Comparison of Two Decision-Making Techniques

 

Delphi technique

            The Delphi method was created by the Rand Corporation in the 1950s.  It gets its name from the Oracle of Delphi, a priestess of Apollo who gave prophecies.  This technique is one that comes to a consensus after speaking to a group of experts (Twin, 2020).  Multiple rounds of questionnaires are answered, and this information is used to forecast based on a “group response.”  The members are told of the aggregated answers and can change their responses according to how they interpret this “group response.”  Information is also provided by members of the group between these rounds.  Based on the fact that this process takes multiple rounds and members can change their responses, this method seeks to find a correct response through consensus.  Correct meaning a mutually agreed result for the group.

Analytic Hierarchy Process

            The Analytic Hierarchy Process is a technique that takes Key Performance Indicators (KPI’s) and compares them with each other.  These pair-wise comparisons will get valued into eigenvalues and their averages will give a measure of how beneficial these KPI’s are to who is evaluating them (BPMSG, 2010).  First, an objective must be defined.  For example, an objective could be to purchase a smartphone.  Next, elements of the phone must be defined as criteria, sub-criteria, and alternatives.  Criteria could be color, memory, and cost while sub-criteria could be blue, pink for color, and $125 for cost.  Alternatives could include a pink phone for $300.  This sub-criteria will be compared with each other to get benefit weighting.  For example, if the colors are being compared and it was decided that the color blue was twice as more beneficial than the color pink, the blue-pink comparison would be 2 (and the pink-blue comparison would be ½.)  This would be done for all combinations.  Pricing can be left out of these comparisons allowing for a benefit-cost analysis to be done afterward.

Similarities

            Both the Delphi Method and the Analytic Hierarchy Process are multi-phased processes.  The Delphi Method will take about 3 rounds while the Analytic Hierarchy Process has about 5-6 steps. 

Differences

            There are stark differences between these two methods.  The Analytic Hierarchy Process is considerably more involved than the Delphi Method.  The Delphi Method utilizes questionnaires and then discussion while the Analytic Hierarchy Process uses a qualitative assignment to an objective’s criteria.  Once these values are assigned, more math follows.  These values are averaged, normalized, and then compared to help identify the best solution for the objective.  The Delphi Method will use the information provided by experts to have a consensus to identify the best solution.


References

BPMSG. (2010, April 19). Analytic Hierarchy Process AHP - Business Performance Management. Retrieved from YouTube: https://www.youtube.com/watch?v=18GWVtVAAzs

Twin, A. (2020, March 6). Delphi Method. Retrieved from Investopedia: https://www.investopedia.com/terms/d/delphi-method.asp#:~:text=The%20Delphi%20method%20is%20a%20process%20used%20to%20arrive%20at,the%20group%20after%20each%20round.

 

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