Figuring IT Outsourcing Costs

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So how much does it cost to splice up a hundred different images? How much does it cost to transform a strict HMTL site into a glossy Web 2.0 showcase? What about email? What’s a reasonable rate for cleaning up thousands of messages? These are great questions that can be answered in two ways:

1. A Little Experience, Please

The first way to figure costs requires a little past experience. Have you spliced up images before? Do you remember how long it took you? You don’t need to have spliced a hundred to drum up a time span. You can slice one or two images and use that as a gauge for determining how long it would take to splice a hundred.

It’s the same for sprucing up a website or mining through email. The goal in this first method is to get a good sense of the number of hours involved, and then put a dollar figure on those hours. You could then…

• pay minimum wage
• pay a fee close to your own in-house costs (that is, costs that are already associated with tasks at your place of employment)

Don’t Be Price-Biased

Forget the “dump the highest and lowest bid” strategy. I often see this mantra repeated online ad nauseum, but I never see any legitimate reasons for it. People will claim the lowest bid accompanies the lowest quality work, and the highest bid accompanies over-priced work. But neither claims are necessarily true.

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The lowest bid could come from an extremely talented budding designer who could solve your problem just as well as (or even better than) a so-called ‘leading expert.’ Why on earth would you throw it away? On the other end of the spectrum, the highest bid could come from the only person who has worked with your preferred medium. So there’s no sense in throwing that away either.

Don’t be price-biased. You could miss out on a great solution (or the only solution).

2. Lookie-Loo’s Welcome

The second way to figure costs is to snoop around a few IT outsourcing services, and note what the higher-end service providers charge for work similar to what you want done.

The reason why I recommend a little high-end espionage is because highly rated service providers essentially answer the question, “Okay, so what is this stuff actually worth?” and “What are other people paying for this service?” Having an answer to those questions will help you establish an appropriate rate.

Just don’t forget to tack on site fees. Remember, some IT outsourcing services append a fee and/or percentage on top of what you’re prepared to pay.

External Resources:

1. Cost Reduction Analysis: Tools and Strategies
2. From Cost Management to Collaborative Innovation
3. Cost Accounting and Management Essentials You Always Wanted To Know