INFLATED IT PRICING
Just imagine that products you use for your daily needs like toothpaste or books or vehicles did not have a maximum retail price or any price as such. Would it have been possible to conduct trade? If the salary a person draws remains only on the drawing boards? Body shopping works precisely that way. This is exactly the situation of the IT companies who have decided to give transparency and data driven objective world to all of us. With decades gone nobody yet knows the price of a software, software development and also the standard pricing of technical manpower deployment on your site, may it be development, warranty or on site maintenance.
What they deliver also remains unknown and its a challenge for the owner to find out the nitty gritty of it. Which software will give way when, nobody knows? How much will it cost no one knows? Whether they will be able to set it right is also unknown? The costing in that case is fully inflated. The product can be sold globally but not the wherewithal for its maintenance. But unfortunately, the warranty and all other contractual agreements remain the same. Even a flimsy understanding of IT will give you a fair idea of the discretion that can be used in executing the IT task and the concomitant pricing.
If you ask for any pricing, the IT guys standard reply would be that they would be back with the estimate. They cannot calculate anything on the fly. The banking and insurance guys will give right then and there and its mostly online now. You try getting IT pricing online real-time and see the challenge. This whole level of opaqueness is not maintained for any reasons of product quality or immediate delivery but to play around with costing / pricing the way they want. Shamelessly, they would tell you that costing has been brought down especially for you.
Once the dice is thrown, another story starts that they are bleeding on the project, that they missed out on couple of unknown costing parameters. The change request is the ultimate tool for further inflating the price. Every syntax counted and costed upon. But for them in a fixed cost project you don’t even need to know any costing break-up, some vague payment schedule should suffice. The only ones to beat them are the consultancy companies in the same trade. Financial sanity is the beginning of the business for the customer.
UNREGULATED IT PRICING, QUALITY & DURABILITY SPELLS DOOM FOR CREATING A ROBUST IT ECOSYSTEM.