Provide a half page response to each discussion post in detail. Make sure that you are responding to the post describing what you agree with and disagree with if anything. Also, provide any alternatives if any. Tell me in detail what you like and or dislike and describe your responses to each discussion.
Buying-in on time and materials contracts always involves deceit, and I would consider that to always be unethical. When the cost of a project can be reasonably estimated, providing a lower estimate to a customer is clearly wrong, even though it is generally understood that projects of this nature tend to run over in time and budget. I would think a project contract written at a fixed cost would give the customer more of a comfort level in the price estimate of the project. It would benefit both the developer and the customer for the estimates to be as close to accurate as possible. Additionally, the developer would need to have confidence in their abilities that their system would either be close to budget, or successful enough to provide future opportunities that would outweigh the additional cost.
In the first ex of the case study, members of the team believe the true cost is $75k, although the budget is only $50k. In this ex, to low-ball the price of the project would be unethical. It is up to management to determine if the project is worth the additional $25k investment. In the second ex where a range of estimates is provided, I think the most ethical approach would be to make the discrepancies in the estimates known to management so the risk of surprises down the line are reduced. Transparency into the project seems like the most ethical approach in my opinion.
Making an estimate for an information system project can be difficult because the full scope of the project is not known in the beginning. It’s not until you start interviewing users and determining requirements that you can even begin to access what is needed for the project.
When dealing with outside vendors, this can be particularly difficult when negotiating the contract. The outside contractor does not want to make a quote and then find he great under estimated the project, and the company doesn’t want to agree to an “open ended” price.
I think fairest way to address this issue is to break the project into two parts. Allow the contractor to define and spec the project for a set fee. Once they understand the full scope of the project, they can then submit another quote for the actual design of the system. For the contractor, he will have a better handle on what is required so he will make a more informed estimate. For the company, if the design quote is too high and you decide not to proceed with the project, it only cost you the fee for the initial phase of the project.
This prevents any unexpected surprises with projects going way over budgets and seems like an ethical solution.
From reading the chapters and the ethics guide it looks to me that there are four choices when it comes to estimations on information projects; lying, averaging, ignorance, and the “go ahead”. Knowingly failing to disclose information in any setting is a form of lying. This type of behavior not only affects the performance and work ethic of the individual but it also chinks their integrity as a person. Doing small lies over time, being untrustworthy or even telling a lie to meet a deadline is a variance from the truth that will only take one down the wrong path.
The second option is averaging the ideas of the team members. This can be done honestly with discussion and openly voicing concerns. The variance in price or timeline may be backed up by actual data or feelings but should be seen in the end as an average of estimates and disclosed as such. Should the company or leadership understand its position as an average estimate and not a hard line number, then this system can be used honestly. The Third choice for estimates is ignorance or a failure to cover all the bases. With many estimates or projects there will be items that are overlooked or a small voice in one’s head that gets forgotten about. These things should be accounted for on a small scale. If the small voice is hinting that the estimate is way off then we get into more of the lying spectrum because more thought has gone into the idea and it is being hidden. However, if it is a fluke or an honest overlook then I believe it’s ethical to carry out the proposal. In this situation though, the change should be addressed as soon as it’s discovered. The final option in estimation is the “go ahead”. For inside jobs this can be in the form of the project boss, leader, or key responsible member hearing the uncertainty of the estimate and deciding it is worth the risk to carry on. In a consulting position this would be the clients agreeing on the estimate with the notice of varied fluctuation or hesitation in the final estimate.
All in all, honesty does count in this system but does not excuse poor work on the research end in coming up with the estimate. Many projects are difficult, if not impossible, to estimate but should still be given due diligence and treated ethically.
I think the ideal, most ethical way to proceed with IS project estimation is to have all costs known right up front. No one will be entering into the agreement with less-than-full knowledge, and no one will end up feeling deceived when previously unmentioned costs are finally revealed. Banks, realtors and some car dealers are finding that consumers really appreciate truth-in-lending or true-cost statements before they enter into contracts. The same would surely be true for managers looking for IS contractors to upgrade the company’s system.
But the ideal may not be possible in many cases. There are probably IS projects that end up costing more than anyone initially thought, and this is where the company benefits by having signed a fixed-cost contract. The contractor, however, loses in this case because he/she will be eating much of the previously unknown costs. In some instances, this can be attributed to contractor error or inexperience in estimating. In other cases, there was no way for the contractor to foresee the added expenses before beginning the project. When this happens, I’d argue that it might be somewhat unethical for the company to not cover the added costs.
A manager entering into a time-and-materials contract, knowing full well that the time and materials are really going to increase the estimate, is acting unethically toward his/her company. It demonstrates a lack of regard for stewarding the company’s resources and will likely end up badly for the manager, especially if the added costs are high. For in-house projects where there is a difference of opinion on a project’s cost, I think it is unethical to proceed without doing more research on cost. Again, this shows poor stewardship of resources and laziness on the decision-maker’s part.
After reading the text, ethics guide and thinking about my own involvement with my company with the “merits of different merit estimation alternatives for information system projects”, this is a very gray area for a lot of beliefs, and I fully believe that ethics play a huge role in it.
I wanted to comment on two of the differences in the ethics case from the text, the ex with three different costs, and the project manager going to leadership with the possible budget overage and seeking approval to move forward. When I think about the three different cost scenarios, I think the best direction would be to analyze each of the pieces to check for validity and which is realistically the best option. I am not a fan of “sand-bagging” results, and would rather see the worst case scenario with all possible options to ensure I am making a sound decision, and to not have this would be unethical and definitely would look bad on the approving party, it might get over-looked somewhat if the project is deemed successful, but still held in the back of the mind of senior leadership. The second option where the PM goes to the senior manager and delivers the news in regards to the project that, “I think there may be other costs, but I know that $50,000 is all we’ve got. What should I do?” (Kroenke, pg.252-253) In the long-run, this might be the most viable option to ensure that you have the complete buy-in from the senior leadership. Honestly, it depends on the situation and your leadership. Will they take one for the team as the leader, or throw you under the bus? These are also ethical issues that need to be taken into consideration when estimations are presented for an information system.
In my own organization, I am currently working on a project that I am building a business Proforma and including a 5-yr ROI (Return on Investment) for a large call center department that is updating their Contact Center Suite to a more Cloud based alternative. This new Information System can potentially be used system wide, but where the caveat comes in, is the complete buy-in of other departments. After completing the project, the ROI makes sense for this department to complete, as it will save hundreds of thousands of dollars starting in year 2, but where the ethics come in, and where I am reliant on my business partners to a degree is “actual cost” of the project. I am basing a number of my assumptions on their estimates as they are the “experts” and there is certain information I am not privy too. So if the analysis ends up wrong or the savings are not real savings, is it my fault, the business partners or both? Ethics plays a huge factor in this, and I personally find them to be ethical.
In conclusion, there are many ethical issues involved in each alternative and “project cost” option route to take. The route to start down a road knowing the cost is incorrect and worrying about the consequ3ences later once you prove the benefits, which is risky, or the route to present a budget and if the needs change, then present to the senior leadership. The first is high-risk (high reward) or the latter is the safer route that may end up causing more frustration because the project may get turned down or shelved to a much later date. In business we must take risks, but there is a domino effect that someone with a family might not be willing to take.