Pandemic Changes SAP Freelancer Pricing Model

Dmitry Kaglik

October 5, 2020

SAP

No Comment

It’s no doubt that 2020 goes under one big sign of COVID-19 pandemic. It changes a lot in our lives. It changes the lives. It changes us.

Of course it also changes the world of SAP consulting. Many companies reduced or shut down SAP programmes altogether. Many companies use this time to re-arrange their SAP team. Some even use this low-activity time to increase the SAP implementation speed.

SAP Expert ran a vote that showed that many SAP consultants were still optimistic about their future. There’s another vote about holidays that SAP consultants can or cannot afford nowadays.

Everyone sees and accepts now that SAP projects shifted from on-site to remote model. There’s no need now to come to the office, moreover there’s no possibility to come to the office in many places and companies. SAP consultants can successfully deliver the projects without being dragged from their homes. At least, this is true for non-greenfield implementations, although I know examples of successful go-lives in remote mode (text in Russian).

This inevitable led to the shift in the pricing model for SAP freelance consulting works. I would say this is a tectonic shift.

Customers, or agents, used to ask for the “all-inclusive” rate for a consultant being on-site. This would on top of a regular rate include all overheads that freelance SAP consultant had to pay for with travel and accommodation being the biggest. Of course, this was convenient for customer or agency budgeting, but it was risky for the consultant who would be liable to any fluctuations in travel or accommodation costs. These fluctuations could be significant in popular destinations. Any objections from consultants were not accepted. This was the most standard practice. Luckily, there were also rare exceptions.

With remote work, travel is now out of equation. There is no need for consultant to spend money on tickets, hotels, taxis and so on. Has it affected the rates?

There is no easy answer to this question actually. Mostly because the market contracted significantly. There is no much offer from companies who hire freelancers. But there is still some. And it shows that companies and agents are now more happily accept the rate without travel expenses, agreeing to cover trips separately when (of if?) they return to normal.

This is a significant change in the pricing model. It removes the risks of changes in travel cost from consultants, moving it to customers who have comparably bigger budgets.

Have you noticed similar changes in your conversations with customers and agents?

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