IT consultancy versus software agency: what's the actual difference?

IT consultancy. Software agency. Tech consultancy. Software consulting. Digital agency. Product studio.

They all sound the same. They all reckon they can solve your problems. But here's the thing, they're actually quite different, and picking the wrong type of partner can waste months of your time and cost you thousands. What's the real difference?

IT consultancies tell you what to do. Software agencies build it.

One gives you strategy documents and recommendations. The other gives you working software you can use tomorrow.

Obviously, it's more complicated than that. But that's the starting point. Once you understand where these two types of companies come from and where they overlap, you'll have a much better shot at finding the right partner for your specific situation.

What IT consultancies do

Traditional IT consultancies are all about strategy, planning, and oversight. Big picture stuff. They help organisations answer questions like: What technology should we invest in? How do we modernise our old systems? What's our digital transformation roadmap?

The major players here are the Big Four accounting firms—Deloitte, PwC, EY, KPMG—and global technology consultancies like Accenture, Capgemini, and IBM Consulting. In the UK, this market hit £20.4 billion in 2023. That's doubled since 2018.

What they spend their time doing

Strategy and advisory sits at the top. Technology roadmaps, digital strategy development, operating model design. These engagements typically involve senior partners who produce recommendations, frameworks, and business cases. Not working software—just the plan for it.

Systems integration is where consultancies handle massive enterprise platforms. SAP, Oracle, Microsoft Dynamics. A typical enterprise ERP implementation can last 12 to 36 months, or even longer. These require programme management capability that most pure software agencies simply don't have.

Enterprise transformation combines technology change with organisational restructuring. Multi-year initiatives spanning hundreds of millions of pounds. They require governance frameworks, change management programmes, and the kind of board-level credibility that comes with decades of reputation.

Managed services represents the operational end. Firms take ongoing responsibility for infrastructure, applications, and business processes.

What do IT consultancies usually charge

Consultancy rates reflect the advisory nature of the work. Independent consultants charge £450 to £850 per day. Big Four firms can charge £800 to £1,600 daily. Strategy consultancies like McKinsey, BCG, and Bain often bill £2,000 to £3,000 per day with senior partners hitting £5,000 daily.

You're paying for strategic thinking. But also methodology and often the political cover that comes with a recognised brand name.

What software agencies do

Software agencies like kwiboo define themselves through execution. We design, develop, and deliver custom software products. Actual things you can use.

Agencies typically work in agile sprints. Two weeks, ship something. Two more weeks, ship something else. They've got deeper technical expertise in specific technologies and stronger connections to actual users and product requirements.

What do agencies focus on

Product design covers user research, UX and UI design, prototyping, and user testing. Good agencies obsess over how real people will use the thing they're building. Not just how it looks in a presentation.

Custom development means building bespoke software for your specific needs. Web applications. Mobile apps. APIs. Integrations. Everything in between. Whatever you need that doesn't come out of a box.

Mobile apps remain a major specialty. iOS and Android development or cross-platform solutions using React Native or Flutter. Depends on what makes sense for your users.

Web applications range from customer-facing platforms to internal business tools. Admin systems. Data dashboards. The stuff that makes your business run.

What do software agencies cost

UK agency day rates cluster around £450 to £650 for mid-to-senior developers. Tech leads and architects command £600 to £900 daily. With a blended rate for a typical team sitting around £525 to £1200 per day.

For complete projects, lean MVPs cost between £15,000 to £80,000 over eight to fourteen weeks. Mid-complexity applications run £50,000 to £120,000 over twelve to sixteen weeks. Enterprise-grade systems can exceed £150,000 and reach £500,000 or more for complex builds.

The cost difference between consultancies and agencies can be a staggering 60-80%, with consultancies being considerably more expensive.

Where they overlap: the new hybrid model

That neat distinction between consultancies (strategy) and agencies (execution) isn't as clear as it used to be. A new category now bridges both. Digital product consultancies. Full-service agencies. Tech consultancies. Pick your label.

This became a new category due to client frustration. Organisations got tired of receiving impressive strategy presentations that implementation partners then struggled to build. They wanted partners who could advise on what to build and actually build it.

Why kwiboo sits in the hybrid sweet spot

Firms like kwiboo combine strategic capability with hands-on delivery. We can help you figure out what to build, then build it. Single accountability across both phases. No finger-pointing between the "thinkers" and the "doers."

The major consultancies noticed this gap. Accenture, Deloitte, and McKinsey spent over $1.2 billion on agency acquisitions in 2017 alone. Accenture now positions Accenture Song as the world's largest digital agency after acquiring more than thirty agencies.

They saw where the market was going.

How to match your needs to the right software partner

The choice depends on your specific situation. The nature of your problem. Your internal capabilities. Budget constraints. Timeline requirements. Let's break it down.

Choose an IT consultancy when you need:

Complex enterprise transformation requiring multi-year programmes with significant organisational change. If you're merging two companies' IT systems or overhauling your entire technology architecture, you need programme management infrastructure and governance frameworks. That's consultancy territory.

Multi-system integration involving enterprise platforms like SAP, Oracle, or Salesforce at scale. The major integrators have certified expertise and methodology that pure agencies can't match. They've done it dozens or hundreds of times before.

Board-level credibility where brand recognition matters independently of capability. When projects require regulatory scrutiny or shareholder communication, established consultancy names provide political cover. Sometimes that's just how it is.

Choose a software agency when you need:

New digital products. Customer-facing applications. Mobile apps. Web platforms. Agencies bring user-centred design thinking, agile practices, and technical depth in modern frameworks. They live and breathe this stuff.

Speed to market. You need to move fast. When PayByPhone needed an interactive game weeks before an exhibition, we delivered the solution in just two weeks from first contact. Consultancies just don't operate at that pace. They can't.

Specific technology expertise in particular frameworks, platforms, or approaches. Specialist agencies often have deeper capability in their chosen technologies than generalist consultancies. They're specialists, not generalists.

Cost-conscious projects where budget matters. With day rates typically sixty to eighty percent lower than major consultancies, agencies suit organisations prioritising value over process. Sometimes you just need it built, and you need it built affordably.

The kwiboo approach: strategy that ships

At kwiboo, we've spent over twenty years watching this consultancy versus agency debate play out. We've seen brilliant strategy documents gather dust because nobody could build them. We've seen technically excellent products fail because nobody asked the right business questions first.

We can advise on strategy. Help you figure out what to build and why. But our real strength is making it happen. We're not consultants who hand over a PowerPoint and disappear. We build the thing. We ship it. We make sure it works.

That means when we advise on technology choices, we're thinking about how we'd implement them. When we design user experiences, we're thinking about the code that will bring them to life. When we plan architecture, we're thinking about the team that will maintain it in two years.

We've delivered this combined approach for clients from Mitsubishi Electric and SEGA to Suffolk County Council and growing startups. They wanted a partner who could think strategically and execute practically, without the overhead and cost of a major consultancy.

Finding your right partner

If you're still figuring out what you need, that's fine. That's exactly where many of our clients start. The distinction between consultancy and agency matters less than finding a partner who genuinely understands your problem and can solve it.

Ask potential partners a few questions. Who specifically will work on your project? What similar work have they delivered? Can you see it and talk to those clients? And here's the crucial one—will the people in the pitch be the people doing the work?

Because often, they're not.

The best partnerships aren't about labels. They're about capability, fit, and trust. Whether you need strategy, execution, or both, the right partner will be honest about what they can and cannot do. That honesty is worth more than any sales pitch.

Got a technology challenge you're trying to figure out? Let's talk. We'll help you turn your next big idea into reality.