IT Services Cost Cheat Sheet - Part One

2. Gross Margin – 12- 26 ( Varies from 12 to 26%)
   
   
3. Skills Rationale
   For example, to support 100 Windows Servers, 1 FTE is required per shift, but what is most important is to know the exact skills required to support the service. 1 FTE must be a mix of required skill levels/band levels, like 70% of Level 2 and 30% of Level 3. This combination is vital to define the cost of the particular service and hence a good service architect must possess enough hands-on knowledge of the skillset. In our case, let us produce a rationale for each skillset required.

Skills	Level 2	Level 3
Windows	80%	20%
SQL Server	70%	30%
Linux	70%	30%
MySQL	60%	40%
Network Switches	90%	10%
Large Firewalls	70%	30%

4. Support Rationale
   
   This rationale is required to count the number of service points/Cis which are supported by each individual per shift. In our case, the most generic table would look like the following.

Skills	Count/ FTE
Windows	100
SQL Server	70
Linux	80
MySQL	65
Network Switches	50
Large Firewalls	20

This table requires the knowledge of industry trends, automation of processes within your organization. As you can see there are lots of levers which can control the overall rationale and a smart pre-sales executive plays on these levers to fine tune the overall proposal.

5. FTE Rate Chart

Next thing you need to have is the rate chart of your organization, which is generally a very confidential document and only sales or pre-sales teams have access to the same. This document is issued by the finance team to authorized stakeholders from time to time, highlighting the key changes in a new rate card.

A typical rate card would look like this with other important information.

Employee Band	A (Junior)	B	C	D	E	F (Senior)
Offshore Cost / Month (USD)	2200	2800	3200	3900	4600	5500
Onsite Cost / Month (USD)	6500	7200	7900	8700	9700	11300

Gross Margin: Min 18%

6. Overall Cost Template
   
   Finally, you would need to create a costing template for your service. Now, while all the requested information is provided, please find the cost of the service.
   
   While creating the cost, please keep the following assumptions in mind.

• There is no change in overall IT Landscape
• The same team is supporting the client
• Do not consider any other factor, just calculate the cost for 5 years

Please provide the final cost of services in the comments below and correct responses will be announced on all social platforms.

Happy Learning!!!