McKinsey’s clients are pushing back against the billable hours model given its clear AI makes that a farce.
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McKinsey’s clients are pushing back against the billable hours model given its clear AI makes that a farce.
Instead clients are increasingly tying payment to actual results.
I expect every white collar field that bills based on human effort to face a similar shift to a performance based model.
https://www.ft.com/content/8318a754-7b63-4f1f-8978-7691e7ed3511 -
McKinsey’s clients are pushing back against the billable hours model given its clear AI makes that a farce.
Instead clients are increasingly tying payment to actual results.
I expect every white collar field that bills based on human effort to face a similar shift to a performance based model.
https://www.ft.com/content/8318a754-7b63-4f1f-8978-7691e7ed3511@carnage4life performance based model is a lot better in general. Asses in chairs per billable hour has so many perverse incentives..
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@carnage4life performance based model is a lot better in general. Asses in chairs per billable hour has so many perverse incentives..
@codinghorror
Yes. But there are still many back office saas systems where its difficult to switch to value based pricing. I'd love to switch nitrots.com but its incredibly difficult not to leave gaping holes or make it unclear what you will be paying. Seat based is very easy to understand.
@carnage4life -
@codinghorror
Yes. But there are still many back office saas systems where its difficult to switch to value based pricing. I'd love to switch nitrots.com but its incredibly difficult not to leave gaping holes or make it unclear what you will be paying. Seat based is very easy to understand.
@carnage4life@Pascal_dher @carnage4life as long as people are super happy with the software and getting clear value you don't have to do anything.
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R relay@relay.infosec.exchange shared this topic
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McKinsey’s clients are pushing back against the billable hours model given its clear AI makes that a farce.
Instead clients are increasingly tying payment to actual results.
I expect every white collar field that bills based on human effort to face a similar shift to a performance based model.
https://www.ft.com/content/8318a754-7b63-4f1f-8978-7691e7ed3511@carnage4life I can see how this might work for some types of contracts but there are others that are explicitly for time and materials or actually paying for contract staff to do day-to-day things in the office.
Additionally from the perspective of the consulting company and its employees, it’s hard to get away from “billable hours” because employees have to log their time that way, are required to have a certain percentage of their hours as direct client time per month, etc.
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@carnage4life I can see how this might work for some types of contracts but there are others that are explicitly for time and materials or actually paying for contract staff to do day-to-day things in the office.
Additionally from the perspective of the consulting company and its employees, it’s hard to get away from “billable hours” because employees have to log their time that way, are required to have a certain percentage of their hours as direct client time per month, etc.
1/3
@carnage4life Additionally, for both the consultancy and client perspective (more so the consultancy I admit), having a fixed duration for the contract supports predictability and the ability to plan.
Certain regulated industries and industries with unionized employees may also find it very difficult to switch to “results-based” contracts.
2/3
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@Pascal_dher @carnage4life as long as people are super happy with the software and getting clear value you don't have to do anything.
@codinghorror
I generally agree, but im concerned with what all the AI automation will do in regards to seats.
Btw thanks for Discourse!
@carnage4life -
@carnage4life Additionally, for both the consultancy and client perspective (more so the consultancy I admit), having a fixed duration for the contract supports predictability and the ability to plan.
Certain regulated industries and industries with unionized employees may also find it very difficult to switch to “results-based” contracts.
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@carnage4life I totally understand why some potential clients may want to change over to “results-based” contracts and why people may think that sounds like it’s a good idea, but it’s not really AI or the lack thereof that makes it doable or not.
There are other factors that make it difficult or impossible to treat most contracting like piecework.
3/3
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@carnage4life I totally understand why some potential clients may want to change over to “results-based” contracts and why people may think that sounds like it’s a good idea, but it’s not really AI or the lack thereof that makes it doable or not.
There are other factors that make it difficult or impossible to treat most contracting like piecework.
3/3
@MisuseCase @carnage4life cf. the excellent HourlyBillingIsNuts.com
