Network Intelligence Studies

Volume VIII, Issue 16 (2/2020)

Hasan AL JAFA
University of Debrecen, Hungary

Methodological
IMPROVING ERP SOFTWARE Article

SELECTION PROCESS BY
INTEGRATING QFD WITH AHP
APPROACH

Keywords
QFD;
AHP;
IT Support;
Decision making;
Integrated MCDM;
ERP software selection;

Abstract

Many organizations have realized the importance of establishing a reliable connection with their customers
to identify their requirements, identify IT failures, answer customer queries, and provide real-time customer
support in technical issues. CRM software vendors have provided various solution packages to meet
companies' requirements and needs, but choosing the best one requires a full understanding of the elements
involved and considering them in the decision-making process. Many decision-making approaches have
been introduced to solve complicated selection problems; each method used has advantages and
disadvantages. This article presents an integrated model of one of the most efficient decision-making
methods, the AHP "Analytic Hierarchy Process" combined with the QFD tool. AHP has a consistency tool
to measure the reliability of decisions but does not consider stakeholders’ needs. In contrast, QFD does,
and it provides a full overview of the technical parameters and areas for possible improvements. The
integration of these two methods will eliminate the disadvantages of using each alone and create a reliable
model to help in complex decisions that may define a new enterprise's success or failure.

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INTRODUCTION Decision Making Under Certainty: there is little

vagueness and little possibility of making the
The ERP Enterprise Resource Planning System wrong decision.
refers to the system and software packages used by Decision Making Under Risk: the availability of
enterprises to manage their everyday business. each alternative and its potential, payoffs, and costs
CRM customer relations management is an are all associated with probability estimates.
essential functional part of the ERP system. Some Decision Making Under Uncertainty: The decision-
vendors provide CRM software only with some maker does not know all the alternatives or the
other functional parts of the ERP. risks and consequences associated with each
Selection means selecting the most suitable CRM alternative. To make reliable decisions in these
software from among a set of vendors. MCDM conditions, managers must collect as much
(Multiple-Criteria Decision Making) is a sub- information as possible and address the situation
discipline of operations research. The subject of from a logical and rational perspective.
this research is those IT companies that want to
adopt the ERP or CRM system with a minimum Selection method
change to their already existed processes. This In order to address the Decisions Under
research has been conducted to determine which Uncertainty category, many approaches have been
MCDM method is the best to use for ERP software proposed for information systems software
selection in an IT company. By reviewing the selection, from basic scoring or ranking to
literature of other researchers, the author has listed complicated mathematical optimization and multi-
the advantages and disadvantages of each method criteria decision analysis. Lucas and Moore (1976)
used and possible improvements. The goal in this and Buss (1983) presented the scoring and ranking
research is to create a new proposed model for methods for information systems project selection.
solving the ERP software selection problem, which However, they were intuitive methods, and too
helps to make appropriate decisions to select the simple to be a reliable choice for decision-makers.
best software. The proposed model is a Subsequently, mathematical optimization emerged,
combination of QFD with AHP in the field of to optimize resource allocation in information
MCDM. This integration has not been presented systems projects using a nonlinear 0–1 goal
before; however, it has been used in supply chain programming model (Santhanam & Kyparisis,
management, particularly in supplier selection. The 1995), which considers the interdependencies
central hypothesis is that integrating the two among projects in the selection process of
methods - QFD and AHP - is the best way to information system (IS).
remove the limitations of using both methods alone Following this, Lee and Kim (2000) integrated the
in ERP software selection. 0–1 goal-programming model with the analytic
network process (ANP). They argued that
Santhanam and Kyparisis’ (1995) model had
LITERATURE REVIEW limited criteria when dealing with IS project
selection issues. A further adjustment was made to
The nature of decision making the criteria for selecting an IS project by Badri,
Decision making is the act of choosing one Davis and Davis (2001), who presented a 0–1 goal
alternative from among a set of alternatives programming model taking into consideration
(Griffin, 2015). Managers want to make effective multiple criteria including software and hardware,
decisions, identify the wrong ones, and then and the benefits, risk factors, and preferences of
quickly react to them. Decision-making involves decision-makers and users, training time
identifying and clarifying the nature of a decision- constraints, and completing time. However, the
making circumstance, naming alternatives, picking difficulties in dealing with the mathematical model
the best one, and putting it into practice. There are using these previous methods are limited in a
two types of decisions defined by Griffin: complicated practical situation, such as selecting
programmed and non-programmed. the best ERP system to use in a company.
Programmed decisions are relatively structured, or These methodologies focus on quantifiable
recur with some frequency (or both); these types of calculations with limitations when it comes to
decisions are commonly used in warehouse considering other criteria, such as attributes that
restocking and ordering raw materials in managers cannot easily quantify and understand.
operational manufacturing. On the other hand, non- Saaty (1990) introduced the AHP method, which
programmed decisions are unstructured and occur shows how to measure the rank of a set of
much less often than programmed decisions. The alternatives and determine their priority by
conditions around the decision-maker are measuring the relative importance of attributes.
circumstances of certainty, risk, or uncertainty. This method has been used in solving multiple
criteria decision-making problems and been widely

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adopted in different places and by many The AHP includes both the subjective and
researchers. objective aspects of a decision. It is easy to use,
scalable, and adjustable to the size of the problem;
MCDM methods besides, the AHP includes a valuable technique for
These methods have proved their efficiency in checking the consistency of decision makers’
dealing with complex problems, mainly when evaluations, therefore reducing the bias within the
multiple factors affect the decision. However, some decision-making process.
problems have arisen, and researchers have started The AHP has been applied to solve performance
to combine methods to overcome the shortcomings type problems in IT software or industrial contexts.
of using a single specific method alone. Modern supply management aims to build long
By reviewing the MCDM methods literature in the term partnerships with suppliers and use fewer but
selection process and analysing their results, the reliable suppliers. Therefore, selecting the right
author has identified the most suitable methods for suppliers and ranking others involves much more
selecting IT software, considering their advantages than considering a series of price lists. Choices will
and disadvantages. depend on a wide range of quantitative and
Velasquez and Hester (2013) listed a qualitative factors, and this makes it in some ways
comprehensive review of typical applications of similar to the selection and ranking of ERP
eleven separate MCDM methods and their systems.
corresponding strengths and weaknesses. These Ho, Xu and Dey (2010) illustrated a review of the
methods include: MCDM methods literature with a total of 78
research studies dealing with supplier evaluation
1) Multi-Attribute Utility Theory. This shows and ranking collected within the period from 2000
agent preferences over a package of goods in to 2008. The aim was to find inadequacies in these
conditions of both certainty and uncertainty about methods and suggest new methods with possible
the likely choice result. It deals with uncertainty by future applications.
considering risk factors and assigning a utility to The research showed that 46 studies (58.97%)
every potential consequence, then calculating the considered individual approaches, while the
best possible utility that can decide the best course remainder (41.03%) dealt with integrated
of action for a given problem (Konidari & approaches.
Mavrakis, 2007). The most common individual approach is Data
The ability to consider uncertainty and risks is an Envelopment Analysis (DEA), followed by
advantage of this method. On the other hand, it mathematical programming, then the AHP. DEA
requires a large amount of data to obtain accurate has only a subjective allocation of ratings for
results, and this method cannot be used when qualitative criteria. Decision-makers might become
alternatives are calculated using different confused by the input and output criteria involved
measurements. This method can be used whenever and cannot be used in The ERP software selection
there is enough data with significant uncertainty, problem since it involves both qualitative and
which does not apply to ERP software technical quantitative attributes.
parameters. Velasquez and Hester (2013) listed the
disadvantages of using the AHP method alone,
2) Goal Programming (GP). This approach was including the interdependence between criteria and
first introduced in 1955 by Charnes and is famous alternatives, which can lead to inconsistencies
for its ability to involve conflicting objectives and between judgment and ranking criteria.
produce infinitive alternatives to handle large scale Among the integrated methods, the AHP integrated
problems in production, planning, scheduling, approaches were the most common because of their
health care, and distribution systems. The use of simplicity, high flexibility, and ease of use (Ho,
GP is limited and cannot be applied in the model 2008). The methods evaluated were the following:
due to its inability to weight coefficients, which is
essential in the IT application selection process. 1- Individual approaches:
a- Data Envelopment Analysis (DEA).
3) The Analytic Hierarchy Process (AHP). b- Mathematical programming: 1- Linear
Proposed by Saaty (1990), this is an efficient tool programming 2- Integer linear programming 3-
used in dealing with complex decision making. It Integer nonlinear programming 4- Goal
can help decision-makers prioritize criteria and programming 5- Multi-objective programming.
make the best decision by breaking down complex c- Analytic Hierarchy Process (AHP).
decisions into smaller comparisons. Then, the d- Case-based Reasoning (CBR).
results are integrated, following a hierarchical e- Analytic Network Process (ANP).
structure. (Figure 1; the goal appears at the top, f- Fuzzy set theory.
while the alternative options appear at the lower g- Simple Multi-attribute Rating Technique
level) (Wang, 2012). (SMART).

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h- Genetic Algorithm (GA). possible benefits to ERP software vendors who

work on improving their software and to third-party
2- Integrated approaches: consulting companies that help organizations in
a. Integrated AHP approaches: transferring to a new ERP system.
• Integrated AHP and Bi-negotiation.
• Integrated AHP and DEA. AHP Analytic Hierarchy Process
• Integrated AHP, DEA, and artificial neural The AHP was designed to deal with complex
network. decisions by breaking them into smaller, more
• Integrated AHP and GP. manageable decisions. Wei, Chien and Wang
• Integrated AHP and grey relational analysis. (2005) applied the AHP method in the ERP system
• Integrated AHP and mixed integer nonlinear selection process using a successful
programming. implementation and process; therefore, this
• Integrated AHP and multi-objective research will follow a similar approach which has
programming. been developed to integrate with the QFD process,
which consists of the following steps:
b. Integrated fuzzy approaches: 1. Form a team consisted of company
• Integrated fuzzy and AHP. stakeholders, then collect all possible information
• Integrated fuzzy, AHP, and cluster analysis. about ERP vendors and their technical
• Integrated fuzzy and GA. specifications. Input: the Internet, magazines,
• Integrated fuzzy and multi-objective exhibitions, books. Output: make an ERP software
programming. list.
• Integrated fuzzy and QFD. 2. Identify ERP system characteristics. Input: the
business reason(s) for software adoption, defining
• Integrated fuzzy and SMART.
problems, and methods for solving them. Output:
make a list of the decision elements, including
c. Other approaches:
stakeholders’ needs, the number of possible
• Integrated ANN and CBR.
alternatives, the project's objectives, and the risks
• Integrated ANN and GA. associated with the project.
• Integrated ANP and multi-objective 3. Sketch out the problem and illustrate its
programming. possible causes.
• Integrated ANP and GP. 4. Develop an initial plan which takes into
• Integrated DEA and multi-objective consideration the possible risks and difficulties.
programming. 5. Build a structure of objectives to develop the
• Integrated DEA and SMART. fundamental-objective hierarchy and means-
• Integrated GA and multi-objective objective network.
programming. • Create two types of objectives: the fundamental
objectives hierarchy and the means objective
Ho et al. (2010) concluded that even if the network.
approaches mentioned above can deal with multiple • Establish the Hierarchy of the ERP system’s
and conflicting criteria for selecting the best fundamental objectives (top-down, or bottom-up).
supplier, the company may still not achieve what Input: strategic scope. Output: fundamental
customers want without considering their objectives, mean objectives, and the hierarchy of
stakeholders, and their business objectives and objectives.
requirements and their strategic impact on the 6. Extract the attributes that form the basis of the
evaluation criteria. AHP for evaluating ERP systems from the structure
Previous suggestions proposed by Ho et al. (2010) of the objectives. Input: objective structure.
and (Velasquez & Hester, 2013), to overcome the Output: attributes for evaluating ERP systems
disadvantages of the MCDM methods led to (quantitative and qualitative).
integrating them with other qualitative tools, such 7. Filter out unqualified vendors, according to
as Quality Function Development (QFD). system requirements. Input: detailed
Xie et al. (2011) successfully tested this new QFD characteristics (measurable attributes). Output: a
with an AHP approach in manufacturing, in the shortlist of ERP software candidates and a checklist
evaluation of suppliers’ performance; QFD (questionnaire) of system specifications.
translated the stakeholder's needs and made them 8. Start evaluating the ERP systems using the
requirements that were later ranked by the AHP. AHP method in three phases:
However, no other model has been developed for 1- Decomposition: the project team will develop
the ERP system or CRM software selection; the AHP hierarchy model from the fundamental
therefore, a generalized approach is presented in objective.
this research to integrate these two methods. The 2- Comparative judgments: each decision-maker
suggested approach in this article points out other utilizes paired comparisons for the attributes and

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alternatives to extract judgment matrices with a consistent judgment for the decision-makers, thus
nine-point scale at each level. avoiding any logical conflicts in their decisions by
3- Synthesis of priorities: the paired comparison using the AHP instant consistency tool.
process is repeated for each attribute in the
alternative prioritization problem. Based on the
largest eigenvalue method, the relative importance MATERIAL AND METHODS
of attributes and the global priority of alternatives
can be obtained by aggregating the weights over The aim of the research is to develop existing
the hierarchy. approaches by integrating the Quality QFD with
9. Discuss the results and make the final decision. the Analytical Hierarchy Process by taking into
consideration the IT support department’s
Product Development Based on QFD requirements.
QFD defines customer needs compared to A comprehensive literature review carried out by
engineering characteristics, and assesses how the author covers the MCDM methods used from
relevant they are to those needs and desires. 2000 until 2019, listing the advantages and
It was established in Japan in 1966 and aims to help disadvantages of using each method or integrating
in transforming the voice of customers into it with others. The suggested process is the
engineering characteristics, and is commonly used integration of Wei’s et al. (2005) AHP process with
for designing, developing, and improving a Tidwell and Sutterfield’s (2012) suggested QFD
product. method.
Yoji Akao, the creator of this method, described it Figure 3 illustrates the concept of the created
as a "method to transform qualitative user demands model, HoQ is used in QFD to list and define the
into quantitative parameters" (Akao, 1994). customer needs from stakeholders - "the voice of
However, QFD is not common in other applications the customer (VOC)" - and to identify engineering
which require structured decisions or ranking characteristics and assess how relevant they are to
multiple criteria, including ERP systems and CRM those needs and desires. Then, the importance and
software selection. impact of each criterion are assessed using the AHP
Tidwell and Sutterfield (2012) proposed a five step while checking the consistency of the ranking in
approach to rank the supplier by applying only each step. The AHP is used to break down the
QFD. This research will adopt the first two steps of complex decision into smaller comparisons.
their approach and integrate them with the previous The decision-making team will collect and examine
steps of the AHP. the technical parameters from multiple sources,
Step 1. Use a cause and effect diagram (Ishikawa) including the vendor's websites, magazines, and
to determine the customers identified and collected internet articles. These criteria are to be collected
needs involved in the model by answering the after considering the vendors first nominated set
questions "what," "where," "when," "why," and (three to five nominees), selected on the basis of
"how". the company’s structure, size, and operating sector.
Step 2. Translate the needs collected from Step 1 Based on the stakeholders’ ranked requirements
into the necessary ERP software technical and the collected ERP technical characteristics, the
characteristics through the first House of Quality AHP is used again to obtain an optimal selection of
(HoQ) shown in Figure 2. Customer collected the alternative ERP software packages.
needs are assigned a rating in this step (using the
AHP) to determine the importance of each one;
then each of the ERP software characteristics is RESULTS AND EVALUATION
rated in terms of its effect on each of the ERP
software properties. This research proposes the following ten-step
Steps 3, 4 and 5. These steps involve rating the process for an AHP and QFD integrated method:
ERP software alternatives, and from this step, the start the model process by creating an initial
model presented in this study will continue with the structure, define its steps, and assess which data
AHP to obtain the rating for the most qualified and and criteria are missing.
best vendor.
Tidwell and Sutterfield (2012) concluded that their Creating the Model
model is limited because QFD contains no tool or Figure 4 shows the process of applying the
method for determining whether group selections integrated model. The process starts by collecting
have been made consistently, but this can be the needs of the company and the technical
overcome by combining QFD with the AHP. parameters, using VOC and a literature review (the
One of the distinct advantages of the integrating functional areas of ERP/CRM software and success
model is that stakeholders are considered by the use factors that can help determine the needs and the
of QFD, which is essential for a company’s technical parameters).
strategic goals. The other advantage is having a

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The ranking of needs comes next, using the AHP to • Hardware/infrastructure cost
determine which factors are the most important. • Integration/middleware cost
Then, within the QFD table comes the relationship • User-friendliness
matrix between the needs and the technical • Maintenance cost
parameters. This matrix will give the first result, • Software acquisition cost (initial cost)
which is the ranking of the technical criteria, which • Consultancy cost
can help the vendors in developing the CRM
• Scalability and upgradeability
product. Then, ranking the alternative options (the
• Stability and recovery capacity
CRM vendors) using AHP is carried out, which
• Security issues
will give the second result, which is the best
software package, based on customer needs. • Customization
Some criteria can be collected from professional
Step 1: Define the goal, problem statement, and websites sources such as Bergen (2019) and
hypothesis: The first step is to understand the Customer Relationship Management Software
existing problems in a chosen company or (2020), in order to select the one which relates to
department and set objectives to overcome them; the selected department in an IT company.
this is essential to provide the scope that will guide
the selection process, to help to identify involved Step 3: Form the decision-making team from the
stakeholders and to validate the results. stakeholders: Form the team that will work on the
model, including the collection of the requirements,
Step 2: Collect information about MCDM ranking, and the assessment of needs and the
methods and software success factors: It is vendors.
essential to have all the required information ready
before starting the implementation process; this Step 4: Define the needs and requirements:
will eliminate any unnecessary delay later on and Invite all stakeholders to provide and review
allow the decision-making team to have a full department requirements. One way of collecting
understanding of the tools used. information and suggestions would be to create a
The previous research literature review describes document in a cloud drive such as Google drive, or
how the integrated AHP and QFD model is use a special requirements management software
recommended and described the steps taken to programme.
perform each method in the selection process.
The scale in AHP rank is based on Saaty’s 1-9 Step 5: Define and collect technical criteria for
scale (Table 1). the selected software: Understand the
Uță, Intorsureanu and Mihalca (2007) presented the functionality of the software, then collect data and
criteria used to assess the different ERP systems, information about the selected vendors; these
separating the most appropriate criteria into two criteria will form the "How" part of the QFD
groups (technical team capability and ERP software Model.
package).
Step 6: Rank the department's needs and
Technical team capability: prioritize them: The needs are ranked according to
their importance using the MCDM AHP. w is
• Coverage of the required functionalities/norms
calculated (i.e. an m-dimensional column vector)
/regulations
by averaging the entries on each row of the
• Vendor reputation and portfolio
Standardized Matrix.
• Guarantees offered
• Technical support quality Step 7: Measure the consistency of the weighted
• Training services department needs: The consistency of the ranking
• Vendor financial conditions shows how accurately the decision-makers have
• Consultancy services quality determined the ranking:
• Market share/scale of the vendor
• Implementation ability 𝑋−𝑚
𝐶𝐼 =
• 𝑚−1
ERP Software Package:
• Operating system compatibility m = the number of examined criteria.
• Hardware requirements The scalar X is the average of the weighted needs
• Database engine compatibility divided by m.
• Integration with other platforms
∑ 𝑤𝑒𝑖𝑔ℎ𝑡𝑒𝑑 𝑛𝑒𝑒𝑑𝑠
• Accessibility to source code 𝑥=
• Documentation quality 𝑚
• Software license cost

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Using programmed software or a customized Excel efficiency, except for the disadvantages involved
spreadsheet using the matrix multiplication when using each method alone.
function MMULT() to measure the consistency, the Considering that stakeholders are essential for
decision-maker can see it directly and adjust his/her companies' strategic goals, the AHP does not
decisions to make them more consistent; decisions consider these goals, while QFD does. QFD
are perfect when CI=0, but other values up to 0.2 provides a full overview of the technical
can be accepted depending on the number of parameters and areas which need improvement but
ranking criteria and alternatives. The Random does not have a consistent tool to measure the
Index (RI) values are given from Saaty's CIr values reliability of decisions made by decision-makers.
for matrices (Saaty, 2008). The AHP consistency tool is used to avoid any
logical conflicts in their decisions, allowing them to
Step 8: Fill out the Relationship matrix: Perform reconsider their rank to reach a consistent judgment
the relationship matrix between the defined at the end.
requirements and the technical parameters within This research has two valuable outcomes; the first
the QFD matrix. This provides the first results for is that it creates a model specialized in ERP
the proposed model by ranking the technical software; it can be generalized to become a
criteria to define which technical parameters are the decision-making software programme or a website
most important ones that can help vendors develop which provides this service. The second is that it
their software. features an integrated model that helps companies
select the best software that meets their needs. It
Step 9: Rank the alternative using AHP: The aim would be fruitful to pursue further research in a real
is to rank the competitors’ software and select the case study to verify the efficiency of this integrated
best choice for the company based on their needs. model.
Using the final obtained matrix, i.e. the ‘score It has always been difficult to make decisions when
matrix (S)’. Each alternative's rank is calculated by there are many criteria involved, especially when it
the following formula: comes to essential, but sophisticated, software that
defines the company service and is the initial
𝑣 = 𝑆. 𝑤 interface that deals with customers.
This study offers a comprehensive, integrated
w is the weight vector of the needs approach that considers technical requirements and
S is the calculated score matrix stakeholders’ requirements. Creating this integrated
model overcomes existing disadvantages and
Step 10: Communicate the results: provides a solution that can deal with complex
By reviewing the literature from other researchers, problems.
the advantages and disadvantages of each method
used and possible improvements can be assessed. Acknowledgements
In conclusion, Based on Xie et al. (2011), Ho et al. The author would like to express special gratitude
(2010) and (Velasquez & Hester, 2013), the AHP to his Ph. D. supervisor, Dr. László Várallyai, for
with QFD integrated model is the best MCDM his administrative help in conducting this research
method for the selection of ERP Software in the IT part of the PhD programme at the University of
industry. Debrecen.
After filling the base structure of the model, the
AHP is used to break down the complex decision Biographical Sketch
into smaller comparisons, and the team starts the Hasan is a highly motivated Industrial Engineer
process by ranking the needs, and then the who graduated as the top student in his class, then
alternatives with consideration given to the ranked continued his education in Hungary and obtained
needs. an MSc in Engineering Management. He was able
to obtain practical work experience in international
companies during his studies, which provided him
CONCLUSIONS with strong managerial and problem-solving skills.
Currently, he is focusing on IT Management. His
This study aimed to propose a new integrated PhD is about the implementation of agile and lean
methodologically appropriate model to help management in IT companies.
decision-makers solve complex problems by
combining the AHP with the QFD method in the
field of MCDM. The formulated hypothesis was REFERENCES
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LIST OF TABLES

Table 1
The fundamental scale of absolute numbers

Intensity of
Definition Explanation
Importance
1 Equal importance Two criteria contribute equally to the objective
Moderate importance of one Experience and judgment slightly favor one
3
over another criterion over the other
Experience and judgment strongly favor one
5 Essential or strongly important
criterion over the other
Experience and judgment very strongly favor
Very strong or demonstrated
7 one criterion over the other; its dominance is
importance
demonstrated in practice
The evidence favoring one criterion over
9 Absolute importance another is of the highest possible order of
affirmation
Intermediate values between
2, 4, 6, 8 When compromise is needed
the two adjacent judgments

Source: (Saaty, 2008)

LIST OF FIGURES

Figure No. 1
AHP hierarchical structure model
Source: (Saaty, 1990)

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Figure No. 2
QFD house of quality (HoQ)
Source: ("Quality Function Deployment (QFD)," 2020)

Selection
AHP Model

QFD

VOC

Figure 3
Diagram shows the concept of the integrated model
Created by the author

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Figure 4
The process of applying the Integrated QFD and AHP model
Created by the author

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