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A Combined Method for Evaluation Criteria when Selecting ERP Systems

This paper presents a combined method for selecting ERP systems, integrating BPR efficiency, reducing IS payroll, considering international differences, and using the PIRCS meta-method for smart multicriteria selection. Various criteria, such as cost, functionality, support, and flexibility, are analyzed to aid in decision-making. The study also explores the benefits of open-source ERP software and outlines the steps involved in the selection process.

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A Combined Method for Evaluation Criteria when Selecting ERP Systems

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  1. A Combined Method for Evaluation Criteria when Selecting ERP Systems David L. Olson, Univ. of Nebraska Björn Johansson, Lund Univ. RogérioAtem de Carvalho, CEFET Campos CONFENIS 2011 Aalborg

  2. ERP • Integrated • BPR efficiency • Reduced IS payroll • MANY OPTIONS • International differences • SELECTION • PIRCS meta-method • SMART multicriteria selection CONFENIS 2011 Aalborg

  3. Alternative Supply Chain Software Sources

  4. ERP Selection CriteriaBaki & Çaki [2005] CONFENIS 2011 Aalborg

  5. Open Source Development Red Hat [2009]: Can save by: • Enabling use of commodity hardware rather than proprietary machines • Avoids maintenance contracts • Greater functionality, reliability, performance • Faster learning curve, available support tools • Avoid vendor lock-in • Reduce need for security consultants & tools CONFENIS 2010 Natal

  6. Open Source ERP/EIS • Jaisingh et al. [2008]: OSS ERPs can be customized to modify code, gain competitive advantage • Serrano & Sarriegi [2006]: OSS ERP benefits: • Increased adaptability • Decreased reliance on single supplier • Reduced costs CONFENIS 2010 Natal

  7. Open Source ERP Products • Compiere • OpenMFG • Open for Business Project • Tiny ERP • Web ERP • Open Office • OpenBravo • OpenPro Sourceforge.net listed over 1,000 ERP projects May 2009 CONFENIS 2010 Natal

  8. Conclusion • Open source ERP projects are increasing • Not all projects are highly structured • Reluctance to use open source ERP in firm’s core activities • PROVIDES OPTION FOR SME • VENDORS CAN USE TO REFINE THEIR SYSTEMS • Open source an access to free labor

  9. Open Source ERP Software Selection Criteria CONFENIS 2011 Aalborg

  10. ERP Selection Crtieria for Outsourcing ERP CONFENIS 2011 Aalborg

  11. Conjoint AnalysisKeil et al. [2006] CONFENIS 2011 Aalborg

  12. AHP CriteriaÜnal & Güner [2009] • Cost • Functionality • Implementation approach • Support • Organizational credibility • Experience • Flexibility • Customer focus • Future strategy CONFENIS 2011 Aalborg

  13. ANP Vendor Selection CriteriaPerҫin [2008] CONFENIS 2011 Aalborg

  14. AHP HierarchyKahraman et al. [2009] CONFENIS 2011 Aalborg

  15. PIRCSDe Carvalho [2009] • Prepare • Define requirements • Establish positioning strategy • Identify attributes and constraints on the decision • Identify measures of attributes to be considered • Identify • Identify alternative ERP options and their characteristics • Rate • Establish the utility (value) of each attribute on each alternative • Compare • Apply multicriteria methods, such as AHP or SMART • Select • Consider the comparison analysis • Make the decision CONFENIS 2011 Aalborg

  16. Value Matrix CONFENIS 2011 Aalborg

  17. Swing Weighting CONFENIS 2011 Aalborg

  18. Relative Scores of Alternatives CONFENIS 2011 Aalborg

  19. Conclusions • Many criteria important in ERP selection • Business case for ERP challenging • Costs complex (hidden) • High levels of benefit uncertainty • PIRCS framework • SMART selection evaluation CONFENIS 2011 Aalborg

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