A hybrid MCDM methodology for ERP selection problem with interacting criteria

Abstract

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 (MACBETH). 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.