Hourly consulting rates for online projects vary dramatically. As a customer it can be quite difficult to figure out whether you are paying a reasonable rate as each project has its unique characteristics and consultancies may be more or less hungry for work.
There are many factors which influence what you'll end up paying. You'll notice the wide span in the below ranges for hourly rates collected during the last 6 months (February - July 2009):
- Creuna, a Scandinavian digital agency: €130 - €150
- IBM Global Services: €190 - €300
- LBi, a large full service digital marketing agency: €100 - €130
- Pentia, a Danish Sitecore partner: €150 - €175
- Reading Room, a UK-based system integrator: €100 - €120
Some vendors will offer differentiated pricing based on staff seniority, so that you pay more for experienced consultants. In addition to the hourly rate, it is not unusual to also charge for travelling time, typically at 50 % discount. So, if it takes 4 hours to get to and from your office, travel time alone could easily cost you €200. This is added to the actual travel cost (train, flight, hotel).
Not surprisingly, most vendors are big fans of volume discounts. You should be able to get a substantial discount if you buy a large number of hours. Some will also offer discounted rated for government agencies and charities.
You might prefer to get a fixed price for your project, but still much consulting is done based on an hourly rate. If you manage to get a fixed price, you can expect to pay an hourly rate for change requests, which in some projects tend to accumulate.
In general, implementation partners don't like to talk about money until they have heard your thoughts and plans for the project. They certainly don't advertise their rates on their websites and very few will try to base their pitch to you on their attractive rates. Instead they will try to convince you to use other selection criteria, such as their experience, references and project methodology. For a perspective from the other side of the table, see Darren Fergussons interesting posting on My day rate is my rate, not your rate.
I'm not saying that hourly rates should be your main selection criteria, but since they tend have such a tremendous impact on total project cost, even a few €'s difference will easily add up. Also, remember that once you've started the project it is both expensive and cumbersome to change partner.
What hourly rate are you paying?
Full disclosure: While J. Boye does not do any implementation work, our hourly consulting rates are between €175 - €200.
Hi Janus,
Can I ask which country you did your research in? For example, are these (theoritically) the rates for LBi Denmark? LBi, as an example, certainly has different rates in different countries.
Jon (who works for LBi UK)
We think that UK hourly rates are excessive. We charge< £85 per hour for Livelink or Alfresco consultancy and we find that the larger SI companies in the UK consistently over estimate development timescales making the overall comparison much wider (Is this a comment or an advert… in honesty, a bit of both!)
In my experience, the hourly rates from CMS vendors and systems implementers are much higher than for straight web development firms. I think the theory is that they have a “captive market”, and charge accordingly…
(AU$150/hour is not uncommon in my part of the world, which is at least 25-50% higher than typical rates on the open market, as far as I can tell.)
Cheers,
James
Thank you for the comments.
The prices are collected from throughout Europe. I did not have enough data to do something specific for the UK or to include the US.
My impression is that due to the strong Euro, prices are generally a bit lower in the UK and a further bit lower in the US. Locally there are also differences, eg. Sweden is cheaper than Denmark due to the weak Swedish kroner.
Cheers,
Surely most companies vary their rates based on staff seniority.
And they all vary their rate on the size of the job and the number of hours billed.
If we are talking hundreds or thousands of hours on some implementation project – very few are able to charge 300 euros pr hour and certainly not IBM.
I know of cases where the long term hourly rate is 1/3 of the rates mentioned above. For the listed vendors and for customers in Denmark.
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