Understanding Multi Criteria Decision Analysis

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In the world of business analysis, making decisions is a daily occurrence. Whether it’s choosing a new supplier, selecting a marketing strategy, or even hiring new talent, business analysts play a vital role in guiding organizations toward success. However, decision-making can be a complex task, especially when faced with multiple criteria to consider. This is where the concept of Multi Criteria Decision Analysis (MCDA) comes into play.

The Basics of Multi Criteria Decision Analysis

Definition and Importance of Multi Criteria Decision Analysis

Imagine you’re standing at a crossroads, trying to determine the best path to take. Each direction comes with its own set of advantages and disadvantages, as well as various factors to consider – such as distance, time, and safety. Multi Criteria Decision Analysis is like having a compass that helps you navigate through these decision-making crossroads.

Simply put, Multi Criteria Decision Analysis (MCDA) is a structured approach that allows business analysts to evaluate and compare different options based on multiple criteria. It provides a systematic framework to consider the diverse factors that influence decisions, ultimately aiding in choosing the most favorable alternative.

The importance of MCDA cannot be overstated. By using this methodology, organizations can minimize bias and subjectivity in decision-making, increase transparency, and enhance the overall quality of the decision-making process.

But how does MCDA actually work? Let’s delve into its key components and explore the process in more detail.

Key Components of Multi Criteria Decision Analysis

Before diving into the process, let’s explore the key components of Multi Criteria Decision Analysis.

First and foremost, there are the decision criteria – these are the factors that matter most when making a decision. They could be anything from cost, time, and efficiency, to sustainability, customer satisfaction, and market potential. Identifying the decision criteria is crucial, as they form the foundation of the analysis.

For example, if a company is considering expanding its operations to a new location, the decision criteria could include factors such as the availability of skilled labor, proximity to suppliers and customers, infrastructure, and local regulations.

Next, we have the options or alternatives. These are the potential choices that are being considered. For example, if a company is deciding on a new location for expansion, the options could include different cities or regions.

Each option will be evaluated against the decision criteria to determine its suitability. This evaluation process involves assigning scores or ratings to each option based on how well it meets each criterion. The scores can be numerical or qualitative, depending on the nature of the criteria.

Lastly, there is the concept of weighting and ranking. In MCDA, business analysts assign weights to each criterion based on its relative importance. These weights reflect the organization’s priorities and values. For example, if cost is considered more important than customer satisfaction, a higher weight will be assigned to the cost criterion.

Once the weights are assigned, the alternatives can be ranked and evaluated accordingly. This ranking helps decision-makers understand which option is the most favorable based on the weighted criteria.

It’s important to note that MCDA is not a one-size-fits-all approach. The specific methodology and techniques used may vary depending on the context and complexity of the decision problem. Some commonly used MCDA techniques include Analytic Hierarchy Process (AHP), Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS), and Preference Ranking Organization Method for Enrichment Evaluations (PROMETHEE).

In conclusion, Multi Criteria Decision Analysis is a powerful tool that enables organizations to make informed and objective decisions by considering multiple criteria. By identifying decision criteria, evaluating options, assigning weights, and ranking alternatives, businesses can navigate complex decision-making processes with greater clarity and confidence.

The Process of Multi Criteria Decision Analysis

Identifying the Decision Criteria

Before embarking on the decision-making journey, it is crucial to identify and define the decision criteria. This involves brainstorming and gathering input from relevant stakeholders. It’s important to consider both qualitative and quantitative factors to ensure a holistic analysis.

Let’s picture a business analyst as an architect constructing a building. In the initial phase, the architect needs to determine the key requirements of the structure – the number of floors, the size of each room, and the overall design. Similarly, identifying the decision criteria sets the stage for a successful MCDA process.

Imagine the business analyst sitting down with various stakeholders, engaging in lively discussions to identify the decision criteria. They consider factors such as market demand, financial feasibility, environmental impact, and customer satisfaction. Each stakeholder brings their unique perspective, contributing to a comprehensive list of criteria that will guide the decision-making process.

Once the criteria are identified, the business analyst meticulously defines each one, ensuring clarity and specificity. They break down complex concepts into measurable components, creating a framework that will facilitate the evaluation of options later on.

Evaluating the Options

Once the decision criteria are established, it’s time to assess the different options. This includes gathering information, analyzing data, and evaluating the alternatives against each criterion. Here, the business analyst acts as a detective, gathering evidence and uncovering insights to make an informed decision.

Consider a chef creating a new recipe. They carefully choose the ingredients, experiment with flavors, and evaluate the taste, presentation, and nutritional value of each dish. Similarly, in MCDA, business analysts evaluate options based on the defined criteria, taking into account various aspects such as cost, feasibility, and potential risks.

The business analyst dives deep into market research, conducting surveys, analyzing competitors, and studying industry trends. They gather data on the potential options, examining their strengths and weaknesses. They explore the feasibility of each alternative, considering factors such as resource availability, technological requirements, and time constraints. Through this meticulous evaluation process, the business analyst gains a comprehensive understanding of each option’s potential.

Furthermore, the business analyst engages with subject matter experts, seeking their insights and expertise. They consult with professionals in various fields, such as finance, marketing, and operations, to ensure a well-rounded evaluation. By leveraging the knowledge and experience of others, the business analyst enhances the accuracy and reliability of their analysis.

Prioritizing and Ranking Alternatives

After evaluating the options, the next step is to prioritize and rank them to identify the most favorable choice. This involves assigning weights to each criterion, reflecting their relative importance. Think of a judge at a talent competition, scoring each performer based on different aspects like talent, stage presence, and originality. By assigning scores and ranking the alternatives, the judge determines the winner – the performer who excelled in multiple criteria. In MCDA, a similar process occurs to determine which alternative best aligns with the organization’s goals and objectives.

The business analyst convenes a team of experts to assign weights to the decision criteria. Each criterion is carefully considered, with discussions centered around its significance in achieving the organization’s objectives. The team engages in thoughtful debates, weighing the pros and cons of each criterion and reaching a consensus on the weights.

Once the weights are established, the business analyst applies them to the evaluation of options. They score each alternative based on how well it meets the criteria, taking into account the assigned weights. This process allows for a systematic comparison of the options, highlighting their strengths and weaknesses in relation to the organization’s goals.

Through this prioritization and ranking process, the business analyst identifies the most promising alternative – the one that best aligns with the organization’s strategic direction. The chosen alternative becomes the foundation for further planning and implementation, leading the organization towards its desired outcomes.

Types of Multi Criteria Decision Analysis

Weighted Sum Model

One of the most commonly used MCDA techniques is the Weighted Sum Model. It involves assigning weights to each criterion and scoring alternatives based on these weights. It’s like a math problem, where the weights act as coefficients and the alternatives are variables. By multiplying the weights with the corresponding scores and summing them up, the model provides a comprehensive evaluation.

Analytic Hierarchy Process

The Analytic Hierarchy Process (AHP) is another widely utilized MCDA method. It aims to capture the complexity of decision-making by hierarchically structuring criteria and alternatives. It enables business analysts to break down decisions into manageable parts, much like a jigsaw puzzle, where each piece contributes to the final picture. By prioritizing criteria and alternatives on different levels, AHP guides analysts towards a more accurate and informed decision.

Technique for Order of Preference by Similarity to Ideal Solution

Complex problems often require a more intuitive approach. That’s where the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) comes in. It compares alternatives to an ideal solution and a worst-case scenario while considering multiple criteria. This technique is akin to a tightrope walker, carefully balancing on the thin line between the ideal and the worst-case, seeking the most favorable alternative.

Challenges in Multi Criteria Decision Analysis

Dealing with Uncertainty and Risk

Decision-making is not always straightforward. Uncertainty and risk can creep into the process, making it challenging to determine the best way forward. Business analysts navigate this complex landscape like explorers, equipped with tools and techniques to handle uncertainty. They gather data, conduct risk assessments, and consider different scenarios to mitigate potential drawbacks.

Handling Conflicting Criteria

Often, decision criteria can compete with each other, creating tension and conflicting priorities. Imagine a tug of war between two teams, with each side pulling in opposite directions. In MCDA, business analysts act as referees, facilitating discussions and finding common ground. They balance the competing criteria, ensuring that no aspect is ignored or overshadowed in the decision-making process.

The Role of Technology in Multi Criteria Decision Analysis

Software Tools for Multi Criteria Decision Analysis

Advancements in technology have revolutionized the field of MCDA. Various software tools are available that streamline and automate the decision-making process. These tools are like assistants, helping business analysts execute complex calculations, generate visualizations, and save valuable time. From spreadsheets to specialized MCDA software, these tools empower analysts to make more efficient and accurate decisions.

The Impact of Artificial Intelligence and Machine Learning

The rise of artificial intelligence and machine learning has further amplified the capabilities of MCDA. These technologies act as accelerators, enabling business analysts to process vast amounts of data, identify patterns, and generate insights. Like an AI-driven co-pilot, these technologies assist analysts in navigating through the intricate world of decision-making, providing valuable recommendations and predictions.


Multi Criteria Decision Analysis is a powerful tool in the arsenal of business analysts. It helps organizations overcome the complexities and challenges that arise when faced with multiple criteria in decision-making. By understanding and embracing MCDA, business analysts can guide organizations towards optimal choices, encourage collaboration, and unlock new opportunities. So, the next time you find yourself at a decision-making crossroads, remember the compass of MCDA – providing direction and clarity in the quest for success.

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