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Selection and Assessing the Optimal ERP system using ANP-VICOR approach in the Home Appliance Industry Kobra Sabzali Yameqani Ph.D. Student of Business Management, (area of study: Marketing), Shahr-e-Qods Branch, Islamic Azad University, Iran
[email protected] Marjan Abbasi Ph.D. Student of Business Management, (area of study: Marketing), Shahr-e-Qods Branch, Islamic Azad University, Iran
[email protected] Mohammad Aghaei Management Studies and Technology Development of Tarbiat Modares University (TMU), Iran Corresponding author:
[email protected]
Abstract Organizations continuously tend to select the most optimal type of enterprise resource planning (ERP) system, in order to gain competitive advantages. Most important reasons in optimal ERP include the competitive advantage, new positioning, marketplace dynamics, inimical and rupture of environment. Existence of different systems with Varity solutions and thus, changing in competitive circumstance in marketplace has made this selection process complex and difficult. In the investigation, multi-criteria decision making method has been adopted to select an ERP system in Pars Khazar Company as challenger in home appliance business. ANP-VICOR is used in order to achieve the manuscripts purpose. Using ANP and VICOR method it has been found that the third and the second systems are prior to be applied based on the selected Constructs and criteria's in the path of research, respectively. As a conclusion, the company would be able to compensate its shortcomings and achieve higher effectiveness through better implementation of the third ERP system. Among the various criteria's, confirm with the final weight of 0.0841 had the highest value and was the most effective weight in selecting and priorities in the appropriate system. Keywords: Enterprise Resource Planning (ERP), competitive advantage, prioritization, Home appliance, ANP-VICOR technique.
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Introduction Competitiveness of business environment, requirement of creating in-organization and inter-organization integration within the supply chain environment, and extensive development in the field of information system technology are considered as the major factors for the formation of ERP systems (Wei et al, 2005). Kuei argues that supply chain management is an independent or semi-independent network of business institutes cooperating as a family in preparation, production and distribution processes. Companies have more control over their suppliers in supply chain and use information to gain more competitive advantages and empower themselves. To encounter this new challenge and to meet the need of an efficient supply chain, companies all around the world have made large investments on their information systems (Kuei et al, 2002). In practice most of the companies use integrated Enterprise Resource Planning (ERP) system, which can be applied for integration and optimization of various business processes such as Order entry and production planning across the company (Mabert et al, 2001). This kind of investment enables the sharing of wide range of information in supply chain and also well-timed partnerships of supply chain members and creates a forward-looking perspective for the organization to improve the inventory and distribution management (Yi-fen and Chyan, 2010). Some studies have declared that information systems can lead to the improvement of decision making, facilitation of communications (Davenport, Harris, & Cantrell, 2004) and integration of electronic deliveries. (Nazir & Pinsonneault, 2012). ERP systems are regarded as a strong pillar in business processes and management activities (Nazir & Pinsonneault, 2012; Schlichter & Kraemmergaard, 2010). ERP is considered as a basic empowering factor of management, which provides the opportunity of simultaneous information sharing for the partners. (Hsu et al., 2009; Sanders, 2007). Moreover, to extent their integration ranges with suppliers and customers, most companies have adopted ERP systems in order to enhance their E-commerce, E-operations, and also the organizational efficiency. (Yi-fen & Chyan, 2010). Problem statement ERP systems help organizations largely in technical fields such as standards, transparency and globalization; and are considered as high performance instruments and the inseparable components of supply chains (Themistocleous et al., 2004). Therefor in spite of the difficult and complicated processes of implementing such systems, they are used in companies intensively (Yi-fen & Chyan, 2010). The literature of supply chain is based on strategic management, partnership, logistics and marketing (Su and Yang, 2010). Supply chain management deals with processes from using raw materials by companies to production of final products; and when all companies work as a strategic unit organization, the overall system performance would be increased considerably. The successful management of supply chain and the development of information technology advantages, requires integrated ERP systems, which enable managers to meet their customers’ expectations in the best way (Chang et al, 2008). In order to select an appropriate ERP system, different methods have been applied. For example, using MADM, Chun Chin et al (2004) have proposed a new conceptual framework for selecting the http://www.ijhcs.com/index.php/ijhcs/index
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appropriate ERP system (Chun-Chin et al, 2004). One year later Chun-Chin et al improved their previous model and presented a systematic procedure for ERP selection by using the AHP method (Chun-Chin et al, 2005). The model presented by Jacqueset al describes the process of ERO software purchase in 6 stages including planning, information searching, primary selection, evaluation of alternatives, selection, and negotiation (Jacques & Alannah, 2002). Emphasizing the importance of selecting the appropriate ERP, Stephanou has proposed a conceptual framework for evaluation of ERP software. Stephanou believed that two groups of strategic and operative criteria should be considered for evaluation and selection of ERP (Stephanou, 2001). Luong has also designed a decision backup system bearing in mind the various qualitative and quantitative criteria for selecting the best computerized integrated production system. In his study, the process of selecting computerized integrated production system was conducted in 4 stages using AHP method and based on the information obtained from the data of a database; for the purpose of evaluation and analysis of criteria the Excel software has been used (Luong, 1998). In this study the FVCORE, ANP method has been applied for evaluation and selection of an appropriate ERP system. The combined method can cover the defects and shortcomings of other methods. Literature review and related work The word ERP was first introduced in 1990 as the next generation of MRPII software, by Gartner Group. The goal of ERP is to integrate all activities of manufacturing firms in form of a number of applicable software packages. Indeed, ERP is a kind of integrated software system in the organization, in which customer relationship management (CRM) and supply chain management are performed electronically (Nazemi et al, 2006). This system is one of the most efficient tools of management for gaining competitive advantage (Sudeep, 2010). ERP is the extensive series of management tools, which makes a balance between supply and demand and has the ability of connecting the customer and the supplier in a supply chain. This system uses fixed business processes for better decision making and presenting higher level of integration in sales, marketing, manufacturing, operations, logistics, purchase, financial affairs, development of new products, and human resources. As a result, companies would be able to gain high level of customer service supply, productivity, reduction of available inventories and costs (Yi-fen & Chyan, 2010). ERP reflects a general image of business which results in considerable reduction of costs (Kakouris & Polychronopoulos, 2005). An ERP system potentially increases the transparency of supply chain through the reduction of alteration in information. Thus applying the ERP system in the organizations can increase the effectiveness of supply chain (Henk et al, 2003). An important aspect of ERP is the eagerness of managers for accepting the ongoing changes and encouraging their subordinates to cope with these changes (Kakouris & Polychronopolus, 2005). Real advantages can't be achieved only through the development of information systems, but changes in structures of organizational activities are necessary for the success of information technologies (Dhillon, 2005). Various scholars have proclaimed different advantages for ERP. For example, Mabert has presented these results based on his research: quick responding, increase in interaction across the company, improvement of orders management, improvement of customer relationship, on time delivery, improvement of supplier relationship, reduction of inventory level, improvement of financial management and reduction of direct operative costs (Mabert et al, 2000). Startman and Rothe have http://www.ijhcs.com/index.php/ijhcs/index
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introduced eight structural advantages for ERP. They argued that in order to gain sustainable competitive advantages, all features of ERP should be applied completely and regularly (Startman and Rothe, 2002). Shang and Seddon have classified advantages of ERP in five groups consisting of information technology, operative, management, strategic and organizational infrastructures (Shang and Seddon, 2000). The first advantage that could be expected in short time after the implementation of ERP is the reduction of operating costs such as inventory control cost reduction, production cost reduction, accounting operations and finance logging cost reduction, marketing and support cost reduction (Samuel and Kumar, 2014). Navigations of the ERP system There are three common methods for running of an ERP: The explosive method (all at once): this method is the most difficult way of creating an ERP. In this method, the institute suddenly puts aside all of its old systems and launches new ERP system across the institute. In this method, all operative departments of the organization would be mechanized suddenly by ERP packages and all departments would be affected by changes resulted from the launch of the new system. The organization prepares a comprehensive project to implement this system. Hence, the installation and application of all parts of the system would be started in all units of the organization simultaneously. If the method is implemented properly, it can reduce integration costs. The method could be applied for primary ERP systems; however today it is applied less than before (Behboodi Asl; et al, 2012). Optional strategy: in this method, some independent parts of the system that are important for the organization and have common data would be mechanized optionally by ERP packages and the required and relevant packages would be added gradually. Hence, only one of the organizational units would be involved each time. This method is mostly appropriate for organizations which have less processes exceeding the organizational unit boundaries and involving more than one unit, compared to the other organizations. Firstly, each section of ERP system would be implemented separately in organizational units and in the next step they would be integrated. This makes each organizational unit have its own specified database. This method has been used more than the others. Separate implementation of different parts reduces the risk of installation, regulation and application of ERP system through limiting the implementation scope. This method advices large companies that most of the processes shouldn’t be shared with different parts, rather distinct copies of ERP be installed in each part and have just some common specific processes (such as keeping financial information). This is the most common way (Olson, 2005). Processional (proceeding from up to down): in this method, the working processes of the company would be redesigned and in fact a kind of reengineering would be implemented on them. This method is mostly applied in small businesses. In this method, the main focus is on some key processes embracing limited number of organizational units. Institutes that have ERP at their service in this way, cannot claim that they have experienced high profitability from the new system. Most of them use the system as an http://www.ijhcs.com/index.php/ijhcs/index
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infrastructure for further efforts. Such a system is a little better than old systems, since it would not force employees to change their old habits (Olson, 2005). One of the most effective implementation methods of ERP is using experiences of successful and pioneer companies in this area. Being familiar with experiences of hundreds of top companies in global economy and using thousands of novel methods and processes would result in solving many of the current problems of the organizations, and creation of new methods for joining the information technology pioneers and users of reengineering technology, and then leading to CRM and ERP. Criteria for ERP System selection In order to select the best ERP system, various criteria are considered. In this study, we have considered 5 criteria of cost, technical capabilities, user, service and reputation. Intense competition in competitive market has made business environment to have significant focus on cost reduction. Selecting an appropriate ERP system is reliable method for cost reduction in the organization. Costs related to price, maintenance, consultation and infrastructure could be reduced using ERP system, if it is designed and implemented properly (Yusuf et al, 2004). ERP software has been designed through information systems that cover the whole organization, with the purpose of integrating business processes across the organization and its subsectors; it also helps reduction of operative costs significantly. The most important advantage of ERPs is the increase in coordination of organizational departments and the efficiency of the processes. The first advantage that could be expected in short time after the implementation of ERP is the reduction of operating costs such as inventory control cost reduction, production cost reduction, marketing and support cost reduction (Sohrabi et al, 2011). Technological capabilities are also important criteria for selection of an appropriate ERP system for the organization. ERP system requires using complicated information systems in terms of model and technology (Davenport, 2000). Therefore, those organizations, which are at a good level of technology, would be more successful than others in implementation of ERP system. The main prerequisite of an ERP system is the bases of well technologies that should be integrated and interrelated with each other in the organization. Thus, it is necessary for all units of an organization to have a good level of technology if their purpose is to experience a successful implementation of ERP (Teltumbde, 2000). Based on their type, ERP systems try to cover all activities of a database or an organization (regardless of organizational structure). Along with changes made in in-organization processes, the implementation of ERP systems requires the development of executive systems and technologies in other sections including human resources, training and financial departments, to create the desired integration of all units. Thus, for successful implementation of an ERP system, at first all technological infrastructures of the organization should be improved (Aghajani et al, 2014). User criterion is another criterion for selection of an ERP system. The criterion is one of the most important and fundamental criteria for selection of ERP, which has significant role compared to the other criteria. The ease of using an appropriate ERP system helps the organization for better implementation of it. The higher the level of use, security, access to software, information resources and settings in a http://www.ijhcs.com/index.php/ijhcs/index
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system is, the more interested people would beat learning and accepting it (Wei et al, 2005); and this will pave the way for success. The services delivered to people through implementation of integrated ERP system, has a crucial role in its success. Systems that have the capability to deliver multiple services to users and meet their expectations rapidly and with the lowest defect possible, could reach to their desirable position. Services such as guarantee, consultation, training and the speed of delivering these services could be considered as important criteria for successful acceptance and implementation of the system in the organizations (Wei et al, 2005). Customers, who receive optimal services at high speed, have significant effects in increasing the role of ERP in the organizations’ success. Another service that is delivered to customers for purpose of minimizing additional costs and maximizing the realism toward units requirement to be affected by ERP, as an additional service is offered to customers, is the establishment of a consultation committee using cooperative management for the organizations; and during the designing stage, the company leaders would come closer to each other to be affected by changes inside ERPs for obviating the needs of management and demand planning control (Aghajani et al, 2014). Market share, reputation, the number of consultants, the number of OEM projects, the support infrastructures and consolidation of previous implementations are factors that reflect the validity of a system and its suppliers to customers (Behboodi Asl; et al, 2012). Reputation and validity of an ERP system is considered as a factor in increasing the probability of success of implementing the system in the organization. The main credit of ERP systems is to follow reengineering philosophy in redesigning the processes and information proceedings of the organizations. ERP systems, beyond an integrated information system, have conducted the organizations toward the adjustment of their processes and structures. These systems have led organizations to increase the efficiency of the processes and flexibility of the organizations via communicating top experiences in the field of operative and fundamental processes. ERP systems change processes in a way that the capability of the organization to meet the costumers’ needs be improved and an operative integration be created between all business processes (O'Leary, 2004). Based on our discussion, the final model of the study has been prepared as following:
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Figure 1: final model of the study
Methodology In terms of the data collection method, the current study is a descriptive-survey study, and in terms of the purpose, is in the framework of applied researches. The data collection instrument in is the questionnaire. The statistical population of the study is the experts of Pars Khazar Co. Two types of questionnaires have been applied. After designing the initial questionnaire and surveying the experts in several stages and making final corrections, the final questionnaire was distributed among them in person. The first questionnaire distributed with the purpose of localizing the conceptual model and based on the Delphi technique. In this regard, first the experts were asked to determine the level of significance for each sub-criterion scaling from 1 (very low significance) to 10 (very high significance). All sub-criteria with the mean level of significance above 7 were selected. It should be noticed that all sub-criteria were confirmed. The second questionnaire included two sections. The first section indicated the level of significance of the criteria and sub-criteria of the model, compared to each other; and the second section indicated the degree of interdependence of sub-criteria. According to the subjective nature of the conceptual model, experts having MA and higher degrees and job experiences more than 5 years, were selected as the statistical population. Generally, 12 questionnaires were distributed and collected, and the data analysis was conducted based on the number of collected questionnaires. Questionnaires were designed in a way that experts could draw comparisons more accurately.
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Finding and Discussions For the purpose of the primary localization of the study using Delphi technique, experts were asked to determine the degree of the relationship between factors existing in research model. Table 1 presents the mean value of experts’ opinions with regard to the relevancy of selected sub-criteria (according to the author, opinions with mean value of higher than 7 were remained in the model). Table 1: mean values of opinions of experts in regard with sub-criteria Criteria Sub-criteria Mean Cost Price 9 Maintenance 8.7 Infrastructure 9 Technical capability Research and development 8.5 Implementation 7.5 Technical support 7.33 Updating 9 User Easy use 8.6 Easy learning 8.5 Easy integration 8 Security 7 Services Guarantee 8.6 Consultation services 9 Training services 7 Reputation and credit Sales rate of manufacturer 7.5 Market share 7.8 Financial status of company 9 Reputation 8
Fuzzy analytic network process (ANP) After applying the necessary changes in the framework due to the results obtained in previous stages, the level of significance for each dimension has been estimated using Fuzzy ANP. The reason for using ANP is the existence of direct and indirect correlations between sub-criteria. Verbal comments of respondents collected based on clockwise 9-item scale can be changed into triangular fuzzy numbers via different methods. Verbal scale for prioritizing the criteria and sub-criteria is presented in table 2. Table 2: fuzzy number scale and linguistics scale for weighting criteria and sub-criteria Linguistics Equal A little More Highly Very highly scale significance more significant significant significant (VL) significant (ML) (H) (VH) (L)
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Triangular fuzzy numbers
(1, 1, 1)
(1, 3, 5)
(3, 5, 7)
(5, 7, 9)
(7, 9, 11)
In this study, Gauges and Boucher (1998) method has been used to estimate the adaptability percentage. This method was applied for all fuzzy paired comparison matrixes of all 12 experts and the matrix of experts’ consensus; adaptability percentage was estimated and matrixes that were found non-adapted according to the rules were returned to respondents for revision. To estimate the weight of significance for each dimension, criteria and sub-criteria of the paired comparison matrix, Chang's Development Analysis method was used. After estimating the vector of weights and interrelation matrixes, the final super-matrix was formed in order to estimate the total weight of criteria and evaluation dimensions. Table 3 shows the matrix of experts’ consensus about the main criteria. Main criteria Costs Technical capability User Services Reputation
Table 3: matrix of experts’ consensus about the main criteria Technical Costs User Services capability
Reputation
(1, 1, 1) (1.73, 3.87, 5.91)
(0.16, 0.25, 0.57) (1, 1, 1)
(1, 3, 5) (3.87, 5.91, 7.93)
(0.16, 0.0, 25.57) (0.77, 1.28, 2.64)
(0.44, 0.1,57) (0.72, 1.73, 2.23)
(0.2, 0.1, 33) (1.73, 3.5, 87.91) (1, 0.73, 2.23)
(0.12, 0.16, 0.25) (0.37, 0.77, 1.29) (0.44, 0.57, 1)
(1, 1, 1) (3, 5, 7) (1.73, 3.87, 5.1)
(0.14, 0.2, 0.33) (1, 1, 1) (0.44, 0.1, 57)
(0.16, 0.25, 0.57) (1, 1.73, 2.23) (1, 1, 1)
In this step, the value of fuzzy composite expansion was calculated for each criterion:
After calculating the fuzzy composite expansion, the feasibility degree for each possiblebinary state has been estimated based on table 4, and the minimum feasibility degree of each main criterion has been calculated compared to other criteria; so the weight vector could be obtained according to table 5. Table 4: feasibility degrees for each binary state
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Table 5: final weight
Main criteria
Cost
Technical capability
User
Services
Reputation
Minimum feasibility Final weight
0.47 0.15
1 0.32
0.06 0.01
0.94 0.30
0.68 0.22
Table 6: final super-matrix
Final G A B C D E A1 A2 A3 B1 B2 B3 B4 C1 C2 C3 C4 D1 D2 D3 E1
G
A
B
C
D
E
A1
A2
A3
B1
B2
B3
B4
C1
C2
C3
C4
D1
D2
D3
E1
E2
E3
E4
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.01
0.01
0.01
0.01
0.01
0.01
0
0.092
0.092
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.02
0.02
0.02
0.02
0.02
0.01
0.094
0
0.094
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.01
0.01
0.01
0.01
0.01
0.01
0.036
0.036
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.03
0.01
0.03
0.03
0.03
0.01
0
0
0
0
0.087
0.087
0.087
0
0
0
0
0
0
0
0
0
0
0
0.02
0.01
0.02
0.02
0.02
0.01
0
0
0
0.099
0
0.099
0.099
0
0
0
0
0
0
0
0
0
0
0
0.02
0.01
0.02
0.02
0.02
0.01
0
0
0
0.067
0.067
0
0.067
0
0
0
0
0
0
0
0
0
0
0
0.05
0.05
0.05
0.05
0.02
0.01
0
0
0
0.036
0.036
0.036
0
0
0
0
0
0
0
0
0
0
0
0
0.03
0.01
0.03
0.03
0.03
0.01
0
0
0
0
0
0
0
0
0.096
0.096
0.096
0
0
0
0
0
0
0
0.01
0.01
0.03
0.01
0.02
0.01
0
0
0
0
0
0
0
0.052
0
0.052
0.052
0
0
0
0
0
0
0
0.01
0.01
0.03
0.01
0.02
0.01
0
0
0
0
0
0
0
0.059
0.059
0
0.052
0
0
0
0
0
0
0
0.01
0.01
0.03
0.01
0.02
0.01
0
0
0
0
0
0
0
0.09
0.09
0.09
0
0
0
0
0
0
0
0
0.01
0.01
0.03
0.01
0.02
0.01
0
0
0
0
0
0
0
0
0
0
0.029
0
0.029
0.029
0
0
0
0
0.03
0.01
0.03
0.03
0.02
0.03
0
0
0
0
0
0
0
0
0
0
0.029
0.029
0
0.029
0
0
0
0
0.02
0.02
0.03
0.02
0.02
0.02
0
0
0
0
0
0
0
0
0
0
0.016
0.016
0.016
0
0
0
0
0
0.02
0.02
0.03
0.02
0.02
0.02
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.036
0.036
0.036
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0.05
0.05
0.03
0.05
0.05
0.05
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.033
0
0.03
0.03
0.03
0.03
0.03
0.03
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.013
0.01
0.01
0.01
0.01
0.01
0.01
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.036
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0.033
0.033
0.013
0
0.013
0.036
0.036
0
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Criteria
Weight of criteria
0.15 Cost
0.31 Technical capability
0.01 User
0.29 Services
0.21 Reputation & Credit
Table 7: final weight Sub-criteria
Weight of sub-criteria
Final weight
Price
0.092
0.0138
Maintenance
0.094
0.0141
Infrastructure
0.036
0.0054
Research and development Implementation
0.087
0.02697
0.099
0.03069
Technical support
0.067
0.02077
Updating
0.036
0.01116
Easy use
0.096
0.00096
Easy learning
0.052
0.00052
Easy integration
0.059
0.00059
Security
0.09
0.0009
Guarantee
0.29
0.0841
Consultation services
0.029
0.00841
Training services
0.016
0.00464
Sales of manufacturer
0.036
0.00756
Market share
0.033
0.00693
Financial status
0.013
0.00273
Reputation
0.036
0.00756
Comparative evaluation using FVICOR method In order to determine the priority of relevant systems, FVICOR method and fuzzy numbers have been applied. The normalized matrix of experts’ consensus related to the 18 sub-criteria is presented in table 8.
System 1 System 2 System 3
Table 8: normalized fuzzy matrix of experts’ consensus Sub-criterion 1 Sub-criterion 2 … Sub-criterion 17 Sub-criterion 18 (5.95, 8.55, 9.71) (4.58, 7.23, 9.17) … (6, 6, 6) (0.09, 0.09, 0.09) (5.17, 8.21, 9.44) (9.17, 6.64, 10) … (10, 10, 10) (0.04, 0.04, 0.04) ). ،3044 ،70.7( (4.72, 7.32, 9.44) … (8, 8, 8) (0.07, 0.07, 0.07)
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Further steps of FVICOR technique are presented in table 9. Table 9: the best and the worst fuzzy value Best fuzzy value (f+)
worst fuzzy value (f-)
Sub-criterion 1 Sub-criterion 000 SubSub-criterion Sub-criterion 1 Sub-criterion 2 2 0 criterion 17 18
00 SubSub-criterion 00 criterion 18 17
(5.95, 8.55,9.71) (6.64,9.17,10) 000 (10, 10, 10) (0.09,0.09,0.09) (0, 4.33, 7.07) (7.23, 4.58,9.17) 000 (6, 6, 6)
(0.04,0.04,0.04 )
Table 10: Si and Ri values (0.20, 0.46, 0.95) (0.29, 0.45, 1.18) (0.35, 0.61, 1.61)
System 1 System 2 System 3
(0.03, 0.04, 0.10) (0.04, 0.05, 0.17) (0.05, 0.07, 0.32)
Table 11: the best and worst Si and Ri values (0.35, 0.61, 1.61) (0.20, .45, 0.95) (0.05, 0.07, 0.32) (0.03, 0.04, 0.10)
Table 12: prioritization of systems
System 1 System 2 System 3
Q I fuzzy
Q I DE fuzzy
System prioritization
(0.16, 0.48, 6.98) (0.08, 0.50, 0.58) (0, 0, 0)
2.54 2.13 0
3 2 1
Now is the time for table control and optimal selection. For this purpose, the conditions for selecting the final option should be tested. First test (acceptability score):
2.13
0
As it is observed, the first condition of the mentioned method has been covered for system 3. Second test (acceptable stability in decision making): Based on the data of the table, it has been found that the lowest value of parameters Si and Ri doesn’t belong to system number three. It should be noted that the first test of the method has http://www.ijhcs.com/index.php/ijhcs/index
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been estimated and the second test not; so according to the problem solving in specific conditions, the best option should be selected as following: based on the equations, it has been found that systems number two and three have been selected as the best systems due to the selected sub-criteria. Discussions and Conclusions Enterprise Resource Planning (ERP) system is a useful software solution for integration of organizational resources. Implementation of ERP in the organization provides an integrated context for fast information exchange between different sections and processes. In our study, we have discussed how to use multi-criteria decision making method for selection of an ERP system based on a case study. Due to the importance of selecting an ERP, using methods that result in selecting the appropriate system is important for the buyer organization. Using ANP and FVICOR methods in evaluation of alternatives, when an option lacks the required adaptability and consistency with organizational conditions, enables one to investigate the conditions of another corresponding indicator in order not to pass up the chance of selecting the right option. In this study, we have found that for selecting the right system, some criteria associated with organization using ERP, such as cost reduction criteria, technological criteria, user criteria, services, reputation and credit criteria, must be taken into consideration. After gathering the opinions of experts about the criteria and their corresponding indices, the level of significance for each criterion was determined using fuzzy ANP method. Finally the final weight of each criterion was estimated; the most important criterion found for selecting the right ERP system in Pars Khazar Company was the technical capability of the organization with the weight of 0.31. The second one was the services criterion with the weight of 0.29. Thus, in order to select an appropriate ERP system, the managers of Pars Khazar Company should focus mainly on their technological features and principles and try to strengthen them. Having the technology and the knowledge of using it for the increased productivity of the organization, recognized as the most important element for successful implementation of this system in Pars Khazar Company. As a result, it could be claimed that before selection and successful implementation of an ERP system, the company requires equipping all of its units with the appropriate technology. Since the consistency and integrated implementation of an ERP would not be possible if one unit has an advanced and up to date technology level and the other one has a poor level, it is urgent that such technologies be right at the same level. Among sub-criteria of technological capability, the implementation criterion, with the weight of 0.31, was identified as the most important one. Hence, if technological capabilities of the organization be in a good level, the most important dimension of it would be the implementation of ERP system. In the next step, the VICOR fuzzy logic was used. Using ANP and FVICOR methods in evaluation of alternatives, when an option lacks the required adaptability and consistency with organizational conditions, enables one to investigate the conditions of another corresponding indicator in order not to pass up the chance of selecting the right option. After implementing the fuzzy processes on research data, triple ERP systems in the organization were prioritized using the fuzzy logic. In this study the priority was given to system 3, which gained the acceptability http://www.ijhcs.com/index.php/ijhcs/index
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score and acceptability constancy in selecting out from the two other systems. Therefore, systems 3, 2 and 1 were introduced as the best system for implementation respectively. Thus, in a suitable context of technology, the organization would be able to implement the third ERP system with ease and success. Since the evaluation of the desirable criteria of the organization may have some errors, in decision making via fuzzy system, the existence of errors in calculating the desired value of a criterion, would not question the decision making process. Due to the nature of fuzzy logic, all of the considered criteria would indicate the optimal rate of the organization for each main criterion of decision making. In this study, multi-criteria decision making method has been applied to reduce weaknesses and to achieve higher effectiveness for selecting ERP to remove defects to high extent. According to the obtained results and outputs of software, system 3 can meet the needs and defects of the organization, and its implementation is depended on superior support of the management and all sections and departments of the organization, so that the desired result can be achieved through designed plans and training programs for individuals. The most important factor in achieving the purpose of this study is being flexible enough to gain the desired features. The followings are suggestions for future studies: Using AHP-based method for classification and prioritization of systems It would be better to evaluate some additional criteria for selection and implementation of ERP systems. Assessment of the conditions and good context for the development of this system in the organization for the purpose of empowering the organizational software programs.
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