CONSULTING & CUSTOM DEVELOPMENT.Even for desktop applications, customers routinely request (and pay for) a wide variety of consulting services Noun 1. consulting service - service provided by a professional advisor (e.g., a lawyer or doctor or CPA etc.) service - work done by one person or group that benefits another; "budget separately for goods and services" , including requirements analysis (project) requirements analysis - The process of reviewing a business's processes to determine the business needs and functional requirements that a system must meet. , custom application development, custom report design, system integration, installation, data conversion, and training. For smaller developers, such consulting and custom development work can be a major source of funding for ongoing R&D--though more commonly, software companies tend to regard consulting as a distraction Distraction Divination (See OMEN.) Porlock a “person from Porlock” interrupted Coleridge while he was recollecting the dream on which he based “Kubla Khan”. [Br. Lit.: Poems of Coleridge in Magill IV, 756] that takes programmers away from more lucrative product development work. Why are margins low in consulting ? One reason is that consulting assignments- -like most services--are usually scheduled according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the customer's timetable, which is almost always urgent. As a result, it's tough to create an orderly flow of assignments and to manage employee productivity, especially when consulting is not the company's core management expertise. In addition, the pricing of consulting services usually involves a good deal of guesswork, and many companies certainly underprice un·der·price tr.v. un·der·priced, un·der·pric·ing, un·der·pric·es 1. To price lower than the real, normal, or appropriate value. 2. their services. (The problem is compounded when sales reps discount customization services to help close deals.) Based on prevailing salaries for programmers and analysts, any rate under $700-$800/day is probably unprofitable, yet 18% of our respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. peg their primary consulting rate at $800 or less. At the same time, there's clearly a de facto [Latin, In fact.] In fact, in deed, actually. This phrase is used to characterize an officer, a government, a past action, or a state of affairs that must be accepted for all practical purposes, but is illegal or illegitimate. ceiling on consulting prices, which tends to squeeze overall rates into a fairly narrow range around a median rate of $1,200/day. Judging from our data, higher-skilled design and analysis services do command a small premium, but the rates for custom development, installation, and related services otherwise rarely exceed $1,500/day. Moreover, the cost of the software itself apparently has little impact on the pricing of related consulting services: Software Price Range Consulting Rate $10,000+ (45 responses) $1,250/day $1,000-$9,995 (57 responses) $1,200/day $15-$999 (27 responses) $1,050/day All (141 responses) $1,200/day 50% range $950-$1,500 * '50% range' represents the middle half of all responses. |
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