Project Decision Analysis Process
Decision framing is based chiefly on subjective expert judgment. Experts provide their own beliefs in the form of their answers, which can be biased. There are many forms of biases: cultural, organizational, motivational, cognitive, and others. Motivational and cognitive biases are most common in project management.
a. Identifying Potential Problems and Opportunities
In some cases, it is difficult to identify the problems and opportunities. For example, what is causing the different projects within the organization to go consistently over budget in relation to the different specific corrective actions that were undertaken? In our software development example, the project will be delayed if certain actions are not taken.
b. Assessing Business Situation
Before attempting to make a decision, it is important to assess the business environment and define the constraints related to the problem. The assessment may also include an analysis of markets, competition, prices, or anything that can be related to the problem or opportunity. In our example, it is the availability of an additional resource.
c. Determining Success Criteria
In our software development example, it is the chance that project will be completed on time. Very often project managers have to make decisions based on multiple criteria, including project duration, cost, scope, and other parameters.
d. Identifying Uncertainties
Understanding of uncertainties is the key to the decision analysis process. In our example, there are uncertainties in task duration, start and finish times. Potentially, there could be many different types of uncertainties including uncertainties in cost, resource allocation, and others.
e. Generating Alternatives
First, let’s identify what cannot be changed, or project constraints for making the particular decision analysis. In our software example it is the deadline. The project scope is a constraint as well. However, there is the possibility of bringing additional resources (software developers) to accelerate the development. As a result, we have three potential project scenarios:
a. “Do nothing”. In this example, it means that additional project resources will not be added to the project team.
b. Bring a developer from another team within the organization.
c. Hire an external contractor.