consulting rate

ara3n · 2006-07-30

I've been going onsite recently and have been hearing from clients complaining about rate that we charge. I'm sure you've been hearing as well from time to time. What kind of answer do you give them?

Basically by saying that, they feel that they are not getting their money worth? or are they implying that specifically to me?

I'll be more than glad to spend my time on other clients that value my time.

So I would like to hear your experiences.

thanks.

DenSter · 2006-07-30

Sometimes it comes down to that they feel they are not getting the value for the rates, in which case you could tell them in certain instances when you've spent a lot of time on a seemingly small thing that you'll bill them for x instead of y, or you can choose not to bill them for the half hour you spent on the phone talking to a user.

If I feel it's political I tell them it's the rate they negotiated and they should complain to someone else, because I have no control over my rates

. I wasn't in the room when they negotiated the rates, and I was not the one putting my signature accepting the rates either.

Miklos_Hollender · 2006-07-30

Here in Hungary, the typical user, say, a sales assistant, earns, say, $400 a month. It's her total cost, as most companies "play" with taxes. Even if they did everything fully legally, her total cost would be $1000. If you are a Navision developer/consultant, and you "play" with taxes as most people usually do, then your monthly cost is about $1000 - and if you do it fully legally, then $2500.

The typical consulting rates here are $400-500.

I think it's waaaaay too bloody much. It's simply unreasonable - but we do have to charge as much because we don't have enough sales.

I think many of our problems break down to it. The customer complains about something. We offer to change it in two days. It's $1000. And then they just go "WTF???!!!! I can pay an employee for almost a season for that!... "

And this is why clients say to us things like "Implementing Navision is like buying a really expensive Ferrari and then finding out that the mirrors, seatbelts, and air conditioning are missing - and being charged thousands of $ for them. As our previous system costed $15000 as a TCO, we really feel cheated... "

Miklos_Hollender · 2006-07-30

Generally, I think a daily rate should be arout 1/6 of the total monthly cost of the consultant. That way if you plan for 10 days a month - which is reasonable taking holiday, trainings, illnesses, and lack of sales into consideration - you have a 40% of gross margin. I think that must be enough.

Charging too much can mean consultants go freelancers and take some customers with them - they can charge half as much and still get rich...

It's crucially important to not have a large administrative overhead. At my first job, we 10 chargeable constultants had to financially support 3 sysadmins, 3 marketing/PR folks, 3 salespeople, 2 accountants, 1 manager assistant, 1 receptionist... it just doesn't work.

ara3n · 2006-07-31

Miklos Hollender wrote:

Charging too much can mean consultants go freelancers and take some customers with them - they can charge half as much and still get rich...

Here in US companies require you to sign non-compete agreement and you cannot steal their customer after you leave. Or work on other clients while you are employed by them. You cannot also go work for a client. The client also signs an agreement that they cannot steal a consultant from NSC. Otherwise the NSC will take them to court to pay two year consultant salary to NSC. This one I think sucks major. Because There aren't that many NSC so one of the places where you could find work is at a client that is using Navision.

Miklos_Hollender · 2006-08-01

Maybe you can go to somebody else's client? I also had a non-competition agreement at my previous job, but it was only 6 months and they paid 3 months of it. I think it's OK as long one does not have too high mortgages, 6 months of rest between two jobs I think are OK.

Denis_Petrov · 2006-08-25

no wonder many companies work with Indian or Eastern European developers in our days, cause $150-175 Per Hour here in the US is a good daily rate over there.

:-k

Denis Petrov

Savatage · 2006-08-25

Denis Petrov wrote:

no wonder many companies work with Indian or Eastern European developers in our days, cause $150-175 Per Hour here in the US is a good daily rate over there.
:-k
Denis Petrov

I wonder if its a good daily rate or is that weekly :?:
Did you see that show "30 Days"? When they had that Programmer from NY, who had his job outsourced, go to India to find out where his job actually went.
http://www.fxnetworks.com/shows/origina ... s/home.htm
It was Episode 2

Anyway speaking as an end user what really frustrates the customer is when the NSC charges you per hour for seconds of work.

For example: We asked our NSC way back to have the posting date change to todays date when you open a form.

"Posting Date" := TODAY;

this is the code - $250 was the bill. That's when we started looking into doing it ourselves. The charges always rounded up to the next hour.

I remember sending them an email about error 19 1355 telling them that we had a problem. The response is hotfix & upgrade & More $$$$. As a customer your first thought is - hey you sold me a product that doesn't work..stand behind your sale and fix it!

Software is a very different business from regular life. If I bought a car or computer or anything & the product has a problem 2 weeks later - you expect a new replacment product. In the software world they offer you a fix.

ara3n wrote:

Basically by saying that, they feel that they are not getting their money worth? or are they implying that specifically to me?

I don't think they are angry with you they are just not used to the "software world" where nothing is perfect. where the unwritten rule is you're buying a product that admittadly has bugs, hopefully they will not effect you. We all have different opinions on what something is "Worth"

David_Cox · 2006-08-25

Some customers have a valid point when they have a number of "Consultants" working on a project, and a "time and materials", flat rate which is not subject to the skills of the consultant.

When they are paying a premium they should expect a high skillsets, but they are often paying first class rates for sub standard work, and often wind up paying for the work several times, as the requirement was not understood or poorly specified or under specified.

I spend a lot of my time correcting work that was not simply done well enough by the NSC's Consultants, take reports, I am not talking about different code structures that do the same job, but totals not adding up, the use of the wrong fields, and poor selection of keys and filters, where there is an apporiate key available, and the customer finds they are paying to have the report speeded up because it has become so slow, now they have some transaction data, where as it should have been considered before.

I know of companies charging the same full consultant rates for all resources, but these guys are not paid the same, graduates from 25K+ to lead consultants 55k+, you could argue a balance overall, but only if the NSC's use the right guys for the right jobs, which often they don't.

I think instead of us all being "Consultants", there should be a breakdown of skills and charges pro-rata, and companies should train new resources, and not expect the end user to pay to train thier latest recruit, out of uni friday customer site Monday.

This is only my obsevation, I don't know how it is in other countries.

How would you like to employee a builder and his gang, "time and Materials",paying the same rate for the master builder and the apprentice, put them up in a local hotel, pay all expenses, then when they have finished pay someone else to put it right. :-k

Miklos_Hollender · 2006-08-30

Savatage,

I think it's simply because you didn't negotiate hard enough. My experience is always was that the customers demanded dozens of days of free work just because "you sold me a bad product" and we had to comply because we badly needed the sale and badly needed the reference. So just find an NSC that needs the sale and the references badly - probably a newly starting, small one. Of course after one has 40 clients who can keep the NSC afloat by their support charges even if they don't sell any new product, then one is getting harder and harder on customers, trying to recover the losses of the starting period when they had to accept everything for free or low cost. So just choose a newly starting NSC, it's the only trick.

kriki · 2006-08-30

Miklos Hollender wrote:

So just choose a newly starting NSC, it's the only trick.

But preferably with people who have already a lot of experience with Navision...

DenSter · 2006-08-30

David Cox wrote:

Some customers have a valid point when they have a number of "Consultants" working on a project, and a "time and materials", flat rate which is not subject to the skills of the consultant.

This happens because some customers don't want rate differentiation. They think that by negotiating one rate, they can always demand the most senior people on their project. Unfortunately, it then happens a lot that you have both senior and junior people (which is not a bad thing) that you pay the same rate for, and this is then perceived as 'unfair' when it is actually negotiated by the customer. I think rate differentiation should be applied in every project, with a pretty good difference between junior and senior people.

It's tricky stuff

DenSter · 2006-08-30

David Cox wrote:

I spend a lot of my time correcting work that was not simply done well enough by the NSC's

Let's not make this a 'NSC bashing' thread. What you are saying about NSC can also be said about free lancers. I have seen BIG crap coming out of that corner, so lets not point fingers at one camp or another shall we

David Cox wrote:

I know of companies charging the same full consultant rates for all resources, but these guys are not paid the same, graduates from 25K+ to lead consultants 55k+, you could argue a balance overall, but only if the NSC's use the right guys for the right jobs, which often they don't.

Like I said before, often it's the customer who insists on one rate, expecting to have the right to always have the most senior people working on their project. What you think is 'full rate' may actually be reduced by quite a bit.

David Cox wrote:

I think instead of us all being "Consultants", there should be a breakdown of skills and charges pro-rata, and companies should train new resources, and not expect the end user to pay to train thier latest recruit, out of uni friday customer site Monday.

We don't charge customers for training our people, and I doubt that many NSC's do. If a junior person sits in on a training with a new customer with the purpose of learning what is being taught, they don't get charged. If the new person sits in as the scribe for documenting new requirements and/or gaps, then of course that gets billed, and the new person doesn't get to pay much attention to the training. If the customer has negotiated one rate, then of course they pay the same for the newbie as what they are paying for the veteran teacher.

The most important part is to be honest about staff seniority when they are introduced to the customer. We always present customers with profiles, so they know what they are getting. Often if a newbie spends a lot of time on something, we don't charge for all the hours, recognizing that some of the work was really 'learning on the job'.

David_Cox · 2006-08-30

That's good to hear, I can only talk from my own experiences, over the last 10 years, from Navision's early years in the UK to today.

It's a shame that not all companies think like you do, and yes you are correct there are bad Contractors as well as NSC's and good in both camps.

I suppose I should not compare today's business ethics with those of when I started work as a tool fitting apprentice, where I did not get to touch the customer's machinery for a year while I was training, then only under strict supervision, so the companies were more prepared to invest for a future return.

I doub't if many companies are in a position to invest in to much training as the average stay with a company in IT is 2 - 3 years, so not a long term prospect.

And bottom Line customer will take as much as they can for as little as they can, so it is a two way street.

Someone said about looking for a start up company, so you can take advantage of them, but I must disagree, find a good company with a proven track record, that has took time to grow, rather than a new company or one that has been eaten up by the big players.

David

Alex_Chow · 2006-08-30

David Cox wrote:

Someone said about looking for a start up company, so you can take advantage of them, but I must disagree, find a good company with a proven track record, that has took time to grow, rather than a new company or one that has been eaten up by the big players.
David

I would disagree with that completely. Instead of looking at the company's track record, why not take a look at the individuals that work in the company's track record as well as their customer references? It's unfortunate, and also fortunate, that this industry remembers faces instead of companies.

I think there was a discussion not too long ago about this. I can't remember the exact thread though.

Joe_Mathis · 2006-08-31

ara3n, I hear the exact same thing.

Unfortunately it all boils down to whether the client thinks that are being charged too much.

If you are working on their problem and the resulting charge is from your work, then you are the face of your company. The client will come to you with any complaints.

When I first started Navision they offered my services at a much reduced hourly rate (about 30% less than senior consultants) and we bill by consultant, so you get what you pay for. Maybe it's a good business model, maybe not but what did happen is that I was able to get my feet really wet and the customer thought they were getting value. As I gained more certifications and proficiency my fee went up. I am still not billing at full price, but I still learn every day and will eventually get there.

As for comparing Navision to selling a Ferrari, you should politely point out that a Ferrari is really useful for one purpose and that is driving really fast - flat out. Try moving your house using a Ferrari, or take a family of 5 on a drive through the country. All businesses are different even though they believe everyone does it the same way. (Wouldn't that be nice.) I would rather compare Navision to the Mercedes-Benz car company. You can buy a sedan or a truck. Even better would be the versitile VW Bug. Have you seen how many different configurations you can create on one of those platforms. Do a Google search for Kitcar and VW.

Navision does come with the basic features for operational safety, it's just the options and the custom body work that are extra (just like everything else).

Miklos_Hollender · 2006-09-07

Navision does come with the basic features for operational safety, it's just the options and the custom body work that are extra (just like everything else).

I don't agree. Navision comes with horrible usability - 100 fields on one form without any obvious way to make it mandatory the ones that needed to be filled, lots of bugs, and generally a type of functionality that only barely gets the job one. Standard Navision is something you can probably use if you reall y want to, but knowing the FACT that most users hate using ANY ERP system and therefore ERP systems need to be turned into being damned simple to use, very strict, and enforcing what needs to be done, it's clearly not just options and custom body work.

All those companies who really grew big and successful with Navision realized the fact that Navision is NOT an ERP system, it's a

- a very good development environment
- well-known brand name
- financial posting backoffice system

for BUILDING an ERP system yourself. All successful projects are based on add-ons, and all successful add-ons are glued onto the General/Item Journal level, creating and posting journals, and everything that has a direct interaction with the user is completely custom.

Alex_Chow · 2006-09-07

Miklos Hollender wrote:

All those companies who really grew big and successful with Navision realized the fact that Navision is NOT an ERP system, it's a

- a very good development environment
- well-known brand name
- financial posting backoffice system

What are you basing your statment on? Personal experience? Or formal studies done by Microsoft or 3rd party research?

It's very dangerous to mislead the people that goes through this forum based just on your personal opinion.

I'm very interested on what you consider as FACT. Isn't it not just your personal opinion or opinion derived from only the customers you've interacted.

Of those customers, how many percent of those customer would say the same things you said? And are their thoughts not influenced by your lack of trust in the product you deliver?

DenSter · 2006-09-07

Miklos, you clearly don't understand NAV

or are very unhappy with how it works. If you'd spend half as much energy on simply explaining how it works instead of dissing it, you'd feel a lot better

Just so you know, I am just joking!

We're also getting quite far off topic here, but that's not for me to decide O:)

ara3n · 2006-09-08

I think Miklos does have valid points. To give you an example. Take a look at v5 Sales order and v4 Sales Order, and compare how many fields are on it.

There are a lot less fields in v5 than in v4.
This is one example that mentioned that therer are way to many fields on all the forms.

The second point about making fields mandatory. Is true. You can create an item and not specify Item tracking code, and once you have ledger for the item, it's impossible for the end user to change it.

v5 has workflow implemented for this. I don't know how it works or how much setup needs to be done, but it could be used for enforcements of fields.

the info about
- financial posting backoffice system

A warehouse guy doesn't need to know about his posting date range error he gets when he posts a shipment or what dimension he needs to specify on a sales order. All he cares about is shipping his orders.
Another example is Point of sales Addon LS Retail. The navision client is used as POS. Can it be done, YES. Should it be done, NO.
A Cashier doesn't need to know if an item cateogry is not setup on item card. Especially when he is posting a sale. And having a disconnected system for cash register, makes replication as complicated as you can get.

Everytime I go onsite, I can't help myself but make minor changes for the client to make their daily work easier. I'm sure MS developer could do the same and make the basic usablity better.

I think they have and that is why they have released their study

http://www.microsoft.com/dynamics/product/familiartoyourpeople.mspx

I'm just hoping that with v5 at least they (MS developers) study and have 2 guiny pig customer who sits infront of navision everyday do they job on v5 and make the recommended changes to UI.

David_Cox · 2006-09-08

ara3n wrote:

The second point about making fields mandatory. Is true. You can create an item and not specify Item tracking code, and once you have ledger for the item, it's impossible for the end user to change it.

Lets not forget the reason why, back in time all systems were field mandatory, then the workflow was mostly fixed, and fed from paper based documents, as ways of placing orders etc: changed the user needed to be able to switch about, to get information, go back later and edit the information, so the systems became more open as users did not want mandatory fields but flexibilty, as they did not want to be made to work in a pattern.

Dynamics is such a good product as it is flexible and the developers can make mandatory fields at the time of posting, the "Item Tracking Code" is not mandatory in most installations so should not be, If you have a customer on the phone placing a large order, and the item does not have a tracking code setup, do you want to be able to still take the order or tell the customer "Call back tomorrow when the purchase clerk has set up the Item correctly" ?

So lets drop the we want mandatory fields like a "Hot chestnut"

The days when business was lost becase the data entry clerk did not know the value of a mandatory field, or the customer got frustrated at how long it took to place an order, so the customer went to another supplier, are history I hope.

There are a large number of NSC's with a diverse Customer base, so what work for one does not follow for the next, so two endusers testing is a "no no", flexibility should be the main focus, then the NSC can cripple the forms, make fields non editable or mandatory, so all scenario's can be meet, for all customers!

DenSter · 2006-09-08

The biggest issue with making fields mandatory is that you can use records in so many places that you'd have to set Items up for everything before you could use them. Why would you want to make Item Tracking code mandatory if you don't use Item tracking? Why would you make Production BOM number mandatory if you don't use manufacturing?

By the way, all we've seen is screenshots of NAV 5. We have no way of knowing how many fields are on the form. As far as I can tell there are just as many fields, possibly even more, hidden under the bands.

Marije_Brummel · 2006-09-08

DenSter wrote:

... all we've seen is screenshots of NAV 5. ...

That's not true for all of us...

Joe_Mathis · 2006-09-08

We're also getting quite far off topic here, but that's not for me to decide

I have to agree most of this is WAY off topic of consulting rates but at least we're in general chat.

Standard Navision is something you can probably use if you reall y want to,

So you really do agree!!

but knowing the FACT that most users hate using ANY ERP system and therefore ERP systems need to be turned into being damned simple to use, very strict, and enforcing what needs to be done, it's clearly not just options and custom body work.

I also agree with you... most users are a pain in the a$$. Overall they are lazy and only care about getting a paycheck with the least amount of effort. (Not all users, but enough of them). There is also the FACT that every business does everything differently although they think "Everyone does it this way!".

Now for the elimination of the custom body work and options fantasy...

If we could just get businesses to get their acts together and stop having their own procedures and rules we could really design an ERP system that would address the needs of all businesses right out of the box with all the reports that are needed to properly run a business. We could have it run on computers that are all assembled and configured the same way that never crash, run out of disk space, lose the network, get virii, lose power.
Naturally they wouldn't need us so we could skip happily through the default Windows meadow background screen or sit in a big circle playing tamborines and singing "Kumbyah", living off the land drinking milk and honey.

Honestly, I'm glad that you and other people are out there and voice your complaints about how this isn't a perfect solution. It isn't perfect. I think that with enough registered complaints that it does help in getting it to perform better out of the box. It also helps the people who are looking at this forum to understand that it is NOT a simple application but a complex one that CAN be customized to do what they need.
Most people in this thread have also helped me in the past with some of their ideas and complaints. This has helped me to either inform the customer properly or avoid the potential problem.
So keep complaining! =D>

I have just reviewed what I wrote and realize I have too much free time this morning. I had better stop being a lazy employee and get back to work. Hopefully I can get some billable hours so that I can hear someone complain about our consulting rates.

See how I brought it back full circle?

Joe_Mathis · 2006-09-08

BTW....

My facts in my last statement were simply my own opinions. There were no studies performed that I am aware of. They are simply my own observations.

DenSter · 2006-09-08

Mark Brummel wrote:

DenSter wrote:

... all we've seen is screenshots of NAV 5. ...

That's not true for all of us...

No you're right, but some of us are rampantly speculating based on really thin information, and it is bugging me a little bit.

Alex_Chow · 2006-09-08

jondoba wrote:

I also agree with you... most users are a pain in the a$$. Overall they are lazy and only care about getting a paycheck with the least amount of effort. (Not all users, but enough of them). There is also the FACT that every business does everything differently although they think "Everyone does it this way!".

Yes, but what right do you have to call them lazy and only care about receiving a paycheck? You consider them as lazy, but their family consider him/her as hardworking.

In what context have you taken from your customer's statement on "Everyone does it this way!"? It's true that all business that you have vendors and customers. It's also true that every business send out invoices and receive bills from vendors. It's also very true that business receives checks from customers and writes checks to their vendors.

So when you look at it in that context, everyone "does it this way", doesn't it?

Joe_Mathis · 2006-09-08

Hi deadlizard,

I suppose I needed to start that post with "These are my opinions." Although I had taken that for granted as it looks as this whole thread is full of opinions.

I see that you are in Los Angeles, California, United States of America. I have every right to voice my opinion, just as you do. I served in the US Armed Forces to provide that right for the both of us. I may think that Rosanne Barr is the sexiest thing that ever was and ever will be, and I have the right to say so.
Doesn't make it true, but I can say it.
You may think that I am some complete idiot a-hole and warmonger. You can say it and it still doesn't mean that it's true.
That's your right and the right of anyone that reads this.
Please let's not go down that isle though. [-o<

I guess you are right though... at least they are working and paying taxes and the context could be explained better.

The people that I call lazy are the ones that expend little or no effort to understand how to do their jobs most efficiently and effectively. If there is a change to how to do their jobs they resist it to the full extent of their ability and often to the point of getting someone else to do it for them all while creating meaningless busy work for themselves. (Such as posting in general chat forums.

) They seek no challenges and when one comes up they give up without trying. I haven't had the luxury of being in this field my whole adult life but that has also exposed me to many different types of people from many geographic locations and backgrounds with many different work ethics.
I would like to find less of these people but unfortunately I find quite a few. There are hard workers out there though and I do admit that too.

The context from the "Everyone does it this way!" is more about business rules than the generic AR, AP and Inventory. I should have made that clear.

For example, say I sell things on a consignment basis to a large re-seller customer. Accounts wise, I no longer have the stock in inventory that I can use for Financial purposes. So I cannot get a loan based on my inventory that is in consignment otherwise it's fraud. But I still have to be able to register a sale. Which means that I still have this inventory somewhere and I have to account for it in my ledger.

How many different ways can you handle this? I could come up with at least two without much analysis.

So my business process might be the first way and yours might be the second or you don't do consignment at all which is where I get the self proclaimed FACT that every single business does things differently.

I admit that at the core of *ALMOST* every business the objective is to provide a product/service to a customer and make a profit after paying their vendors. My former employer, The US Government, being one of the largest Non-profit companies.

My semi-flame is over thank you all for tolerating it.

Savatage · 2006-09-08

I really don't think he was attacking you...

Anyway I call it the Fred Flintstone Syndrome.
If at 5:00 that person drops what they are doing and leaves YABA DABA DOO!, even though there is something that HAS to get done and it will only take a few more minutes to complete.

I don't call it lazy, but not having the best interest of the company in mind.
I know I don't want to start looking for a new job at the age of 50 or 55.
To me we are all in this together to keep this ship sailing and I do not like when one person jeapordises everyone elses.

"Your Fired!" - The Donald

But I guess that's a different topic - sorry.

Joe_Mathis · 2006-09-08

I know.

I respect his opinion from what I can tell about him from his other posts.

I added the semi-flame end part because I realized I was on a rant....
Most likely due to recent customer interaction. :oops:

Just me being defensive and having too much free time today.

Alex_Chow · 2006-09-08

jondoba wrote:

I know.

I respect his opinion from what I can tell about him from his other posts.

I added the semi-flame end part because I realized I was on a rant....
Most likely due to recent customer interaction. :oops:

Just me being defensive and having too much free time today.

Yeah, no offense was taken.

Everyone has a right to express their opinion. However, not everyone has the right to express the opinion as facts. That's false advertisement and is not legal in the US.

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