As a manager, you probably know the term “decision matrix,” whether you’ve used one or not. What you may not know is just how helpful a decision matrix can be — and how easily you can create one for whatever problem you’re facing.
Whether you’re selecting a new time-tracking system, accounting software or other management solution, you need to be sure you’re making the right decision. Sure, cost is a major concern, but there are other factors to consider when weighing the right solution for your business long term. That’s where a decision matrix comes in.
How a decision matrix works
A decision matrix is an analysis tool that helps you decide between several options. You start by defining all the factors you need to take into account, and assigning each factor a weight according to its importance.
In general, here’s how a decision matrix works:
- Identify your options (cost, implementation time, ease of use) and lay them out as rows on a table.
- Set up columns to show the factors you need to consider.
- Score each choice 0–5, ranging from poor to very good.
- Add weights to show the importance of each factor.
- Multiply each score by the weight of the factor to show its importance.
- Add up final scores for each option. The highest scoring option is the winner.
A step-by-step guide to making a decision matrix
While creating a decision matrix may sound complicated, it’s not if you take it step by step. Below is an example of how you could use a decision matrix to select a new time-tracking software for your business. MindTools offers this free worksheet if you’d like to fill it in as we go.
Step 1: Lay out options and factors
- List all of your options in the row labels on the table.
- List the factors that you need to consider as the column headings.
Using the time tracking example:
- Options could include Time Tracker, TSheets, ClockShark, Boomr and TimeCamp.
- Factors could include cost, customization, reporting, automation, time to implement, ease of use, GPS or mobile capabilities.
If you want to get granular, take your decision matrix all the way down to specific factors such as time-clock kiosk capabilities, client invoicing and GPS geofencing.
For simplicity, here is an example comparing just 2 options and 3 factors:
Step 2: Score each option
- Working your way down, score each option for every factor listed.
- Assign every factor a score of 0 (poor) to 5 (very good).
Don’t feel compelled to differentiate between each option. If none of your options offer sufficient GPS geofencing capabilities, for example, score them all 0! That’s not the case here as Time Tracker and a few others do offer that feature, but you get the point — some rows can have the same score all the way across.
Step 3: Rank factors by importance
- Identify the relative importance of each factor in your decision.
- Give each factor a weight from 0 to 5, where 0 is unimportant and/or inconsequential and 5 is extremely important and/or critical to your business.
Remember: It’s normal to have factors that have the same weight. For example, with a time-tracking solution, your business may determine that:
- Mobile accessibility merits a score of 5.
- GPS ranks as a 3.
- Reporting capabilities don’t affect you at all, thus ranking a 0.
Step 4: Calculate weighted scores
Multiply scores by weight to get weighted scores.
Step 5: Find your high score
Add up weighted scores, and select the option with the highest score.
Remember: A decision matrix is a tool that attempts to make everything quantifiable, but it relies on proper factors and weights. If you get to the final scores and feel like something is off, try the exercise again.
See how Time Tracker stacks up
Looking to make a decision matrix to compare the best time-tracking software options? We’ve done some of the legwork for you! Check out the chart below and this post, and then start a free 14-day trial of Time Tracker.