In the previous article in this series, we covered the first step to being a trustworthy consultant – establishing a personal business relationship with your clients. In this article, we look at:
2. Establish a Fair Billing Policy that Allows for Change
Many software development consulting companies will tell you that they follow an Agile Methodology, but upon inspection it seems that their billing policies often don’t allow for the type of change that Agile allows. Many consulting companies will offer flat-rate billing, which appeals to businesses at the beginning, because what they don’t realize is that the consulting company typically comes up with a cost estimate and then triples or quadruples it before giving the customer the quote, simply to handle any unexpected change. And of course, any changes will cause a deluge of change orders to be created, each of which ups the cost of the project even more.
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Epic are the tales of the battles large companies get into with their consultants over such change orders, and in the end someone always loses. Because flat-rate billing or large minimum-billing increments (one company I’m familiar with charges $100,000 minimum increments) give both parties the incentive to say “No”, the project suffers when new ideas for features are not allowed to be included. By establishing a fair hourly rate with small billing increments, your customers won’t be afraid to ask for new features to match their changing business needs, allowing you to do what a good consultant should – say “Yes” to innovation.