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Using Analytic Hierarchy Process to Assist on Prioritizing Investigations
Suely Mello (Sue) | March 5, 2020
Who has heard of Analytic Hierarchy Process?
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Quick question
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WARNING: The presentation you are about to see contains lots and lots of numbers and spreadsheets. Please feel free to:
1. ASK questions as I talk 2. Leave if you get bored or tired (I hope not) 3. Scream!!!!
DISCLAIMER: I am not responsible for the damage I may cause to your brain, after a long day’s work and still having to see more numbers and spreadsheets.
Agenda
▪ Corporate investigations - the backlog issue ▪ Overview of AHP ▪ A simpler way ▪ Conclusions
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Corporate investigations – the backlog issue
▪ Reported misconduct is increasing ▪ Too many cases to investigate ▪ Resource constraints ▪ Which cases are more important? ▪ Need to investigate all reports of misconduct
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How to effectively address reported misconduct?
The AHP rating method A potential solution
Overview
▪ AHP = Analytic Hierarchy Process ▪ Method for multi-criteria decision-making ▪ Created by Thomas L. Saaty ▪ Uses pair-wise comparison ratios
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Examples of AHP applications
▪ Select and prioritize projects in a portfolio
▪ Prioritize factors impacting software development and productivity
▪ Choose strategies for safety improvement in motor vehicles
▪ Estimate cost and scheduling for material requirements planning (MRP)
▪ Select software from several vendors
▪ Evaluate the quality of research or investment proposals
8 Source: Decision-making using the Analytic Hierarchy Process and SAS/IML, Melvin Alexander
AHP used in investigations – a study
▪ Development of a Decision Model to Prioritizing Potential Fraud Cases for Internal Investigative Purposes – James Carroll and Enrique Mu
▪ Used software for calculations
▪ Eight criteria:
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§ Specificity of report § Control Structure
§ Personnel involved § Related instances of misconduct
§ Potential financial impact § Document/records access
§ Legal exposure § Access to reporter
AHP software
▪ ExpertChoice
▪ Super Decisions ▪ Transparent Choice
▪ SpiceLogic
▪ PriEst ▪ Logical Decisions
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Goal, criteria and alternatives
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Goal: Decide on Something
Criterion 1 Criterion 2
Alternative D Alternative C Alternative B Alternative A
Criterion 3
Alternative E Alternative G Alternative F
Step 1 - Define comparison scale
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Judgment/Interpretation IntensityofValue Explanation
Both requirements are of equal value 1 Two activities contribute equally to the objective
Slightly higher value 3 Experience and judgment slightly favor one activity over another
Strongly higher value 5 Experience and judgment strongly favor one activity over another
Very strongly higher value 7 An activity is very favored very strongly over another; its dominance demonstrated in practice
Absolutely higher value 9 The evidence favoring one activity over another is of the highest possible order of affirmation
Intermediate values between two adjacent judgments 2,4,6,8
Step 2 - Compare criteria pairs
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Goal Criterion 1
Criterion 2
Criterion 3
Criterion 1 1 3 7
Criterion 2 1/3 1 5
Criterion 3 1/7 1/5 1
Reciprocals
Criterion 1 is more important than Criterion 2, but even more important than criterion 3
Continue comparing criteria pairs – for all criteria and alternatives
Step 3 – Calculate averages and totals to obtain weights
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Goal Criterion 1
Criterion 2
Criterion 3
Total Average
Criterion 1 0.677419355 0.714285714 0.538461538 1.930166608
0.643388869
Criterion 2 0.225806452 0.238095238 0.384615385 0.848517074 0.282839025
Criterion 3 0.096774194 0.047619048 0.076923077 0.221316318 0.073772106
Total 1 1 1
Calculate averages and totals for all criteria and alternatives
Steps – in summary
▪ Keep building comparison matrixes ▪ Calculate averages and totals to obtain weights –
for all matrixes ▪ Validate the model through calculation of a priority
vector (Eigenvector) and the consistency ratio ▪ Obtain the final relative weights
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Pros and cons
Pros ▪ Comparison ratios are more
accurate than simply ranking
Cons ▪ Time consuming
▪ Still relies on judgment (pair-wise comparisons)
▪ Cannot handle inter-relationships of alternatives from different criteria
▪ Complex calculations when there are many criteria and alternatives
16 Source: Frank Moisiaidis - The fundamentals of prioritising requirements
A lot of work!!
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“
So…
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The way we’ll do Let’s make it simpler
What we want to accomplish
▪ Efficiency of corporate investigations ▪ Effectiveness of the usage of resources ▪ Close more cases faster
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Our goal: prioritize investigations
Prioritize Investigations
Financial Impact Category
Conflict of Interest
Corruption
Major Case (potential impact >= $1 mi)
Executive Involvement
Violation of Code of Conduct
Misappropriation of Assets
Aging
Not major case (potential impact < $1 mi)
Equal or less than 30 days
More than 30 days and less than 365
Equal or more than 365 days
Yes
No
Assessment criteria ▪ Financial Impact ▪ Executive Involvement ▪ Aging
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Selection of criteria and alternatives
Prioritize Investigations
Financial Impact Category
Conflict of Interest
Corruption
Major Case (potential impact >= $1 mi)
Executive Involvement
Violation of Code of Conduct
Misappropriation of Assets
Aging
Not major case (potential impact < $1 mi)
Equal or less than 30 days
More than 30 days and less than 365
Equal or more than 365 days
Yes
No
Let’s assign easier rankings
1 – lowest priority 2 – slightly more important 3 – more important 4 – even more important 5 – way more important 6 – way way more important 7 – the most important of all
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Assign weights – rank most important
Prioritize Investigations
Financial Impact Category
Conflict of Interest
Corruption
Major Case (potential impact >= $1 mi)
Executive Involvement
Violation of Code of Conduct
Misappropriation of Assets
Aging
Not major case (potential impact < $1 mi)
Equal or less than 30 days
More than 30 days and less than 365
Equal or more than 365 days
Yes
No
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3
2
2
7 5
2
1
1
1
1
Pull the case list
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Note: Only relevant case data elements shown here
Calculate Priority - AGING
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=IF(H5="closed",0,IF(K5>30,IF(K5>=365,6,3),2))
Calculate Priority – FINANCIAL IMPACT
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=IF(J5="Major case", 5,2)
Calculate Priority – EXECUTIVE INVOLVEMENT
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=IF(E5="Y",7,2)
Calculate Final Ranking
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=L5+M5+N5
Instead of three columns + final ranking, you can have one single formula with all the rankings together in one column
Sort final ranking
31 Use conditional formating to show color scales
Top Priority
Issues with using AHP on investigations
▪ Ranking is subjective
▪ All cases still need to be investigated
▪ Management will change priorities
▪ Aging – cases are automatically set to higher priority
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§ Justification for cases not addressed timely
§ Impartial way to decide what complaints to tackle first
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Conclusions
§ Trends in increased volume of HR-related reports can benefit from AHP
§ Hybrid solution: § Investigator decision § Help decision-making using AHP
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Conclusions
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Discussion
▪ Let’s talk
Credits
Special thanks to all the people who made and released these awesome resources for free: ▪ Presentation template by SlidesCarnival ▪ Photographs by Unsplash
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