An adventure in IT consulting

For its next-generation application, XYZZY Software Inc. decided to do a major overhaul using the latest and greatest “best practices” framework for enterprise applications: Plugh Version 2009. To do the prototype, XYZZY hires Luke, a bright young developer who has been using Plugh for at least six months. In no time at all, Luke whips up a working example of what the application might look like — well, three pages of it anyway. Everyone who sees it says “ooh” and “aah” and wants to know how long it will take to convert the entire application — salespeople in particular show special interest in that question. Luke (who knows very little about the existing application but has seen the regular demo) tosses out “oh, probably about six months.” This becomes a war cry for the sales force. They descend on all levels of management with cries of, “Luke says it can be done in six months! We desperately need this new look and feel ASAP in order to compete!” Upper management asks the Director of Development if this really can be achieved so quickly. During a development meeting, the old-guard programmers lay out all the (known) complexities of the existing system in order to show Luke how far off he is in his projection. The Director of Development (who doesn’t want upper management to think he’s being a nonagile wet blanket about the project) coaxes everyone to agree that it can be done in two years. Of course, they’ll have to release an interim version of the company’s current product in one year for regulatory changes and bug fixes, so there will be ongoing parallel development. Management, marketing, and sales approve of the plan — after sales gets three months trimmed off the schedule so they can have a beta version ready by their annual conference. Development doesn’t feel very good about the adjustment, but they figure they can just work extra hard to make that deadline — and maybe leave a few of the lesser-used features out of the beta if necessary. A new team is formed, and Luke is named the lead programmer. The team also includes several of the oldguard programmers, a couple of testers, a documentation specialist, and a project manager. They set right to work. The team soon discovers that not all areas of the application easily translate into the Plugh framework. When they attempt to define the requirements of these sections, they realize that no one who is still at the company really knows what that code is supposed to do. They get existing customers involved in the discussion, which leads to the startling discovery that nobody agrees on whether the current behavior is a bug or a feature. Six months into the project, they only have several more input forms developed than Luke had in his original prototype. It’s clear that the prototype didn’t do everything that will be required of the same pages in the full version. The security and internationalization mechanisms of the existing system will not migrate to Plugh, and the replacements have not even been pondered. Luke finds himself in a maze of twisty little requirements, none of which are alike. Sales is still telling customers it will be ready by next year’s conference, but upper management is getting nervous. Development insists they can keep the project on schedule, but management demands a reality check. The employees decide to call in an outside consultant to validate their plan. After spending several days examining both the old and nascent forms of the application, talking to users and developers, and crunching the numbers, the consultant renders this verdict: “Your current approach is doomed to failure. From the sheer size of the project, it will take at least three, possibly four, years to even get to a usable beta version — depending on how many other unspecified requirements you run into along the way. Throwing more developers on the project will not help. But I can recommend a different approach that will make incremental improvements to your existing application and allow you to release a new version every year without massively parallel development.” The employees (except sales) breathe sighs of relief. And even the sales team is mollified when the consultant shows that the very first incremental improvement could be to the portion of the application in which users spend 80 to 90 percent of their time and which would make a great demo if it weren’t so ugly today. 1

Whether XYZZY Software followed the plan laid out by the consultant is not as important as the fact that the employees listened to what she said not to do. Prior to the meeting, at least 20 employees knew the project was headed off the rails, so why didn’t anyone sound the alarm? Because they worried whether being the naysayer would damage their career. Their fear kept them silent and prevented them from thinking about alternative solutions; instead, these employees focused all their energies on achieving the impossible.

Truth in fiction
Even though there is no XYZZY Software or Plugh development framework, I have seen this same story play out many times. I have played the part of Luke, the Director of Development, and the consultant (though I’ve never been a woman, but I have played one on stage — that’s an entirely different story). Unfortunately, many of these scenarios do not turn out as happily as the tale of XYZZY Software. I have seen some companies sink several years and millions of dollars into these types of projects before coming to their senses. I genuinely feel so badly for them that I don’t even smile when I say “I told you so.” An outside consultant can provide the voice of disinterested honesty. If the client doesn’t like what you have to say, the most you lose is the engagement. If they listen to you and it doesn’t work, things could get ugly. You’re not part of the protected herd of employees who will be all too happy to blame you. So, you’re incented to be as honest as possible about what will and will not work. Also, be sure to keep yourself out of office politics. Obviously, you’re going to feel beholden foremost to the person who signs your checks, but the best service you can provide the client is to tell it like it is. There are many more companies that never even call in a consultant to tell them so. And there are some consultants who don’t have the backbone to tell their clients that they’re making a colossal mistake.

What happened to Luke? He was promoted into project management, of course. From there, he worked his way up to Director of Development before he had a falling out with management and became an independent consultant. ==

1. Have you seen this story in real life?
Sterling "Chip" Camden - 06/06/08 Parts of this story came from at least four of my clients, one former employer, and at least three prospects who didn't listen. How about you? Reply

1.1. It's like Groundhog day
Ed Woychowsky - 06/09/08 Again and again and again. Reply

1.2. consultant as enabler
dofek@... - 06/09/08 most of projects' challenges are human. neither technological nor business. a modern IT consultant should focus on people dynamics. meaning, let them do their best by methods of brain storming, mirroring, open comm channels etc. direct advice or activity is relevant only rarely and may be too dangerous to both sides. Reply

2. IT Consultants gone Bad
reisen55@... - 06/09/08 My company just picked up an account due to an IT consultant who totally lost control. Server crash in late 2007 and they lost all of their accounting data because the consultant was backing up OTHER OLD DATA on tapes too small for capacity, so everything was useless. The old consultant panic'd, bought a 500 gb drive on his own dime, left it there and fled. WE come into a grand mess and after a heroic 2008 start have everything in place including standardized desktops, new server, 2

verified backups, remote control and more. The old consultant - please, find another field. You will not be promoted. Ever. Reply

2.1. Goes to prove the old adage...
Sterling "Chip" Camden - 06/09/08 ... if you've never restored from backup, you don't have a backup. Reply

3. Been there, done that.
jereg - 06/09/08 The larger the company, the bigger the mess. It happens all too often. A kid thinks he's gods gift to programming comes up with a nifty idea that he has no idea how to implement it. But it sounds good. The more experienced staff know that it's doomed from the start. Management NEVER wants to hear the down side. I've spent 25 years in IT and this happens every day. I know I've lost my status in the department because I had the nerve to point out the pitfalls. I learned to keep my mouth shut and let others take the heat when a project fails. I won't get promoted, but I get to keep my job. It's sad that this happens in too many companies, mostly because IT managers seem to have little experience with the IT industry. Reply

3.1. Keeping one's mouth shut
Sterling "Chip" Camden - 06/09/08 That's exactly what allows these kinds of projects to go under. Me, I was never able to stand idly by and watch the train wreck. One time, it might have indirectly cost me my job to speak out, but it has always helped more than it has hurt. Reply

3.1.1. Agreed
dawgit - 06/09/08 It's one (of many, I'm sure) social skill I've never managed to aquire. If it is, it is, if it ain't, I don't don't keep quite about it. <sighs quietly> -d Reply

3.1.2. Committing the Truth
techrepublic@... - 06/09/08 I call what you mention "Committing the Truth". Often, when you do this you become the pariah and are labeled "not a team player". As a consultant, I don't have to worry about that. Honesty is, in the long run, the best policy after all. Oh, and I loved your "Adventure" references. You're really showing your age! I will now disappear in a puff of greasy black smoke


CHAGING IN IT As I’ve mentioned before, I don’t go onsite very often; I do almost all my IT consulting work from my home office via the Internet. Some of my clients I have never even meet in person — one of whom is right across Puget Sound in Seattle! When I do go onsite, it really messes with my routine because I’m used to working for two or three clients in a day. But when I work at a client’s office, I’m theirs for days at a time. So does it still make sense to bill by the hour? I don’t have a firm policy for this situation. Sometimes I continue to bill at my hourly rate; there are times when I work out a daily rate; and, occasionally, I go for a flat fee for the visit. (The flat fee is really just a restatement of a daily rate — presuming you know how many days you’re going to be there.) The difference between daily and hourly pay, though, can be significant. Before you decide which way you want to go, there are a number of questions you should ask yourself to help set expectations for you and the client. • How many hours per day will you work once you get onsite? • If you charge by the hour, your incentive is to work longer days, but is that what you want? What does your client want? • Does your client want to know upfront how much the trip is going to cost them? If so, a daily rate can be useful, and it lets you know how much you’re going to take home. • If you decide on a daily fee, how do you determine what to charge? Do you multiply your hourly rate by how many hours you think you’ll be working? Do you give a discount for volume? Personally, I agree with TechRepublic member John McGrew that a daily site visit rate should be higher than your normal hourly rate. Here are reasons why: • #1: Exclusivity The customer has your dedicated attention. This is worth something extra because you will be more productive for them by staying focused on their tasks all day long. Plus, you’ll be able to interact personally with all their people, which always has unforeseen benefits. • #2: Other clients’ needs become secondary You’ll have to ignore your other clients while you’re onsite. If you do get to work for your other clients, it will probably be early in the morning or late in the evening. You’re taking the risk of not being available for them if an emergency or a new opportunity should arise, which could lead to lost business. • #3: Expenses associated with being away from home You’re away from your home and family. Not only do you miss them, but there are probably some extra expenses attached to that. For instance, I’m going to have to board my dogs when I’m out of town later this month because my wife can’t handle both of them. I’m not going to bill my client for that as a line item. • #4: The inconvenience factor You’ll sleep in a hotel, eat restaurant food, and drink whatever excuse for coffee they have at their office. You’ll have to figure out some way to exercise; you won’t be able to listen to your own music without headphones; and you’ll probably have to sit in a cubicle. You won’t have all your own equipment; for instance, I usually bring my computer but not my 24″ second monitor, my external keyboard, or my server. • #5: Security The financial certainty provided to your client by a daily rate should be worth something. It’s like insurance — people are willing to pay more overall to avoid sudden surprises. Do you have a policy for onsite fees, or do you negotiate each situation on a case-by-case basis? Reply 4

Onsite IT consulting: Do you charge by the hour or per day?
Sterling "Chip" Camden - 05/12/08 Please read the original article. Reply

1. In this post...
Sterling "Chip" Camden - 05/12/08 ... I was talking mainly about travel that keeps you out of town for at least one night. But what about day trips? Do you charge differently for those as well? Reply

1.1. re - blog
mothershelper - 05/19/08 thanks for the blog I recently set up 'flat rates' for clients that bring me into their offices. Per day. I couldn't afford not to. Not only does it make up the difference in my bottom line but it's helped discourage the ones that wanted to monopolize my time for things that are 'sprung' at the door. Reply

1.1.1. You've encapsulated my point very well
Sterling "Chip" Camden - 05/20/08 By applying a different rate to onsite consulting, you help your client to recognize that they're holding a temporary monopoly over your time. It's not that you won't do it -- but additional compensation is appropriate. Reply Ordinary Economics
herlizness@... - 05/21/08 No business can afford NOT to pass along all costs of doing business; I can't even imagine why a client should think they don't have to pay for my time spent AND my time lost. Working onsite is *very* inefficient for me and most other people, so it has to be paid for ... and that includes my daily travel time. I know ... some clients want to think that "that's just a commute" ... no, it's typically two hours lost out of my day ... not to mention the gasoline, the additional time and expense of "looking officeacceptable," the phone calls I can't field and so on. They have to pay for this the same way we all have to pay for all kinds of goofy overhead that's built into the products and services we buy ... when your friends in sales tell you about the $1000 dinner they hosted or attended, do you think their customers are not paying for that? All this said, I think it's best to build overhead into base pricing; I'm not about to deliver an invoice with line items for all the overhead .. it's a hassle and they'd go nuts if they saw it. Bottom line: everything costs and ALL expenses incurred on behalf of a client have to be compensated. Reply Amen
Sterling "Chip" Camden - 05/21/08 ... but it's all in the expectations you create and how you present it to the client. Reply

2. RE: Onsite IT consulting: Do you charge by the hour or per day?
PC-guru - 05/12/08 i always charge by the hour but i know if im going to spend all day ill up my rate based on it incase i feel ealry so they don't ask if they get a discount since i finished early so i don't have to BS my way through the rest of the day to get that time. 50$/hr i thnk is a good rate for VA where im at. geeksquad charges 100/hr Reply

2.1. A good rate...
Sterling "Chip" Camden - 05/13/08 ... for your client. If GeekSquad charges $100/hr, and I hope you're better than they are, then shouldn't you charge more? Reply

3. RE: Onsite IT consulting: Do you charge by the hour or per day?

mjd420nova - 05/12/08 Rates are based on distance from the home office. Usually $105. per hour with $135 site charge which includes travel (within 50 miles) and the first hour of on site. Travel outside the 50 miles are thirty cents a mile and travel time is $75 per hour. Overnight if required are for hotel and meals at cost. For extended travel, over 600 miles, includes airfare and rental car at cost. These are very competitive rates for California. Meals are a flat rate of $40. per 8 hour day or broken down at $9.50 breakfast, $11.50 lunch and $19.00 for dinner. Reply

3.1. Yes, I think you're quite reasonable
Sterling "Chip" Camden - 05/13/08 ... and could probably ask for more, especially in CA. Reply

4. RE: Onsite IT consulting: Do you charge by the hour or per day?
HAL 9000 - 05/12/08 With me it depends on what the actual job is. I find that charging by the Day allows the customer to mess me around a lot more as they know that they are paying for the day so they don't see it as necessary to clear space and computers for me. They want me to work around them and their workload. This can be useful at times but it can also mean standing around for long periods while something Little is done which can take quite some time to finish. When I worked for a Boss and was a Mechanical Engineer they charged for my time by the hour from when I left the office till I returned be that 3 hours latter or 3 weeks. The customer paid 24 Hours per day and supplied food and accommodation. While I'm not quite that greedy it depends on what is being done as to how I charge for my time. I may actually charge by the hour but not at Consulting Rates but at fitting Rates or if the work is Routine I am likely to charge by the Day. Repair work for failures is however always a hourly charge as I never know how long I'll be there. If I had to travel there by Aircraft there would be a Call Out Fee covering Expenses and then a Hourly Rate including a certain amount of travel time. I have to say over all It Depends on the individual situation though and how much I've been messed around. The more that I'm messed around because someone has fiddled above the normal the more that they are charged, but if it is hardware that I supplied that has suffered a failure out of Warranty that's a different story. Col Reply

4.1. 24 hour clock
Sterling "Chip" Camden - 05/13/08 I've never heard before of charging for sleeping time -- your previous employer must have had a lock on that business. Reply

4.1.1. Well as I am a Mechanical Engineer We used to support
HAL 9000 - 05/14/08 Places like Gold Mines and so on where down time is measured in the Millions of $ per hour or part there of. Also the Equipment that I was called in to look at wasn't exactly cheap and a lot of it was One Off Prototype stuff that was made specially for one job. As there where no service manuals or suppliers to tell the companies who used it how to fix the unusual things that went wrong I got lumbered with the fun stuff. Standing below ground looking up 200 feet to a hopper that had 40 tons of dirt dumped in it at a time was well interesting even if I did want to run and take cover every time that anything was emptied into it. Actually the computer stuff that I work with now costs about as much in downtime so I suppose that I should charge the same way. All the mine equipment is now computer controlled and I now fix the computers that keep it running. Or places like that movie studio here who use a SUSE installation to do their stuff. Down time there is horrendous also. However I try to avoid any long trips or times away from home I'm sick of traveling now and it's no fun. But even when I was with that little 3 letter company who sells electronic devices they used to charge in 24 hour blocks for travel time. I can distinctly remember having to go up north by plane and staying there for 3 days for the Federal Government well one of their departments there anyway. They where charged by the hour for my time and there where no complaints but then again that was in the Main Frame Days so maybe things have changed a lot since then as we no longer need programmers on staff to write the software being used. Col 6

Reply There's nothing better than scarcity...
Sterling "Chip" Camden - 05/14/08 ... to drive up price. A good argument for carving out a niche market. Reply Wasn't so much the scarcity but we where the only ones
HAL 9000 - 05/15/08 Willing to do the work. Everyone else was way too sensible to even consider it worth the effort in looking. Actually for that matter I was the only one willing to do the work as none of the others ever went out to these jobs so maybe it was the customers begging and offering unrealistic payment for my services. Same thing happened with the Main Frames Days I got all the Great jobs that no one else wanted to touch with a barge pole. That 3 day stint up north was because one of the data entry Staff could type faster than the system could handle so when she wanted a break she would push in something and bring the system down in a heap. Took ages to workout what was going on with that one and when I fixed the problem she tried to kill me. Seems that she was very unhappy that her breaks when wanted had been stopped. I tended to get all the interesting ones that took ages to work out what was happening and then what the solution was to prevent it happening again. As I liked that type of work I must really be a Sick Little Puppy. Col Reply Being the only one willing...
Sterling "Chip" Camden - 05/15/08 ... is a form of scarcity. Funny story. It's interesting how any state of affairs can come to be a requirement over time, for somebody. Reply

4.1.2. Sleeping
herlizness@... - 05/21/08 I've never heard before of charging for sleeping time -- your previous employer must have had a lock on that business. All depends on who you have to sleep with .. or who you get to sleep with. Ask Eliot Spitzer about this sometime. Reply Sleeping with your client...
Sterling "Chip" Camden - 05/21/08 ...not going there! Both types of relationship are confusing enough on their own, without mixing them. That said, I have been guilty on several occasions in the distant past -- the last of whom is now my wife! Reply OK it's not quite as bad as it sounds
HAL 9000 - 05/22/08 On these trips I had to fly for a few hours get off the plane hire a car and then drive for a couple of hours to remote places like Mine Sites. I stayed in the staff quarters generally in single accommodation but depending on what was wrong I would work till it was fixed. Sleep for a couple of hours then jump in the car drive back to the airport and fly back to base. Because this stuff was measured in the Millions of $ per minute it was down even 3 days at 24 hour days billed was much cheaper than the lost money while it was broken. The places that dragged me there found it cheaper to work that way than to have an engineer On Site all the time. When you get a guy walk in like that it's still far cheaper to do it that way than to employ someone who you may need once a year to be there when something breaks. Even then there was a fair chance that the Engineer might not be On Site as they work 10 Days on and then 14 Days off away from the site. Teh fact that my costs where chicken feed to then as well in costs per hour didn't hurt either. Of all the stuff I ever looked at it cost more in Electricity to run a hour that it cost them to have me there for a day. While it cost them more that a Staff member to have there for the time I was there it still worked out much cheaper to bring me in for the time necessary as they always knew that I would be there. Quite often they put on a plane as well because commercial flights where once a day things and if I missed the first one it was another day before I could get there. The equipment in question wasn't something that 7

could be pulled out and replaced well quickly at least as the type of thing that I was called in for was specially made for the place and took at least 6 months to install. Some of it took 3 years to get on site and assembled. One of the Drag Lines took 3 days to remove the transformer from then it had to be sent 1,200 KMS away to be reconditioned then returned and refitted to the monster machine. That particular Drag Line was under water 3 months ago so I'm assuming that it's still off line while they repair it from the Flood Damage. The thing had 12 X D12 Cat Track Bases on it and that was the small part. The smallest equipment that was on site where the 40 Ton Dump Trucks and they where way to small for me to look at. Besides they where off the shelf stuff and had Service Manuals not the custom stuff that they had built for the mines. Col Reply

5. RE: Onsite IT consulting: Do you charge by the hour or per day?
tonys@... - 05/14/08 I think of it from a different point of view. Its a good chance that I will be unable to work off site due to equipment requirement. However I may discount for working off site depending on distance. Reply

6. A different method.
stan@... - 05/19/08 I charge by how much I don't want to do it. And I think $250 an hour is quite reasonable. Reply

6.1. Charging more for what you don't want to do
Sterling "Chip" Camden - 05/19/08 That's a policy that's been discussed here a few times, but it bears repeating. Reply

6.2. I have what I call the "PITA" rate
JohnMcGrew@... - 05/20/08 It is applied to jobs or clients that are a "pain in the *ss". Reply

7. Good thoughts
reisen55@... - 05/19/08 OnSite if done right has one other advantage: if your client trusts you enough, see if you can get weekend access. This means key and burgler alarm code but if you can get that, you have the best of everything. I enjoy exclusive access to my job, without shoulder taps or questions, peace and quiet and food. This is wonderful indeed. I bill by the hour but state that rate in my annual retainer agreement. I estimate the number of visits on a standard basis, 52 per year and build in some other factors. I leave room for emergency visits and unusual events as outside billing factors. Overnight trips are billable as direct cost to client. I do not eat big meals on the road and would go crazy if I included those per invoice. BUT I do put doughnuts on counters for client staff. (Once one entire box was gone within one day). Project Cap: Sometimes a project begins small and becomes huge. Anticipating this, I sometimes bill and establish a fee CAP beyond which I will not charge, which ensures a known number for me and gives client a budget number. Now, I am off to pick up a monitor and pick up a check from a client. Bye. Reply

7.1. The Chicago Way
dan@... - 05/19/08 Chicago is a funny litle town. Here it depends on wich climate you are in it seems. If you are in the north, the geeks charge about $140 minimum just to knock on the door and say hello. In the south it runs about $110. And then everyone complains that the work was crap and the cost too high, plus the fact that they try to sell you the store while they got you cornered in your own office or home! My company chares between $85 to $95/hour with an houry rate cap of 4 hours on any single PC service call. Customers like it and rarely does it take more than 2 for any issue. But the psychology of knowing we won't charge a lot has resulted in higher profits mainly due to less marketing. EVERYTHING we do is on8

site btw. our business model has been such a huge success that we stopped advertising and marketing in August of 07 due to the word of mouth it generated. But remember this... no matter how you price yourself, if you can't satisfy the customers WANTS as well as their needs, you might as well go back to work for the crappy burger joint. Reply

7.1.1. Caps
Sterling "Chip" Camden - 05/19/08 Having a cap is an interesting proposition. Obviously, it entices more business. For consultants who don't like to work on-site (which includes moi), it wouldn't be advisable to have a cap for on-site fees. But if your business depends on on-site, then obviously you want to do whatever you can to attract that business. Reply On Project Caps
reisen55@... - 05/19/08 They work best on specific projects and depends too on relationship with customer. We all have "horror" tales of something that seemed insignificant and became a horrendous monster in terms of time and effort. The "hole in the bucket" project. If you can anticipate these kinds of issues in advance, you can either (a) bill hourly as a special rate and/or (b) put a GONE TO HELL price-cap on it so the customer is assured that you will not BILL THEM TO THE MOON. I find the better customers can accept this and also the better customers I UNDERSTAND and can avoid this issue. Now, home computers are DIFFERENT. I never know what the hell I am going to find with these vaudeville acts. What can be an easy issue is really a total rebuild when you get done with it. And they often pay lousy too so I avoid "HOME" computers like plague. Project caps are really mutual protection. Reply

8. Best customer should pay less...
twessels@... - 05/19/08 Most of my on-site work is within 75 miles of my home/office. Customers pay half-time for travel and my on-site rate breaks on how large a retainer I'm working off for any particular customer. Customers with 50-hr. or 100-hr. retainers get a break on my hourly rate. Customers who won't or don't want to pay a retainer get invoiced at a higher or "open billing" rate. I have multipliers of my hourly rate for working after 5:00 PM, weekends, holidays and emergencies. All travel expenses are invoiced at cost. I generally recommend that a customer purchase a 50-hr or 100-hr. retainer for a project and use the balance, if there is any, for additional support requests. Reply

9. I hope your clients don't read this article...
Marty R. Milette - 05/19/08 Working as an independent consultant was never easy. Nobody ever said it was, and there isn't any reason that it should be. I would suggest that the difficult and demanding lifestyle and high professional expectations of the clients is exactly what keeps the riff-raff from taking it up -- and what keeps the rates high. I've been doing it for the past 15 years and have stayed everywhere from a 5-star hotel to a shipping container in Kosovo with the US Army. If the gig is too 'tough' for you -- don't take it, but for god's sake don't show up and spend the entire time whining about whatever you have to 'put up with'. GET IN -- GET IT DONE -- GET OUT -- GET PAID. Some people are simply not cut out to be contractors. If people need to be spoon-fed, want comfort, convenience, security, and to have every detail of their working life 'handled' -- go get a regular job. Is it any wonder that H1-B 'body shops' have no problems placing people -- it isn't just the 'lower rates' that unemployed Americans put forward -- often times it is simply a matter of the Indians, Asians or whoever are WILLING TO WORK under conditions that may be 100s of times BETTER than working in their own country? As a contractor myself, and as an occasional employer of contractors, if I am paying good money for someone to work on-site, I'd fire their butt right out the door if they started whining about working conditions typical in any US-based firm. I've worked all over the world and in all types of conditions -- believe me -- there isn't an IT firm in America that has anything even close to the 'unbearable sweatshop' you make working on-site sound like. Let's take 9

a look at the picture from the customer's perspective and see how they may answer your points... #1: Exclusivity The customer has your dedicated attention. This is worth something extra because you will be more productive for them by staying focused on their tasks all day long. Counterpoint: I expect my EMPLOYEES to show up for work, do their time and focus on work all day long. Why should YOU, an overpaid contractor (in the employee view) be paid MORE to sit there and listen to music or service other clients? If I'm paying you to do a job -- I EXPECT your full attention during every hour you bill. If you can't FOCUS -- then don't take me on as a client. If you have too many clients to focus properly -- then don't take on new work until you can manage your time properly. #2: Other clients’ needs become secondary You’ll have to ignore your other clients while you’re onsite. Counterpoint: TOUGH BEANS! See point 1. If you can't focus on the job at hand -- then don't take it. I've fired consultants who come in to work and then spend half their time talking on the phone, emailing or MSN'ing with other clients (or friends). If you have too many 'outside activities' distracting your attention - go work for them, but don't waste MY time and money. #3: Expenses associated with being away from home Counterpoint: If you are in the same city -- then it's your problem how you get to/from the office and to take care of whatever home issues you may have. Everyone else who works in the office can manage their home/work life -- it makes me wonder what's wrong with YOU if you can't? And you expect me to PAY MORE for you to manage your home affairs? (Come in with this complaint and you better be careful the door doesn't hit your butt on the way OUT.) Agreement: For 'non-local' work, where the client is more than a 2-hour trip depending on the client/work/contract I may suggest that I'd bill for travel time, and if that didn't fly, I'd factor it into the rate. Again, if you can't live with the terms presented -- you have the option of taking the work OR NOT. I recently turned down a contract because the client didn't want to pay for my trip on a 10hour overnight train each way -- despite the fact that it saved them 2 nights of hotel, meals and incidentals in Moscow. Unless you don't have enough work, you always have a choice. My last contract I 'commuted' from Russia to/from the UK - the rate was SET and I was competing against 'locals' -- I had the choice to either accept the rate with NO travel time -- or walking away from the contract. I chose the former, but worked out a deal where I worked 3 weeks worth of hours in a 2-week period -- and spent a week at home. #4: The inconvenience factor Counterpoing: GOOD GOD MAN -- THE HORRORS! Restaurant food, hotels, bad coffee, no music, no paid health club, no 24" monitor -- WHAT NEXT? They actually ask you to do some WORK between the health club and cafe latte??? If these kinds of 'problems' bother someone -they are definitely NOT cut out to be a contractor. They should get a degree and go work for Google -- at least then they can enjoy all the 'perks' mentioned above for free. #5: Security The financial certainty provided to your client by a daily rate should be worth something. Counterpoint: This makes absolutely no sense. A daily rate provides 'security' -- BS. When I hire a contractor, the FIRST thing I ask them is if they fully understand the scope of the work and if they have the time available to do it. If not -- goodbye. If a contractor walks in the middle of a project (or if I fire them for non-performance) -- I don't care whether they are working on-site or off-site, hourly or daily -- they're going to get blacklisted. What would a customer think if you walked up to them and said, "if you want to be sure of having my full and undivided attention and a guarantee that I'll do the work promised and not work on other people's stuff -- you need to pay me more -- think of it as 'insurance'..." (I'd tell you exactly where you could insert that insurance...) In the business world, it isn't about YOU, it is about the CLIENT and what they want. The client doesn't care if you have dogs, chickens or have to drink their coffee and eat at their cafeteria. Everyone else at the office has to manage their lives, show up for work and sustain themselves -- why should that be a problem for you? It isn't the employer's job to make your life 'convenient', cheap or easy. They don't give a fuzzy rat's a$$ about you -- they are paying for a unit of work to be done -- and if you won't do it for the price that they are willing to pay -- then there are plenty of alternatives. For the home-based consultant -- you're not competing against the local guy who will happily come to the office to work - you are competing against the Indians, Chinese, Russians, etc. -- so you had BETTER offer a good value proposition and not worry about being 'inconvenienced' at having to actually 'show up' for work sometimes. The fact that you ARE ABLE to be working from home most of the time should ALREADY be reward enough. In fact, if you are local to the customer, the one BIG advantage you have over offshore-outsourced labor is that you CAN 10

show up at the office. This opens opportunities that are DENIED to off-shore workers in many cases. One should APPRECIATE having that option open. After reading about the 'horrors' and 'inconveniences' of working on-site and having to actually manage one's own life to slip in some work -- is it any wonder that companies want the cap on H1-B's lifted? Sorry if I sound a bit harsh, but having worked all over the world, I've had my fill of spoiled contractors who gripe about conditions that are 100 times better than those in other countries. Reply

9.1. Praise Marty!
dan@... - 05/19/08 He said what probably a good many of us were thinking but didn't say ourselves. Reply

9.2. Amen brother!
jim@... - 05/19/08 I agree 100% with Marty. I've been at this for about 15 years as well, and I do it because I enjoy it and understand that *I* and at the customer's service, *not* the other way around. I also work out of a home office frequently, and when I do I focus on the project and customer at hand. I don't expect my clients to be any more flexible than I would be, and I do not put up with 'distracted' contractors either. If it's all too inconvenient, step aside for those that actually appreciate their clients. Reply

9.3. You make good points, Marty...
Sterling "Chip" Camden - 05/19/08 ... but the way you took what I said reveals the limitations of the printed word. My reason for pointing out the disadvantages of working onsite was solely to justify a higher rate for that work. It's easy to think that an hour is an hour -- but one should consider all the value propositions of how that hour is spent. I don't work onsite often, and I don't like to. I'm very happy to step aside and let others take that work. I don't need it. But sometimes my clients think that they need me onsite (once or twice a year), and so I do that for them, precisely because I do care about what they want. That doesn't mean that I shouldn't charge more for it. I fully expect that one or two of my clients will read this post. They know where I stand on it, and I'm not ashamed. Reply

9.4. Shorter, please
herlizness@... - 05/21/08 Sorry if I sound a bit harsh, but having worked all over the world, I've had my fill of spoiled contractors who gripe about conditions that are 100 times better than those in other countries. And I'm tired of clients who want everything but don't want to compensate their consultants on the same terms they demand to be compensated themselves. Your sanctimonious rant is unpersuasive. Reply

9.4.1. Your place in the food chain...
Marty R. Milette - 05/22/08 Wearing my "employer" hat, when I see a statement like this, I have to laugh: >And I'm tired of clients who want >everything but don't want to compensate >their consultants on the same terms they >demand to be compensated themselves. And what makes you think you DESERVE to be compensated the same as the CEO of the corporation hiring you? Did god come up, wave the magic wand and make you suddenly "equal" in terms of value to THE COMPANY? You walk in the door and expect the keys to the executive washroom and use of the company jet in ADDITION to your $2,000 per day? Contractors with this kind of attitude last about 5 minutes in the real world. When a contractor walks up to me and says "I'm worth $xyz per hour." -- without even bothering to ask what the work is, or knowing anything about the project -- what kind of answer do you think that deserves? Unless a customer has a NEED for your services, and feel that your rates represent a good VALUE in solving HIS problems -- YOU ARE WORTH NOTHING. ZERO. ZIP. YOU, your 'needs', your home life, your family, your pets, your expectations or your self-determined 'value' are COMPLETELY IRRELEVENT. If I have a floor that needs sweeping -- that is $10 per hour work. If I have a server that needs rebuilding -- that may be $100 per hour work. I don't care if you can build the server if the actual work that needs to be done is sweeping the floor 11

-- and I certainly won't pay the same for each type of work no matter how much you think you are 'worth'. Your 'value' is based on the pain the customer's particular problem is causing them. If you don't want the work, or if you have rediculous expectations -- go away. These days, any customer can shake the tree and another 100 hungrier contractors will fall out. Think you are 'special' or 'indispensible'? The cemetaries are full of 'indispensible' people. Additionally, think long and hard as to whether a particular 'unit of work'can be done remotely. What do you offer 'extra' that someone in India, China, Russia or the Ukraine can't offer? There are very few temporary positions in the IT industry that can't be filled by a quick search on I'm not targetting you in particular - this unfortunate attitude is present in the vast majority of IT consultants. They fail to recognize or understand that the CLIENT is the one with the problem, and THEY are the one with the MONEY to solve it. Many contractors have this high and mighty attitude that they are worth some specific dollar per hour/day/whatever figure -- and this kind of thinking is completely backwards. (And a major contributor to the 'perceived' unemployment problem in IT industry in the USA today.) For the client, the contractor is nothing but a servant, a gun for hire -- an expedient way to solve a particular problem. Disposable. Certainly much closer to a prostitute than a wife. Every problem has a certain amount of 'pain' or 'value' to the customer -- and THIS is what sets the price point in the customer's mind. This is what determines your compensation (and 'perks'). Not some 'perceived value' you place on your own head. For many, this is a bitter pill to swallow. Call it a rant, plug your ears, switch off your screen or whatever you like -- but welcome to the REAL world. Reply Prostitute vs wife
Sterling "Chip" Camden - 05/22/08 Absolutely, I'm a code *****. But nobody's going to screw me for less than $200 an hour. I've got plenty of Johns at that rate, so you can find your cheap trick elsewhere. Reply turn on the lamp
herlizness@... - 05/22/08 Wearing my "employer" hat, when I see a statement like this, I have to laugh: >And I'm tired of clients who want >everything but don't want to compensate >their consultants on the same terms they >demand to be compensated themselves. And what makes you think you DESERVE to be compensated the same as the CEO of the corporation hiring you? If you've completed your belly laugh, chest-thumping and table pounding, then listen up: The issue here is not what I or anyone else here THINKS we deserve to be compensated nor what our relative value to a given organization might be as compared to the CEO, CIO or the guy who cleans the toilets. Having been in the game for over 25 years I have a very good idea of what I can command for fees and what I cannot command. Rational self interest says that I am going to quote the higher end of the range every time. For you, I would double the rate as there is much pain in working for pompous, imperious people with a fascist view of the world .. and like everything else, you will pay for that ... not to worry; monkeys will fly and Siberia will become the sun-bathing capital of the world before you and I ever work on the same project team. Independent professionals can set their fees wherever they choose; if they are smart, they will of course set them at a level the market is willing to pay. My original -- and only -- point was that from my vantage point, all of my time is billable and all of the expenses I incur as a result of doing YOUR work will be reimbursed. It's not a hard concept, and I guarantee you that every company you've brought all of your valuable certificates to does business in precisely the same manner. IF you can manage to get off that high horse and stop trying to fix people on the "food chain" in a place of YOUR choosing, you might understand it. If you can't get it, at least try real hard to not get it fewer words going forward. For the client, the contractor is nothing but a servant, a gun for hire -- an expedient way to solve a particular problem. Disposable. Certainly much closer to a prostitute than a wife. that little gem of a paragraph speaks volumes about you, sir Reply

12 Well if I swept floors I would expect to be paid for that at the going rate
HAL 9000 - 05/23/08 But as I am a Professional I expect to be paid at the going rate for that work not at the same rate as the Company Owner who robs others blind or at the rate of a floor sweeper. If they want someone cheaper that's fine with me but I do draw the line when they constantly call me up to tell them how to get Joe Blow who is willing to work for peanuts how to fix the same problem that they didn't want me there to fix because I'm way too expensive. If the Employer wants my knowledge they are going to pay for it if they want someone who works for 2 cents a day they can not expect me to tell them how to fix the mess that they have made for noting either. If the guy approaches me expecting to get me to sweep the floor and is willing to pay me my rates I still wouldn't do that job as I have more productive work that I need to get on with. The same things happens if the employer/client whatever wants me to type in the play list for a I Pod I don't do it no matter how much they offer to pay me. They can get someone else to do this if they like or do it them self. I have a niche that I work in and don't do other peoples jobs just to make money. They fail to recognize or understand that the CLIENT is the one with the problem, and THEY are the one with the MONEY to solve it. Not at all but I do object to the person who has a problem that is painful in your words who will not pay the going rate and try to talk you down to nothing and then take a year to pay for what has been done and try to claim that what happened 6 months latter is my responsibility when they have had 3 other people mess things up. Additionally, think long and hard as to whether a particular 'unit of work'can be done remotely. What do you offer 'extra' that someone in India, China, Russia or the Ukraine can't offer? There are very few temporary positions in the IT industry that can't be filled by a quick search on I have to disagree with this statement but even if it was true I'm not a Temporary Staff member never was and never have been. I'm currently a Independent Contractor who is a Gun For Hire and I do get hired when needed to fix a problem that is occurring and the really smart people get me in to prevent these things from happening rather than wait till things have gone sour and it's costing them vast amounts of money. I've seen way too many people who do things on the cheap and expect the same results as getting a professional in to fix it right the first time. You can never make a Mini work like a Porsche 959. In some cases the Mini might be the better choice but when you need the 959 there is nothing else that will do the same job as well, quickly, or cheaply. Col Reply

10. Why not charge for boarding the dogs?
JohnMcGrew@... - 05/19/08 Look at all of the silly "line item" charges that we are getting hit with every day that really are just overhead or costs of doing business. It started several years ago with the "fuel surcharge" on shipping and the like. But in recent years it's gone absolutely nuts. One of my favorites is the "facility charge" that many car rental places now charge. Um, the rest of us call that "rent". Shall I add a line item on my bills for a portion of my mortgage payment? The airlines have gotten so bad with it, that the junk fees are frequently now more expensive than the actual airfare. Where will it end? So no, I don't consider a "Domestic Companion Accommodation" fee any more absurd than what I've seen elsewhere lately. Reply

10.1. I'd rather build it into the onsite rate...
Sterling "Chip" Camden - 05/19/08 ... than try to justify that line item. It's an extra discussion I don't need to have. Reply

11. Marty was harsh, but....
MidwestITLady - 05/19/08 I think Marty said it harshly, but I agree with him in principle. It should be about meeting the needs of the client, not meeting your wants for comfort and convenience. Put aside petty things and get the work done while charging a fair (but competitive) rate. The client should not pay extra for you to board your dogs (and I have pets too!). 13


11.1. Meeting the client's needs
Sterling "Chip" Camden - 05/19/08 That's obviously always job 1. But if I am able to do that just fine from my home office, yet the client wants me to make a special trip to their site, shouldn't I be able to charge more for that? Do you always eat any excess costs for your clients? Reply

12. RE: Onsite IT consulting: Do you charge by the hour or per day?
Ian Thurston - 05/19/08 I charge established clients by the half day plus travel time if required, and new folks and small volume business by the hour, two-hour minimum, again plus travel expenses. While others in this thread seem to think there's an added benefit to them to be able to work in starts and stops at home, I've found that what the time management experts say to be true: it's easier and more productive for me to work in one framework. I pass that on to my customer as added value. I keep my clients a long time. Reply

12.1. Distractions
Sterling "Chip" Camden - 05/19/08 Perhaps I miscommunicated something about how I work at my home office. It isn't one big series of distractions. I allocate blocks of time to each client, and only interleave them when I have to wait on some process to complete. But it isn't 8 to 12 hours straight for one client, either (not usually, anyway). That's the difference I was trying to highlight in the post. Reply

12.1.1. While in the office in any given hour...
JohnMcGrew@... - 05/21/08 ...I might be concurrently dealing with 2, 3 or more clients. I might be writing some code for one, on the phone with a problem with another, and doing some on-line maintenance for another. When I'm done with any particular client/task, I'll log the time into my billing system. The phone time is tracked on my voice mail system or cell phone, and usually billed at 100%. On-line time can come off of logs, but since it's rare to dedicate 100% of my attention to someone on-line, it's typically estimated as far less. And programming time is guesstimated when I stop working on a project for the day. Needless to say, when I’m on a job site, all that multitasking among different clients usually does not happen and they have 100% of my attention. There are times when I’ll get a call or have to go on-line for someone else in an emergency, but naturally I’ll discount that time from client I am seeing on-site and will charge the client I am temporarily dealing with. Most clients do not mind this at all, since they realize that sooner or later it will be them on the phone needing my attention in an emergency. Reply Divided attention
Sterling "Chip" Camden - 05/21/08 Sounds a lot like what I do, except maybe even more divided. In software development, I find that I must be able to focus on one problem for at least an hour or so without dealing with anything else. I don't answer the phone during those times. But I'm sure that software development consulting has fewer time-sensitive emergencies than system admin or some other types of consulting. Reply

13. Very particular ...
unistar@... - 05/19/08 It depends. I (mainly) charge customers by the hour. If I don't travel: $50/hr (minimum) but for good/repeat customers I go to 1/2 hour minimum = $25, very good current website customers I go down to 1/4 hour (minimum)= $12.50 (I have only one customer I go down to 1/4 hr minimum). When I travel the minimum is 2 hours or $100 which is only in the city. But if it's far or difficult (more difficult than the easiest, whatever that means for you) then I tell them minimum $100 for 1.5 hrs (instead of 2 hrs). So you see you have to play with that always. But most of the time it will be from your 14

experience and you'll always think about it for every single customer, to not cheat yourself or your customer and so that he calls you back. Reply

13.1. If I had any local clients...
Sterling "Chip" Camden - 05/19/08 ... then I'd probably do something like that for onsite. But all of my clients are an airplane ride away, so it warrants a different policy. Reply

14. Evening Time is BEST
reisen55@... - 05/19/08 I have off-hours access to several clients and I will tell you there is nothing nicer than (a) making coffee and eating food while (b) working in peace and quiet where I can (c) stage my projects without having staff WORKING and making my life more difficult. Nothing like reboot of server during the working day!!!!! If you can off-site and off-hours access, enjoy it. Reply

15. We like fixed-price best.
kingmail53@... - 05/20/08 We try to do fixed price engagements based on the value of the solution to the client. If the work is something to what we've done before, we like to focus on deliverables and charge a fixed price for the whole engagement. If the work is special to a particular client, we charge by the hour for our analysis work - onsite or offsite. In those cases, we like to bifurcate the contract - charge by the hour until we have enough information documented so that we can know the deliverables - then we do fixedprice for that portion. Our nominal rate for partners is $270 an hour. $210 an hour for Senior Consultants at a bare minimum that's Bachelors, fully certified (technology and all pertinent industry certs including PMP), minimum 10 years IT experience, three years specific with the product. We discount on specific rules: Prepaying and certain volume discounts. If client does a publishable case study then we do givebacks(sometimes significant), especially if they let us use their trademark. If the client is willing to join us with presentations at conferences - also a giveback. Reply

16. Tie Rate
AzDataArchitect - 05/20/08 I also have a tie rate. If I see the office atmosphere requires a tie and ironed shirt and pant, I raise it by a few dollars for the inconvenient factor. Reply

16.1. Ties are so 1980's
Sterling "Chip" Camden - 05/21/08 I haven't visited a client with that sort of dress code for a long time -but unless they state otherwise, I always wear a tie on my first day onsite -- just in case. Reply

17. No wonder Marty has issues.
A contractor - 06/09/08 I think it is time for Marty to be blacklisted from replying to ANY blogs for awhile. He needs some quality time to just chill. Marty's points are valid, I see them all the time myself, but I think he suffers from IT shellshock. The vicousness of his wording and tone leads me to believe that he has lost one too many contracts to the rest of the world. Marty - take a couple of months off to find a new profession, dude. I highly recommend the book 'What Color Is Your Parachute?' for the exercises that will help tou find a less stressful career change.


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