The Delphi Method Is a Multi-Criteria Decision Making to Achieve Business Objectives
Results from Delphi studies approved the use of a decision-making study technique toward organizational goals . . .
Decision makers (e.g. executives, managers) in general need a multi-criteria decision making (MCDM) approach to support their decisions in order to achieve the organizational strategic goals and business objectives. This has revealed the following question to simply and confirm the importance of the Delphi method as a decision-making study technique for improving business process management (BPM) and workflow system performance.
Why Delphi method is an appropriate study technique to achieve organisational goals?
To begin, discussions about the importance of the Delphi method and BPM for the organizational performance using results from Delphi studies, which have been used to explain how such decision-making study technique can be applied as an MCDM framework. Also, the application of the Delphi method as an approach to deliver empirical evidence in order to support decision maker during their decision-making process to achieve the appropriate decisions and sustain business performance.
“Most discussions of decision making assume that only senior executives make decisions or that only senior executives’ decisions matter. This is a dangerous mistake.” By Peter Drucker
Certainly, the Delphi’s three fundamental rounds can be applied as decision-making stages, as each round has a specific purpose and aims. These decision-making study rounds are Brainstorming, Narrowing-down and Weighing.
Results from Delphi Studies
Business studies have explained the use of the Delphi method as an MCDM framework using empirical evidence. These Delphi studies did focus on obtaining consensus and verified the effectiveness using Delphi’s rounds to evaluate business processes, policies and standards.
Further, the Delphi method has provided significant findings in many BPM and workflow systems performance components, which positively affected organizational efficiency and effectiveness. Therefore, the following Delphi studies provide adequate discussions about Delphi results and how such important results support organisations to achieve their business objectives.
“The Delphi Method is Capable to Identify BPM Values and Key Performance Indicators”
Delphi’s rounds can support business process management by evaluating workflows using the organization cultural values. These values are known as BPM values, which are the core values of the key performance indicators (KPIs) or measurement variables for measuring a workflow system. The Delphi method can find these BPM values and their variables (KPIs) to measure workflow systems in order to improve business process management and organizational performance. Thus, the identified KPIs can be employed as performance measurement factors for managing workflow information systems (WISs). Schmiedel et al. Delphi studies (see resources) discovered four BPM values, which can be used as KPIs or instrument to measure workflow systems (see BPM values table). These BPM values are customer orientation, excellence, responsibility and teamwork (CERT).
CERT values have variables, which can be used as key indicators to evaluate the organization’s workflows. For instance, the excellence BPM value has the following variables (KPIs): continuous improvement, innovation, leanness and quality; these KPIs can be used to generate the workflow excellence ratio; however, in case that the excellence ratio comes at a low level, then decision-makers can employ the excellent value in order to improve the workflow system performance by measuring the organization’s excellence.
Consequently, the organization’s workflow information system characteristics can be examined to evaluate the workflow in order to make such efficient and effective organizational performance. Also, the use of Delphi method along with BPM values can make systematic BPM construct, which can be used as a workflow decision-making development model. This can be applied by decision-makers from the first decision-making phase up to the completion of the testing phase, and therefore, the developed workflow decision-making model can be implemented as a complete workflow system to achieve the required organizational performance and business objectives.
The Schmiedel et al. Delphi study to develop and validate an instrument has applied an evaluation of a measurement instrument design to recognise and weigh four BPM key dimensional values, which are capable to ensure the success of BPM objectives (see BPMC development stages table). This study has six stages to implement the BPM construct (BPMC) of CERT values in order to confirm that their suitability to support decision makers by measuring BPM. The study has two core strategic entities, which are the development core and validation core. The development core entity consists of the following: Stage 1, items creation to recognise the key indicators/dimensions using literature review, questionnaires, and interviews; Stage 2, substrata identification to identify the important items in order to construct categories; Stage 3, selecting the key items which are derived from item pools in stage 2 and ranking the items based on responses; Stage 4, indexing — key items revision by conducting an index-card-sorting test, which is used to make enquiries based on expert feedback to identify KPIs from stage 3 and calculate the ratio of each KPI based on the feedback.
Thereafter, the recognised KPIs will be implemented in the validation core entity. This entity consists of the following: Stage 5, the BPMC preparation, which enhances the recognised KPIs by developing a pre-test and a pilot test studies (the pre-test is used to evaluate and expand the understanding of the BPMC; the pilot test is used to evaluate and confirm the BPMC validity and reliability using exploratory factor analysis); Stage 6, examines the application of the validated and reliable BPMC using confirmatory factor analysis techniques based on a survey (questionnaire) to confirm the practicality of the CERT values as a business process management instrument.
Another Delphi study conducted by Quyên and published by Procedia — Social and Behavioral Sciences in 2014 revealed consistent and comprehensive key performance indicators to measure an organization’s governance procedures. The Quyên’s Delphi study shown 5 potential KPIs as business dimensions of the organization’s practice, as follows: 1. Management & Direction; 2. Participation; 3. Accountability; 4. Autonomy & Transparency; and finally, 5. Management & Direction. These 5 dimensions can be used to recognise the business resources at all levels within the organization in which decision makers utilise for management purpose to fully identify the organization’s business processes, as well as each employee tasks and duties. As a consequence, the Delphi method has demonstrated the capability to be the most useful in finding and evaluating the recognised 5 dimensions and in providing KPIs for the weighting system. Indeed, the Quyên’s Delphi study gathered its findings based on 4 levels developed by Delphi’s rounds:
Level 1: the first level looked at a set of indicators (initial list), which recognised 91 indicators.
Level 2: the second level looked at the importance levels, which are used to rank the importance of each indicator. This recognised all indicators, which should be included, and therefore, 92.3% of the initially listed indicators were rated very (or extremely) important and 7.7% rated relatively important.
Level 3: the third level measured consensus levels where 3 different groups (A, B, C) are formed to find the coefficient of quartile variation (CQV) along with interquartile range (IQR) and median levels to measure the convergence level within the experts’ opinions and the indicators importance level.
Level 4: the fourth level looked at the weighting system, which comes from level 3 (the indicators importance scores) within the ratings and the CQV formula, which is CQV = (Q3 — Q1)/(Q3 + Q1). Finally, the recognised indicators mean scores have been used to calculate the definitive indicator importance levels in order to weight each important indicator, which is recognised through the ratio of an indicator importance score to the sum of all indicators importance scores for each identified factor. Each factor weight is the ratio of the sum of all indicators importance scores for each factor to the sum of all indicators importance scores for each dimension, as each dimension contains a set of factors.
Furthermore, the Quyên’s Delphi study found a high level of agreement within experts’ on the importance of the indicators, as 70% indicating high reliability of the recognised set. Similarly, the weighting results provided significant variations in the indicator weights within 23% of the factor groups and 80% in the dimensions’ factor weights. These findings have indicated that the weighting is significant and proves the reliability of the study findings.
“Delphi’s Rounds Can Be Used as a Multi-Criteria Decision-Making Business Study Technique”
Moreover, the Pangsri study has applied the Delphi method as an MCDM framework to support decision makers to produce many ways and complex assessments for their construction projects. This study used Delphi’s rounds for ranking projects to achieve business objectives. This study MCDM framework consists of the Delphi method — stage 1, the analytic hierarchy process (AHP) — Stage 2 and the order preference by similarity to ideal solution (TOPSIS) — stage 3 (see MCDM study framework).
The analytic hierarchy process can be used to determine the weights of criteria for complex decision-making situations. The AHP consists of the following 5 steps:
1. State the business issue and make the decision purpose;
2. Recognise the structure of the decision from the decision purpose and develop the objectives;
3. Build a set of comparison matrices; for instance, consider n elements to be compared C1 to Cn then denote the relative significance weight of Ci relating to Cj by aij and then form a square matrix A= ( aij ) of order n as aij = 1/aji where i ≠ j , and aii = 1 , all i;
4. The significance weight components can be used to weigh the priorities for each component, then reweight the components by scoring its weighted values to have the overall significance;
5. Calculate the consistency index (CI) using formula λmax — n / (n — 1).
The MCDM framework uses the AHP in the assignment of the weight of the criteria (see MCDM study framework), and then, the TOPSIS is applied as a multi-criteria process for identifying solutions based on a set of predetermined components. The TOPSIS is usually used as criteria to find an appropriate decision in order to increase profits and reduce cost.
Indeed, the Pangsri study provided alternatives and applied the TOPSIS weighting approach for finding the appropriate decision-making criteria (see projects ranking table). This resulted in the ranking of the projects. Therefore, the application of the Delphi method together with other decision-making approaches based on Delphi’s rounds can result in effective decision-making tool for such complex decision-making situations.
The application of the MCDM framework has ranked the construction projects using the Delphi method, AHP and TOPSIS at the weighting phase (stage 3) to order these projects based on their significance, importance and indexed values.
Conclusion
Business studies have verified the importance of using an MCDM framework to support decision makers in order to achieve business objectives. It is clear that the Delphi method can be used as an MCDM framework to develop a decision-making mechanism to achieve organizational strategic goals.
Delphi’s rounds have revealed remarkable results for several decision-making studies. The Schmiedel et al. studies have utilised Delphi’s rounds to construct and validate BPM values, which can be used to meet business objectives. The Quyên study has used the Delphi method to develop KPIs, importance and consensus levels for a weighting system to measure workflows in order to facilitate business processes. The Pangsri multi-criteria decision-making study has developed a decision-making mechanism where Delphi’s rounds have played an important role in initiating the MCDM framework and allowing the application of other decision-making techniques along with the Delphi method for ranking construction projects.
Overall, the Delphi method along with other decision-making approaches such as AHP and TOPSIS can be used as a multi-criteria decision-making framework for decision-making and achieving organizational goals. Business studies have shown significant results for applying an MCDM framework to achieve business objectives.
