Analytic hierarchy process for selection of ERP software for manufacturing companies

Abstract

Enterprise Resource Planning (ERP) systems are popular as an IT enabled tool, which integrates different functional areas of business. ERP systems are implemented as a total business solution that supports major functionalities of business. However, many of the implementations are not success stories. Most post implementation problems are due to the inappropriate selection of systems.

This paper describes multi-criteria decision model using Analytic Hierarchy Process for the selection of ERP systems for manufacturing companies. First, ERP evaluation criteria are developed by using past literature and through a questionnaire distributed among Sri Lankan manufacturing companies. Seven major criteria are identified and under each criterion several sub-criteria are identified. Selection of the best suited ERP system leads to a multi-criteria decision making problem as ERP systems should be evaluated based upon many criteria. Using the identified main and sub criteria, an Analytic Hierarchy Process (AHP) model is developed for ranking the ERP software. An example of a case is presented to show the actual implementation of AHP model. Expert Choice software is used to solve this AHP model.