IT technologies provide businesses with a lot of opportunities to fulfill their needs so that companies will invest more in tech trends. The demand for IT consulting services will increase correspondingly. The stats fully prove it: according to Acumen’s data, the worldwide software consulting market size will be more than $383 billion by 2026. Such growth is understandable: IT consultancy will gain popularity, helping companies move forward by adapting the latest tech innovations in their products.
This post will cover average prices for software consulting services, factors influencing their costs, and other necessities.
Things to Know About IT Consulting Rates
To obtain a high-class end product fully responding to your business aims, you should find an experienced technical specialist to take their advice. IT consultants are the best match for these purposes having profound expertise in particular tech fields.
The specialists’ consulting rates typically depend on the company’s location and size, industry specialization, gathered experience, etc.
Prices by Consulting Business Size
Various companies choose IT consultancy in order to improve their workflow, make profitable business investments, and save time to focus on essential business objectives.
Let’s learn more about the software vendors providing the clients with advisory services.
- Enterprise-grade consulting companies collaborate with government institutions and Fortune Global 500 businesses that can afford to pay such project fees as $500,000 – $100 million and higher. The development and consulting hourly rates of enterprise-grade IT companies vary from $250 – $850 on average regarding the skills of the particular consultant, location, or tech expertise.
- Large advisory businesses’ staff (from 100 to 1,000 consultants) also works with big industrial companies. However, their services are not very expensive as previous ones: project costs of large consulting companies differ from $125,000 to more than $5 million, and their hourly wages are $200 – $300 on average.
- Average-sized companies consist of 10 to 100 consulting specialists and developers working with small and medium enterprises (and sometimes with companies listed at Fortune 500). The project fees of such consulting companies are from $50,000 to $5 million. Their hourly wages vary from $125 to $175; however, exact costs depend on the country.
- Small-sized IT consulting businesses consist of 2 to 10 staff members (along with CEO) serving startups, small and medium-sized regional companies. They typically focus on one area, such as UI/UX design, mobile app development, or specialized programming languages (Node.js, React Native, etc.) with hourly rates from $75 to $175 and project costs starting from $10,000.
Consulting Rates by Industries
IT consulting specialists work with various spheres (such as healthcare, logistics, blockchain, or fintech), having profound domain expertise in them. The IT advisory cost is determined by the consultant’s experience, skills, or domain they are experienced in.
For instance, Glassdoor, a globally known hiring platform, states that US Java consultants earn $81,817 annually. It means their average hourly rate is $52. According to ZipRecruiter, Java consultants in the United States charge $55 – $120/hour, and their yearly fee is $123,695. C# consultants charge $77,500 as a rule. This is equal to $30 – $50 roughly per hour.
Consulting Rates by Region
According to Grand View Research data, the US dominates the consulting market providing software advisory services in different well-invested domains (such as ERP, CRM, IoT, or data analytics). So, the US hourly consulting rates are considered to be the highest ones ($100 – $250).
The Asia Pacific region is the second-biggest consulting market, which is closely connected to the e-commerce industry’s expansion. As the requirements for fintech services grow, so does the need for IT consultancy.
As to the other destinations of IT outsourcing, Europe is the third-largest software advisory market in the world. It constantly rises according to government support and quick investments in development projects. So, if you want to choose an appropriate offshore destination, Eastern Europe could be the best one due to its top-class services at reasonable prices.
IT Consulting Fee Structure
The first thing to ask when hiring a consultant is how much they charge for their work. To be flexible for clients, IT consultants use the below invoicing models, which are the most common ones.
- Hourly wages (rates) are a popular choice for projects where following a strict timetable is difficult. This fee model is charged for the number of working hours needed for a concept implementation and varies according to the region. However, you would never know at once the actual cost you’ll pay at the end of the project.
- Daily wages are just the hourly rates multiplied by the number of hours the consultant will devote to the project. IT consultants often work 12-14 hours a day, charging $1,500 – $3000 and up.
- A monthly retaining fee is a wonderful option if you’ve worked with a consulting company for a while and want to keep working with them on a month-to-month basis. This fee is paid in advance for the consultants’ services that would be provided during the project.
- A project-based price is paid for the job completed within a specified time limit. The majority of projects pass through multiple stages, including:
- Project evaluation
- Deep research
- Deployment and maintenance
Remember that the project-based approach is more complex than the hourly wages model, but you will know precisely how much you’ll spend up beforehand.
- According to the value-based pricing model, the consultants are paid depending on the project’s monetary value. To put it another way, you pay for the results that the consulting company produces for you. IT consultants often charge 10% of the value of the services they provide.
Different factors influence the cost of IT consultancy, such as staff qualification, software company location, or average hourly wages. However, if you want to obtain high-class advisory services at affordable costs, competent IT specialists will help you. They will define your business needs and analyze them to provide you with the best technical solutions and dev tools to make the upcoming end product competitive and thriving on the market.