A theorical model design for ERP software selection process under the constraints of cost and quality: A fuzzy approach Semih Onut∗ and Tugba Efendigil
Department of Industrial Engineering, Yildiz Technical University, Yildiz, Istanbul, Turkey
Abstract. Enterprise Resource Planning (ERP) software selection is one of the most important decision making issues covering both qualitative and quantitative factors for organizations. Multiple criteria decision making (MCDM) has been found to be a useful approach to analyze these conﬂicting factors. Qualitative criteria are often accompanied by ambiguities and vagueness. This makes fuzzy logic a more natural approach to this kind of problems. This study presents a beneﬁcial structure to the managers for use in ERP software vendor selection process. In order to evaluate ERP vendors methodologically, a hierarchical framework is also proposed. As a MCDM tool, we used analytic hierarchy process (AHP) and its fuzzy extension to obtain more decisive judgments by prioritizing criteria and assigning weights to the alternatives. The objective of this paper is to select the most appropriate alternative that meets the customer’s requirements with respect to cost and quality constraints. In the end of this study, a real-world case study from Turkey is also presented to illustrate efﬁciency of the methodology and its applicability in practice. Keywords: AHP, fuzzy AHP, multiple criteria decision making, software selection
1. Introduction Technological opportunities, demands for innovation, and changes in global markets force organizations to be more outward looking, market-oriented and knowledge driven with a ﬂexible infrastructure. This development affects organizations’ business practices and procedures to remain in a competitive environment. At this point, information technology has an important role in increasing the competitiveness of organizations. Enterprise resource planning (ERP) systems were introduced into companies to solve various organizational problems and to provide an integrated frame as an information technology. ∗ Corresponding author. Tel.: +90 212 3832872; Fax: +90 212 2610674; E-mail: firstname.lastname@example.org (Semih Onut).
An ERP system is an integrated software package composed by a set of standard functional modules (production, sales, human resources, ﬁnance, etc.) developed or integrated by the vendor that can be adapted to the speciﬁc needs of each customer . A formal deﬁnition of ERP given by APICS (American Production and Inventory Control Society) dictionary is “An accounting-oriented information system for identifying and planning the enterprise-wide resources needed to take, make, ship and account for customer orders”. A successful ERP project involves selecting an ERP software system and vendor, implementing this system, managing business processes change and examining the practicality of the system . ERP implementation process involves macro-implementation at the strategic level and microimplementation at the operational level .
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S. Onut and T. Efendigil / A theorical model design for ERP software selection process under the constraints of cost and quality
Shang and Seddon  classify ERP beneﬁts into ﬁve groups as follows: • Operational, relating to cost reduction, cycle time reduction, productivity improvement, quality improvement, and customer services improvement. • Managerial, relating to better resource management, improved decision making and planning, and performance improvement. • Strategic, concerning supporting business growth, supporting business alliance, building business innovations, building cost leadership, generating product differentiation, and building external linkages. • IT infrastructure, involving building business ﬂexibility, IT...