Page 502 - Using MIS

ethics Guide

eStimation ethiCS

A buy-in occurs when a company agrees to produce company needs this system. If management doesn’t realize
a system or product for less money than it knows the project it and fund it appropriately, then we’ll just force their hand.”
will require. For example, when a vendor of development These issues become even stickier if team members
services agrees to build a system for, say, $50,000, when disagree about how much the project will cost. Suppose one
good estimating techniques indicate it would take $75,000. faction of the team believes the project will cost $35,000, an-
If the contract for the system or product is written for “time other faction estimates $50,000, and a third thinks $65,000.
and materials,” the project’s sponsors will ultimately pay Can the project sponsors justify taking the average? Or
the $75,000 for the finished system. Or the project will fail should they describe the range of estimates?
once the true cost is known. If the contract for the system Other buy-ins are more subtle. Suppose you are a proj-
or product is written for a fixed cost, then the developer will ect manager of an exciting new project that is possibly a ca-
absorb the extra costs. A vendor would use the latter strat- reer-maker for you. You are incredibly busy, working 6 days
egy if the contract opens up other business opportunities a week and long hours each day. Your team has developed
that are worth the $25,000 loss. an estimate for $50,000 for the project. A little voice in the
Buy-ins always involve deceit. Most would agree that back of your mind says that maybe not all costs for every as-
buying-in on a time-and-materials project, planning to pect of the project are included in that estimate. You mean
stick the customer with the full
cost later, is wrong. Opinions on
buying-in on a fixed-priced con-
tract vary. You know you’ll take a
loss, but why? To build intellec-
tual capital for sale elsewhere?
For a favor down the road? Or for
some other unethical reason?
What about in-house proj-
ects? Do the ethics change if an
in-house development team
is building a system for use in-
house? If team members know
there is only $50,000 in the bud-
get, should they start the project
if they believe that its true cost is
$75,000? If they do start, at some
point senior management will
either have to admit a mistake
and cancel the project with a loss
or find the additional $25,000.
Project sponsors can state all
sorts of reasons for such buy-
ins. For example, “I know the
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