A Hybrid MCDM Approach for Solving the ERP System Selection Problem with Application to Steel Industry

Abstract

Selecting a proper system of Enterprise Resource Planning (ERP) is a major challenge for enterprise managers. Heavy expenses of incorrect decisions in selection of ERP systems have made academics and managers consider this phase as highly important. Several research studies proposed different approaches to selecting the ERP and many case studies of organizational experiences have been published. However, there has been less regard for simultaneous use of the findings of academic studies and judgments of industrial experts or organization mangers for making the most appropriate choice. This study proposes a combined multiple-criteria decision-making (MCDM) approach through which both previous studies and judgments of industrial experts or organization managers would be integrated in order to select the proper ERP system. Having studied the literature comprehensively and conducted interviews with experts and managers, this approach will determine the most important criteria in ERP selection using Shannon entropy technique. Then, based on the judgments obtained from experts and using DEMATEL technique, these criteria will be classified into the two groups of “Cause” and “Effect” and the most appropriate choice will be selected using Fuzzy AHP technique. Finally, a case study is conducted to demonstrate and prove the applicability of the proposed approach.