Comments on: Billing rates http://noenthuda.com/blog/2008/07/09/billing-rates/ Tue, 31 Jan 2012 15:37:29 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Sriram http://noenthuda.com/blog/2008/07/09/billing-rates/comment-page-1/#comment-1310 Sriram Wed, 14 Jan 2009 12:34:50 +0000 http://noenthuda.com/blog/?p=38#comment-1310 Fair points about the moral hazard in hourly billing. In practice this is not such an issue because the service provider won't get repeat business if he screws around idling hours away. For the kind of companies you mention, cost of acquiring new clients is high, so ensuring repeat business is vital. Secondly this is an apples (non-knowledge work) to oranges (knowledge work) comparison. Sizing work anywhere nearly as accurate as area of space to be painted is only possible for extremely well understood and mature knowledge domains. And for such domains, commoditized off the shelf help is availble. External consultants aren't called in to help. Fair points about the moral hazard in hourly billing. In practice this is not such an issue because the service provider won’t get repeat business if he screws around idling hours away. For the kind of companies you mention, cost of acquiring new clients is high, so ensuring repeat business is vital.

Secondly this is an apples (non-knowledge work) to oranges (knowledge work) comparison. Sizing work anywhere nearly as accurate as area of space to be painted is only possible for extremely well understood and mature knowledge domains. And for such domains, commoditized off the shelf help is availble. External consultants aren’t called in to help.

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