Across the board, agencies are being challenged by the Obama Administration to achieve mission goals with less money. In January’s address to the nation, the President proposed freezing annual domestic spending for the next five years, starting this year. As the country focuses on the economy, mobility and the environment, making the case for transit investments is paramount. By linking funding decisions to strategic goals, we can demonstrate the benefits of transit capital investments. Prioritizing projects and gaining buy-in, however, are complex budgetary challenges. They often result in an equally complex cycle of dysfunctional decision-making and poor outcomes. Agencies must improve collaboration and transparency for greater efficiency and effectiveness of decisions. With process and structure, organizations with complex multi-stakeholder, multi-criteria decisions, can find a course of action and create value. Here are five ways to improve budgeting decisions. 1. Set the goals and objectives of the decision, and develop a decision framework before evaluating options Avoid debate and stay focused when evaluating options. Establish a decision goal and have a collaborative discussion about the factors that should influence the decision. Then evaluate alternatives within this framework. Forcing decision makers to establish their priorities against a goal and then holding projects to that test overcomes power-driven arguments and limits arguments for pet projects. 2. Involve an appropriately broad number of stakeholders in the decision process based on the decision framework Asymmetric information (complementary information known by different people) is a decision risk. Develop defined key decision criteria. Then prioritize criteria and engage relevant subject matter experts on how the options perform against those criteria. This broadens participation in critical decisions and gets the best possible information to inform the decision. 3. Set roles for participants across/within the process, then divide and conquer Many organizations do not know how they make a decision. Is the group making a recommendation, or are the decision makers themselves? Look at the nature of the decisions and the process of determining and weighting criteria, proposing options, and evaluating options against the criteria. Then assign those activities to the people or groups best suited to them. 4. Understand key interdependencies among projects and consider sequencing of their start times. Are there dependencies among projects? Do they need to be done together to realize their value, or are they competing solutions to the same problem? Often, an activity may be funded in one area while the project’s enablers or beneficiaries are ranked lower in another. Independent solutions to similar problems may be pursued without considering how to combine efforts to improve efficiency, project integration and knowledge sharing. Mapping interdependencies is critical to creating a valuable pipeline without risking delay or wasted efforts against larger goals. 5. Explore scenarios to compare and contrast possible future courses of action There is no “one right answer” to a budget portfolio decision. All decisions are largely predictions based on forecasts and projections; there is no real way to know the single best choice. Consider scenarios that change assumptions in the constraints, costs and value of the portfolio. A proven process (like the Analytic Hierarchy Process, for example) can structure and aggregate information, and map the relative importance of cost, dependencies and other key criteria. To sum up: Structure decisions, and crowd-source insights. Then review priorities as well as the data and opinions of their organizations. These steps allow agencies to focus discussion on a limited number of trade-offs and information requirements, creating the level of comfort needed to move forward. Kevin Connor is Vice President of Decision Lens’ Solutions Group. He can be reached at [email protected].