Need Some IT Consultant/Implementation Advice Not HTPC related

[Glitchy]

Hope this is the right place to post this (and allowed), so here we go ….

Little backround, I’m not an IT guy, but I have been advocating new systems for my corporation, and my division for 3 years and finally got the go ahead for a trial. We just finished a 4 month “Proof of Concept” trial run and it is contract time. The implementation time for the setup, implementation and switch over time is 2 years.

Since I was the advocate, somehow I’m leading this charge, for good or bad (Though not IT, I am great at organization, team building and project management)

So a little help from you IT/Consultant types! (This is proprietary software and industry specific).

So the questions:

1. Why would I pay software maintenance the first when year the software is being setup with very few concurrent users …. is this normal practice? Or can I negotiate?

2. What is a fair rate for consulting services for programming, setup and customization for our implementation on site? I know this negotiable, but I would like to know a fair rate, for them and us. The average going rate?

3. Maintenance is 18%, that seems fair, i guess?

4. Does the company want our maintenance or the original software purchase? I know both, but how negotiable is the initial purchase?

5. I need to hire a SQL/Crystal Repots programming in the Southwest (of America) what’s the going rate for our region?

I have lots of questions on SQL/2008 Server hardware, clients per server and CALs, but I guess that might be a different thread!

I’m not trying to rape the vendor, but looking for a fair and equitable deal for my company.

Thanks for any thoughs

Jeff

[mikinho]

[quote=Glitchy]

1. Why would I pay software maintenance the first when year the software is being setup with very few concurrent users …. is this normal practice? Or can I negotiate?

[/quote]

Everything is negotiable.  Is there a support path outside of maintenance agreements?  If so, do a cost analysis of a few issues compared to the maintenance.  If this is your first year using the product you will have issues.

[quote=Glitchy]

2. What is a fair rate for consulting services for programming, setup and customization for our implementation on site? I know this negotiable, but I would like to know a fair rate, for them and us. The average going rate?

 [/quote]

Helps to know the product.  The cost is typically dependent on the knowledge base out there versus how competent they are.  If it is a niche product with limited consulting pool then you’ll get a higher rates.  I would consider $85-$150 / hr depending on the product and skillset.

 

[quote=Glitchy]

3. Maintenance is 18%, that seems fair, i guess?

[/quote]

It is fair but depending on the product after 2 years many companies will drop maintenance in favor of purchasing new.

It really depends on the product though.  It’s difficult to drop support for ERP / CRM / MRP due to the need to keep current with changes in laws, taxes, etc.

[quote=Glitchy]

4. Does the company want our maintenance or the original software purchase? I know both, but how negotiable is the initial purchase?

[/quote]

Typically they want maintenance, there is a much higher profit margin.  Check their release schedule, upgrade costs, incident costs, etc

[quote=Glitchy]

5. I need to hire a SQL/Crystal Repots programming in the Southwest (of America) what’s the going rate for our region?

[/quote]

What experience level and skill set?  Will they be a SQL DBA as well?

[quote=Glitchy]

I have lots of questions on SQL/2008 Server hardware, clients per server and CALs, but I guess that might be a different thread!

[/quote]

I’ll be happy to answer any MS SQL questions.

[skirge01]

I can’t help with industry pricing, but I can tell you that Michael is right on with “everything is negotiable”.  Every software company I’ve dealt with (I work for a pretty large company) makes almost all their profit from maintenance and contracted work.  Maintenance is your support (800 numbers, 24/7 coverage, fixes*, etc.).  Contracted work is everything that you want the system to do which it doesn’t do natively.  The more you can adjust your business to work with the native application, the more you’ll save (you have NO idea!).

Also, many companies will tell you “upgrades are included” which sounds like a great bonus, but that’s only if you keep everything completely native (no customizations).  As soon as you have those, upgrades are going to cost you big time.

If (when) you have them do customization work, get clear, written technical specs for what they are doing and make sure you and your company STICK to what you agree to.  Any deviation from that will most certainly cost you a “change fee”.  Those specs will also be what they’ll use when you approach them with a bug.  They’ll come back with, “That wasn’t part of the design.  See?”

A tip for negotiations:  As I said, most software companies make their profit on contracted work.  That means they have the most leeway to negotiate there, as well.  Think outside the box with negotiating.  You can negotiate on the hourly rate or on the number of hours they include.  For instance, say they come back with a price that’s $10k above what you’re looking to spend on maintenance and they won’t budge, yet you want to stick with them.  Ask them to include some hours of development (customization) work as part of that price.

Finally, TEST, TEST, TEST, TEST, TEST!  Then, RE-TEST!  Again, once you agree that they’ve delivered what you asked for, anything else (not covered by the maintenance agreement) is going to cost you.  This includes functionality, usability, interface, reporting, formatting, etc.; in a word:  everything.  It’s pretty much like Windows.  Once you buy it, you’ve said, “This is exactly what I asked for.”  You can’t go back to MS and say something isn’t how you want it.  Anything else is now a customization in Windows.

*Make SURE that bug fixes are included in any contract.  If they break it, they should fix it entirely for free (no hidden fees for the fix, even if it breaks a customization they did for you).

[santanan]

 

[quote=Glitchy]

1. Why would I pay software maintenance the first when year the software is being setup with very few concurrent users …. is this normal practice? Or can I negotiate?

[/quote]

Industry specific software companies tend to include maintenance for the first year of support on their software package.  But keep in mind that the support will be limited to the modules purchased originally.  Not all components are subject to negotiation.

 

[quote=Glitchy]

2. What is a fair rate for consulting services for programming, setup and customization for our implementation on site? I know this negotiable, but I would like to know a fair rate, for them and us. The average going rate?

[/quote]

When purchasing an “off the shelf” product, from an industry specific software company, you will be subject to their consulting and programming fee for customized needs.  You have to remember that the product is developed to serve a specific need and any custom work will be out of scope and would have to be tested to comply with their product and not cause any downtime.  Remember, the product works fine without customization.  

 

[quote=Glitchy]

3. Maintenance is 18%, that seems fair, i guess?

[/quote]

Annual maintenance fees DO NOT decrease on a year to year basis, it will continue to rise.  It is to your best interest to ask the software company for a set annual cost, for the maintenance, at the beginning of the purchase.  This is best practice since it will be quoted at current rates.

 

[quote=Glitchy]

4. Does the company want our maintenance or the original software purchase? I know both, but how negotiable is the initial purchase?

[/quote]

Both.  It is best practice to establish an annual cost, for the maintenance fee, at the time of purchase.  Maintenance is something you will continue to renew on the product.

 

[quote=Glitchy]

5. I need to hire a SQL/Crystal Repots programming in the Southwest (of America) what’s the going rate for our region?

[/quote]

My suggestion would be to look at some job posting sites for your region and take it from there.  It is all dependent on the region, job specifics and skill sets.

 

Although parts of a quote are negotiable, keep an open mind that you will be limited.  Since you would request some customized work.  I definitely DO NOT recommend to hire an independent programmer to work on a industry specific product.

 

P.S.  I would be more than happy to help with any hardware related questions also.

[Glitchy]

[quote=santanan]

 

[quote=Glitchy]

1. Why would I pay software maintenance the first when year the software is being setup with very few concurrent users …. is this normal practice? Or can I negotiate?

[/quote]

Industry specific software companies tend to include maintenance for the first year of support on their software package.  But keep in mind that the support will be limited to the modules purchased originally.  Not all components are subject to negotiation.

 

[quote=Glitchy]

2. What is a fair rate for consulting services for programming, setup and customization for our implementation on site? I know this negotiable, but I would like to know a fair rate, for them and us. The average going rate?

[/quote]

When purchasing an “off the shelf” product, from an industry specific software company, you will be subject to their consulting and programming fee for customized needs.  You have to remember that the product is developed to serve a specific need and any custom work will be out of scope and would have to be tested to comply with their product and not cause any downtime.  Remember, the product works fine without customization.  

 

[quote=Glitchy]

3. Maintenance is 18%, that seems fair, i guess?

[/quote]

Annual maintenance fees DO NOT decrease on a year to year basis, it will continue to rise.  It is to your best interest to ask the software company for a set annual cost, for the maintenance, at the beginning of the purchase.  This is best practice since it will be quoted at current rates.

 

[quote=Glitchy]

4. Does the company want our maintenance or the original software purchase? I know both, but how negotiable is the initial purchase?

[/quote]

Both.  It is best practice to establish an annual cost, for the maintenance fee, at the time of purchase.  Maintenance is something you will continue to renew on the product.

 

[quote=Glitchy]

5. I need to hire a SQL/Crystal Repots programming in the Southwest (of America) what’s the going rate for our region?

[/quote]

My suggestion would be to look at some job posting sites for your region and take it from there.  It is all dependent on the region, job specifics and skill sets.

 

Although parts of a quote are negotiable, keep an open mind that you will be limited.  Since you would request some customized work.  I definitely DO NOT recommend to hire an independent programmer to work on a industry specific product.

 

P.S.  I would be more than happy to help with any hardware related questions also.

[/quote]

 

Sorry I haven’t relied sooner, been wild around here. Thanks to all of your for your replies.

I’ll review all more in depth, gather all the thoughts and get back with some additional questions.

Thanks Again

Jeff

 

[Author]

Posts