An integrated fuzzy multi criteria group decision making approach for ERP system selection
Graphical abstract
Decision hierarchy for software selection process has four phases, which includes goal, criteria, sub-criteria and alternatives.
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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