Ask HN: Billable Hour Model in IT?

2 pointsherp233 comments

What is your experience with using the hourly billing model for IT work or for code/programming work either at a larger org or in a consulting capacity? Does billing by the hour for coding and IT work put efficient/senior resources at a disadvantage? Is this a good model for the business, but bad for the clients?

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Inside an enterprise it’s dumb. Just define services and provide them, use showback or cost recovery.

For professional services, it’s the best way. Otherwise, the seller of services is always going to be nickel and dimed to death by scope creep. Hours are a known thing that can be objectively measured.

What kind of common roles in an IT org fall into professional services?

I’ve seen places try to make onboarding or design work like an internal consulting service. Sometimes programmers or security folks too.

Ultimately it doesn’t work out unless it’s a mechanism to get some third party to pay the bills. It ends up creating the wrong incentives in many cases.

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