Jul 5, 2022 Project Management

Pros and Cons of a Decision Matrix

Pros and Cons of a Decision Matrix

Making decisions, especially those that will affect your entire team and their performance, is the most challenging thing to do as a project manager. While many believe that writing pros and cons can fix this issue, it's not as easy as it seems.

Different aspects need to be revised and when stakeholders are part of this process, come prepared because there will be a lot of biased opinions involved.

So instead of relying on everyone else, you could employ a decision matrix technique. Many say this is the best tool for complex and important decisions, so let's test it out!

What is the purpose of a decision matrix?

A weighted decision matrix is a powerful technique used to evaluate and select the best option out of different choices. A decision matrix is particularly useful if you choose more than one option, with several different factors involved that affect the outcome.

You may encounter names like grid analysis, Pugh matrix, decision grid, or problem selection matrix. They all mean the same thing – a decision matrix.

There is no need to use a decision matrix all the time. While it's relatively easy to use, the decision matrix is most effective when deciding between a few comparable options.

Let's put it this way. If your choices don't have the same or similar evaluation criteria, the decision matrix won't provide you with the best results. For instance, this technique won't help you decide what approach your team should assume for the next year because you aren't choosing between similar things. It's recommended to use a decision matrix in the following situations:

  • When faced with multiple, similar choices
  • When you have to narrow down options to a single one
  • When hoping to make a decision from a logical point of view instead of an emotional one

Creating a decision matrix

It's crucial to thoroughly understand the problems and their implications when forming a decision matrix. Once you manage to identify these aspects, you will be able to create an analysis with columns and rows. For example, decision alternatives should be listed as rows while relevant factors like effectiveness, ease, and costs as columns.

Next, you should set up an evaluation scale that will help you assess the value of individual alternative and factor combinations. Usually, they have the following form: high cost equals one, and low cost equals 5.

Keep in mind that this scale must be consistent throughout the matrix. To get the score, multiply the original ranking by the weighed ranking and then add up all the factors under each option.

What should be included in a decision matrix?

There are seven steps to making a decision matrix. We will name each of them and briefly explain what they are about.

Identifying alternatives. As we already mentioned, a decision matrix helps you decide between similar choices. But, before you even consider creating a matrix, you need to identify your options. For instance, you are launching a new product this summer, and you need a vendor who will take care of visuals. You have three agencies you are considering; they all offer similar services but also have their pros and cons.

Identifying criteria. The second step involves identifying crucial considerations that will influence your decision. This way, you will be able to focus on the best decision while avoiding subjectivity. Continuing our agency example, your team members have decided that past customer reviews, communication, experience, and price are significant criteria for selecting the right agency for the job.

Creating a decision matrix. This is a grid that you use to compare considerations and options. There are various online tools you can use to make a decision matrix. For instance, you will compare customer reviews, communication, experience, and cost between agencies in a grid.

Fill in a decision matrix. Next, you will use a predetermined scale to rate each consideration. If you don't have a lot of variation between options, apply a 1-3 scale. If more options are involved, use a 1-5 scale, where five is the best.

This is the moment when the decision matrix really starts to shine. Let's go back to those three agencies. Even though you have four essential criteria, you aren't able to make a decision. Here's how the agencies stack up:

  • Agency 1: affordable, lacks experience, average customer reviews, and communication.
  • Agency 2: expensive, they have plenty of experience and excellent customer reviews, but communication is not so good.
  • Agency 3: most expensive, professional service with extensive experience, pretty good reviews, but lacks communication.

As you can see, these descriptions are more or less similar, so it's hard to make the right decision, especially when each agency has pros and cons.

Add weight. More often than not, you will notice that some criteria are more important than others. In that case, you will use a decision matrix to spot the best option. Let's continue with our example.

Imagine you have a fixed budget when hiring an agency, so the price is an important factor in the decision-making process. We can't neglect customer reviews, as they indicate how effective an agency is. To add weight, you need to assign a number to each consideration. Later on, you will multiply the weighting factor by each reference.

Multiply the weighted score. This step helps you identify more important criteria and assign them a higher weight, which eventually assists you in choosing the best agency.

Total score. Calculating the total score is the final step in the decision matrix. At this point, you should have a clear picture. The total score will help you make the best decision and select the agency that meets your desired criteria.

The advantages of decision matrix

One of the most significant advantages of the decision matrix is that it encourages self-reflection among team members and makes them analyze their decisions with minimized bias. Also, this technique will help you make complex and challenging decisions. Still, with a decision matrix, you will be able to prioritize tasks, craft arguments, and solve problems to defend decisions you have already made.

If there are several quantitative criteria, a decision matrix will be an ideal tool to help you select among a couple of comparable solutions.

The disadvantages of decision matrix

When weighing the decision matrix's pros and cons, there are several disadvantages you should pay attention to.

First, the list of criteria options is arbitrary, meaning there is no way to know whether the list is complete. More likely, some important criteria are missing.

Also, some less important criteria might be included, distracting decision-makers from making the right choice. When it comes to scoring methods, they tend to equalize all the requirements, even with weighing.

And lastly, the values you assign to guesses aren't based on quantitative measurements. The decision matrix creates an impression of being scientific without offering any quantitative measures.

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