IT BUSINESS, CRAZY LOGIC!
IT is one of its kind business, very rarely the pricing is known. The two parts of this trade are radically different from each other. The hardware and software worlds are diametrically opposite, but they are bound to work together. Hardware the prices are known and it makes it to the public domain, the market, is compared, as any other product. We will not get into the quantum of profit debate of the hardware, suffice to say, the quality and computational power is increasing by the day and the prices are falling. If still they can still have windfall profit, there is nobody to grudge. In general you get more for less. Even if the price is the same, the product is way better. The game changes when it comes to software.* It is wild goose chase in nearly every single way.
Go hunting for the price of a software and you will realize what a quicksand is. You can never find it on the company’s website. If you feel you would be able to find out from their marketing department or the sales team, you are badly mistaken. *Even the sales fellows operate without any pricing at their command.* There are tons of marketing puppeteers in every company. The only reply you would get all around the place is that prices cannot be given offhand. To the craziness of the market economy, the standard price of a standard product or any combination of it becomes an estimate. We have no access to different estimates / quotes given to different customers, that itself can become the scandal of the century.
If the standard products don’t have a fixed price or anything that can be called a price, same is the case of the customer requirement-based software development product. This is what they term as the Software Project. There are any number of permutations and combinations but suffice to say there is no standard pricing for software developers / other resources. From there the effort calculation and then the pricing, there is no algorithm that has been able to sort it out. The customer is at vortex of their nefarious game. It is a common knowledge that human resources are priced a few times higher than what they are actually paid.
The play is also on the number of resources. Fake numbers can hike prices is not very difficult to understand. Additionally, shared resources are shown as project dedicated ones. Then we have the exciting tool of time overrun. The Change Request imbroglio. They are not ashamed of any of these, they dutifully keep inflating the cost. Then we have the Project Level Costing. You can opt for either the fixed cost or the variable cost variant. However much you try, both will play with you in equal measure. The final assault is by the license price, single or multi-user, some don’t have the multiuser variant at all. You also have the timelines for the license, for the simple ones it might be a one time license. Licenses can play havoc with your project, you need to be careful.
PRICE DISCOVERY CAN BRING SANITY TO IT BUSINESS.