Dispelling the Agency Hex

There’s no question that outsourcing to foreign lands is becoming a growing trend for corporations and small businesses, but lets take a second and figure out why.

Since the birth of technology there has been an unspoken rule for agencies and developers that the information we possess is priceless. For us to share it… it’s going to cost you!

For years domestic agencies have over inflated the rates and over valued the worth of their products and services, leaving consumers with a very bad taste in the their mouth. They’ve pushed off mediocre work for excellence and set the bar for quality lower and lower. It’s no wonder that when presented with a sub par option at a much lower cost, consumers are flocking for the borders willing to sacrifice service, support, and accessibility for bargain bin prices.

I’ve been on the inside of this ‘Hex’ for years now and have been exposed to the working and methodologies implemented and will expose a couple here.

The Mark-Up

Typically, an agency will mark up the hourly rate for development and design by 150%. Let’s break down that number. You, as a consumer, request a price quote to develop a standard Web 2.0 compliant site. You contact an agency and after explaining what you want, they come back to you with a statement of work which details the amount of manpower and hours needed to produce your site. Of course the agency is trying to turn a profit so they inflate the hourly rate for the developer/designer working on your project. They then extend the total time to complete the project to justify the high quote and explain that there are project management and quality assurance budgets included.

Now let’s step back and look at what just happened. You went from needing a website to getting a ‘project’, which needs to be managed and quality assured. The agency charged you for 2.5 developers/designers and instead of putting 2.5 developers/designers on the ‘project’ they subbed in a project manager and quality assurance professional (which usually ends up being the project manager in most shops).

In the end you finally get your website (3 – 4 weeks later and over budget). Had you hired a freelancer and re-purposed  someone within your organization to keep tabs on the progress and oversee reviews; you would have probably had your site completed within a week and 100% cheaper. WHOA!! don’t pull out your passports just yet let me finish!!

Over Booking/Selling

This happens when an agency bids on a multitude of jobs and wins the lion’s share of them. A rational minded person would think: “Hey, we’ve got all this work, now we need people to complete it!”

WRONG!

Instead, the agency tries to juggle the time lines so that 1 or 2 developers can do double (and in some cases triple) the work. As a developer, this personally annoys me the most. You’re put into a no win situation here. If you stand your ground and decided: “Hey, that’s too much for 1 person to do, you’re looked down upon and threatened to be let go and what not.” When the reality is: They’ve (the agency) wronged you! They’ve sold your services 3 times over and expect you to pause your life to get the work done. Wait a minute now that I think about it.. they’ve sold me 10 fold, lets not forget about the MARK UP!!!!!

Stop Googling foreign web design now!!! I’m not finished!!

The Solution

1. The first thing you can do as a consumer is know the worth of what you’re asking for. This may sound trivial, but it will save you a lot of haggling with agencies. You can learn the worth of your project by shopping it out to a few freelancers / contractors and weighing the cost of hiring a developer / designer and having it done in house.
2. Next, do some research and find out if there are any “out of the box” solutions for what you want. Take a look at social networks and blogging software and find out if they will meet your needs. You’ll be surprised how many pre-built web & interactive utilities are out there.
3. Take your research and feedback to an agency and find out if they’re willing to perform the work. It’s likely that they aren’t, but they WILL drastically lower their bid if they want to get your business (especially during the GFC).
4. Take your new bid from the agency and shop it out to a freelancer/contractor again.
5. Compare the freelancer / contractor bid to illumifi interactive’s products and make the best choice.
6. Stop thinking about sending your web and interactive project over seas!

About the Author

Cameron Tullos – Web Dev Expert

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As a multimedia developer for 9+ years at major web & interactive studios in Columbus, OH, Cameron is well oriented to the inner working of agencies and Corporate America.
Fact: Cam can slam a revolving door