Elsevier

Applied Soft Computing

Volume 38, January 2016, Pages 106-117
Applied Soft Computing

An integrated fuzzy multi criteria group decision making approach for ERP system selection

https://doi.org/10.1016/j.asoc.2015.09.037Get rights and content

Highlights

  • This paper ensures an analytical tool to define the most convenient software.

  • Fuzzy AHP determines the weights for criteria of software selection problem.

  • Fuzzy TOPSIS defines the most appropriate alternative in uncertain environment.

  • It decreases the uncertainty and the information loss in group decision making.

  • Further study can focus on interval type 2 fuzzy set to develop a decision support system.

Abstract

This paper aims to ease group decision-making by using an integration of fuzzy AHP (analytic hierarchy process) and fuzzy TOPSIS (technique for order preference by similarity to ideal solution) and its application to software selection of an electronic firm. Firstly, priority values of criteria in software selection problem have been determined by using fuzzy extension of AHP method. Fuzzy extension of AHP is suggested in this paper because of little computation time and much simpler than other fuzzy AHP procedures. Then, the result of the fuzzy TOPSIS model can be employed to define the most appropriate alternative with regard to this firm's goals in uncertain environment. Fuzzy numbers are presented in all phases in order to overcome any vagueness in decision making process. The final decision depends on the degree of importance of each decision maker so that wrong degree of importance causes the mistaken result. The researchers generally determine the degrees of importance of each decision maker according to special characteristics of each decision maker as subjectivity. In order to overcome this subjectivity in this paper, the judgments of decision makers are degraded to unique decision by using an attribute based aggregation technique. There is no study about software selection using integrated fuzzy AHP-fuzzy TOPSIS approach with group decision-making based on an attribute based aggregation technique. The results of the proposed approach and the other approaches are compared. Results indicate that our methodology allows decreasing the uncertainty and the information loss in group decision making and thus, ensures a robust solution to the firm.

Graphical abstract

Decision hierarchy for software selection process has four phases, which includes goal, criteria, sub-criteria and alternatives.

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Introduction

An enterprise resource planning (ERP) system is a package of business software that combines a number of modular software implementations to meet all the requirements of a firm. An ERP system is the knowledge framework of a firm that automates and combines whole business tasks like purchase, sales, inventory control, human resource, production planning and finance. Applications of ERP systems are one of the most important investment projects due to the difficulty, high cost and adaptation risks. Firms have spent billions of dollars and utilized many amounts of man-hours for installing detail ERP software systems [1]. Unprecedented market competition has impressed whole facets of business environment with the conclusion that firms need to decrease total costs, be more sensitive to customer requirements and reduce lead times. To overcome these challenges, novel software systems known in the business environment as ERP systems have surfaced in the market targeting primarily large scale organizations [2]. Any ERP software in market cannot fully meet the needs and expectations of companies, because every company runs its business with different strategies and goals. Thus, to increase the chance of success, management must choose an appropriate software that most closely suits its requirements [3]. Therefore, ERP software selection is an extremely serious and difficult decision making problem for managers. Many firms apply their ERP software hastily without exactly understanding the inclusions for requirements of their business strategies and goals. The conclusion of this hurry approach is the failure in ERP software selection that leads to the failure of project or firm performance will get weakened [4]. It is essential to select an appropriate software system for firms because of its difficult and expensive process. Clearly, software selection is not a well-defined or structured decision problem. The presence of multiple criteria (both managerial and technical) and the involvement of multiple decision makers will expand decisions from one to many several dimensions, thus, increasing the complexity of the selection process [5], [6].

This paper consists of six sections. The Section 2 presents the related literature review. The Section 3 introduces the integrated fuzzy extension of AHP and fuzzy TOPSIS approach in software selection problem (SSP). Section 4 is related with illustrative implementation of the developed decision making approach. The results of this paper are presented in Section 5. The concluding remarks that have been acquired are in the Section 6.

Section snippets

Related literature review

Although the software selection has a remarkable significance, there are few studies that consider software selection methodologies in group decision making. Lai et al. [6] focused on the selection of multimedia authorizing systems by using AHP (Analytic Hierarchy Process). Lai et al. [7] recommended that AHP method was used to aid the selection of a multi-media authorizing system. Lee et al. [8] studied on SWOT based ERP software selection. Wei et al. [9] defined AHP model which enables a firm

Proposed methodology

In this paper, the recommended hybrid fuzzy extension of AHP-fuzzy TOPSIS methodology is employed to rank the software options. Firstly, we identified cost, technical specifications, vendor specifications and ease of use as the main criteria in an appropriate SSP through experts’ opinions and literature review. Cost criteria covers two sub-criteria like purchasing fee, updating fee, and technical specifications criteria covering five sub-criteria like interface, functionality, module framework,

Numerical application of proposed methodology

A real life application is analyzed in order to provide the better understanding of the proposed approach. This application is achieved in an electronic firm which produces electronic devices and is located in Turkey. Managers are planning to establish an ERP software system to their firms. However, they have some concerns about the most appropriate alternative. To evaluate the specified software alternatives, this study proposed a hybrid approach which presented in Section 2.

Software selection

Results and discussion

AWA operator in Eq. (14) can be used to calculate the overall weight in fuzzy extension of AHP phase. Fuzzy extension of AHP, which is presented Eqs. (1), (2), (3), (4), (5), (7), (8), (9), is used to compute the weights of criteria and sub-criteria. The results of calculation are showed in Table 4, Table 5, Table 6, Table 7, Table 8, Table 9, Table 10. Main criteria weights were computed in elaborations and showed below. Sub-criteria weights can be computed in the same way. The highest weights

Conclusions

This study has investigated a hybrid model is recommended for selection with fuzzy extension of AHP and fuzzy TOPSIS in an electronic firm's software selection problem that includes four alternatives. The initial three experts’ opinions and the literature review investigated the framework, which performed as the fundamental for modeling the suggested four criteria (cost, technical specifications, vendor specifications and ease of use) and 15 sub-criteria to assist software selection for firms

Acknowledgements

The author would like to thank to the editor and the anonymous reviewers whose insightful and constructive comments have improved the paper greatly.

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