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CONSULTING AND SUPPORT What is a consultant? The computer industry like all other industries likes to create notional titles. The word consultant in computing generally means someone from outside the organisation who is paid to provide a service. What then is the difference between a consultant and a contractor. A consultant generally works in the following manner:
A contractor
It is important to differentiate between a consultant and a contractor. Often contractors are given the title of consultant, so it is important to consider the role they hold rather than the title. The reason it is important is the consultant rate is higher than the contractor rate. By using a consultant as required, a business can obtain expertise when it needs it most. The prudent use of consultants can slash your computing costs. Use consultants as contractors, or as substitute employees, and you may find your computing costs soaring. We have seen one consultant placed in an organisation for a three month period where we believe a contractor should have been retained. The cost to the client would have been twice they needed to pay. At consulting rates this would have been an excessive and unnecessary premium. Consulting and Support services provided Defining the consulting services provided is actually quite difficult as they are determined by the client, their current facilities and their needs. Services which have been provided in the past include:
The more common services currently provided are: General
Hardware
Network
The role we often play is as a hands-on IT Manager shared across a range of clients. Support is provided by telephone, via the Internet and also on-site, with most support being provided the same or next day dependent on the clients location and needs. What should you pay? In the computer industry rates vary considerably because there are a lot of options. At the lowest end there are the mates rates, then there are students working for very low rates, people with full time jobs working as part time consultants picking up extra income and working for what appear to be low rates. (The rates can be low because it is not their primary income.) You then have a general industry rate which can vary considerably. Finally you have the big end of town rates. Each level has it's advantages and disadvantages. Price is not always the best measurement. It is ultimately up to you to determine what you are prepared to pay and what level of service you wish to receive. Be careful, I have seen consultants charging higher rates because they can get away with it and clients not knowing any better. I have also seen one unemployed person told to charge a high rate or otherwise they will not be considered seriously. Check a person's rate, but also check their background and recent work history. For a consultant who works on an as required basis, the hourly rate should probably be around three times the hourly rate of a full time employee. If it is lower than this it is unlikely the consultant will remain profitable and in business for the long haul. The big end of town suppliers often charge out at five times or more the employees rate. Pay too little and the consultant will not be around when you need them. If you pay a person under twice the normal hourly rate of a full time person, it is unlikely the person will be around long. Some simple calculations will show you the person would be better paid in a full time job and will go and get one at the earliest opportunity. The Online Connections business name was registered on the 26th day of November 1991. As you can see we have been around for some time. To assist others, the following are a couple of rule of thumb calculations you can use to determine an indicative rate. Contractor rate Around twenty years ago I read a book and I remember the author stating that to determine the hourly rate for a contractor, take the yearly salary of an equivalent full time position and divide by 1,000. Interestingly that same rule appears to apply today. Eg. Let's say the salaried person for the position would earn $75,000 a year. An equivalent contractor would thus be paid around $75 an hour. This is by no means exact, but it is a good starting point. Consultant rate Previously when working for a second tier consulting firm the charge out rate was generally three times the person's hourly rate. I also noted the large firms charged out at five times the person's hourly rate and sometime more. So again let's start with the equivalent full time salary. Let's say $75,000. There are 52 weeks in a year and 38 hours per working week. A total of 1976 hours per year. This gives us an hourly rate of around $38 per hour. At three times the hourly rate this would give us a chargeable rate of $115-$120 an hour. At five times the hourly rate this would be around $190 an hour. The above should be used as a guide only. Ultimately as a client you have to be happy not with the rate, but that you are receiving appropriate value for your money. How we work and charge Our approach is a combination of approaches we have seen in different industries. In the computer industry we saw companies charge a minimum one hour and in one case,a minimum of eight hours for support. In the accounting industry the minimum charge was one tenth of an hour plus costs. The problem we saw in the accounting industry is if a cost was borne by the client, then there was no attempt to reduce this cost for the client. I also noticed this trend in other industries. Our approach
We have two different charge out rates based mostly on the level of technology you use in your business. Due to the higher technical requirements and software costs of supporting Microsoft server products those businesses requiring support that requires us to be involved with Microsoft server software are charged a higher rate. Rate for support not involving Microsoft server software Our hourly rate is currently $140+GST per hour. Our minimum charge is $14+GST which is one tenth of an hour. Rate for support involving Microsoft server software Our hourly rate is currently $180+GST per hour. Our minimum charge is $18+GST which is one tenth of an hour. Additional information Should clients exceed $3,000 of chargeable time in a financial year the hourly rate is reduced $10+GST an hour. All out of pocket costs are paid by the client. We only sell hardware, software and consumables to existing clients. We only do this where we believe our prices are competitive or we offer some added value. Generally if a client can purchase cheaper elsewhere, we advise them to do so. If you would like to use our services please feel free to contact us. Our contact details are on our home page.
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