The Day Rate as a Black Box
When you buy IT consulting, sooner or later you get a number: a day rate. In the German market, anything between 800 and 2,500 euros is common, sometimes for seemingly similar services. Few consultants volunteer to explain where these differences come from.
That's no accident. Opacity protects margins. If you don't understand how a price is built, you can't evaluate it. You end up negotiating the wrong lever or comparing apples to oranges.
How IT Consulting Prices Are Calculated
The day rate is the basic unit of every consulting calculation. It follows a clear logic, even though this is rarely communicated openly.
Starting Point: The Consultant's Cost Base
The basis is always what a consultant costs internally. For employed consultants, a firm works backwards: annual salary plus overhead (social contributions, training, sales, infrastructure, administration) equals the fully loaded cost. Then add a profit margin.
Industry rule of thumb: the billable day rate runs 2.5 to 4 times the internal daily cost of an employee. For freelancers, this overhead disappears, but they carry the entrepreneurial risk themselves, which is likewise reflected in their rate.
Utilization Assumptions
Not every day is a billable day. Sales, proposal writing, vacation, sick leave, internal projects: a consultant is realistically billable 60 to 75 percent of the time. The remaining quarter to third must be funded through the day rate.
Project Size and Discount Logic
Single days are expensive. If you provide planning certainty, you get better terms.
| Volume | Typical Effect on Day Rate |
|---|---|
| Single day / short notice | List price or premium |
| 5 to 10 fixed days | 5 to 10 percent discount possible |
| Multi-week project (team) | Project flat rate or discounted package price |
Planning certainty has real value for consulting firms. Resources can be allocated firmly, capacity blocked specifically. Reputable providers pass this advantage on.
Seniority and Specialization
A generalist profile is cheaper than deep industry know-how combined with project experience. If you need a consultant who understands both IT and business, runs projects independently, and needs no ramp-up time, you pay more per day. But you often save weeks over the course of the project.
Overhead at Large Firms
Large consulting houses have high fixed costs: prestige offices, extensive back-office structures, global career programs, elaborate certification processes. All of this flows into the day rate, even when none of it directly benefits your project.
Day Rate, Fixed Price, or Package: When Each Makes Sense
Beyond the pure day rate, there are other pricing models that suit different project types.
Day Rate (Time & Material) works for projects with open scope, when it's unclear at the start how many days which topics will require. The risk sits with the client: if you don't steer, you pay longer.
Fixed Price makes sense when the deliverable and scope are clearly defined. The provider carries the risk and prices it in. Fixed prices are therefore rarely cheaper than T&M, but they create planning certainty for both sides.
Packages are the logical evolution of fixed-price thinking: a defined team, a clearly scoped goal, a timeline, and a price that wraps it all together. This works particularly well for development projects where deliverables and methodology are clear from the start.
The advantage: no counting individual days, no scope creep risk. The client knows what they get and what it costs. The consultancy can work efficiently with a dedicated team without coordinating every single day.
What's Behind the Numbers at Ekstend
Ekstend is a small consultancy with a lean structure: no offices in five countries, no bloated middle management layer. That keeps the cost structure lean and prices realistic.
Our prices are built on three factors.
Experience of the person deployed. We rely on consultants with real project experience. No learning on the job at the client's expense. That has its price, but that price goes into the project, not into overhead.
Type of service. Strategic advisory and operational project management are priced differently because effort and responsibility differ. For development work, we offer packages, for example the Ekstend Digital Sprint: four weeks, dedicated team, working prototype, fixed price. Clear scope, clear result, no day-rate counting.
Volume and duration. Larger projects or firmly planned engagements give us planning certainty, which we pass on in the form of better terms.
You can find our prices transparently at ekstend.de/leistungen. What you see there is not an opening bid, but an honest frame of reference.
If you'd like to know which model fits your project, talk to us. No sales pitch, no strings attached.
