Decision Making For Technology

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Decision Making For Technology
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Transform Enterprise Methodology
Develop Vision and Plan
Plan for change
Create Desired Culture

• A Passion for
• Better
• Faster
• Cheaper

Improve and Integrate Processes
Develop Technology Solutions
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Why is Using a Process Important?

• To explain the reason for the decision to others
• To increase confidence of leadership in decisions
• To remove personalities and biases from the
  review/approval cycle
• To generate several alternatives
• To consider risks
• To communicate choice/recommendations

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Underdowns Weighted Decision Making Process
Step 1 Describe Decision Step 2 Establish
Criteria Step 3 Separate Criteria into Must and
Wants Step 4 Invert Musts into Wants Step 5
Establish Importance Values for Wants Step 6
Check Criteria Step 7 Identify alternatives Step
8 Evaluate alternatives against Musts Step 9
Establish Weight Values for Wants Step 10
Evaluate alternatives against Wants Step 11
Assess Risk Step 12 Make Choice
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Step 1 Describe Decision

• State the decision to be made
• Structure
• VERB select, choose, determine, ...
• NOUN object of verb
• ADJECTIVE constraints, modifiers
• Examples
• Determine the best cost-reduction approach
• Choose a new truck for city-wide deliveries
• Select the best applicant for plant manager

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Exercise

• You have identified the need for a new personal
  computer for your office. You budgeted 2,200
  for this, but due to some unexpected costs in
  other areas, only 2,000 is now available. The
  other company computers all run Windows NT and
  Windows 98 programs, and they have a mixture of
  3.5" and ZIP diskette drives. Your storage
  requirements are for at least 16 Gigabytes on the
  hard disk, and your graphics program requires at
  least 2 Gigabytes of memory. The graphics
  program also needs a mouse, and many of the
  images you want to use come on compact disks, so
  a CD ROM drive is also needed.
• Based on this information, what is your Decision
  Purpose?

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Outcomes to be achieved?
Develop Criteria Worksheet
DECISION PURPOSE
Select a personal computer for my office
What is the impact of previous decisions?

• Outcomes to be avoided?

Assets available for use?
Assets to be preserved?
Other?
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What are Criteria?

• A means for judging
• Use to facilitate comparison between alternatives
  
• Represent the elements used to determine success
  or failure
• Represent desirable outcomes of the decision
• Should be specific and quantifiable
• Wrong criteria can lead to poor decisions

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Step 2 Establish Criteria

• Visualize goal as a set of criteria
• Develop criteria from many sources
• Specific factors that must be satisfied
• Resource constraints
• Assets to be preserved
• Outcomes to be avoided
• Obstacles to achieving Decision Purpose

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Decision Criteria Guidelines

• low cost to implement -NOT-implementation
  cost
• available by March -NOT-availability

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Outcomes to be achieved?
Develop Criteria Worksheet
DECISION PURPOSE
Select a personal computer for my office
What is the impact of previous decisions?

• Run Windows NT and Windows 98

• 16 gig disk storage

• CD ROM

• 2 gig memory

• Mouse

• Outcomes to be avoided?

• Slow computer response

• Service delays

Assets available for use?

• 2,000 available for purchase

Assets to be preserved?

• Both 3.5" and ZIP diskettes

Other?
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Step 3 Separate Criteria into Musts and Wants
Separate Criteria Into MUSTS/WANTS
Establish Weighted Values for WANTS
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MUSTS
YES/NO FILTER ON ALTERNATIVES
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WANTS
Used To Determine How Well Alternatives Meet
Criteria
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Alternatives
Evaluate Alternatives Worksheet
Purpose Select a personal computer for my office
Musts
A
B
C
D
Run Windows NT and 98 Max 2,000 purchase price 3
in and ZIP diskettes Min 16 Gig disk storage Min
2 Gig memory Mouse CD ROM
Wants
WS
IV
W
W
W
W
WS
WS
WS

• Min purchase price
• Max storage space
• Max memory
• Max processor speed
• Best access to service

C Total
B Total
A Total
D Total
Percent of Total
Percent of Total
Percent of Total
Percent of Total
16
Step 4 Invert Musts into Wants

• MUST a maximum 20,000 purchase price
• WANT (inverted) minimum purchase price
• Binary MUSTS cannot be inverted such as located
  in Beaumont school district

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Step 5 Establish Importance Values for WANTS

• Use the following rating scale
• 5 Extremely important crucial to performance
• 4 Important but performance not reduced
  significantly
• 3 Important - but performance reduced
  moderately
• 2 Important - but performance reduced
  significantly
• 1 Not important, but would be beneficial
• WANTS may have equal importance values if they
  are truly equally important

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Alternatives
Evaluate Alternatives Worksheet
Purpose Select a personal computer for my office
Musts
A
B
C
D
Run Windows NT and 98 Max 2,000 purchase price 3
in and ZIP diskettes Min 16 Gig disk storage Min
2 Gig memory Mouse CD ROM
Wants
WS
IV
W
W
W
W
WS
WS
WS

• Min purchase price
• Max storage space
• Max memory
• Max processor speed
• Best access to service

2 4 4 5 3
C Total
B Total
A Total
D Total
Percent of Total
Percent of Total
Percent of Total
Percent of Total
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Step 6 Check Criteria

• ALL CRITERIA
• Relate to Decision Purpose
• Too general?
• Facilitate comparisons?
• MUSTS
• Mandatory - Realistic - Measurable
• Inverted into Wants?
• WANTS
• Bunching?
• Duplication?
• Most important weighted 5?

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Step 7 Identify Alternatives

• Identify alternatives (technologies) - as many as
  possible
• Brainstorm to identify additional alternatives
• Seek many different sources of information
• Consider future needs

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Exercise

• You have been doing your research in the personal
  computer arena, and you have identified these
  alternatives.
• ACME - comes with Windows NT and Windows 98. It
  includes a hard drive of 10 gigabytes along with
  both 3.5" and ZIP diskette drives. 2 gig of
  memory are standard, and the processor speed is
  400 mhz. A mouse is included, and the price is
  1,250. On-site service is provided under
  warranty for the first year, and at a nominal
  cost after that.
• BLUE GEM - comes with Windows NT and Windows 98.
  It includes a hard drive of 18 gigabytes along
  with both 3.5" and ZIP diskette drives and a CD
  ROM drive. 2 gig of memory are standard, and the
  processor speed is 500 mhz. A mouse is included,
  and the price is 1,850. Phone service is
  provided under warranty for three years.
• HIGH TECH - comes with Windows NT and Windows 98.
  It includes a hard drive of 16 gigabytes along
  with both 3.5" and ZIP diskette drives and a CD
  ROM drive. 2 gig of memory are standard, and the
  processor speed is 600. A mouse is included, and
  the price is 1,500. On-site service is provided
  under warranty for one year. An extended
  warranty is available for two more years at an
  additional charge. Carry-in service is also
  available after the warranty period.
• LIGHTNING - comes with Windows NT and Windows 98.
  It includes a hard drive of 16 gigabytes along
  with both 3.5" and ZIP diskette drives and a CD
  ROM drive. 2 gig of memory are standard, and the
  processor speed is 450. A mouse is included, and
  the price is 1,900. Carry-in service is
  provided under warranty for two years. An
  extended warranty is available for two more years
  at an additional charge.
• Evaluate these alternatives using the criteria
  you previously established.

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Step 8 Evaluate Alternatives Against Musts
Compare to each required
Compare to Weighted Criteria
Evaluate Risk
Balance choice
Alternatives
Yes
Preferred
No
Not Preferred
Disregard
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Step 8 Evaluate Alternatives Against Musts

• Destructive YES/NO test
• NO eliminates ALTERNATIVE from further
  consideration
• If none survive?
• Generate additional alternatives then, if
  necessary
• Review MUST criteria

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Alternatives
Evaluate Alternatives Worksheet
Purpose Select a personal computer for my office
Blue Gem
Musts
ACME
A
B
C
D
High Tech
Lightning
Yes 1,250 Yes 10 gig 2 gig Yes No
Yes 1,500 Yes 16 gig 2 gig Yes Yes
Yes 1,850 Yes 18 gig 2 gig Yes Yes
Yes 1,900 Yes 16 gig 2 gig Yes Yes
Run Windows NT and 98 Max 2,000 purchase price 3
in and ZIP diskettes Min 16 Gig disk storage Min
2 Gig memory Mouse CD ROM
Wants
WS
IV
W
W
W
W
WS
WS
WS

• Min purchase price
• Max storage space
• Max memory
• Max processor speed
• Best access to service

2 4 4 5 3
C Total
B Total
A Total
D Total
Percent of Total
Percent of Total
Percent of Total
Percent of Total
25
Alternatives
Evaluate Alternatives Worksheet
Purpose Select a personal computer for my office
Blue Gem
Musts
ACME
A
B
C
D
High Tech
Lightning
Yes 1,250 Yes 10 gig 2 gig Yes No
Yes 1,500 Yes 16 gig 2 gig Yes Yes
Yes 1,850 Yes 18 gig 2 gig Yes Yes
Yes 1,900 Yes 16 gig 2 gig Yes Yes
Run Windows NT and 98 Max 2,000 purchase price 3
in and ZIP diskettes Min 16 Gig disk storage Min
2 Gig memory Mouse CD ROM
Wants
WS
IV
W
W
W
W
WS
WS
WS

• Min purchase price
• Max storage space
• Max memory
• Max processor speed
• Best access to service

2 4 4 5 3
C Total
B Total
A Total
D Total
Percent of Total
Percent of Total
Percent of Total
Percent of Total
26
Step 9 Establish Weighted Values for Wants

• Rate each alternative (technology) based on the
  Want criteria
• Use the following rating scale
• 5 Excellent
• 4 - Above Average
• 3 Average
• 2 Below average
• 1 Poor
• 0 Alternative does not possess this criteria

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Alternatives
Evaluate Alternatives Worksheet
Purpose Select a personal computer for my office
Blue Gem
Musts
ACME
A
B
C
D
High Tech
Lightning
Yes 1,250 Yes 10 gig 2 gig Yes No
Yes 1,500 Yes 16 gig 2 gig Yes Yes
Yes 1,850 Yes 18 gig 2 gig Yes Yes
Yes 1,900 Yes 16 gig 2 gig Yes Yes
Run Windows NT and 98 Max 2,000 purchase price 3
in and ZIP diskettes Min 16 Gig disk storage Min
2 Gig memory Mouse CD ROM
Wants
WS
IV
W
W
W
W
WS
WS
WS
3 3 5 3 4

• Min purchase price
• Max storage space
• Max memory
• Max processor speed
• Best access to service

4 5 5 4 3
2 4 4 5 3
1,500 16 gig 2 gig 600 on-site
1,850 18 gig 2 gig 500 phone
1,900 16 gig 2 gig 450 carry-in
5 3 5 5 5
C Total
B Total
A Total
D Total
Percent of Total
Percent of Total
Percent of Total
Percent of Total
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Step 10 Evaluate Alternatives Against Wants

• Multiply Importance Values by Alternative
  Weights to produce a Weighted Score for each
  alternative
• Total the sum of Weighted Scores for each
  alternative
• Calculate the Percent of Total for each
  alternative
• Eliminate alternatives with Weighted Scores and
  Percent of Total values significantly below
  others

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Alternatives
Evaluate Alternatives Worksheet
Purpose Select a personal computer for my office
Blue Gem
Musts
ACME
A
B
C
D
High Tech
Lightning
Yes 1,250 Yes 10 gig 2 gig Yes No
Yes 1,500 Yes 16 gig 2 gig Yes Yes
Yes 1,850 Yes 18 gig 2 gig Yes Yes
Yes 1,900 Yes 16 gig 2 gig Yes Yes
Run Windows NT and 98 Max 2,000 purchase price 3
in and ZIP diskettes Min 16 Gig disk storage Min
2 Gig memory Mouse CD ROM
Wants
WS
IV
W
W
W
W
WS
WS
WS
3 3 5 3 4

• Min purchase price
• Max storage space
• Max memory
• Max processor speed
• Best access to service

6 12 20 15 12
4 5 5 4 3
8 20 20 20 9
2 4 4 5 3
1,500 16 gig 2 gig 600 on-site
1,850 18 gig 2 gig 500 phone
1,900 16 gig 2 gig 450 carry-in
5 3 5 5 5
10 12 20 25 15
C Total
65
B Total
A Total
D Total
82
77
Percent of Total
Percent of Total
Percent of Total
Percent of Total
79
100
94
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Step 11 Assess Risk

• Consider consequences and future implications
• Consider ease to modify (flexibility)
• Monitoring
• Cost of error
• Time for correction

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Sources of Risk

• Performance close to limits of MUSTS
• Reference checks
• Customers
• Vendors
• Financial services
• Observed facts
• Personal experiences

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Alternative
Determine Risk Worksheet
High Tech
Residual Risk

• Risk

Impact
Prob
Serious
Action
ness
Prob
Serious
ness
Computer quits working
With on-site service requiring 3 days, computer
may not be available for an extended period of
time
low
high
1. Arrange backup in office 2. Keep current
backup of data
low
low
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Step 12 Make Choice

• Select the alternative which best satisfies the
  criteria with a level of risk you are willing to
  accept

BEST BALANCED CHOICE
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Test 2 - Question 6

• You have identified the need for a new personal
  computer for your office. You budgeted 2,000.
  The other company computers all run DOS and
  WINDOWS, and they have a mixture of 3.5" and
  5.25" diskette drives. Your storage requirements
  are for at least 200 megabytes on the hard disk,
  and your graphics program requires at least 4
  megabytes of memory. The graphics program also
  needs a mouse, and many of the images you want to
  use come on compact disks, so a CD ROM drive is
  also needed.

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Exercise

• You have been doing your research in the personal
  computer arena, and you have identified these
  alternatives.
• ACME - comes with DOS 6.0 and WINDOWS 3.1. It
  includes a hard drive of 107 megabytes along with
  both 3.5" and 5.25" diskette drives. 4 mb of
  memory are standard, and the processor speed is
  33. A mouse is included, and the price is
  1,250. On-site service is provided under
  warranty for the first year, and at a nominal
  cost after that.
• BLUE GEM - comes with DOS 6.1 and WINDOWS 3.1.
  It includes a hard drive of 250 megabytes along
  with both 3.5" and 5.25" diskette drives and a CD
  ROM drive. 4 mb of memory are standard, and the
  processor speed is 33. A mouse is included, and
  the price is 1,850. Phone service is provided
  under warranty for three years.
• HIGH TECH - comes with DOS 6.1 and WINDOWS 3.1.
  It includes a hard drive of 170 megabytes along
  with both 3.5" and 5.25" diskette drives and a CD
  ROM drive. 4 mb of memory are standard, and the
  processor speed is 25. A mouse is included, and
  the price is 1,500. On-site service is provided
  under warranty for one year. An extended
  warranty is available for two more years at an
  additional charge. Carry-in service is also
  available after the warranty period.
• LIGHTNING - comes with DOS 6.1 and WINDOWS 3.1.
  It includes a hard drive of 250 megabytes along
  with both 3.5" and 5.25" diskette drives and a CD
  ROM drive. 4 mb of memory are standard, and the
  processor speed is 50. A mouse is included, and
  the price is 1,900. Carry-in service is
  provided under warranty for two years. An
  extended warranty is available for two more years
  at an additional charge.
• Evaluate these alternatives using the criteria
  you previously established.

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Outcomes to be achieved?
Develop Criteria Worksheet
DECISION PURPOSE
What is the impact of previous decisions?

• Outcomes to be avoided?

Assets available for use?
Assets to be preserved?
Other?
37
Alternatives
Evaluate Alternatives Worksheet
Purpose
Musts
A
B
C
D
Wants
WS
IV
W
W
W
W
WS
WS
WS
C Total
B Total
A Total
D Total
Percent of Total
Percent of Total
Percent of Total
Percent of Total
38
Alternative
Determine Risk Worksheet
Residual Risk

• Risk

Impact
Prob
Serious
Action
ness
Prob
Serious
ness
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Outcomes to be achieved?
Develop Criteria Worksheet
DECISION PURPOSE
Select a personal computer for my office
What is the impact of previous decisions?

• Run DOS and Windows 3.1

• 200 mg disk storage

• CD ROM

• 4 mg memory

• Mouse

• Outcomes to be avoided?

• Slow computer response

• Service delays

Assets available for use?

• 2,000 available for purchase

Assets to be preserved?

• Both 3.5" and 5.25" diskettes

Other?
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Alternatives
Evaluate Alternatives Worksheet
Purpose Select a personal computer for my office
Musts
A
B
C
D
Yes 1,250 Yes 107 mg 4 mg Yes No
Yes 1,500 Yes 170 mg 4 mg Yes Yes
Yes 1,850 Yes 250 mg 4 mg Yes Yes
Yes 1,900 Yes 250 mg 4 mg Yes Yes
Run DOS and Windows 3.1 Max 2,000 purchase
price 3 in and 5.25 in diskettes Min 200 mg disk
storage Min 4 mg memory Mouse CD ROM
Wants
WS
IV
W
W
W
W
WS
WS
WS
3 5 5 5 4

• Min purchase price
• Max storage space
• Max memory
• Max processor speed
• Best access to service

6 20 20 25 12
4 5 5 4 3
8 20 20 20 9
2 4 4 5 3
1,850 250 mg 4 mg 33 phone
1,500 170 mg 4 mg 25 on-site
1,900 250 mg 4 mg 50 carry-in
5 3 5 3 5
10 12 20 15 15
C Total
83
B Total
A Total
D Total
72
77
Percent of Total
Percent of Total
Percent of Total
Percent of Total
100
87
93