Monday, November 11, 2002

Community

Guest commentary: Ethics an oft-ignored player in corporate IT decisions

By David H. Gleason

Two years ago I was involved in a $4 million software failure. At the end, my client had no recourse, because the developer all but went out of business.

Granted, we were at the apex of the dot-com rise, and money and hopes were flowing freely. The rules were fuzzy and the players naïve. The developer engaged in deceptive business practices. Still, the project went 370 percent over budget and the product never worked properly.

According to a recent study by the National Institute of Standards and Technology, software errors cost U.S. businesses $59.5 billion a year. Half of U.S. software projects fail, and more than 80 percent exceed both deadlines and budgets. In the current economy, companies can't afford such mistakes.

To prevent them, ethical standards and practices must be applied right from the beginning. Doing so significantly boosts a project's chances for success.

Yet at the beginning of most IT projects today, critical questions typically go unasked, especially those relating to the ultimate effects of the technology to be installed.

Will a new system, for example, improve the work of all users, or just some of them? Such ethical questions must be asked if IT projects are to succeed. And they are ethical, not technical, questions because they strike at the heart of the people to be served, as opposed to merely increasing features and bells and whistles.

While it is generally agreed in business that IT project outcomes can be significantly improved by good project management, most project methods do not include analysis of the impact of activities on relevant stakeholders.

A thorough analysis will evaluate project impact on a broad range of stakeholders, but during the '90s the primary stakeholder in the corporation shifted to stockholders. This view has led some corporate executives to disregard stakeholders such as employees, vendors and even customers.

In extreme cases, such as Enron and WorldCom, basic accounting principles have been ignored to boost shareholder value at the expense of other stakeholders and, ironically, the shareholders themselves. One glance at the falling values of unethical companies makes it clear that this approach benefits no one.

Alternatively, an ethical approach embraces many groups of people, without whom the business couldn't exist including customers, employees, vendors, local community, supply chain partners, to name the best known.

So what critical questions must be asked if ethical decision-making is to drive a major IT project? First, basic project management questions should include:

• Has a project development methodology been selected? If so, what is it?

• Have project scope and deliverables been defined? Do we have verifiable milestones and standards of completion?

• Are the project team, the project manager and all project vendors fully qualified? Are communications channels clear? How do we know?

• Have project financial, schedule, quality and risk controls been established? Are monitoring processes in place?

• Do we have a change management system? Does everyone understand it?

Next, frame some ethical impact analysis questions. For each stakeholder, could the project:

• Fail to meet the stakeholders' needs?

• Cause loss of information or productivity?

• Compromise security or privacy? Create safety risks? Compromise integrity or cause a conflict of interest?

• Require unnecessary expenditure or be unfeasible?

In the case of the $4M failure, basic project management questions would have prevented my client from even starting the project in the first place.

Perhaps more important, once that project did get started, the second set of questions would have stopped or redirected it toward success in the following ways:

• Stakeholders would have included users and customers, not just shareholders, management and the developer.

• Conflicts of interest that compromised the project would have been identified.

• Loss of information and productivity would have served as warning signals to redirect or terminate the project.

• Unnecessary expenditures would have been curtailed; the ultimate unfeasibility of the project would have been recognized.

• Deception on the part of the developer would have raised red flags on the project as a whole.

IT projects are difficult at best. When project management techniques are combined with stakeholder impact analysis, all the players in a project have an equal chance of being genuinely served. But without such ingredients, IT projects will continue to fail dramatically.

David Gleason is managing consultant of Information Ethics Inc., a Boston-based IT education firm focusing on cost-effective IT infrastructure. Contact him at dgleason@info-ethics.com.