>> The Benefits of Decision Modeling and Simulation
Increasingly adopted in management, the employment of decision models improve the development and selection of strategic alternatives in many ways, including:
- By adding a logical structure to complex strategic choices, as those involving interdependencies, uncertainty, multistage decisions, or multiple and conflicting objectives;
- By taking account of the impacts of uncertainty;
- By allowing decision alternatives (and the intuition included in them) to be tested and measurably compared in an inexpensive virtual world. Simulation results are updated as new suppositions or new information are fed into the models;
- By considering crucial factors that are difficult to directly measure in monetary or quantitative terms;
- By examining plausible future scenarios in a way that allows early recognition of, and reaction to, important emerging trends;
- By allowing decision science to be methodically employed, e.g., in order to check unconscious biases in judgment;
- By providing guidance on what information is worth acquiring to improve decision effectiveness;
- By allowing a transparent management of choice subjectivity;
- By allowing better avoidance of inefficiencies such as indecisiveness, unnecessary rework and excessive analysis;
- By constructing graphic representations that compact large amounts of information and so allow visualization of how decision outcomes are affected by causal factors. Quickly and clearly, this visualization allows analysts’ understanding to be deepened and shared;
- By foffering a common language for debate as well as tools that assist the communication of complex decisions. This facilitated communication, besides improving the development and selection of decision alternatives, increases decision buy-in from key stakeholders and promotes effectiveness in decision implementation;
- By facilitating the identification and management of drivers of value and risk existing in each strategy. A good understanding of these drivers will also boost creative thinking when new, improved courses of action are sought.
DA methodologies with which these and additional benefits can be obtained are described in the Services section.