inhouse team will need up-to-date knowledge of compliance standards, CE marking, FCC regulations, and licensing processes. This requires ongoing training and can expose the business to risks if expertise lapses – or if people leave your organisation.
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External consultancies: Specialists work daily with compliance, licensing, and regulatory bodies. This reduces risk and accelerates time-to-market.
Conclusion: External partners usually offer stronger, up-to-date compliance expertise.
Equipment
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Internal: Investment in design software, prototyping tools, test jigs, and compliance testing equipment can be significant to say the least. These assets require training, must be maintained and upgraded regularly.
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External: Already own and operate the necessary equipment, spreading costs across multiple clients. This gives smaller businesses access to high-end tools without heavy upfront investment.
Conclusion: External partners remove capital expenditure barriers.
Training and Development
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Internal teams: Continuous investment in training is essential to keep pace with new technologies, but this consumes time and budget. Staff turnover risks losing that investment.
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External consultancies: Invest in staff development as part of their business model, ensuring you benefit from up-to-date skills without paying directly for training.
Conclusion: External partners share the burden of keeping skills current.
Costs
Like any business venture, your decision is going to largely be weighted in the financials, so let’s do a cost comparison scenario. Let’s imagine a mid-sized company developing a new connected device, with an internal team of 4 engineers and a manager.
Inhouse costs
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Salaries: £300k–£350k per year (including NI, pensions, bonuses).
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Recruitment costs: £25k–£40k initial outlay.
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Equipment & tools: £50k+ upfront for test benches, software licences, compliance tools.
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Training budget: £10k–£15k annually.
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Risk of downtime between projects : High due to holiday/sick leave/life events.
External Consultancy costs
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Project-based costs: £30k–£500k+ for a full development cycle.
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Equipment: Included in service.
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Compliance expertise: Included in service.
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Flexibility: Scale costs with project pipeline.
Cost conclusions: In-house costs typically exceed £400k in year one, regardless of project volume. An external partner can deliver for a fraction of that, particularly if development needs are intermittent. Over time, the economics tip towards in-house if product design is a constant, strategic activity.
Which is right for you?
- Internal teams make sense for organisations with:
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- – Constant, high-volume product pipelines.
- – Long-term budgets to support recruitment, training, and equipment.
- – A strategic focus on product design as a core competency.
- External consultancies offer better value when:
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- – Development needs fluctuate.
- – Speed-to-market and regulatory confidence are priorities.
- – Access to specialised equipment and skills is essential.
- – You want to reduce HR, training, and compliance risk.
Our view…
At Ignys, we believe the real value lies not in choosing one model exclusively, but in recognising when to lean on each. Many of our clients operate hybrid approaches. That means, maintaining small internal teams for product ownership while partnering with us for specialist design, compliance, or surge capacity.
This often delivers the best balance of cost-efficiency, risk reduction, and innovation.
Want to find out more?
We’d love to talk, use this link and reach out today.