A hybrid MCDM methodology for ERP selection problem with interacting criteria

a r t i c l e i n f o An enterprise resource planning (ERP) system is an information system to plan and integrate all of an enterprise's subsystems including purchase, production, sales and finance. Adopting such a comprehensive framework may result in the great savings in both costs and man hours. This research explores the application of a hybrid multicriteria decision making (MCDM) procedure for the evaluation of various ERP alternatives. The proposed evaluation framework integrates three methodologies: Analytic Network Process (ANP), Choquet integral (CI) and Measuring Attractiveness by a Categorical Based Evaluation Technique (MAC-BETH). ANP produces the priorities of alternatives with respect to the interdependent evaluation criteria. The conjunctive or disjunctive behaviors between criteria are determined using MACBETH and CI. Numerical application of the proposed methodology is implemented on the decision making problem of a firm that faces with four ERP projects. The final ranking is compared to the one obtained by ignoring the interactions among criteria. The results demonstrate that the ignorance of the interactions may lead to erroneous decisions. Due to severe market competition, companies have directed to consider alternative business environments in order to reduce total cost, maximize return on investment, shorten lead times and be more responsive to customer requirements. An enterprise resource planning (ERP) system can be considered as a solution for inefficient business processes. Organizations think about purchasing it when they deal with a number of complex and interrelated business troubles , such as achieving company's financial goals, managing and streamlining the company's operational processes, better forecasting features or obtaining the benefits of improved information management by reducing data duplication. An ERP system typically implements a common enterprise-wide database together with a range of application modules [13]. It standardizes processes and stores information as well as recalls that data when it is required in real time environment. Implementing an ERP system may be costly and time-consuming. Companies spend billions of dollars and use numerous amounts of man-hours for installing elaborate ERP software systems. However, the benefits of a successful ERP project are worthwhile. The offered ERP software packages cannot provide a once-for-all business model for every process of all industries. In other words, no single ERP packaged software can meet all company functionalities or all special business requirements [33]. Thus, companies must choose a flexible ERP system that is responsive to customer requirements. The major reason for ERP implementation failures is …