How can programmers charge by the hour for systems automation?

Discussion in 'Trading' started by virtualmoney, Oct 7, 2007.

  1. Shouldn't the price be a fixed quotation by the project?

    What happens if he takes longer than expected?

    fell asleep
    scratched his butt
    read newspaper at toilet

    ...while waiting for backtest results

    or worse...have no idea what he is doing...
  2. slacker


    The quote can be anything you agree on.

    1. Most people who want software developed have no spec and no clue how long it will take.

    2. Most people who want software developed would never agree to the cost of the project if they really knew how much it would cost before completion.

    Suggestion, identify milestones and pay only when milestones are reached. Step-by-step may give you what you want.

    Suggestion, get multiple bids from several programmers for each step in your project.

    However, programming an automated system is a very unbounded problem and hard to cost out. Anyone smart enough to do a good job is probably doing the same for himself; or knows better than to commit to a 'bad trip'. (Not saying your project would be a bad trip!) :)

    Good luck on your project!
  3. jsmith


    It depends on the programmer. Some projects which are more difficult to fully estimate the time required may be charged by the hour. It is a good idea to speak with a few references and see some previous work before taking on a consultant.

    I know consultants who gather all the requirements and charge by the complete project. The consultant cannot increase the cost of the project if he runs into unexpected problems themself that are within the original requirements so some problems are priced into the project quote. However, changes or additions to the initial requirements would increase the cost.

  4. atonix


    While he could abuse it (ie, scratch his butt), he probably has no idea how long it would take, so wants to be compensated for the work he does (however much it may be). If you're paranoid, ask for daily/weekly (or whatever) code updates, and make sure it's progressing (even if you can't fully understand it).
  5. Absolutely correct... Ok... You approach a building contractor and you say... I want a house, its complex, i have no plans... What is it going to cost... - Building Contractor is speechless... Walks away...

    Software development requires even better plans (flexible / agile!) than a building contractor needs since it is WAY harder to create excellent software than it is to build an elegant house...
    Amen to that - consider that lawyers make 200 to 400 dollars an hour and yet what programmers do is 5 to 10 times harder but get PAID less... that's why so many of them are always irritable..
    Yes, its the only way to control the chaotic creative process that is programming... but still it will be like trying to get a solid grip on a greased pig on a hot day while you are drunk...
    Negative... Other programmers DO NOT like to come in behind someone else's code that is already there to add to it - much harder than doing your own from scratch - its like walking in a swamp...

    You have to see the code in the mind of the other coder... twice as hard... try to stick with one guy you trust from the start.

    Give him a wee percentage of the net for awhile to lock him into a long term agreement.

    Like Microsoft gave all their top coders stock options in the beginning and made them millionaires.


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  6. How can programmers charge by the hour for systems automation?

    Easy. I say to people OK you pay me $ 100 / hour. Done.
  7. Being over charged should be the least of your worries.
    Worry about getting someone who is competant.
    When you pay someone $100 an hour does it really matter if they really cost $120 or $150? As long as they get the job done thats much more important.

  8. I have seen a lot on both sides of this issue.

    1. Make sure you have a detailed functional description of what the project actually involves. Without someone with software engineering experience being involved in that functional description process itself, you stand little chance of being satisfied with the final result. Seriously consider hiring someone to help you understand what the possibilities are and what the resulting estimate is for each of your functional items.

    2. If you can find several competent people that are balking at committing to the job at what you consider a "reasonable estimate", it is likely that the project is either badly defined, an overoptimistic attempt at something very difficult, or you are not correct in what you consider "reasonable". The absolute worst thing you can do is hire someone to do it who thinks it is "no problem" if you have already found several good people that are walking away. If you hire this person, you will be very lucky if the project is completed at all, or the quality will be so bad that you will wish you never did the thing at all.

    3. Do not attempt to hire overseas programmers to do it unless it is a very repeatedable, well understood problem, or something which needs a rewrite but already exists in a currently working form. There is an art to systematic disciplined creativity which has cultural roots, and which is very difficult to teach to people who are used to being "programmers" rather than software engineers.

    4. Price the work on the project level, not by the hour, but be sure to include incentives for QUALITY as well as SPEED, have definite PAID MILESTONES, and be sure that you price it at a "generous" level. Do not pay by the hour since people have been known to "milk" things when they know they are being paid by how long it takes. On the other hand, trying to save money by underpricing the project will de-incentivize the person from doing their best work. If you want a Mercedes level product, do not pay them as if they are creating a VW Beetle, in other words. A way underbid project is just as bad for you as the person bidding it, because once they realize they underbid it, they will just slap together anything to get it over with and minimize the "loss".

    5. Be flexible, and realize that 9 out of 10 projects will have changes made during the process (mostly initiated by YOU once you see something underway), which will necessitate additional effort, and thus additional cost. Figure that 70% of the cost (Step 4) will be anticipated, and 30% of the cost (Step 5) will occur due to changes, some of which will be impossible to anticipate until the project is well underway.

    6. Get references from the people that you are considering hiring if possible. Value QUALITY over SPEED and COST. Do NOT usually go for the absolutely lowest bid if you are taking multiple bids. Particularly, if one of the bids is WAY LOWER than the others.

    Consider using a friend in this field (if you know one) to help with the process of determining the best people to use for the project.
  9. My question is 'how can you pay a lawyer by the billable hour?" They tend to bill about 50 hours per day, IMO. LOL. You call and say, "hi, did you get my request?" He says, "yes." I get bill for 1 hour, minimum charge, LOL.

    What we've done with several different programmers is to offer an ongoing participation in any profits that might develop from their programming assistance. This, of course, only applies to trading programs. We have guys who actually "rent" their programs, or charge a percentage of profits for ongoing, workable programs.

    For specific tasks, we generally negotiate up front. Both sides knowing full well that the other side "might" come out ahead, which means it's probably a fair deal. The Programmer will bid on the high side of antipated hours, and we then say, we'll pay a bit extra if you get thid done sooner, and please allow us xxx hours of re-working.

    Just a couple of ideas....

  10. Excellent Ideas... !!

    Incentive = Free Enterprise = Growth for all parties...

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    #10     Oct 8, 2007