The purpose of Decision Analysis and Resolution (DAR) is to analyze possible decisions using a formal evaluation process that evaluates identified alternatives against established criteria.
The Decision Analysis and Resolution process area involves establishing guidelines to determine which issues should be subject to a formal evaluation process and applying formal evaluation processes to these issues.
Hint
Many key acquisition decisions are made early in a project’s lifecycle and have a major impact on project outcomes. Start by using formal evaluation methods on these key decisions before using them for selected day-to-day decisions. An effective source selection process or well-thought-out lifecycle milestone decisions are results of classic DAR activities.
A formal evaluation process is a structured approach to evaluating alternative solutions against established criteria to determine a recommended solution.
A formal evaluation process involves the following actions:
• Establishing the criteria for evaluating alternatives
• Identifying alternative solutions
• Selecting methods for evaluating alternatives
• Evaluating alternative solutions using established criteria and methods
• Selecting recommended solutions from alternatives based on evaluation criteria
Rather than using the phrase alternative solutions to address issues each time, in this process area, one of two shorter phrases are used: alternative solutions or alternatives.
Tip
DAR takes the blame out of decision making. A bad decision is made when all the necessary information that might impact the decision was not considered and relevant stakeholders were not consulted.
A repeatable criteria-based decision-making process is especially important, both for making critical decisions that define and guide the acquisition process and later for critical decisions made with the selected supplier. The establishment of a formal process for decision making provides the acquirer with documentation of decision rationale. Such documentation allows criteria for critical decisions to be revisited when changes or technology insertion decisions that impact requirements or other critical project parameters are considered. A formal process also supports the communication of decisions between the acquirer and supplier.
Hint
Maintain the rationale for key decisions that drive the acquisition strategy to make early project thinking available to team members and stakeholders who join the project later.
A formal evaluation process reduces the subjective nature of a decision and provides a higher probability of selecting a solution that meets multiple demands of relevant stakeholders.
While the primary application of this process area is to technical concerns, formal evaluation processes can also be applied to many nontechnical issues, particularly when a project is being planned. Issues that have multiple alternative solutions and evaluation criteria lend themselves to a formal evaluation process.
X-Ref
To see how to create an acquisition strategy, see “Techniques for Developing an Acquisition Strategy by Profiling Software Risks” at www.sei.cmu.edu/publications/documents/06.reports/06tr002.html.
Guidelines are created for deciding when to use formal evaluation processes to address unplanned issues. Guidelines often suggest using formal evaluation processes when issues are associated with medium to high risks or when issues affect the ability to achieve project objectives.
Tip
Examples of nontechnical issues include staffing profiles for the acquisition project team over time and the mix of skills required to ensure project success.
Formal evaluation processes can vary in formality, type of criteria, and methods employed. Less formal decisions can be analyzed in a few hours, use few criteria (e.g., effectiveness and cost to implement), and result in a one- or two-page report. More formal decisions may require separate plans, months of effort, meetings to develop and approve criteria, simulations, prototypes, piloting, and extensive documentation.
Both numeric and non-numeric criteria can be used in a formal evaluation process. Numeric criteria use weights to reflect the relative importance of criteria. Non-numeric criteria use a more subjective ranking scale (e.g., high, medium, or low). More formal decisions may require a full trade study.
Tip
Tools such as the Analytic Hierarchy Process (AHP), Quality Function Deployment (QFD), the Pugh Method, the Delphi Method, prioritization matrices, cause-and-effect diagrams, decision trees, weighted criteria spreadsheets, and simulations can incorporate weights in decision making.
A formal evaluation process identifies and evaluates alternative solutions. The eventual selection of a solution may involve iterative activities of identification and evaluation. Portions of identified alternatives may be combined, emerging technologies may change alternatives, and the business situation of suppliers may change during the evaluation period.
A recommended alternative is accompanied by documentation of selected methods, criteria, alternatives, and rationale for the recommendation. The documentation is distributed to relevant stakeholders; it provides a record of the formal evaluation process and rationale, which are useful to other projects that encounter a similar issue.
While some of the decisions made throughout the life of the project involve the use of a formal evaluation process, others do not. As mentioned earlier, guidelines should be established to determine which issues should be subject to a formal evaluation process.
Refer to the Project Planning process area for more information about general planning for projects.
X-Ref
Refer to SSAD for more information about selecting one or more suppliers to deliver the product or service. The selection activities incorporate formal evaluation techniques and decision-making processes when selecting suppliers.
Refer to the Integrated Project Management process area for more information about establishing the project’s defined process. The project’s defined process includes a formal evaluation process for each selected issue and incorporates the use of guidelines for applying a formal evaluation process to unforeseen issues.
Refer to the Risk Management process area for more information about identifying and mitigating risks. A formal evaluation process is often used to address issues with identified medium or high risks. Selected solutions typically affect risk mitigation plans.
Tip
Many of the issues that may benefit from a formal evaluation process are addressed in PP, SSAD, RSKM, ARD, ATM, AVER, and AVAL.
Decisions are based on an evaluation of alternatives using established criteria.
Issues requiring a formal evaluation process may be identified at any time. The objective should be to identify issues as early as possible to maximize the time available to resolve them.
Establish and maintain guidelines to determine which issues are subject to a formal evaluation process.
Not every decision is significant enough to require a formal evaluation process. The choice between the trivial and the truly important are unclear without explicit guidance. Whether a decision is significant or not is dependent on the project and circumstances and is determined by established guidelines.
Refer to the Risk Management process area for more information about determining which issues are medium or high risk.
Typical Work Products
- Guidelines for when to apply a formal evaluation process
Subpractices
Establish and maintain criteria for evaluating alternatives, and the relative ranking of these criteria.
Evaluation criteria provide the basis for evaluating alternative solutions. Criteria are ranked so that the highest ranked criteria exert the most influence on the evaluation.
This process area is referenced by many other process areas in the model, and there are many contexts in which a formal evaluation process can be used. Therefore, in some situations you may find that criteria have already been defined as part of another process. This specific practice does not suggest that a second development of criteria be conducted.
Document the evaluation criteria to minimize the possibility that decisions will be second-guessed or that the reason for making the decision will be forgotten. Decisions based on criteria that are explicitly defined and established remove barriers to stakeholder buy-in.
Hint
Make sure you include participation of relevant customer and supplier stakeholders when selecting evaluation criteria.
Typical Work Products
- Documented evaluation criteria
- Rankings of criteria importance
Subpractices
- Define the criteria for evaluating alternative solutions.
Criteria should be traceable to requirements, scenarios, business case assumptions, business objectives, or other documented sources.
- Define the range and scale for ranking the evaluation criteria.
Scales of relative importance for evaluation criteria can be established with non-numeric values or with formulas that relate the evaluation parameter to a numeric weight.
- Rank the criteria.
- Assess the criteria and their relative importance.
- Evolve the evaluation criteria to improve their validity.
- Document the rationale for the selection and rejection of evaluation criteria.
Identify alternative solutions to address issues.
A wider range of alternatives can surface by soliciting as many stakeholders as practical for input. Input from stakeholders with diverse skills and backgrounds can help teams identify and address assumptions, constraints, and biases. Brainstorming sessions may stimulate innovative alternatives through rapid interaction and feedback.
Sufficient candidate solutions may not be furnished for analysis. As the analysis proceeds, other alternatives should be added to the list of potential candidate solutions. The generation and consideration of multiple alternatives early in a decision analysis and resolution process increases the likelihood that an acceptable decision will be made and that consequences of the decision will be understood.
Hint
When you are evaluating competing designs that are identified by your suppliers, make sure you solicit alternatives that may be more innovative and less obvious. Consider commissioning a special study by a team with a lower stake in the selection outcome to help ensure that a range of alternatives are identified.
Typical Work Products
- Identified alternatives
Typical Supplier Deliverables
- Supplier identified alternatives, if any
Subpractices
- Perform a literature search.
A literature search can uncover what others have done both inside and outside the organization. Such a search may provide a deeper understanding of the problem, alternatives to consider, barriers to implementation, existing trade studies, and lessons learned from similar decisions.
- Identify alternatives for consideration in addition to those that may be provided with the issue.
Evaluation criteria are an effective starting point for identifying alternatives. Evaluation criteria identify priorities of relevant stakeholders and the importance of technical, logistical, or other challenges.
Combining key attributes of existing alternatives can generate additional and sometimes stronger alternatives.
Solicit alternatives from relevant stakeholders. Brainstorming sessions, interviews, and working groups can be used effectively to uncover alternatives.
- Document proposed alternatives.
Methods for evaluating alternative solutions against established criteria can range from simulations to the use of probabilistic models and decision theory. These methods must be carefully selected. The level of detail of a method should be commensurate with cost, schedule, performance, and risk impacts.
Hint
Make sure the method chosen is appropriate for the decision. A complex and time-consuming approach may be overkill for a simple binary decision.
While many problems may require only one evaluation method, some problems may require multiple methods. For instance, simulations may augment a trade study to determine which design alternative best meets a given criterion.
Suppliers competing to develop a technical solution for the acquirer may be directly evaluated in a final competition that involves a performance or functional demonstration of proposed solutions.
Typical Work Products
- Selected evaluation methods
Subpractices
- Select methods based on the purpose for analyzing a decision and on the availability of the information used to support the method.
- Select evaluation methods based on their ability to focus on the issues at hand without being overly influenced by side issues.
- Determine the measures needed to support the evaluation method.
Refer to the Measurement and Analysis process area for more information about specifying measures.
Evaluate alternative solutions using established criteria and methods.
Evaluating alternative solutions involves analysis, discussion, and review. Iterative cycles of analysis are sometimes necessary. Supporting analyses, experimentation, prototyping, piloting, or simulations may be needed to substantiate scoring and conclusions.
Often, the relative importance of criteria is imprecise and the total effect on a solution is not apparent until after the analysis is performed. In cases where the resulting scores differ by relatively small amounts, the best selection among alternative solutions may not be clear. Challenges to criteria and assumptions should be encouraged.
Tip
Evaluation criteria for a competitive source selection should be part of the solicitation package so that all stakeholders understand the relative importance of solicitation requirements.
Typical Work Products
- Evaluation results
Subpractices
- Evaluate proposed alternative solutions using the established evaluation criteria and selected methods.
X-Ref
Refer to SP 1.2 of SSAD for more information on establishing evaluation criteria for use in selecting suppliers.
- Evaluate assumptions related to the evaluation criteria and the evidence that supports the assumptions.
- Evaluate whether uncertainty in the values for alternative solutions affects the evaluation and address these uncertainties, as appropriate.
- Perform simulations, modeling, prototypes, and pilots as necessary to exercise the evaluation criteria, methods, and alternative solutions.
Untested criteria, their relative importance, and supporting data or functions may cause the validity of solutions to be questioned. Criteria and their relative priorities and scales can be tested with trial runs against a set of alternatives. These trial runs of a select set of criteria allow for the evaluation of the cumulative impact of criteria on a solution. If trials reveal problems, different criteria or alternatives might be considered to avoid biases.
- Consider new alternative solutions, criteria, or methods if proposed alternatives do not test well; repeat evaluations until alternatives do test well.
Document the rationale for the addition of new alternatives or methods and changes to criteria, as well as the results of interim evaluations. Determine the scores for each alternative based on criteria evaluations and scoring methods previously determined.
- Document the results of the evaluation.
Select solutions from alternatives based on evaluation criteria.
Selecting solutions involves weighing results from the evaluation of alternatives. Risks associated with the implementation of solutions must be assessed.
Tip
Selecting a solution still requires humans to make decisions. These decisions are informed by the results of evaluations. Other considerations (such as risk or external constraints) may cause a project to select solutions that score lower based on the chosen criteria. If this is the case, the rationale for the selection becomes even more critical to maintain.
Typical Work Products
- Recommended solutions to address significant issues
Subpractices
- Assess the risks associated with implementing the recommended solution.
Refer to the Risk Management process area for more information about identifying and managing risks.
- Document the results and rationale for the recommended solution.