IT Consulting Rates-A Comprehensive Guide

July 19, 2023 13 min read
IT Consulting Rates 2023

What does it take to make your app to the store charts? Downloads! Increased downloads + better engagement = successful app.

But, the journey to the increase in downloads is not linear. You have much to do before you launch an app and watch its success.

The IT consultants can help you plan the journey better. They are not just people who will give you random advice; they help you see through the success of the application.

The consulting industry generated total revenue of $329 billion in 2022 (Statista). It was valued at $132 billion in 2020, a shortfall due to the Pandemic. However, the industry accelerated between 2021 and 2022 (Statista).

Size of the global consulting market from 2011 to 2020

There are several reasons why businesses are seeking IT consultancy services to convert their idea into an application.

  • Help with identifying the problems that the business should try solving
  • Augment the internal resources by offering requisite support and services
  • Adding specific expertise to your business
  • To enable change within the organization

With IT consultancy services, businesses can augment their solutions and solve real-world problems. This blog will discuss the scope of an IT consultant and the ways to calculate the costs.

What is IT Consulting?

IT consulting helps businesses evaluate their current progress in the field. It will help align the possible solutions in sync with the company's objectives.

The consultant will draw the bigger picture, design the ideal plan and evaluate the current strategies. The consultant will help the company attract more success with their solutions and capabilities.

The IT consultant dons several hats, from determining the risk mitigation strategies to drawing a more holistic plan for your probable solution. They will cater to all needs that fall under your business domain.

The IT consultants can offer solutions in the following fields:

  1. Strategy: They can help build the overall system to build your concept into a full-fledged solution
  2. Architecture and Implementation: your consultant will look at the design methods, infrastructure and overall execution of the defined plan
  3. Security: They will help reduce the risks owing to complex protection and enhance the overall authentication of the website

These are just a few areas where the IT consultant can help. You can use their services across your IT and business requirements.

What is the Work Scope of an IT Consultant?

If you plan to hire an IT consultant, you might want to define the scope. If the definition is unclear, you might get vast and unclear content at your doorstep.

Work Scope of an IT Consultant

1. Planning a Solution

Determine what type of solution you need from the IT consultant. Would you like to modernize the system? Do you wish to move the existing system to the cloud?

You might want to re-engineer the entire solution if you have a CRM system. You may want to replace the whole system with a new one.

In case you might want to set up the right processes in case you are setting up an entirely new solution. You might want to check processes that can be automated in case you already have a ready answer.

Planning is an integral part of the work scope. Depending on the type of solution needed, the consultant will define the plan and identify the best strategy.

2. Validation of Idea

The consultants are responsible for idea validation. They play a crucial role in identifying if the idea is feasible and should be considered by the business.

They will help the businesses define the idea in a better way and determine whether it is fit for the market. The consultant will help create the MVP, define the audience and build the idea to help improve validation techniques.

3. Detailing the UX

The UX design is an integral part of your mobile or web app development. You should have a smooth and clear user interface and experience design. The idea is to build interactions and streamline the processes involved.

The consultant, owing to their experience and project handling, can help determine the exact UX design that will work for your business idea. They will help strategize the interactions, make the navigation incredibly engaging and assure better accessibility.

The consultants will offer their views and interpretation of how customers use the mobile application, which can enhance the experience design.

4. Helping with budget

The budget definition is one of the significant things included in the work scope. As a business, you may be unable to judge how much you should spend on a particular software solution.

However, the consultant brings vast experience and understanding of the software. They can help decide the budget, estimate the overall spending, and also help with defining the contingency funds.

They will help create the ideal budget that will improve the development outcome.

5. Enterprise or mobile app solution-choosing the service

As a consultant, they can help decide if you should go with an enterprise or custom mobile app solution for the idea you have in mind.

Similarly, they can also help choose the medium or channel where your solution should be present.

This will also add one more task to their scope of work. They will be responsible for choosing the mobile or web application technology stack.

The approach or service type will help them define the technologies that can be used to build the software solution.

6. Defining the approach

It is equally essential for businesses to determine the software development approach to define their reach and visibility. If you plan to go native with your policy, your visibility will be limited to the platform/operating system.

That’s why choosing the development approach is critical for the business. The consultant will have an understanding of what will work best for your business. They would know if you should go with an iOS-first approach or choose cross-platform development.

The consultant is not your full-time employee. You can hire their services for a fixed amount. Here are all the factors that impact the consultant’s rates.

Factors Impacting Consultant Rates

The consultant rates are not constant. A consultant in India might go with hourly rates, which might differ from the consultant rates in the US. Let’s look at why these rates differ.

Factors Impacting Consultant Rates

#1 Specialization

Your IT consultant could be an expert in healthcare solutions or retail. They would have acquired specialization in a particular field. For example, an educational tech consultant would be responsible for optimizing LMS solutions and identifying more possibilities in this field.

The viewpoint and vision of the healthcare IT consultant are different. Again, you would notice that the complexities and skill levels needed for each specialist are different.

As a result, specialization plays a pivotal role in defining the consultant rate. If the complexity is high, the hourly charges go up.

If you offer select services to high-level organizations, your rates might differ from when you provide services to medium-sized companies.

#2 Location

The location can play a crucial role in determining the consultant’s rate. For instance, a person in Kentucky might earn more than one in Argentina. Similarly, even if they all belong to the same country, hourly rates will differ depending on the city and area.

The location plays an equally impactful role in determining the prices. In a developing country, the hourly rates automatically go low. A high-end and developed country might notice a significantly higher consultant rate.

#3 Company Size

If the company is enterprise-grade or large-scale, it would have put more effort into creating products. They would have the apt resources and infrastructure along with years of experience.

This means they would translate their size to define the pricing model for their consulting business. However, if you are dealing with a small size company, you are looking at a compact resource size. This would automatically translate to lower consultant rates.

For example, a company with 25 to 50 employees would have different consulting charges than someone with more employees. The base pricing would be derived from the company size.

The software consultants adopt one of the three engagement models:

  1. Hourly rates: This means they would be paid for the number of hours they work on the particular project.
  2. Project-based: If they are handling the entire project end-to-end, they would receive a fixed monthly amount.
  3. KPI: Depending on the metrics they have achieved at the end of the development; they can charge the business. The consultant would be paid only when they have achieved the metric.

Cost of Hiring IT Consultant

On average, the consultant can earn $5k for a particular project. This would increase depending on the work expected from them and other facts.

Average IT Consulting Rates by Industry

Healthcare: $50 to $150 per hour

Retail: $25 per hour

Finance: #38 per hour

IT Consulting Rates by Location

The hourly rates for individual location

  • Australia: $70 per hour
  • Canada: $100 per hour
  • Europe: $100 per hour
  • India: $30 per hour
  • US: $100 per hour

Tips to Estimate Your Rates

It is very important for an IT consultant to know how much to charge. Whether you are new to this niche or planning to take up a new project, estimating your rates can be useful. We have already discussed the average rates for a consultant earlier. This section will help you with the tips that can help estimate.

Tips to Estimate Your IT Consultant Rates

#1 Estimate the Worth of your Services

You are not your service. You are a little more than that. You might be offering an article, blog or video as part of your service; however, what really drives your rates is the value you deliver to the business.

For instance, if you are increasing their page visits or conversions, this is the value you offer as a consultant. To determine the value of the services you are offering, you should determine the following:

  • The proficiency you need for the particular solution
  • The benefits you offer your clients
  • How will they save money if you do their work?

When estimating the worth, you should also consider the client’s business size, their existing resources, and the need for resource allocation. Make sure you calculate the value in terms of the things you will not be able to do owing to the project consulting. For instance, if you are going to take up only one project, you need to take that into account when declaring the estimate.

#2 Define the Scope of Work

This is monumental to estimating the true worth of your job as a consultant. If you are going to write a well-research whitepaper, you need to consider all aspects of the write-up. This will include research, discussions, reading through their material and other aspects. You should also cover the services offered by proofreaders and editors.

You are not going to charge for the one hour of interaction alone; there are a lot of behind-the-scenes tasks that you should accommodate when defining the rates. 

As a consultant, you will have several follow-up calls as well that you need to consider when estimating the price. Defining the work scope can ensure you can define the rates well for your services.

#3 Rates that Build the Perception

The rates you charge your client for the work will also define their perception of your work. For example, if you have set your standards too low or estimated your worth low, your clients may not perceive you as an expert in the field. This can hit you the wrong way in the long run. They may consider your offering poor quality.

Your estimates also talk about the value you are offering. You should study the market, probably understand how the competition demands their salary in the market, and then create the pitch.

Rates that are too high or beyond the market rates can lead to loss of job. You should create a list of deliverables and accordingly identify what you can offer the market. This way you can set the right price for your consultancy services.

#4 Cost-Profit Ratio

Even if you are working from home, there are expenses that cannot be avoided. You might have a huge cash flow that you cannot disregard. As a result, it is important to determine the expenses, identify the personal/professional cash flow and then define the charges.

Your income should be enough to cover your expenses and find a way to offer profits. Ultimately, your aim is to grow the numbers and improve your profit margin.

Calculating Hourly Rates vs Retainer Fees

Calculating the IT consulting fees is an important part of creating the pitch for the company. There are various fee structures that you can use for calculating consultant fees.

Here we will discuss the two most popular methods, hourly rates and retainer fees.

Calculating Hourly Rates

This method of calculation works for people who will have several meetings and in-person communication with the client’s team.

There are two ways to measure IT consulting rates per hour. The 3* hourly method and the 52-week method.

In the 3x hourly rate, you will use the current hourly rates as a base. This is if you have been working with a client as a side hustle. You can multiply the rate by three and take that as the hourly charges for your current hustle. This will help match the current salary you are drawing at your work.

In the 52-week method, you might need to consider the salary you wish to draw from your current hustle. Say, you want to get $50k annually. You will divide this number by 52 weeks.

You will get a weekly rate for the consultancy services you are offering. Divide that by the number of hours you are likely to work and then mark it up by 40%. This would give you the average consulting fee for an hour.

Calculating the Retainer Fee

A retainer is someone who is part of the company for a long time. You will earn some amount every month against the services you offer.

You might want to define the work scope and the number of hours you will devote to the company under this heading. You will get a fixed income at the end of every month, which can help you build your business.

You can use the hourly or 52-week method to calculate your retainer fee too. You might want to consider the work you are offering, the total time taken for each task, and the overall cost (personal and professional) when deriving the retainer fee.

In case you want to go for a monthly retainer and not charge by the hour, this is a useful calculation method.


IT consultants are in huge demand. Businesses lack basic resources like analysts, designers, and developers who can support their vision. Instead of hiring more resources, they prefer adding consultants, who can help further their business.

The IT consultant working for your business should define the pricing based on their cash outflow, services offered, work scope, and the true value delivered.

Expert App Devs is an expert IT consulting company in India with proficiency in software development. We have been filling the gaps in our client’s businesses by offering crucial and important services. If you are looking for retainer consultants or a developer to fill in some gaps, you can connect with our team.

Vaibhav Patel-img

Vaibhav Patel

Project Manager

Vaibhav Patel is a project manager with expertise in web development, API development, Laravel/PHP/WordPress/Node/Perl development, database management, server management (AWS/ Microsoft Azure), mobile app development and Agile practitioner.

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