Are all rates created equal ?

When we look for professional services, being it your plumber accountant or lawyer  we pay special attention to the rates,  and as vendors know it they often would focus on making rates to look low while the fineprint results in your bill being higher than expected.

For example when I was moving and hired moving company to help me with the move  I mainly looked at the rates while in the end there were a lot of cheating and a fine print.  For example there was also fuel surcharge, driving time counted double.  Some items MUST be packed to be moved, like  moving my TV would cost $150 even though I picked it up at the garage sale for half of that price so I would rather get couple of extra scratches.  When there were extremely high usages for supply –  something like $10 per table roll and they there very generous to themselves in using it when it comes.

This is not to mention general performance questions – the movers were students spending few months in US on Work and Travel program so they were not overly experience and performant moving the furniture, and in the end we got scratches both on the furniture and on the walls in addition to getting more hours than I would anticipate.

I was surprised with larger than expected bill and surely will never hire the same company again but I learned a lot about picking moving companies and also get an extra assurance we made the right choice with Percona rates – we keep them high enough to be honest and well performing.

In fact we go much further than a lot of people.  Some consulting companies I talk to say  hiring our consultant is same as hiring employee – will you pay your employee if he meets the new challenge and have to do some reading and digging ? So you should do for consultant.  Not with Percona.   We make sure general education time is not billed to the customer,  learning how the system works – yes but not underlying technologies which we claim to be experts with.

What if consultant have made a mistake ?     At Percona we make sure not to bill for mistakes or other inefficient work as well as for any time required to fix mistake.   This is how I would prefer to be billed when hiring professional services and I think this is good for consultant too, to learn to be careful.

What is about individual performance ?  In particular in even very smart group there are going to be people more junior than others, or less experience with particular task.  We think customer should not suffer depending on this factor and so we make performance adjustments as needed so only the time it would take the the most experience person to do such task.   This is where we learn from Auto Service industry when there is a set amount of hours for the task no matter how long the job really takes  – however because all our jobs are so different we can’t simply use fixed amount of hours say for “query optimization”, but the idea is different,  with exception there is no downside for the client –  we never will bill 1 hour if in this individual circumstances job took just 15 minutes.

Finally comes question of efficiency.  This is the big challenge because natural rate structure of consultant being paid by the hour means he is motivated to spend more hours on the job.  We believe our higher rates do us a favour here too because we know customers look closely at out timesheets and will question if they consider time is wasted.   But really it almost never comes to that  – we make sure our consultant focus being efficient and doing what client really needs to be done rather than wasting hours, plus we have the process of internal time sheet review to ensure customer really needed the work done and it was done with a good efficiency.

This is only one side of efficiency though – the other is how long it takes to do the job ?  We think it is about people, teamwork, processes and tools.  We hire the best people, our consultants work as a team picking into each other experiences as required, we ensure to have efficient processes for doing things, for teamwork facilitation and training and we actively invest in tools to automate our work.   The maatkit is the most well known one though we have done various other tools and MySQL patches

In general, with all these things to make sure client gets a lot for a billable hours I think we’re in as much as 2x efficient in terms of billable hours compared to traditional consulting company and more than that if you compare to inhouse employee, though I do not have a hard data handly.

Is it a right strategy to have  more expensive but more valuable hours ?    I think it takes a little customer education and overcoming bean counters resistance which assume all rates apply to replaceable hours but it is good for everyone in the end.

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