I’m always looking for ways to demonstrate the absurdity and inherent risk to businesses like yours who work with software consultants (or CPAs or attorneys) who bill for their time.
This past January at the international VeraSage conference, I was talking with Ron Baker about how we can more effectively get the message out that the only way for a business to know that a software consultant knows what they are doing is by having that consultant provide them with a fixed price for every project.
Ron provided a wonderful insight. The most effective way to demonstrate the absurdity of a particular idea (in this case, the billable hour) is to ridicule it.
Greg Kyte, who is a VeraSage Fellow, CPA and professional stand-up comedian, and I started working on a video lampooning the practice of billing time.
The result is Bob’s Barbecue. It is the first in a series of videos which will depict all of the many ways that the billable hour is harmful and risky for your company.
May 4, 2011 at 11:47 am
I bill by the hour and make a good case for doing so in a recent blog post on getmorepc.com. Thought you might like to hear from the other side of the coin.
May 9, 2011 at 10:24 am
Daniel,
I definitely disagree with the idea that there are some situations where the billable hour is preferable to a fixed price. We’ve found that since we dumped billable time and time sheets a little over 4 years ago that the billable hour is always a sub-optimal approach because it pits the customer against the consultant. The idea is to create stronger relationships and not weaker ones.
In your article it sounds like you’re pointing out that many IT firms have lousy customer service (and I agree with you there) but I believe that the billable hour is actually a big part of the problem.
May 17, 2011 at 7:59 pm
John, I do look forward to the day when I can have a couple of nice big accounts that pay flat contracts every month, but I’ve yet to get them. Being small, I try (keyword) to provide better service and I think my customers may agree. My motivation for hourly work is purely to help save the client money, but I’m sure the math could be done another way to show that contracts save money as well, especially if they are comprehensive and provide hosting services, web updates, etc. Thank you for your feedback, I enjoy your blog and will continue to check Aries out.
May 19, 2011 at 2:12 pm
John,
Just watched the Bob’s BBQ video at Ed Kless’s 1 Day Consulting Workshop. While I haven’t been successful in getting the buy in to Trash The Billing By the Hour business model from the companys that I have worked I very much believe in Billing By The Project and I think that your R.O.W.E. method for running your business is fantastic, even if you prefer Mooyahs over In & Out Burgers!!. See you in DC
May 19, 2011 at 2:25 pm
Daniel,
You might want to check out the latest book from my friend and VeraSage colleague, Ron Baker.
http://www.verasage.com/index.php/community/comments/new_book_is_released_implementing_value_pricing_a_radical_business_model_fo
May 19, 2011 at 2:28 pm
Thanks Bill!
If you get a chance to go, definitely check out Ed and Ron’s Firm of the Future Symposium. I think there is one coming up in San Francisco. We had a great turnout for the last one in Atlanta.
I haven’t tried Mooyah (it’s not open yet in Knoxville) or In & Out. I hear great things about both of them.
DC should be a blast!
November 28, 2011 at 8:49 pm
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