You have a purchasing decision you need to take. It would help to show that you have taken care with your decision and come to a decision based on sound judgement. Are you going to judge your decision based on price, the technology involved, the contract length, the small print, service levels and the like? To make the best possible decision is could be a good idea to give the exercise some thought and use a tool like the decision matrix to help you.
The more options available to you without an obvious preferred option you have the more of a powerful the decision matrix analysis exercise is.
Decision Matrix Analysis is a straightforward but useful analytical tool. The matrix is derived from the Multiple Criteria Decision Analysis (MCDA) family. These tools can involve highly complex modelling of possible scenarios, using mathematics.
How to use the tool
You to list your options as rows within a table. List the factors in the table columns. Then give the options and factor a number to represents strength. A score you can weight too.
Here is how to conduct Decision Matrix Analysis:
Step 1
As already discussed, start by listing all your potential options along the rows. Then list the factors you need to consider along the column. Within Intelligence, these columns are called drivers. Drivers are what’s going to help you get to where you want. And how they are going to affect your journey. Determine how well you are prepared to get to the destination.
The usual factors (drivers) to consider are cost, location, skills required, reliability and quality. Now he scores each one out of 5 depending on how well each option helps achieved each factor.
Step 2
Now take a look at the table columns and score your options for each of the decision factors – 0 – Poor 5 – excellent.
Step 3
Work out the relative importance of your decision factors. Again score them 0 to 5. Zero unimportant and five very important in the final decision.
Step 4
Multiply each of your step 2 scores by the values for the relative importance of your decision factor (Step 3) to give you a weighing score for each option and associated factor.
Step 5
Add up the scores for each of your options. The highest should be the winner. However, many times you will have a nagging doubt over the winning choice. So spend some time looking again at your scores and the weightings.
How to use a Decision Matrix
In this article entitled how to use a Decision Matrix for your business, we described how you could thoughtfully decide for the right reasons.
