What is your hourly rate?

This post is based on a series of questions from new prospective clients that we will answer publicly.

As a technology consulting company specializing in developing cloud-native custom software and assembling off-the-shelf cloud solutions, our hourly rate varies depending on several factors unique to each engagement. Here's an explanation of these elements:

Team Composition

Technical Skills: The hourly rate depends on the specific technical skills required for the project —specialized skills, such as application modernization in Azure or AI software architecture, command higher rates.

Domain Expertise: Projects needing specialized industry knowledge will see higher rates. However, we cross-train team members across different domains to help lower the average hourly rate.

Experience Level: A mix of junior, mid-level, and senior professionals balances expertise and cost, affecting the overall rate. More experienced team members generally command higher rates.

Client and Stakeholder Interaction: Larger teams may include dedicated roles for client interaction, impacting the overall average hourly rate due to the added specialized resources.

Quality and Risk Management: Including dedicated quality assurance roles and risk management strategies in larger teams can affect the rate but ensure higher standards and better risk distribution.

Team Size

Economies of Scale: Larger teams can lower the average hourly rate as fixed costs are spread over more hours.

Time Constraints: Tight deadlines may require larger teams to expedite work, affecting the rate. Concurrent project phases also necessitate more resources, impacting the rate.

Duration

Long-term Commitments: Longer-term commitments, typically one year or more, allow for more competitive rates due to stability and predictable revenue. These engagements justify offering volume discounts and reducing the hourly rate.

Operational Efficiencies: Longer projects benefit from improved team familiarity with the client's systems and processes, enhancing productivity and reducing costs, thus impacting the efficiency a client gets from a team around longer. We've proven this time and time again with clients.

Lower Sales and Marketing Costs: Securing long-term projects reduces the need for continuous sales and marketing efforts, lowering the hourly rate.

High-Value, High-Cost Reduction, and High-Risk Projects

Clients might prioritize expertise and accelerated delivery over lower hourly costs for critical projects with significant value, cost reductions, or high risks. Projects with substantial financial impacts, such as a $2 million annual cost reduction, justify higher rates for senior and principal engineers to derisk the delivery.

Conclusion

Our hourly rate is influenced by team composition, size, duration, and specific project needs. Each project is unique, and we tailor our rates to ensure we deliver maximum value while being cost-effective. Understanding these factors helps us align our services with your needs and ensure successful outcomes. Please get in touch with us if you'd like to learn more about our services.