The Governance Procedures should include the necessary guidelines to support the Decision Analysis and Resolution process, and the high-level identification of the decisions which should be subjected to a formal evaluation process.

Not all decisions will go through the DAR process, but the Engagement Manager should use DAR when:

• The decision may have a significant impact on the service engagement (plan, cost budget, performance, etc.) and therefore on the overall success.
• Situation is rather difficult, with multiple and complex alternatives to be assessed.
• Many stakeholders with different viewpoints have to participate to the decision making process.

On the contrary, not using DAR when relevant will lead to situations where:

• Decisions on important subjects are made subjectively, and may be questioned later during the service engagement lifecycle.
• Potentially useful alternative solutions are not considered, and thus the selected solution is not the best suited one.
• After some time, it is not clear who actually made the decision and what the rationale was.

The DAR process is a structured approach to evaluating alternative solutions against established criteria to support the making of a decision or determine a recommended solution to address an issue. DAR involves the following actions:

• Confirming the need to use Decision Analysis and Resolution.
• Establishing the criteria for evaluating alternatives.
• Identifying alternative solutions.
• Selecting techniques and tools for evaluating alternatives.
• Evaluating the alternative solutions using the established criteria, techniques and tools.
• Selecting recommended solution from the alternatives based on the evaluation criteria.

While the primary application of the DAR process is to technical concerns, a formal evaluation can also be applied to many nontechnical issues, particularly when a service engagement is being set up. Issues that have multiple alternative solutions and evaluation criteria lend themselves to a formal evaluation process.

Formal evaluation processes can vary in formality, type of criteria, and techniques/tools employed. Less formal decisions can be analyzed in a few hours, use only a few criteria (e.g. effectiveness and cost to implement), and result in a short report. More formal decisions may require separate plans, days/weeks of effort, meetings to develop and approve criteria, simulations, prototypes, and extensive documentation.

Confirming the need to use DAR

Situations requiring a formal evaluation process may be identified at any time. The "obvious" ones will have been identified in the Governance Procedures at the beginning of the service engagement, but other may arise during the life of the service engagement.

Typical guidelines for determining when to launch a formal evaluation process include the following:

• When a decision is directly related to topics assessed as being of high risk.
• When a decision is related to changing work products under configuration management.
• When a decision would cause schedule delays over a certain percentage or specific amount of time.
• When a decision affects the ability to achieve service engagement objectives.
• When the costs of the formal evaluation process are reasonable when compared to the potential impact of the decision.
• When a legal obligation exists to formally document the process and the selected solution.

Examples of decision points where the use of DAR may prove useful are listed below:

• Review and tailoring of procedures.
• Estimating workload and cost budget.
• Selection of resources.
• Make or buy decision.
• Identifying risk mitigation actions.
• Identifying issue resolution actions.
• Assessment of service engagement changes.
• Selection of partners and suppliers.
• Strategic decision to be made by the steering boards.
• Technical decision with potential high impact on the service engagement.

Establishing criteria for evaluating alternatives

The evaluation criteria provide the basis for evaluating alternative solutions. The criteria are weighted so that the criteria with the highest weight exert the most influence on the evaluation. Each criteria is also associated with a range and scale to support the ranking. Both numeric and non-numeric criteria can be used. Non-numeric criteria often use a more subjective ranking scale (e.g. high, medium, or low).

The criteria must be documented to minimize the possibility that decisions will be second-guessed, or that the reason for making the decision will be forgotten. Also, decisions based on criteria that are explicitly defined and established remove barriers to stakeholder buy-in.

The steps to establish the criteria are the following:

• Define the criteria for evaluating alternative solutions.
• Define the range and scale for ranking the evaluation criteria.
• Assess the criteria and their relative importance (weighting).
• Evaluate the evaluation criteria to confirm their validity.
• Document the rationale for the selection/rejection of criteria.

Identifying alternative solutions

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 vendors may change during the evaluation period.

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. Finally, the alternatives must be documented in such a way that they are unambiguous and easy to understand for all stakeholders.

Selecting techniques and tools for evaluating alternatives

Techniques and tools for evaluating alternative solutions against established criteria can range from simulations to the use of probabilistic models and decision theory. These techniques and tools need to be carefully selected, and commensurate with cost, performance, and risk impacts.

While many problems may need only one evaluation technique, some problems may require multiple techniques. For instance, simulations may augment a trade study to determine which design alternative best meets a given criterion.

The steps to select the techniques and tools are the following:

• Select the techniques based on the purpose for analyzing a decision and on the availability of the information required to support the technique.
• Select evaluation techniques 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 techniques.
• Document the selection process, including considerations about the impact on cost, schedule, performance, and risks.

There are many techniques available to support the decision making process. A very thorough list can be obtained from www.mindtools.com. Most common techniques are listed in the table below.

Evaluating the alternative solutions

Evaluating alternative solutions involves analysis, discussion, and review. Iterative cycles of analysis are sometimes necessary. Supporting analyses, experimentation, prototyping, 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 cut. Challenges to criteria and assumptions should be encouraged.

The steps to evaluate the alternative solutions are the following:

• Evaluate the proposed alternative solutions using the established evaluation criteria and selected techniques and tools.
• Evaluate the 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 this as appropriate.
• Perform simulations, modeling, and prototypes as necessary to exercise the evaluation criteria, techniques, and alternative solutions.
• Consider new alternative solutions, criteria, or techniques if the proposed alternatives do not test well; repeat the evaluations until alternatives do test well.
• Document the results of the evaluation.

Selecting recommended solution

Selecting a solution involves weighing the results from the evaluation of alternatives. Since decisions must often be made with incomplete information, there can be substantial risk associated with the decision. These risks should be assessed in parallel with the selection of the solution.

The recommended solution is accompanied by documentation of the selected techniques, criteria, alternatives, and rationale for the recommendation. The documentation, which can be considered as a detailed decision log, is distributed to relevant stakeholders; it provides a record of the formal evaluation process and rationale that are useful to other service engagements that may encounter a similar issue. It is important to record both why a solution is selected and why another solution was rejected.