On Site Consulting Cost:  

If your project requires that we need to be at your location on a full-time basis, we use a daily pricing model.  Typically, we will agree in advance on how many days that we will to be at your location.  The daily fee is $2,500.  There is no set number of hours.  We will work to task, not to time.  Whether I need to be in your facility for 8 hours per day or 12 hours per day, the daily fee remains the same.

Most of the time, this fee structure happens at the beginning of an engagement that predominately will take place off-site, where we will be working remotely or after normal business hours.  This could be an initial visit to meet with key players on the team, or a periodic visit to assess progress, etc.

Off Site Consulting Cost: 

When we are working from the office, the additional benefit of setting our own schedule is passed to the client.  In these cases, we use an hourly rate of $215.00 per hour.

We track time using an online system, and we do not round up to the next hour.  In other words, if  we work on your project for 45 minutes, 3 times per week, you will be billed 2.25 hours, or $483.75    Fair is fair, and we do not expect you to pay for time that we did not work on your project.

Clients may request a detailed breakdown of time spent whenever they would like to see it.

Micro-Consulting Cost: 

We do not want clients to feel like they are obligated to spend a lot of money to solve a very simple problem or just get an answer to a quick question.  APC has experience with clients who only need something small, like a query reviewed or a form modified in their ERP system.  We understand that business issues come in all sizes.

For these situations we offer a micro-consulting option.  The micro-consulting cost varies with the time-spent and subject matter, but typical project ranges between $700 and $2,500.  We usually quote these on a per project basis at a fixed price.  This pricing option requires that we have a very clear and finite scope of work so that the client gets the right result for the quoted price.

Expenses: 

Travel expenses are billed to the client based on actual expenses incurred.  There is no markup.  We fly coach on domestic flights, business class on international. We rent intermediate type cars, and stay in hotels of the Hampton Inn / Holiday Inn Express class.

Other expenses are also billed based on actual rates.  Any significant expenses will be discussed with the client prior to purchase.  We believe in transparency and we want to operate in a no-surprises environment with clients.

Our goal is to cover our costs, not make money from travel expenses.

The Big Question: How Much Does it Cost? 

Unfortunately, we are right back to “it depends”.  Firms all tend to have different pricing models.  The real difficulty is that developers and clients have fundamentally different needs in the project.  Clients usually desire a competitive, fixed price for development.  This makes the client feel secure that they are not dealing with a moving target. 

Developers, on the other hand, need to make sure their costs are covered.  Scope creep and a steady stream of changes from the client tend to drive up costs and make the work less profitable.   This is a leading reason what many developers either do not want to quote a firm fixed cost.  The alternative is that the project gets padded with a lot of “just in case” hours. 

Personally, I think it is best to try and give clients a fixed price whenever possible.  I think this is possible when there is a clear set of objectives.  I will usually quote a fixed price for each feature individually for the customer so they have a clear understanding of where the cost is coming from.  Then, if the scope changes it is much easier to put a price on what the differences are.  Time critical “have to be done now” projects are normal based on an hourly rate.  This is because there is no time to nail down the scope, and we have to make it up as we go. 

Pricing Examples 

When I price a particular feature, I base the price on the number of hours and type of programming that are likely to be required.  We have developed some baseline programming frameworks that allow us to develop software more quickly.  In other words, the foundation code that drives the project is sometimes already developed.  We do not have to spend hours building the foundation, enabling us to get things done quicker and achieve more results for a given project budget.

Here are examples of some past projects and their cost to the client: 

Purchase Order Management System for Overseas Buying: 

This was a very large application built to manage a complex overseas supply chain.  The system cost was approximately $50,000.  It enabled the client to meet their business objectives to manage well over $100 million in purchases.  Additionally, they were able to be more efficient and reduce the labor content of the process by over $100,000 per year.  The delivery time on this project was about 4 months. 

Web Based Quotation System: 

This client came to me having recently put a new ERP system in.   The system was not able to produce quotations in a way that worked for the client, and as such there was a major rush to get the project done.  The time to complete the project was 3 weeks from initial contact to delivery.  The cost of this project was just over $24,000, driven heavily by the urgent nature of the project.  Under normal conditions, with an 8 week delivery time, it probably would about been about $17,000 

Custom Business Rule for Prophet 21 ERP: 

This project entailed developing a solution for wireless scanners that changed how the ERP system performed item lookups.  This was done to prevent having to re-label all inventory in seven warehouses.  This project consumed about 6 or 7 hours of programming, development, and tweaking.    I quoted and billed it for $750.  Looking back, I underbid this one a bit, because I did not anticipate having to replicate the rule in three different parts of the system, and none of them worked exactly the same as each other. 

Closing Thoughts 

Though the range for custom software can be very wide, depending on requirements, there are ways to make it manageable.  The right vendor will ask a lot of questions and focus on trying to meet your business needs.  This is important since the return on investment for the project is directly tied to meeting these needs.  The best way to gauge whether or not the price is fair is to compare the cost to the return that you expect to get.  If you cannot assign a value to what you gain by having the solution, it may not be worth doing.  The right vendor will tell you that as well. 

Atlas strives for price transparency as much as possible. Some services are inherently easier to do that with than others. Remote monitoring costs are fairly straightforward. Atlas will keep watch on some set of your IT assets. If there is a problem, we tell you about it, and it is up to you how it will be dealt with. 

For this reason, it is pretty simple to price out most installations. If you are a small office, maybe you just have everything sitting on one server, and you don’t want to monitor workstations (laptops, desktops, etc). You might expect to spend around $100 per month. 

In another example, if you had 3 servers and 15 workstations that needed monitoring, you might expect to spend $350 to $450 per month, depending on all the different configurations. 

Monitoring is designed to be cost-efficient and simple due to the fact that it is not super proactive in nature. Workstations are inherently cheaper to deal with than servers are due to complexity, so the server to workstation ratio can play into the price structure, too.  It really just depends on what you are looking to accomplish. 

In any event, it is important to keep in mind that cheaper may not always be better.  Monitoring is more than just software installed on your computer. There are people behind it. These people are responsible for reviewing, assessing, and making recommendations on what needs to happen with your critical infrastructure. It may not be best to leave that job in the hands of the lowest bidder. 

Remote Management Costs

Remote management is a different animal than monitoring. There has to be time and cost built into it, because it is a foregone conclusion that your equipment will be attended to, proactively, whenever it is needed. For this reason alone, the cost has to be higher.   

Having said that, remote management is equivalent to hiring a part time person to do nothing but maintain the assets that are put into the scope.  You are buying proactive expertise and problem solving. 

Every environment is different, and every customer’s needs are different. In a typical example, a shop with 5 servers, and no managed workstations might expect to spend $800 to $1,200 per month. This is the equivalent of paying a full time employee $5 to $7 per hour with no benefits, taxes, or other add on costs of employment.    

The bottom line is that in both cases, management and monitoring, there is a part of it that is based on the idea of cost avoidance. You are paying some money now to reduce the probability of spending more later. Maintained servers are less likely to break down, which has a cost far exceeding the value of the server.  A line of business interruption, even for just a few hours can cost tens of thousands of dollars. Even avoiding one of these in a year pays for the expense in a hurry.    

Whatever your situation, it is key to find the solution that fits your particular needs. What is your internal capability and capacity to do these things? Is it worth hiring additional help to take care of the “day-to-day” that in many cases is not getting handled? What is the time value of an outage, and how much is it worth to try and get ahead of that?