Engineering organizations are spending millions of euros annually on software development without basic financial visibility, according to new research from industry analyst Viktor Cessan. The report highlights a systemic failure to connect daily technical decisions to their underlying monetary impact.
Cessan estimates that a standard team of eight engineers in Western Europe costs approximately €87,000 per month. This figure includes salary, social fees, pension contributions, equipment, and management overhead. Despite these high costs, the analysis finds that both engineers and their managers rarely account for these daily expenditures when prioritizing features or infrastructure projects.
The hidden costs of development
Every technical choice carries a specific price tag. Cessan notes that spending three weeks on a minor feature for a small user segment costs the company roughly €60,000. When organizations ignore these numbers, they often prioritize "interesting" work over projects that deliver actual business value.
For internal platform teams, the financial threshold is particularly steep. To break even, a team costing €87,000 monthly must save their colleagues at least 1,340 hours of labor per month. This requires clearing roughly three hours of manual work per week for every engineer they serve.
However, break-even is not sufficient for long-term viability. Because most initiatives fail, successful projects must generate enough value to cover the losses of unsuccessful ones. Cessan argues that a realistic financial target for a software team is three to five times their annual cost. This translates to generating between €260,000 and €435,000 in monthly value for an average team.
This lack of financial literacy has become a structural issue over the last two decades. As headcount grew, many organizations stopped viewing software teams as profit centers and began treating them as fixed costs. The arrival of large language models (LLMs) is now forcing a reckoning, as businesses re-evaluate whether large engineering teams remain an asset or an unmanaged liability.
Customer-facing teams face similar pressures. If a product generates €50 per user, an eight-person team must protect or generate thousands of users' worth of value just to justify their existence. When organizations fail to measure these outcomes, they effectively fly blind, making capital allocation choices that would be scrutinized in any other department.
