Decision Making
SPE: Strategy Performance Engine
Strategic Decisions: An organization’s strategic decisions are typically longer-term in nature and involve significant resource commitments; often, these decisions are irreversible. Usually, the analyzes that support this decision making are generally ad hoc and consequently the quality of the decision is highly variable
SPE- Strategic Performance Engine - is an innovative methodology to evaluate strategic decisions under uncertainties (US Patent Pending). The present invention provides a structured, decision-theoretic framework with a rigorous, computer-implemented analysis engine to compare a base strategy to a wide range of options. Subjective expert opinion and historical data are combined in a disciplined manner. Sensitivity and scenario alternatives analyses allow strategy options to be tested for reasonableness and robustness. Decisions can thus be based on comparisons of multiple performance outcomes predictions and their related risks.
In a New World You Need New Tools.
Context
- Decisions in many fields ( business, engineering, regulation, etc.) involve conditions of risk and uncertainty.
- Decisions are often made using limited analysis and based on intuition.
- Conventional logic tries to avoid or hide the uncertainties.
- Existing models which incorporate risk and uncertainties generally require a substantial effort to model and collect information.
SPE Implementation process - 3 Phases
Phase I: Background and Data Gathering
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Context of the model objective
- What to measure?
- Where the data came from?
- Who is involved?
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Subjective Information
- Capture and process Expert and Tacit Knowledge
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Data Collection
- Data Set and key data identification
- Statistical analysis
- Dependency analysis. (Cause-Effect)
Phase II: Building a SPE Model (6 steps)
- Identification Performance Outcome
- Define Strategies and Options
- Define Model Topology (level structure)
- Identify Variables per level
- Impact Vectors, Direct Impacts of Strategies over Drivers
- Simulation Analysis, Sensitivity Analysis, Check Consistency, Strategy Evaluation
Phase III: Analysis and Report
Strategy Evaluation
- Performance outcome Per strategy/alternative
- Combined analysis of strategies
- Performance Outcomes
- Scenario Evaluation
Report
- Outline
- Finding
- Recommendations
Notable Applications
- Assessing Project Execution Strategies for U.S.A. Embassy Projects
- Exploring the performance of the integrated project delivery process on complex building projects
- Approaches for Making Risk-Based GO/NO-GO Decisions for International Projects
- Selecting Long Term Strategies for Construction Firms
- Performance Modeling for Contractor Selection
Potential Applications
- Compare multiple strategic decisions
- Phase Zero Decisions in Projects
- Evaluation of project execution strategies
- Strategic planning of companies
- Evaluation of environmental regulations
- Risk assessment in the principal-contractor relationship
- Production and Sales Strategies
- Impact on Technological Change
- Evaluate innovative projects
Key Takeaway Points
- SPE Modeling approach has been successfully used to develop sophisticated models and present information in a simple form to decision makers.
- Computer implementation facilitates application to a variety of decision problems.
- This modeling approach has evolved as a powerful tool to help decision-makers and teams frame, analyze and discuss complex decisions and situations.
Want to learn more, contact us at info@andesarena.com