In our company, we are frequently using consulting services to backfill resource needs for our projects. We are shortly going to start capturing those costs for outside services that we use to augment our support group. We want to know the right places to apply costs. Is this the right forum to ask this question?
If so, here is the scenario:
1) An employee resource is assigned to a development project.
2) His ability to meet his current support commitments is impacted.
3) We contract for an outside resource to backfill his support commitments.
Question: is it an accepted practice to charge the project (versus the IS budget) for the consult's time? Or should the employee cost (fully burdened rate) be applied to the project and the consultant cost charged back to the IS budget? Are there any other approaches or considerations we should be aware of?
Thanks to those who provide input.
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George JucanManaging Partner| Organizational Perfomance Enablers NetworkWoodbridge, Ontario, Canada
It all depends on how “clean” your company keeps financial records on the project. If you’re indeed tracking project expenses toward the project execution, then you should drop the employee cost from the moment it does not participate in the project anymore, and add the consulting expenses in. Do not forget about procurement costs that many ignore: time spent for interviews, admin managing contracts and time reports etc. The employee cost should go to the general IS department cost pool, as he/she is still an expense but not related to the project anymore. Saving Changes...
Anonymous
Thanks for replying to this post George. I am going to defer responding to this (other than this thanks to you) until my supervisor returns (he is off today) so that he can follow-up with you. Saving Changes...
