Monday, March 12, 2012

Integrated tools to enhance MCDM for use in selecting ERP software systems

Summary
This paper, written by Tuncay Gürbüz, S. Emre Alpetkin, and Gülfem Işilkar Apletkin, proposes to use Analytic Network Process (ANP), Choquet Integral (CI) and Measuring Attractiveness by a Categorical Based Evaluation Technique (MACBETH) in a hybrid multi-criteria decision making (MCDM) evaluation of ERP solutions for a company.

Technique
The technique espoused uses ANP to provide a general framework for developing a supermatrix which can evaluate interrelationships and allow for weighting criteria. CI is used to determine conjunctive or disjunctive behavior between criteria. MACBETH is used to allow decision makers’ input into ranking attractiveness of elements, which allows qualitative preferences to be quantified.

This overall MCDM approach was used to evaluate four ERP software solutions using the following general steps:

1. Identify the ERP software selection and evaluation criteria

2. Build a model and establish relationsDecide on the analytic method to use (If there is an outer-dependence between sub-criteria, then analyze with ANP)

3. Analyze sub-criteria of the same cluster in order to define the conjunctive and disjunctive behavior between them. (If there is such a relation, use CI; If there is no interaction, use ANP)

4. After handling sub-criteria, take into consideration the upper level criteriaMake the final aggregation and obtain a ranking (If there are conjunctive/disjunctive behavior between criteria, use Shapley indices and the interaction values including the weights of the sub-criteria and alternatives’ individual preferences in order to perform the final aggregation)

The authors propose the use of a decision framework or model consisting of three levels: at the top, the objective of the problem, followed by the listing of criteria, then the list of alternatives.

Strengths
* Gives a framework for implementing MCDM using a variety of tools
* Allows for the use of qualitative and quantitative measures
* Utilizes input from decision makers making it more likely to gain acceptance
* Is flexible enough to be applicable to other IT initiatives
* Clear guidelines as to which tool to use when throughout the process

Challenges
* The model is based in complex mathematical functions which may limit its use
* The model appears to be time-consuming to use

Conclusion
Expenditures in IT, especially when faced with enterprise-wide systems like ERP, should require a methodical evaluation approach. The hybrid-MCDM system proposed in this paper allows an analyst to measure both the quantitative and qualitative criteria while deciding which alternatives are most applicable. Because the criteria are determined within the organization, the approach is customizable for each use, making it flexible. However, it is a complex system of measurements that could be time consuming for the analyst. Its use is most likely only feasible for large IT expenditures.


From: An Integrated Decision Support System for Selecting Software Systems (January 30, 2012). Retrieved from http://www.thinkmind.org/download.php?articleid=eknow_2012_3_20_60044

3 comments:

  1. In my experience the purchase of software systems in large organizations is driven more my internal politics than by the use of a structured methodology. Institutionalizing this type of framework in an organization would seem to help minimize the effect corporate politics would have in the selection decision.

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  2. I agree with Dave that using this framework would minimize corporate politics. Also this would be appealing for decision makers for the ability to allow their input into ranking attractiveness of elements, which allows qualitative preferences to be quantified.

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  3. Hello Friends.........

    Great information.Thanks for sharing this useful information with all of us.Keep sharing more in the future.

    Have a nice time ahead.

    Thanks

    ReplyDelete