Weighted sum model in project management | IAPM

In all areas of life, we have to make a multitude of decisions every day: setting the alarm clock to snooze, what to have for breakfast, how to get to work or which company to commission to create a website. Some decisions don’t have much influence, others do. If there are a large number of decision alternatives, you need an evaluation system. This is where the weighted sum model comes into play.

What is weighted sum model?

The weighted sum model is a model for the systematic decision-making process for evaluating alternatives at all project levels. The alternatives are analysed and compared according to qualitative and quantitative criteria and their weighting. Let’s take the example above again. A website is to be created for a company. In the following section, the weighted sum model is explained step by step using this example.

Creating a weighted sum model — step by step

The weighted sum model comprises a total of six steps.

1. Define alternatives

The first step is to define all possible alternatives. It is important to consider only the most likely alternatives, but no more than five, in order to keep the list manageable. Therefore, 2 companies are selected.

2. Define criteria

In the second step, the criteria relevant to the decision are defined. Both measurable, quantitative criteria such as cost and time to completion and non-measurable, qualitative criteria such as portfolio, expertise, SEO capability and user-friendliness are taken into account. Again, it is important not to define too many criteria. In order to maintain clarity, a maximum of ten is recommended.

3. Weighting of the criteria

The criteria are then weighted, as each criterion has a different influence on the analysis. Each criterion is weighted with a percentage, whereby the sum of the weightings must equal 100%.

4. Evaluation scale

In the fourth step, an evaluation scale is defined with which the criteria are evaluated. For this purpose, the criteria are given points, which can range from 1 for ‘poor’ to x for ‘very good’, for example. The following points system could be chosen for the example:

1 — very bad

2 — poor

3 — moderate

4 — good

5 — very good

5. Evaluation of the criteria

The criteria are evaluated separately for each alternative, whereby an evaluation round in the form of a meeting is recommended to ensure a consistent evaluation. When the meeting is convened, each participant receives 5 different cards. When a criterion is discussed, the corresponding card is held up. In this way, everyone can see what has been chosen and, in the event of differences, a solution can be found together.

6. Multiplying the criteria

Finally, the criteria are weighted by multiplying the points by the respective weighting factors and adding them together. The result is a value, whereby the alternative with the highest value is considered the optimal solution.

According to the result of the weighted sum model, company B would now be selected to create a website. However, there may also be other weighting options. In the example chosen, the individual criteria were of varying importance. However, if the criteria are equally important, the ratings can simply be added together. It is recommended to check the result through sensitivity analyses, as sometimes the result may not be robust, i.e. one alternative wins just ahead of the other. Slight adjustments to the weightings can be used to check whether the result remains stable, which would confirm the correctness of the decision.

Advantages and disadvantages

The method of evaluating alternatives offers several advantages. Firstly, it ensures transparency, which makes the decision comprehensible and understandable. In addition, both measurable and non-measurable criteria can be taken into account, which increases flexibility. By involving the team in the decision-making process, decisions can be discussed, which can not only lead to better results, but also increases motivation. However, there are also some disadvantages to consider. The time required for this method can be considerable, especially if many alternatives and criteria need to be considered. In addition, subjectivity can be a challenge, especially if the criteria are not measurable, which can lead to distorted results. Overlapping criteria can also lead to distortions and incorrect results if they are not adequately taken into account.

It is therefore important to carefully weigh up the pros and cons when using this method and take appropriate measures to minimise potential problems where necessary.

Conclusion

The weighted sum model is a good way of deciding between several alternatives based on criteria you have selected yourself. The weighting can be used to decide for each criterion which one in particular should be included in the analysis. In this way, a good decision can be made that is also supported by the team. Above all, subjectivity can be avoided if the analysis is carried out in a team, as several opinions are taken into account. For example, the team can decide together which new project management tool from the large selection should be used. This can be done on the basis of self-chosen criteria that are particularly important to the team and can be weighted accordingly. The company that is to redesign the project management company’s existing website or the supplier for the required components can also be selected in the same way.

Originally published at https://www.iapm.net.