Applications of Hiview3

Hiview3 for strategy selection

It is accepted wisdom that in order to be successful, an organisation must have a strategy. After all, how can you measure success unless it is relative to a defined desired outcome?

Unfortunately, formulating and selecting strategies is notoriously difficult. A SWOT analysis can identify factors effecting the organisation. Often this can suggest possible directions. But how can these options be evaluated and, more importantly, how can you get all the key players in your organisation to agree on one strategy?

Over many uses, Hiview3 strategy selection models have displayed some key similarities. One such is that strategic options can be defined quite exactly, whilst base data for evaluation is vague.

Consider a strategy for sales growth. Options could include a focus in advertising or launch of new products into new markets. These options and associated costs can be planned in detail. However, the outcomes and benefits will be necessarily inexact. Advertising will result in increased brand awareness but how should that be measured?

Hiview3 provides functions for making relative and qualitative judgements, even verbal judgements. These are incredibly powerful in strategy selection. Brand awareness may not be directly measurable but key players with the right experience can judge that ‘option 1 will increase brand awareness more than option 2.’ Hiview3 turns these judgements into robust evaluations of strategic options.

Hiview3 for site selection/relocation

Relocation and site selection are complex choices. Should you relocate your organisation to an area of tax advantage and cheaper resource? Where should your next retail outlet be? Is the right local labour available in the new region? What about transport? Is the environmental impact acceptable?

Hiview3 is a powerful tool which can be used to evaluate site selection and relocation. Using a supermarket as an example, consider the question of where to build a new store. Practical experience shows that the cost of building a new store is often assigned a small weighting in the model. This is because the building costs are often very similar. As weights are assigned based on the importance of the range of scores, building cost are weighted low.

Relocation also has unique factors to model. There is always a ‘stay here’ option to evaluate. Although this is like a ‘do nothing’ option, it still has costs and benefits associated. When the model is complete, Hiview3 will recommend a relocation strategy but also will show how preferable the recommendation is to the ‘stay here’ option.

Hiview3 for vendor selection and bid evaluation

Procurement processes in many organisations are quite strict, and for good reason. Controls on the placing of large contracts and of large amounts of money must be seen to be fair and equitable. This is especially true in the public sector.

Hiview3 modelling provides a clear audit trail to decisions. The use of criteria scoring and weighting to appraise vendors and bids is a concept already understood in this arena. Unfortunately, many appraisal models in use today are flawed and can lead to poor decisions.

Hiview3 modelling using MCDA is based on the coherence axioms of decision theory and, as such, provides necessary robustness to vendor selection and bid evaluation decisions.

An example of a flawed bid evaluation is as follows: ‘Most consumers purchasing a new car would state that Cost is an important criterion in deciding which car to buy. They would therefore assign it a heavy weighting. However, if the cars in question had a Cost variance of only $200, is Cost really very important? Probably not!’

The above example shows that it is impossible to assign weights to decision criteria until the range of values of the options is known. Many issued tenders are fundamentally flawed in this respect and this can result in bad vendor selection. Catalyze has the solution to this issue.