Delphi Method

Article byRishab Nigam
Reviewed byDheeraj Vaidya, CFA, FRM

What is Delphi Method?

The Delphi method is a forecasting process framework wherein the main objective is to arrive at a group consensus. It involves filling up questionnaires by chosen experts. The expert group opines their views to an initiator or facilitator, then summarizes the gathered information into an understandable report.

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The process of the Delphi method involves asking multiple rounds of questions to the target group of experts. The participants continue with it until they arrive at a common consensus. The process is exploratory and has a broad application in project management and the public domain.

Key Takeaways

  1. Delphi method’s main objective is achieving consensus among the participants, which might be considered a framework for the forecasting process. Therefore, selected experts fill out questionnaires as part of it.
  2. The Greek term “Delphi” relates to the “Oracle of Delphi,” which denotes a universally accepted consensus.
  3. This approach is utilized when the consensus calls for a bigger sample size and in uncertain forecasting topics.

Delphi Method Explained

Delphi Method helps predicts the possibility and likelihood of an event happening. Olaf Helmer and Norman Dalkey ideated the method and it was first introduced in the year 1950. The founding members were part of Rand Corporation.

The word Delphi was derived from the Greek name ‘Oracle of Delphi’ and it helps get a mutual agreement towards a standard solution. This is regarded as an exploratory and detailed procedure. It can happen across the globe and involves collecting streamlined and structured information.

The process remains anonymous, and the experts can share feedback without any discretion. The Delphi method in forecasting was the first test that helped predict the impact of technology in the Cold War The initiator or facilitator collects opinions on a topic from an anonymous group of experts. The process may involve multiple iterations. Each iteration is performed after receiving coherent feedback from the previous step.

The iterations are performed until a unanimous and common consensus is achieved by the chosen experts. The group provides their viewpoints, estimates, and assumptions to the facilitator at each step of the group discussion. After the end of the rounds, experts share their viewpoints and estimates within the group.

Delphi Method

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Steps

The method consists of a series of steps, which include the following:

  • The first step involves the selection and choosing of a facilitator. It is recommended to select a neutral person who remains unbiased throughout the process.
  • Once a facilitator is decided, the second step is selecting the expert panel. The panel may include domain or subject matter experts working in the industry.
  • The subject matter expert is regarded as an individual with critical insight and knowledge to solve problems.
  • The third step involves a decision on the selection of a problem statement. The experts should then be informed on the selected topic to have sufficient time to gather needful points that they can share with the larger group and facilitator.
  • The facilitator then shares the first set of questions through a comprehensive questionnaire.
  • The facilitator collects the completed questionnaire from a larger group, assimilates common points, and removes irrelevant information.
  • The facilitator then shares the second set of questions based on the responses received from the first lot to deep-dive into the problem.
  • The facilitator repeats the above steps until a common consensus arrives and the final results are shared with the target group.
  • The findings and results are analyzed further to determine the solutions and opportunities for the problem statement.

Examples

Some Delphi Method examples are as follows:

  • The Delphi technique has big applications in solving high-impact business projects and sensitive political issues. For high-impact projects to be successful, the project manager has to determine the probability of specific events that can occur and analyze how such events affect the projects. In such a scenario, the Delphi method plays an instrumental role in identifying the opportunities and risks related to a project.
  • Similarly, this method plays a key role in formulating public policy by arriving at comprehensive solutions.

When To Use?

The uses of the process help us understand the Delphi method definition even better.

  • The Delphi method in research and forecasting solves lots of problems, the solutions of which are yet to determine. This is useful when there is no true answer for a problem statement and requires opinionated decision-making. The Delphi method doesn’t rely on one subject matter expert. Rather, it takes into account opinions from several subject matter experts.
  • The Delphi method is a popular choice for forecasting as it maintains anonymity. The subject matter experts might require keeping their identity hidden for difficult subjects or topics such as political significance. This method is the best when there is a need to collect a large sample size, and it becomes difficult for face-to-face interactions to draw subjective inferences from the chosen topic.

Advantages & Disadvantages

Advantages

  • This method provides opportunities to come up and participate.
  • It helps in the early detection of problems and solutions, which helps determine the alternative course of action.
  • After each step and feedback, experts are provided with the opportunity to review their insights and opinions, which they can later change in the succeeding step.
  • The participation by the experts stays anonymous.

Disadvantages

  • It is time-consuming as the facilitator has to facilitate repetitive rounds of interviews to arrive at a common consensus.
  • The process can become complex with increasing instances of multiple and repetitive rounds.
  • The problem statement has to be transparent and clearly defined.
  • The data collected and collated may have some biased estimates coming from experts themselves, and the facilitator may or may not catch such biases.
  • There is a high chance of manipulation in the group dynamics to force an incorrect solution.

Frequently Asked Questions (FAQs)

Is the Delphi method qualitative or quantitative in nature?

A team at the RAND Corporation conducted the first formal, comprehensive, systematic study of the Delphi technique in 1950 and developed several practical applications.

Is the Delphi method reliable?

The Delphi method is dependable and trustworthy since it involves a subject assessed by experts.

What is the nominal group technique?

Nominal group methods bring in excellent problem-solving outcomes. It gives everyone participant a fair and equal chance to share their views. Instead, such interactions are usually dominated by the louder staff.

How many stages/rounds does the Delphi method have?

The typical design of the Delphi research consisted of at least four rounds. Yet, the key elements of superior Delphi surveys include an iterative process and monitored feedback to encourage consensus.

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