Lakshmi varagand ramanandg_grishagarwal

PMI National Conference – Technical Paper

Decision Making Using 2X2 Cartesian Matrix in Managing Vision

PMI National Conference - 2013

Technical Paper

Lakshmi Varagan D - Lead Pre Sales and Solutions , APAC –TCS

Grish Agarwal – Program Manager – Program Management Practice - TCS

Ramanand Garimella – Global Delivery Head – Program Management Practice - TCS

Table of Contents

1 Abstract ............................................................................................................................................................ 3

2 Introduction ...................................................................................................................................................... 3

3 Project Vision and alignment ......................................................................................................................... 4

3.1 Decision making needs in Project Management ....................................................................................... 5 4 Cartesian Matrix based 2X2 Decision Matrix ................................................................................................ 5

5 Framework for Designing 2X2 Decision Matrices ........................................................................................ 7

5.1 Decision Matrices ...................................................................................................................................... 9 6 Case Study ..................................................................................................................................................... 11

7 Future Direction ............................................................................................................................................. 14

8 Conclusion ..................................................................................................................................................... 14

9 References ..................................................................................................................................................... 14

10 Profiles of the Authors .................................................................................................................................. 15

PMI National Conference – Technical Paper (15)


1 Abstract Projects that enjoy success in uncertain times have a definite vision and maintain its continuous alignment with project objectives. The key component in achieving this alignment is effective decision making. When there are multiple objectives in an uncertain environment with many stakeholders to be managed, decision making becomes complex. Hence, a structured framework to aid this decision making is needed. This article examines the 2x2 Cartesian Matrix based framework for a structured approach to decision making. This matrix categorizes items into any one of the four different buckets facilitating effective decision making. One of the most well-known examples of the 2X2 matrices is the BCG-Growth Share Matrix - corporate portfolio analysis tool. This article discusses how the Cartesian Matrix based framework can be used in decision making to align the project vision with the objectives, focusing on three areas: (1) the stakeholder needs management (2) governance activities and (3) benefit realization. It defines an approach for each of these areas to construct a 2X2 matrix with independent and competing attributes mapped with two states of varied intensity (High and Low). The approach consists of the following three stages:

1. Identifying attributes that are critical

2. Segmenting the attributes into two states

3. Categorizing into four buckets and developing the action plan facilitating decision making

Finally, the paper argues that the 2X2 matrix representing the two dimensional model suggested can be extended to three dimensions to reflect more complex situations.

2 Introduction Decision making is an integral part of everyone’s life irrespective of whether in professional or personal front. In our everyday life we are continuously taking decisions without even realizing that we are making a decision. This is because these decisions are repetitive, too simple to make and do not involve any dire consequence. However, when decision-making involves larger stakes and corresponds to a unique scenario, it becomes very critical to ensure that you make the right decisions. Thus, in such situations decision making is a difficult and delicate task. Napoleon Bonaparte once said, "Nothing is more difficult, and therefore more precious, than to be able to decide”. Not taking right decision at the right time, especially in the project context, will have a great impact on the whole objective of the project itself. Project managers are making decisions all the time during different stages of the project and in many cases, the issue is not that the decision to be taken is hard; it is rather the absence of a structured approach that can be applied to make a right decision. Decisions which critically impact the vision alignment of the project need to be correct to make the project successful. Hence, decision making in a project should be methodical and have a structured approach to ensure that decisions taken are aligned with the overall vision of the project.



3 Project Vision and alignment As per PMBOK edition 5

[1], the Project Initiation processes help in setting the vision of the project which defines

the end goal. The vision is the basis for the outcomes and benefits delivered. Further, it helps in communicating the desired end state to all stakeholders which ensures their buy-in and motivation. Thus, the right project vision is the foundation of every successful project. Some of the good characteristics of a project vision are that it: ● Clearly defines the desirable future state without any jargon ● Can be easily communicated to all the stakeholders ● Articulates compelling future to motivate stakeholders While vision defines what needs to be accomplished, it needs to be translated into clear goals to be realized. Robert Kaplan and David Norton, the authors of The Balanced Scorecard

[2], developed the cascading goals

approach providing an elegant method of connecting vision to goals throughout the organization. A similar approach can be used for cascading Project Vision into lower level goals. This approach is visually depicted in the figure 1:

As a first step, the Project Vision is cascaded into project objectives which are specific in nature and can be measured. These objectives can be multiple but, aligned to vision of the project. In the next step, project objectives are cascaded to key process level goals. In this article, we have limited the goal cascading to three process areas namely Stakeholder Management, Benefit Management and Governance. In fact, PMI Standard for Program Management

[3] identified these three themes as critical themes. As a future

course of action, the study can be extended to cover other process areas.

Figure 1 : Project Vision Alignment



3.1 Decision making needs in Project Management The goal of effective project management is to coordinate the actions of the project team so that the project’s vision is realized by achieving the project objectives and process level goals effectively and efficiently. This involves decision making at various stages of the project where the project team and project managers have to take certain course of action to meet the goals. The common issues observed in these decision making situations are conflicting goals in different scenarios. Many a times these decisions will have to be taken with limited time and data yet they have to be more objective than subjective. There is not one right answer but set of options with each one applicable for a context. It is always a challenge for project teams and project managers to decide which of these options apply to which context. To address the above decision making challenges, Cartesian matrix based 2X2 decision matrix can be used.

4 Cartesian Matrix based 2X2 Decision Matrix Cartesian matrix

[4] or Cartesian product is a mathematical operation which returns a set (or product set) from

multiple sets that is, for sets A and B, the Cartesian product A × B is the set of all ordered pairs (a and b) where a

∈ A and b ∈ B. The simplest case of a Cartesian product is the Cartesian square, which returns a set from two sets. A table can be created by taking the Cartesian product of a set of rows and a set of columns. If the Cartesian product rows × columns are taken, the cells of the table contain ordered pairs of the form (row value, column value). If the Cartesian product columns × rows are taken, the cells of the table contain the ordered pairs of the form (column value, row value).A Cartesian product of n sets can be represented by an array of n dimensions, where each element is an n-tuple. An ordered pair is a 2-tuple. An illustrative example is the Standard 52-card deck. The standard playing card ranks {Ace, King, Queen, Jack, 10, 9, 8, 7, 6, 5, 4, 3, 2} form a 13 element-set. The card suits {♠, ♥, ♦, ♣} form a 4-element set. The Cartesian product of these sets returns a 52-element set consisting of 52 ordered pairs which correspond to all 52 possible playing cards. Ranks × suits returns a set of the form {(Ace, ♠), (King, ♠)... (2, ♠), (Ace, ♥)... (3, ♣), (2, ♣)}. Suits × ranks return a set of the form {(♠, Ace), (♠, King)... (♠, 2), (♥, Ace)... (♣, 3), (♣, 2)}. A decision matrix

[5] is a Cartesian Matrix that allows a team or individual to systematically identify, analyze, and

rate the strength of relationships between sets of information. The matrix is especially useful for analyzing multiple decision factors and assessing each factor’s relative importance. A decision matrix is frequently used while evaluating alternative solutions to problems, and in designing remedies. The matrix is useful for looking at large masses of decision factors and assessing each factor’s relative significance.



Boston Consulting Group’s (BCG) growth Share Matrix [6]

is an example of 2X2 matrix used in analyzing the business units among the corporate and helps in strategic investment decisions. Similarly, Gartner’s Magic Quadrant

[7] is another popular tool that uses 2X2 matrix in the business world. Gartner rates vendors upon two

criteria: completeness of vision and ability to execute. They plot the vendor among one of the following categories like leaders, challengers, visionaries and niche players. They used to plot them for different markets and each one is called a Gartner’s Magic Quadrant. Some of the examples are IT Service Management (ITSM), Master Data Management for customer data; Sales force Automation and so on. Hence, our approach is to use this simple, but powerful 2X2 matrix to solve complex problems and aid in making an appropriate decision. The 2X2 matrix will be plotted using two independent attributes (X, Y) and both the attributes will be assigned 2 extreme intensities i.e. High & Low, thereby creating four quadrants of the matrix. Each quadrant will have decision value (action) based on the High Low combination of these attributes. We realize that for any successful project the project outcome has to be aligned to its vision. In order to do so the project team and the project manager shall be taking numerous decisions during the course of the project. The 2x2 Cartesian Matrix can be an effective tool in such situations to aid the team in taking those critical decisions. As discussed earlier Stakeholder Management, Benefit Management and Governance are key Decision Areas in any project to ensure vision alignment, hence multiple 2X2 Cartesian matrices can be designed using various decision attributes to aid in decision making under these areas. Each quadrant of the 2x2 Cartesian Matrix in essence represent a unique decision making scenario in the project. We have given a frame work for arriving at the decision attributes and have also listed the underlying 2X2 decision matrices created using these attributes in the subsequent sections.



5 Framework for Designing 2X2 Decision Matrices This Decision-Making framework provides a structure that guides project team designing Decision Matrices for different process areas. The framework as depicted comprises of the following steps:

1. Identify the Decision Area - To achieve the project goals, key decisions need to be taken by the project manager and the team. The first part of this framework is to identify the Decision Areas where these critical decisions need to be taken. The examples of these areas are:

- Decision on deployment of critical resources ( human) which are scarce and in demand - Decision on the actions to be taken on risk management to enhance opportunities, and to reduce

threats to project objectives The key activities in this step are:

a. Analyzing the process goals to form the basis for identifying the Decision Area b. Identifying all possible Decision Areas and selecting critical ones for next steps

2. Analyze the Decision Area - Once Decision Area has been finalized, analysis is done to identify all

possible decision attributes. The Table 1 provides examples of critical attributes for one Decision Area (risk management):

Figure 2 : Framework for designing Decision Matrices



Decision Area Attributes

Decision on the actions to be taken on risk management to enhance opportunities, and to reduce threats to project objectives

Possible Attributes

• Probability of risk occurrence • Impact of the risk on project goals • Detection of the risk (the ease with which the risk can

be detected before it becomes an issue. If it is easy, the detection ability is low)

• Cost of risk • Stage at which a risk occurs

Based on the above attributes decisions made

Table 1

The key activities in this step are: a. Analyzing the Decision Area to facilitate identification of attributes illustrated above b. Identification of decision attributes c. Prioritizing the decision attributes in the order of impact each attribute can have on project

objectives. The Table 2 lists an illustration of prioritization:

Decision Area Attributes Prioritized Attributes


Possible Attributes

1. Probability of risk occurrence 2. Impact of the risk on project goals

3. Detection of the risk (the ease with which the risk can be detected before it becomes an issue. If it is easy, the detection ability is low)

4. Cost of risk 5. Stage at which a risk occurs Based on the above attributes, decisions are made.

1. Probability of risk occurrence 2. Impact the risk will have on

project goals

Table 2

3. Design 2x2 Matrix - The matrix created helps to identify and prioritize the actions required within each Decision Area in line with the project objectives.

The key activities in this step are:

a. Decide X &Y Axis – The 2 axis of the matrix represents 2 independent and competing decision

attributes b. Design Four Quadrants – For each attribute, assign values Low and High thereby creating 4

separate quadrants. c. Decide Actions for Quadrants – Each quadrant created represents a unique scenario and for

each such scenario identify actions to be taken to help meet project objectives.



The above steps are illustrated with an example in Table 3:

Decision Area Attributes Prioritized Attributes

Matrix


Possible Attributes

1. Probability of risk

occurrence 2. Impact of the risk on

project goals

3. Detection of the risk (the ease with which the risk can be detected before it becomes an issue. If it is easy, the detection ability is low)

4. Cost of risk 5. Stage at which a risk occurs Based on the above attributes decisions are made

1. Probability of

risk occurrence 2. Impact of the

risk on project goals

Probability and Impact represent X and Y axis respectively. Identified actions for each quadrant are Retain , Retain , Avoid and Transfer

Table 3

4. Implement – The actions or decisions identified then needs to be implemented within the project. The key actions in stage are

a. Pilot implementation b. After successful pilot implementation, approve for implementation across the project.

5.1 Decision Matrices We have reviewed many available matrices

[1][3][5][6][7][8][9], discussed with PM professionals and identified some of

the key matrices under the broad category of Stakeholders Management, Benefit Realization and Governance which are very critical for the project vision alignment. The same has been illustrated in Table 4



Critical 2X2 Deicsion Matrix – covering the Key aspect of vision alignment of projects

Stakeholder Management

Benefit Management

Governance



Table 4

6 Case Study A multinational financial institution headquartered in Europe provides comprehensive financial advisory, capital raising, financing and risk management services to corporations, government and financial institutions worldwide. In addition, the firm offers retail and commercial banking, credit cards, wealth management, and investment management services. This firm initiated a technology modernization project across the organization covering multiple geographies and business units with project teams from different organizations. The vision of this project was ‘Technology consolidation leading to lower cost ownership’. The project team used ‘Cascading of Goals’ approach for translating the vision into project objectives and subsequently the process level goals identified were listed in Table 5:

Stage Goals

Project Vision Technology consolidation leading to lower cost ownership

Project Goals Implement the Technology Stack mutually agreed (Align with Target State Architecture)

Achieve targeted cost savings

Process Goals Stakeholder Management

Ensure active engagement of all the affected stakeholders , manage their needs and ensure acceptance of project objectives Benefit Management

Achieve identified cost saving under different heads (License Costs, HW Infrastructure Costs and Operational Costs)

Achieve intangible goals (Targeted satisfaction level of the users)



Governance

Establish oversight and control to achieve project objectives

Implement policies, procedures and structures within the project

Table 5

As discussed in this article, the process level goals can be achieved through effective decision making which can be facilitated by 2X2 matrices. The steps followed in identifying these matrices are as follows:

1. Identification of Decision Area –The project team identified Decision Areas where decisions had to be taken for the key process areas to achieve the process level goals. Some of the Decision Areas identified are as follows:

a. Stakeholder Management: Communication approach for effective engagement b. Benefits Management: Benefit prioritization c. Governance: Critical resource deployment

2. The Decision Areas are analyzed for identifying all possible decision attributes. These attributes are then

prioritized. 3. With the prioritized attributes, 2x2 Decision Matrices were created for different Decision Areas. These

matrices consisted of: a. X, Y axis with four quadrants with each quadrant representing a unique scenario b. Recommended action for each quadrant

4. The decision matrices are implemented. The Table 6 provides details of some of the Decision Matrices used in the project

Benefits Management Decision Area: Prioritization of benefits in terms of focus required in decision making Attributes : • X Axis – Denotes the complexity in realizing the benefits • Y Axis - Denotes the Impact benefits will have on project

goals This matrix helped to decide on benefits which need to be tracked / monitored closely and to be prioritized for early wins.



Stakeholder Management Decision Area: How to interact / engage with project stakeholders Attributes: • X Axis - Denotes the interest stakeholder has in the

project • Y Axis - Denotes the influence stakeholder has on the

project objectives This matrix helped to decide who should be engaged closely and who should be engaged with minimal effort and so on. This enhanced the ability to manage the project stakeholder expectations by meeting the requirements and resolving issues.

Governance – Critical Resource Deployment Decision Area: Where to deploy critical resources (human) which are scarce and in demand Attributes : • X Axis - Denotes the critical resource needs for different

project work units • Y Axis - Denotes the impact of project work units on the

achievement of project goals This matrix helped in deploying resources based on criticality of the work involved; led to creation of horizontal expert team cutting across all project streams which significantly increased the utilization of critical resources.

Table 6



7 Future Direction As a future direction, 2X2 matrix representing the two dimensional model suggested can be extended to three dimensions to reflect more complex situations. The identified attributes within the three areas can be validated through formal statistical analysis and tools. In addition, the matrix can be extended to other project management process areas.

8 Conclusion A successful project has its vision aligned to its outcome. To ensure alignment to the vision is not lost during the course of the project journey, a top down approach needs to be taken whereby the vision gets cascaded down into measurable and actionable goals. We have illustrated the usage of a framework to design 2x2 Cartesian Matrices which acts as an effective tool to aid the project team in decision making process. This 2x2 Cartesian matrix can be implemented across various industries to aid in decision making process. The matrices can be tailor made as per the key Decision Areas and decision attributes identified for the project.

9 References 1. Project Management Body of Knowledge ( Edition 5 ) - PMI

2. https://ist.mit.edu/sites/default/files/about/org/CascadingGoals.pdf 3. The Standard for Program Management– PMI 4. http://en.wikipedia.org/wiki/Cartesian_product

5. http://en.wikipedia.org/wiki/Decision_matrix

6. http://en.wikipedia.org/wiki/Growth-share_matrix 7. http://en.wikipedia.org/wiki/Magic_Quadrant 8. http://handlingresistance.wordpress.com/2010/02/26/avoid-resistance/ 9. Managing successful Programs - OGC (Office of Government Commerce), UK

https://ist.mit.edu/sites/default/files/about/org/CascadingGoals.pdf

http://en.wikipedia.org/wiki/Cartesian_product

http://en.wikipedia.org/wiki/Decision_matrix

http://en.wikipedia.org/wiki/Growth-share_matrix

http://en.wikipedia.org/wiki/Magic_Quadrant

http://handlingresistance.wordpress.com/2010/02/26/avoid-resistance/



10 Profiles of the Authors

LakshmiVaragan D is a pre-sales lead in TCS for APAC Region. Lakshmi has 19yrs of

experience covering both IT & Manufacturing Industry. Lakshmi is PMP, CPIM & ITIL V3

certified professional managing projects in application services, application development, ERP

Implementation, Custom application Development, maintenance & Support in the IT Industry.

Lakshmi completed his BE in Mechanical and MBA in Operations management. He can be

reached at [email protected]

GirishAgarwalis a PM consultant working with Program Management practice in TCS having rich

experience in Program & Project Management. Girish completed his B.E in Mechanical

Engineering and MBA in General Management from IIM Calcutta. He can be reached at

[email protected]

RamanandGarimella is the Global Delivery Head of Program Management practice in TCS

having rich experience in Program, Project and Operations Management. He published articles

on Agile Methodology, Agile Testing, Defect Management and Data Migration. He completed his

B.Tech.in Mechanical Engineering and master’s in IE from NITIE – Mumbai. He can be

reached at [email protected]

mailto:[email protected]

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Lakshmi varagand ramanandg_grishagarwal

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