Anton OosthuizenSenior Business Analyst / Project Manager| Self EmployedPretoria, Gauteng, South Africa
Mar 17, 2020 2:07 PM
Replying to Rami Kaibni
...
Anton
Padding is totally different than Contingency (Refer to Peter's Response) so I humbly disagree with what you've mentioned.
In the way you defined it "Padding Correctly" this is basically doing proper and transparent estimating, its not padding. There is no padding correctly and padding incorrectly.
There is a good article that you can refer to: "Stop Padding Your Estimates" by Bob Zimmerman - Check it out. He starts by saying:
"When you pad an estimate, you typically increase your estimated effort/cost due to fear. I call this estimating from a place of weakness. You are afraid of the unexpected event, so hopefully padding it will cover it.
When asked why you think something might take 50% longer or cost more than expectations, it leads to an awkward uncomfortable conversation. And almost always, it creates distrust."
RK
Happy to disagree ;)
...
1 reply by Rami Kaibni
Mar 18, 2020 5:05 PM
Rami Kaibni
...
As long as you're happy Anton, that's all what matters. Stay Safe :-)
Saving Changes...
Thomas WalentaGlobal Project Economy ExpertHackenheim, Germany
Mar 16, 2020 4:21 PM
Replying to Manuel Perez
...
Sometimes padding is forced upon PM's by the organization. Although, I don't ever use padding, it is a battle to convince the organization that your estimated cost are valid. If you are in an organization that always requires you to lower your estimates, then as a result PM's will up their estimates to end at a level which it needs to be.
Rami
ethical obligations are not only in regard to one ethical value (honesty) but to some more. If I am honest but neglect my responsibility and respect towards the sponsor they do not like it.
Ethical judgements and decisions are dependent on the specific situation and the balancing of all ethical values.
No tool, including padding, therefore can be unethical per se. It depends how it is used and the context.
...
1 reply by Rami Kaibni
Mar 18, 2020 5:09 PM
Rami Kaibni
...
Thomas
While in real life, there might be truth in what you've mentioned, however, from my side, I always do whatever is ethical and if my sponsor asks me to pad estimates without rationale and I know for a fact this will mislead the client and is no honest and transparent, I won't do it but will give a proper rationale as to why and that doesn't mean disrespect to the sponsor. Ethics takes precedence over what the sponsor asks for.
This happened to me in real life and believe it or not, the sponsor came back afterwards and thanked me. We have an ethical responsibility to do what we believe is right and stand by it if necessary.
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Mar 18, 2020 5:00 PM
Replying to Thomas Walenta
...
Rami
ethical obligations are not only in regard to one ethical value (honesty) but to some more. If I am honest but neglect my responsibility and respect towards the sponsor they do not like it.
Ethical judgements and decisions are dependent on the specific situation and the balancing of all ethical values.
No tool, including padding, therefore can be unethical per se. It depends how it is used and the context.
Thomas
While in real life, there might be truth in what you've mentioned, however, from my side, I always do whatever is ethical and if my sponsor asks me to pad estimates without rationale and I know for a fact this will mislead the client and is no honest and transparent, I won't do it but will give a proper rationale as to why and that doesn't mean disrespect to the sponsor. Ethics takes precedence over what the sponsor asks for.
This happened to me in real life and believe it or not, the sponsor came back afterwards and thanked me. We have an ethical responsibility to do what we believe is right and stand by it if necessary.
Stay safe my friend.
RK Saving Changes...
Thomas WalentaGlobal Project Economy ExpertHackenheim, Germany
Hi Rami
yes, I can understand and agree with your ethical judgement in the situation you describe.
In similar situations my client well understood that it is my responsibility to come up with an estimate at a confidence level and did not want to know the details, as the risk was on our side. The sponsor did not press me unduly either. So for my judgement it was totally ok to use padding and not share that I did so.
I get uncomfortable with absolute statements. There is always yin-yang, two sides of a medal.
...
1 reply by Rami Kaibni
Mar 18, 2020 5:51 PM
Rami Kaibni
...
Thomas
There are no absolute statements in life and yes, its always a ying-yang but there are certain principles and value we have to live by no matter what.
In your situation that you described, you were transparent with the client, and did not pad or bump the estimates just to be on the safe side and instead did that objectively with a proper rationale based on your judgement so that is totally fine.
I think we might be on the same page but on a different ying-yang tone :-)
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Mar 18, 2020 5:42 PM
Replying to Thomas Walenta
...
Hi Rami
yes, I can understand and agree with your ethical judgement in the situation you describe.
In similar situations my client well understood that it is my responsibility to come up with an estimate at a confidence level and did not want to know the details, as the risk was on our side. The sponsor did not press me unduly either. So for my judgement it was totally ok to use padding and not share that I did so.
I get uncomfortable with absolute statements. There is always yin-yang, two sides of a medal.
Thomas
There are no absolute statements in life and yes, its always a ying-yang but there are certain principles and value we have to live by no matter what.
In your situation that you described, you were transparent with the client, and did not pad or bump the estimates just to be on the safe side and instead did that objectively with a proper rationale based on your judgement so that is totally fine.
I think we might be on the same page but on a different ying-yang tone :-)
RK Saving Changes...
Peter RapinSubject Matter Expect; Project Delivery| Independent ConsultantOntario, Canada
Here is a situation to consider: A company has identified a need - there is a demand for more product and they are in a position to supply that additional product but they need more manufacturing capacity. They hire a professional analyst to undertake a business case for an expansion project. The analyst likes the project but the cost estimate may jeopardize the approval by making it un-affordable. The analyst request the cost estimator to trim down the cost estimate, essentially negative padding. His rationalization is that 1) savings will be found, and/or 2) more money will be found "once we get into it". Is there a professional or ethical concern here? If so, who would be considered unprofessional? Does collusion between the two (analyst and estimator) make it alright? Does it make a difference if the project is ultimately successful?
...
2 replies by Daire Guiney and Rami Kaibni
Mar 18, 2020 7:11 PM
Rami Kaibni
...
Peter
Yes of course this is considered bad practice to say the least as it is based on no solid grounds and it will be misleading to the client.
If the project was successful and it might, it will be based on luck but what if it wasn't ? This takes us to the fact that we should do what is right.
Would you consider this an ethical and professional situation ?
RK
Mar 19, 2020 8:46 AM
Daire Guiney
...
Dear Peter,
I would not call this collusion because the only one to benefit from this 'arrangement' is the organization as the Analyst and Estimator are doing their jobs but instead I would see this as pressure coming from further up the management chain.
Also for any expansion you will only break even and get a return on Investment after a considerable amount of time.
The reason that a organization would expand in such an example would be to retain the contract that they have. It is necessary for a customer to know that there is additional capacity in the supply chain in order to fail safe against unknown risk.
Going back to your original example, this would be unethical and illegal as you are furnishing information that you know to be factual untrue and not representative of the situation you have been asked to undertaken.
If this 'arrangement' came to light, and most likely it would, then it could spell doom for anybody involved in the situation.
What the analyst is hoping for, a bit of a gamble, is economies of scale on some level as production would ramp up but not bearing in mind that the customer may now look for a discount as a result in the increase in order.
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Mar 18, 2020 7:04 PM
Replying to Peter Rapin
...
Here is a situation to consider: A company has identified a need - there is a demand for more product and they are in a position to supply that additional product but they need more manufacturing capacity. They hire a professional analyst to undertake a business case for an expansion project. The analyst likes the project but the cost estimate may jeopardize the approval by making it un-affordable. The analyst request the cost estimator to trim down the cost estimate, essentially negative padding. His rationalization is that 1) savings will be found, and/or 2) more money will be found "once we get into it". Is there a professional or ethical concern here? If so, who would be considered unprofessional? Does collusion between the two (analyst and estimator) make it alright? Does it make a difference if the project is ultimately successful?
Peter
Yes of course this is considered bad practice to say the least as it is based on no solid grounds and it will be misleading to the client.
If the project was successful and it might, it will be based on luck but what if it wasn't ? This takes us to the fact that we should do what is right.
Would you consider this an ethical and professional situation ?
RK
...
1 reply by Peter Rapin
Mar 18, 2020 7:32 PM
Peter Rapin
...
This is wrong on many levels - unethical, unprofessional, bad start for the project, increases potential for failure (high risk), possible credibility issue, zero trust, may be fraudulent.
I don't see positive padding much different.
Saving Changes...
Peter RapinSubject Matter Expect; Project Delivery| Independent ConsultantOntario, Canada
Mar 18, 2020 7:11 PM
Replying to Rami Kaibni
...
Peter
Yes of course this is considered bad practice to say the least as it is based on no solid grounds and it will be misleading to the client.
If the project was successful and it might, it will be based on luck but what if it wasn't ? This takes us to the fact that we should do what is right.
Would you consider this an ethical and professional situation ?
RK
This is wrong on many levels - unethical, unprofessional, bad start for the project, increases potential for failure (high risk), possible credibility issue, zero trust, may be fraudulent.
I don't see positive padding much different.
...
1 reply by Rami Kaibni
Mar 18, 2020 7:34 PM
Rami Kaibni
...
Peter
Given the situation you presented, I fully agree with you.
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Mar 18, 2020 7:32 PM
Replying to Peter Rapin
...
This is wrong on many levels - unethical, unprofessional, bad start for the project, increases potential for failure (high risk), possible credibility issue, zero trust, may be fraudulent.
I don't see positive padding much different.
Peter
Given the situation you presented, I fully agree with you.
Community Champion
