Choosing by Advantages (CBA)

Decision-making processes are important due to its significant impacts on the actual outcome. Sound decision-making skills are especially important for people who make decisions that affects other people. This includes for example architects, engineers, governments, psychologists, educators, consultants and leaders. Decisions can be affected by experiences, arguments, biases and time restrictions that all can lead to unintended results. Using a sound decision process is essential to achieving sound results.

Choosing by Advantages (CBA) is a decision-making system that include a wide variety of decision-making methods, definitions, principles and models. The purpose of the CBA system is to simplify decision-making and make it sound through differentiating alternatives and understand the importance of those. CBA hinders double-counting through focusing on decisions based on the importance of advantages, not advantages and disadvantages . The CBA system supports visual and transparent decision-making with an collaborate and integrating environment that acknowledges that decisions are essentially subjective. Values and culture of Lean/IPD project management are aligned with an emphasis on project's value for stakeholders and the use of data .

Virtually, the CBA system can be applied in all decision-making processes, simple and more complex situations . Although, the CBA system demands use of more resources in comparison with for example experienced based decisions. CBA is often used when in need for sound methods due to the importance of the decisions. This does not directly relate to the size or scope of the decision. The CBA can be implemented in project-program and portfolio management depending on the decision and who are responsible for the decision-making One example of program management where CBA can be used is in making an analysis of a project's Business Case. This analysis will result in rejection or approval of the Business Case in relation to the outputs, outcome and benefits of the project. One other example of a project management process with the use of CBA is to find out which windows one should choose to order from a supplier in a primary-school construction project. The designer of the CBA system, Jim Suhr, describes CBA as a process for making sound decisions for both simple and complex situations in project management.

The principles in the CBA system are explained by the definitions and models, where the methods applies the principles. The CBA system is based on four central principles .:


1. The foundation principle of sound decision-making

2. The fundamental rule of sound decision-making

3. The principle of anchoring

4. The pivotal sound–decision-making

This article will look into the CBA concept, purpose, current state, limitations and a concrete example using the Tabular Method of CBA to describe how applicate a CBA as a decision-making system.

Big idea

Decision-making methods can influence people's decisions that further trigger actions, thus lead the actions to cause outcomes. The outcomes of decisions can be of great importance and with a high degree of complexity. For example in the architecture, engineering and construction industry is there a need for decisions to be supported by decision-making processes. The CBA is in comparison with the traditional engineering projects re-engineering the art system of decision-making.

Concept and purpose

Choosing by Advantages (CBA) is a decision-making prosess that offers methods that support creation of transparency and collaborative environments in which to make decisions. This method for making decisions are made when several goals or criteria has to be evaluated at once: design choices and concept choices. In addition to the decision methods, CBA includes definitions, principles and models. Figure 1 presents CBA definitions adapted from Suhr (1999) .

Figure 1: CBA Definitions

The principles in the CBA system are explained by the definitions and models, where the methods applies the principles. The CBA system is based on four central principles :


1. The foundation principle of sound decision-making - decision makers must learn and skillfully use sound methods of decision-making

2. The fundamental rule of sound decision-making - decisions must be based on the importance of advantages

3. The principle of anchoring: sound methods anchor - decisions must be anchored to the relevant facts

4. The pivotal sound–decision-making - different types of decisions call for different sound methods of decision-making

The CBA decisions are based on the advantages (Principle 2), not disadvantages and advantages. This ensures the process to have no double counting.

The purpose of the use of CBA is to support sound decision-making through achieving transparent-and congruent decisions, anchor subjective evaluation in facts and emphasize on actual benefits.

The system is easy to applicate and simplifies complex decision-making through differentiate alternatives and understand the importance of those. It is here important to mention that there is a focus on using the correct data and use the data correctly, on the basis that the decisions must be anchored to the relevant facts.

Current state

Todays decision-making processes needs to be emphasized in a way where architects, engineers, leaders in organizations, and many others should become artist in the art of decision-making . Suhr (2015) state that they should become professional decision-makers since decisions it what they do for a living.

Some traditional decision making processes today are based on earlier experiences, arguments, hierarchy based authority, biases and time restrictions that all can lead to unintended results. This can cause to non-sound processes.

There is a global trend that focuses on sustainable projects. This will have more stakeholder involvement by the experiencing globalization together with the rise of multinational companies that have created a demand for increased innovation, renommé/reputation and effective work environment. This demand results in more complex supply chain management.

Application example: Choosing a yoghurt

Guidance

This section will provide guidance on how to use CBA and when it is applicable. Firstly, the "CBA Tabular Method" is reviewed. This method is divided into the following five phases: (1) Stage-setting Phase, (2) Innovation Phase, (3) Decision-making phase, (4) Reconsideration Phase, and (5) Implementation Phase.

The focus in this article is on Decision-making phase (3). This phase is described in 7 steps (see Figure 2):

1. Identify alternatives

2. Define factors

3. Define criteria for each factor

4. Describe attributes for each alternative

5. Decide advantages for each attribute

6. Evaluate importance of each advantage and if costs is of importance the final step is to

7. Evaluate cost

Figure 2: CBA 7 steps

Application

Figure 2 shows the CBA decision-making phase, including needed action in each step. To fully understand the implementation of the CBA process, an example is given. The decision that need to be taken is which yoghurt to buy based on different alternatives, factors and importance of advantages. See Figure 3 for CBA Table.

Figure 3: CBA Table

Note! The cost can not be chosen as a factor. The cost is applied and reviewed in a Importance of Advantages (IoA) versus cost graph, that are based on the table output from the following seven steps:

Step 1

Choose the alternatives. In this case the alternatives are a lemon yoghurt, strawberry yoghurt and a peach yoghurt.

Step 2

Defining the factors with the purpose of differentiating between alternatives. In the example this is: calories, protein content, sugar content, and fat content.

Step 3

Agreement on the criteria for each factor. This criteria is used to evaluate the attribute of alternatives. The criterion can be two types of decision rule: desirable (want) or mandatory (must).

In the example this is written after 'Crit:'. One example is for calories where the criteria is lower is better.

Step 4

Summarize the attribute of each alternative, and underline the worst attribute.

In the example for the criteria 'calories' this is Alternative 2 with 88 kcal.

Step 5

Decide the advantages of each attribute. This is done be relating the two other alternatives to the least-preferred one / worst alternative. 


As mentioned, the worst attribute = Alternative 2 with 88 kcal.
 In comparison with other alternatives:


- Alternative 1 : advantage of '10 kcal lower' since it contains 78 kcal.

- Alternative 2 : advantage of '14 kcal lower' since it contains 74 kcal.

Then the best attribute for this criteria is Alternative 3.

Step 6

The best attribute for each criteria is marked with a circle. For the criteria 'calories', the attribute for Alternative 3 is circled.

Then, explicit state preferences og distribution of the advantages of importances (IoA) from a scale from 0-100, see Figure 4 for case example. The least-preferred attribute / worst attribute always gets a 'Importance' of zero, relative to itself. The other alternative(s) are compared to the most-preferred attribute with the following calculation:



IoA (compared alt.) = Advantage (most-preferred alternative) * Advantage (compared alternative) / IoA (most preferred alternative)

Figure 4: Distribution of Importance of Advantages (IoA)

In the example the criteria 'calories' are weighted 100 (i.e. most important criteria). Alternative 3 is the most-preffered attribute and thereby have importance of 100. Alternative 1 is the least-preferred attribute / worst attribute and thereby have importance of 0. Alternative 2 are weighted compared to alternative 1 (most-preferred). The advantage is 10 kcal lower. Then the importance is: 14 kcal/100 * 10 kcal lower = 72

Step 7

Summarize the total IoA for each alternative.

In the example for Alternative 1:

Total IoA = 72 + 40 + 80 + 50 = 242

Then the total IoA for each alternative are compared to cost in a Importance of Advantages versus cost graph.

See Figure 5 for illustration of the example. Here I would have chosen Alternative 1 based on that the advantages are very higher than the others and where the cost are not many NOK ekstra.

Figure 5: Importance of Advantages (IoA) vs Cost graph

This CBA process is highly collaborative and integrating process of parties, for example stakeholders. Furthermore, the alternative chosen must be reconsidered (Phase 4) in regard to if it exists other alternatives and that the IoA distribution reflects stakeholder's viewpoint.

Limitations

As mentioned, the CBA system is helpful in integrating multiple stakeholder's perspectives, identification of advantages, transparent and conflict-free trade-offs between alternatives, providing documentation for decision-making rationale, separating "value" of the alternatives from the cost and alternatives (cost vs value).

Thus, it is needed to mention the limitations and barriers of the CBA system. Some examples are:

Need for intensive time / resource use in data collection and participation. The used time can exceed the expectation of the team. Not all manufactures hav an EPD (Environmental Product Declaration) where data collection can be challenging, e.g. comparing products from the environmental perspective. Participation of all stakeholders together F2F (Face-to-Face) in the same room at the moment of the decision. Not optimal in time-restricted decision-making where one need a rapid decision To fully achieve CBA system advantages CBA must be facilitated by someone trained and practiced in CBA (at least one-hour introduction to CBA session that is facilitated by an expert user of the system)