ERP system selection using a simulation-based AHP approach: a case of Korean homeshopping company

Byeong Seok Ahn · Seunghyun Choi

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Multi-Criteria Decision Making Decision Support System Applications ERP Systems Implementation and Impact

Abstract

An enterprise resource planning (ERP) system is a critical investment that can significantly affect future competitiveness and performance of a company. The analytic hierarchy process (AHP) method is often applied to select an ERP system since it is well suited to multiple criteria decision-making problems. This study presents a simulation-based AHP (SiAHP) method for group decision making and is applied to the real-world problem of selecting a suitable ERP system for a Korean homeshopping company. To enhance the fitness of a group AHP method and to facilitate the ERP system selection process, this paper proposes a simulation-based approach for building a group consensus instead of forming point estimates that are aggregated from individual preference judgments. To be specific, the proposed method is based on observations from empirically observed frequency distributions and does not use aggregation procedures, compared to typical group AHP for obtaining a group solution. This approach, reflecting the diversification of group members' opinions as they are, is conceived to be useful as a tool for obtaining insights into agreements and disagreements with respect to the alternatives among the individuals of a group. The real-world example demonstrates the feasibility of our proposed approach.

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References

1985The Analytic Hierarchy Process 2002Enterprise resource planning: Implementation procedures and critical success factors 2005Global supplier development considering risk factors using fuzzy extended AHP-based approach 1998Aggregating individual judgments and priorities with the analytic hierarchy process 1994Group preference aggregation methods employed in AHP: An evaluation and an intrinsic process for deriving members' weightages 2004An AHP-based approach to ERP system selection 1989Group Decision Making and the AHP 2003Enterprise information systems project implementation:

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