Billing Rates Anyone?

Quick question… Now I certainly realize that billing rates are specific to each organization and definitely dependent upon the job itself, but are the rates typically a set amount for the entire engagement or are the specific job functions being billed out at different rates? Let me clarify myself…for example…

  • Project Manager - $150 per hour
  • Developer - $150 per hour
  • Implementor - $125 per hour
  • Support - $100 per hour
    What I’m trying to find out is if there is a tiered approach (as detailed above) to billing in regards to many of the Navision clients out there, is it a straight fee like $150 per hour for all work done, or if there is another unique approach to this that many of you might be willing to provide insight on. Thanks in advance. Bill

Actually a very interesting topic (but posted in the wrong forum - now moved to “Open Business Subject”). The rates you mention common for the US, but they variates a lot from area to area - and if you go outside the US then they variates even more. In Denmark the “normal” rates are between 850 and 1150 DKK (114-155 Euro or 128-174 USD) for developer services. Senior services might be a lot more. In other countries I know it’s even lower - I’ve heard of rates as low as 50 USD per hour. But as an end-user my question is really more “What am I from for my money?”. I’ve no problem in paying lots for the “right” consultant/developer - whereas 50 USD might be too much for the wrong person! Your question might now be “What is a good consultant/developer?” - too me that’s the person with a deep knowledge in both the system AND in the business. Someone who is able to combine his knowledge and share this with the customer. In my time as a developer (with my own solution center and as a free agent) my own rates was DKK 1100, but if my customers bought and prepaid i.e. 100 hours then I gave up to 20% discount on this rate. I know this is very common here in Denmark.

Hi Bill Well firstly I suppose I would say we do take a tiered approach similar to yourself, but each project is assessed individually. We rate our implementors and developers on the same pricing platform and given a currency rate of 1.6 and a 7.5 hour working day (whenever that happens on site I do not know [:D]) and we charge around $129.00 per hour. However we do offer discounted bundles and customers negotiate for projects and probably we never charge the $129.00 per hour! I would say we are not too dis-similar overall in our projected rates if that helps! From a support perspective I believe the norm in the US is to charge by the hour for an incident. But we offer an annual contract at a fixed price to cover teh annual maintenance fee and support time. It is not the culture over here to charge for each call I am afraid. To combat this the time used is assesed in the renogotiation of the subsequent years contracts, so if they use lots in 2003 we would mark it up and argue the price rise with the data on usage, if they are unwlling to pay this then we (try to) insist on the training they have been avoiding by using the support line as a crutch for training. but again each case is assessed, some are easy, some complicated - I would rather we moved to a per incident basis (we have one customer who has chosen this route - but they are unusual). With regards to Erik’s argument regarding the value of the person I would agree. However coming from an implementation background those customers that have a needs analysis so the consultants get to understand the business without the software do get a higher quality consultant as the decisions and opinions are based upon gathered knowledge. Yes companies charge for this, but generally this can be taken off the sale price of the software, so the net affect is zero. I would argue in the SME market this is affected by the size of the business and the cultural attitudes of the business (please remember the SME market in the UK is different statistically and economically in the UK than in the US) - but I know personnally I am worth more to them the more I understand their business. I think one thing I pride myself in is irrelevant to the information given and the hourly rate, whoever the customer I will do the best job I possibly can for them, as it is a good feeling get a site in, working and happy. A happy customer is always easier to work with then an unhappy one.

Gentlemen, I’m not so interested in the specific rates that anyone provides. I totally understand the differences in locations and the impact that has. I’m also extremely familiar with the bundling itself. The issue I had was whether or not the specific players being utilized by the NSC were being billed out at different rates based on the specific duties performed.

Hi Bill Well I kind of answered it. Implementors and developers are the same. Support is completely different and cannot be calculated on an hourly rate (easily). Project managers will be more.

Steven, Bill, In general that’s also what I said. Implementors and developers are the same. Support is less or on a contract. Project managers are more. Senior consultants (implementors) and senior developers are also more, if the project allows it. That is if the customer has specified that they want a specific senior person, then it’s ok to charge more. But actually as from my new role (now with an end-user - compared to my time with NSC’s) then I look at a little different. I want who I want. I don’t want to pay (much) more. If they don’t accept, then I find someone else (just as good) from another company. Right now I feel it’s more the buyers market than the sellers - if your company is able to shift provider and is not dependant on one reseller only.

Thank you both gentlemen for your prompt, informed, and always courteous replies to this. I’ve had many clients ask these same questions and I took different approaches as well. Kind regards again… Bill

The Clients in this part of the world prefer a Taks/Project-based Billing System rather than resource-based. Internally you may workout the Price based on Resources required depending on the Task, but Customers generally are scared with a variable content in the Pricing. If we extend our discussion of Pricing for the following: 1. Pre-Sales Quotation 2. Implementation excluding Training 3. Training 4. Support 5. Enhancements(Upgrades/Hotfixes etc.) Does the above System of billing per resources still holds good or alternate Pricing mechanisms are used/required?