J Med Syst (2011) 35:265275 DOI 10.

1007/s10916-009-9362-x

ORIGINAL PAPER

Strategic Enterprise Resource Planning in a Health-Care System Using a Multicriteria Decision-Making Model
Chang Won Lee & N. K. Kwak

Received: 26 May 2009 / Accepted: 3 August 2009 / Published online: 10 September 2009 # Springer Science + Business Media, LLC 2009

Abstract This paper deals with strategic enterprise resource planning (ERP) in a health-care system using a multicriteria decision-making (MCDM) model. The model is developed and analyzed on the basis of the data obtained from a leading patient-oriented provider of health-care services in Korea. Goal criteria and priorities are identified and established via the analytic hierarchy process (AHP). Goal programming (GP) is utilized to derive satisfying solutions for designing, evaluating, and implementing an ERP. The model results are evaluated and sensitivity analyses are conducted in an effort to enhance the model applicability. The case study provides management with valuable insights for planning and controlling health-care activities and services. Keywords Enterprise resource planning . Health-care system . Multicriteria decision making

Introduction In todays turbulent business environment, appropriate enterprise resource planning (ERP) is required for more efficient and strategic management decisions. The healthcare environment is no exception to this trend. Successful

C. W. Lee School of Business, Hanyang University, Seoul 133-791, South Korea e-mail: leecw@hanyang.ac.kr N. K. Kwak (*) Department of Decision Sciences and ITM, Saint Louis University, St. Louis, MO 63108, USA e-mail: kwakn@slu.edu

ERP adoption planning and implementation may permit decision-makers to overcome many of the challenges faced by health-care systems [1]. Such successful planning and implementation can deliver unprecedented opportunities to establish strategic ERP in health-care systems. Even though significant differences exist between manufacturing and health-care, ERP previously adopted and implemented for manufacturing is attempted for the health-care setting [2, 3]. Due to technology and organizational paradigm shifts, ERP in health-care settings may become more tightly coupled with financing, manpower, capacity, revenue, and admission resource functions. The successful linkages of these complicated processes perform a critical function affecting business performance in health-care settings [4, 5, 6]. A well-developed ERP in a health-care environment is a growing requirement for improving both profitability and productivity [7, 8, 9]. Although factors affecting business performance in a health-care system have been widely identified, monetary payoff and technical justifications are overemphasized. Intangible attributes and operational excellence with customer intimacy should be considered in the health-care ERP decision-making process. When health-care management considers several conflicting goals to be achieved, multicriteria decisionmaking (MCDM) models enable effective results in the strategic ERP process and other operational environments. Subjective decision-making processes related to conflicting health-care business problems with trade-off relationships may produce the worst possible situation. Appropriate ERP strategies must be established on a compromise-based and objective decision-making process among diverse stakeholders in the health-care system. However, attempts to resolve such complicated and multidimensional health-care managerial decision concerns via an application of MCDM models have not been well

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recognized as the best application for ERP in health-care systems. In particular, the integrated approach of goal programming (GP) and the analytic hierarchy process (AHP) is rarely applied to the handling of an ERP adoption process, considering admissions, capacity, financing, manpower, and revenue planning as key ERP areas in a healthcare system. The purposes of this study are as follows: (1) to develop an integrated multicriteria decision-making model aimed at designing, evaluating, and implementing a strategic ERP for health-care planning, and (2) to provide strategic managerial insights where the decision-making model can successfully implement ERP process in health-care and other similar settings. The first section of this paper introduces current research issues in both MCDM and strategic ERP process in a health-care setting. The second section provides a review of ERP and MCDM models. The third section describes the background of the case study, along with the description of data collected for the study. The fourth and fifth sections presents the application of the model to a real-world setting. The sixth section presents analysis and discussion of the model results and sensitivity analyses. The seventh section provides the conclusions of the study.

turing systems is not easily applicable to health-care systems. Moreover, difficulty of clinical standardization hinders the adoption of ERP for health-care business and clinical system integration. However, ERP allows healthcare systems to integrate fully many business resource activities and functions that are not necessarily connected between decision processes and activities in clinical resources. Recent ERP system in health-care settings is more advanced to health/hospital information system perspective. It is extended to integrate with customer relationship management (CRM), supply chain management (SCM), and clinical decision support system (CDSS). ERP issues and applications are also treated in clinical informatics [14], cultural issues [15], implementation [16, 17], and technology empowerment [18]. Multicriteria decision-making The multicriteria decision-making (MCDM) model is defined as a mathematical model of a decision process that allows the decision-maker to assess a variety of competing alternatives to achieve a set of goals. In MCDM, a decisionmaker must select the best overall decision among a number of alternatives that are evaluated on the basis of multiple criteria. Goal programming (GP) is one of the most extensively utilized MCDM models [19, 20]. GP is a mathematical programming model which deals with multiple conflicting and non-commensurate objective problems. It is a mathematical model that establishes a specific numeric goal for each of the objectives, formulating an objective function along with goals, then seeking a solution that minimizes the sum of the deviations of these goals. Analytic hierarchy process (AHP) is a more generally accepted remedy by which the priorities of preemptive goals can be established. AHP utilizes hierarchical structures to represent a decision-making problem and then develops priorities for the alternatives on the basis of decision-makers judgments throughout the decisionmaking process. The procedure requires the decisionmaker to judge the relative importance of each criterion and specify a preference on each criterion for decision alternatives based on pairwise comparisons for elements in hierarchy using the pairwise comparison matrix. For estimation of relative importance for the decision problems, the decision-makers perform synthesization and compute eigenvalues and eigenvectors that are used for measuring consistency. The value of consistency in judgment is determined by the smallest eigenvector. The result is that the smaller the value of consistency, the smaller the value of eigenvector. The value of the consistency ratio of 0.10 or less is considered to be acceptable. AHP technique provides a measure of consistency of comparisons by a consistency ratio. The AHP results are a prioritized relative importance

Literature review Enterprise resource planning Enterprise resource planning (ERP) is defined as a business philosophy to achieve effective business value creation and enhance operational excellence with internal and external customer intimacy via an integration of activities, processes and functions. ERP is configured by a system that integrates flows of information, materials, and monetary transactions. ERP has evolved from material requirement planning (MRP), followed by manufacturing resource planning (MRP II). ERP has expanded to ERP II that integrates supply chain management (SCM) and customer relationship management. Recent ERP systems provide management with tangible and intangible advantages and strategic competitiveness, as well as new business values via business process innovation [10, 11, 12]. ERP adoption strategy is identified as an extremely complicated MCDM concern. It is complicated because varied tangible and intangible attributes have to be considered in the ERP adoption decision-making process [13]. Since the ERP concern deals with practical applications, many researchers have applied diverse methodologies to real-world ERP adoption situations. Due to the paradigm differences between manufacturing and health-care industries, a typical ERP used in manufac-

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implying the overall preference for each decision alternative. (For a detailed description of the AHP technique including eigenvalues and eigenvectors,1 see [21, 22].) MCDM applications in health-care settings have spread into various areas, including allocation of health resource [23], business process reengineering [24], health policy [25], medical assessment [26], medical decision [27], regional resource [28], resource allocation [29], surgical case [30], and surgical waiting lines [31].

Problem statement Data background The Fatima Hospital for this study is a leading patientoriented health services provider in Korea. Its mission is to support the institution by providing a financially sound environment for health-care services. Its goal is to provide high quality and cost-effective health services, while enriching the organizations mission. The hospital has built a new comprehensive building with intelligent functions. The hospital system recently invested financial funds for the construction of an ultra-modern building and established another budget to adopt newly integrated ERP. The hospital borrowed additional funds from a financial institution. As the dynamics of the demanding marketplace and the requirements associated with competitive advantage have changed, the need for strategic decision-making models for ERP in the health-care system has been emphasized. The health-care system has been faced with challenges in the areas of financing, manpower, capacity, revenue, and admission resource functions. Management wants to provide better services for patients in the health-care organization. Among 26 departments, 20 OB/GYN/pediatrics departments, five surgery departments, and one internal medicine department were selected for this study since they are the most competitive areas in this organization. Group decision-makers consisted of a chief of health science center, chief information officer (CIO), and project managers in the health-care system. A consulting firm also participated in the overall review process. The associated goals and criteria were created by the task force team
Note: Eigenvalues and eigenvectors are derived from the German word eigen which means proper or characteristics. In matrix algebra, an eigenvalue of a scalar matrix is a scalar that is usually represented by the Greek letter (lambda). An eigenvector is a non-zero vector, commonly denoted by the smaller letter x. All eigenvalues and eigenvectors satisfy the equation Ax = x for a given square matrix A. Definition: Consider the square matrix A. It is called that is an eigenvalue of A if there exists a non-zero vector x such that Ax = x. In this case, x is called an eigenvector (corresponding ), and the pair (, x) is called an eigenpair for A.
1

(TFT). Data templates relevant to the strategic ERP proposal were derived. On the basis of the dataset, an initial proposal of the ERP adoption was established. An initially proposed ERP was re-evaluated in terms of managerial and/or technical aspects of goals and criteria establishments. It was validated and adopted by management with minor modifications. Even though an ERP system in the market and practice is currently considered as a business information system itself, such as the one by SAP or ORACLE, the real purpose of ERP is on effective and efficient resource allocation. Ultimately, this will result in improving patient safety and quality of care. Thus, this study is focused on the context of effective and efficient ERP resource allocation in health-care settings.

Model development Goal prioritization Establishing goal decomposition and prioritization is completed for the MCDM model application in strategic ERP. A synthesized priority is calculated for each goal in order to obtain the overall relative importance of the five goals using the AHP. Figure 1 shows individual criteria and goals of the MCDM model. It presents the criteria to utilize for prioritizing goals in this study. Four criteria are considered for the strategic ERP in the health-care system. Goals are listed in order of priority. Financial resource goal Table 1 presents an operational measurement matrix for the financial resource goal (G1). This resource goal has the following two sub-goals: (1) prepare a proper fund for service expenditure and (2) supply an appropriate budget for information facilities.
Criteria Goals
Financing Resource Cost Manpower Resource Quality Revenue Resource ERP Flexibility Capacity Resource

Delivery

Admission Resource

Fig. 1 Individual criteria and goals for ERP

268 Table 1 Financial measurement matrix Operational matrix Total service revenue Total service expenditure Information facilities budget Values ($000) 31,124 30,252 2,088

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visit type (first visits or revisits). Identifying these characteristics is very important to estimate the potential profitability of the hospital system. Three major divisions have an annual admissions goal of 15,000 patients per month. For example, 70% of 15,000 patients are expected as first visit residents. This estimation is important for planning utilization of the system. Normalized eigenvectors Table 4 illustrates the relative importance with normalized eigenvectors with respect to each criterion that the task force team developed. It also illustrates the final prioritization for goals of health-care strategic ERP using the AHP. This table presents the relative priority (RP) and the order of prioritization. Decision-makers have justified the synthesized prioritization of the overall goals for the strategic ERP in the health-care system under consideration. Synthesized detail results by AHP are provided in the Appendix. The output of Appendix provides the decisionmaker with a prioritized ranking indicating the overall preference for each of the decision alternatives. It enables the decision-maker to handle problems in which the subjective judgment of individual decision-maker constitutes an important role of the decision-making process. Based on the above data, the goal priorities and the relevant information on ERP are established as follows: priority 1 (P1)financial goal (G1), priority 2 (P2) manpower goal (G2), priority 3 (P3)revenue goal (G3), priority 4 (P4)capacity goal (G4), and priority 5 (P5) admissions goal (G5). In general, MCDM models for health-care management are limited to addressing financial goals, rather than other strategic policies of an organization. In this paper, an MCDM model is formulated based on the following information.

Manpower resource goal Manpower resource goal (G2) has two sub-goals to achieve: (1) optimize the human resource utilization and (2) honor the payroll increase agreement. Table 2 exhibits the salary levels in various human resources types and total manpower level. Revenue resource goal Revenue resource goal (G3) has two sub-goals to achieve: (1) limit the increase in total revenue and (2) achieve the profitability requirement. Capacity resource goal Capacity resource goal (G4) is related to hospital utilization in each departmental level as follows: (1) minimize the under-achievement of the accommodation goal; (2) optimize hospital utilization with three department levels; and (3) optimize the hospital capacity for new patients. Table 3 presents the related capacity resources. Admissions resource goal Admission resource goal (G5) is also exhibited in Table 3. There are three sub-goals to achieve in the admission resource maximization as follows: (1) minimize the underachievement of resident goal; (2) minimize the overachievement of the admissions goal of non-resident patients; and (3) attain the admissions goal of first-visit patients. Characteristics of patients are divided by residency status (resident in the city or non-resident in the city) and
Table 2 Human resources types and salary levels Human resources type Physician group Nurse group Senior technician Technician Line management Senior management Total Base salary level 4,053 11,645 914 1,460 1,313 1,082 20,467 Total manpower 37 166 10 39 53 13 318

MCDM problem formulation MCDM is appropriate for situations in which the decisionmaker must consider multiple criteria in arriving at the best overall decision. The MCDM model can be expressed in the following generalized form for preemptive goal programming: Minimize: Z
K X m X k1 i1 m X i1

wi Pk d i di

subject to:

aij Xj d i di bi ;

j 1; 2; . . . ; n

X j ; d i ; di ! 0; i 1; 2; . . . ; m; j 1; 2; . . . ; n

J Med Syst (2011) 35:265275 Table 3 Maximum number of monthly admissions and its capacity Patient type FVRP RVRP FNRP RNRP Total capacity OB/GYN/pediatrics 1,800 5,700 1,500 2,500 9,000 Surgery 900 1,900 400 800 3,500 Internal medicine 850 2,100 550 1,200 4,000 Total demand 3,550 9,700 2,450 4,500 20,200 16,500

269

Patient ratioa 0.7 0.7 0.4 0.5

FVRP first-visit residential patient, RVRP revisit residential patient, FNRP first-visit non-residential patient, RNRP revisit non-residential patient
a

Each ratio is independent probabilities

where: Z w Pk
d i ; di

B R R S where XA i , Xi , Xi , Xi , and Xi ! 0.

aij bi

the sum of the weighted deviational variables, a weight assigned to a priority, a preemptive priority for the kth P of m goals (k= 1, 2,, K), negative and positive deviational variables describing under- and over-achievement of the ith goal, technical coefficients for the decision variable Xj, the right-hand-side (RHS) value for the ith goal constraint.

Constraints The MCDM model in this study has 12 system constraints and 24 goal constraints. Since the system constraints do not have deviational variables, these variables will not appear in the objective function. System constraints System constraints (112): The number of various group patients cannot exceed the maximum level of accommodation in each patient category (see Table 3). That is: XA 1 bi ; i 1; 2; . . . ; 12 112

Decision variables There are four different types of decision variables embracing 28 decision variables in this study. They are: XA i XB i XH i XR i XS i numbers of admissions in patient group i (i=1, 2,, 12), financing resource levels for services expenditure (i=1) and for information facilities (i=2), human resource levels in different types of work (i = 1, 2,, 6), amounts of health services revenue in health services type i (i=1 and 2), salary level based on health services type i (i=1, 2,, 6),

1; 800; XA 900; XA 850; XA 5; 700; Thus, XA 1 2 3 4 A A A X5 1; 900; X6 2; 100; X7 1; 500; XA 400; 8 A A A XA 550; X 2 ; 500; X 800; and X 1 ; 200. 9 10 11 12 Goal constraints Priority 1. (P1): Financial resource goal (G1) has two sub-goals. Sub-goal 1: Prepare proper budgets for service expenditure considering economic trends. This

Table 4 Relative importance (normalized eigenvectors) COST Financing (G1) Manpower (G2) Capacity (G4) Revenue (G3) Admissions (G5) CRP 0.254 0.183 0.278 0.209 0.076 0.121 QUAL 0.398 0.241 0.100 0.171 0.090 0.269 FLEX 0.280 0.362 0.162 0.088 0.108 0.417 DELI 0.235 0.159 0.117 0.368 0.121 0.193 RP 0.300 0.269 0.151 0.178 0.102 1.000 Rank 1 2 4 3 5

COST cost criteria, QUAL quality criteria, FLEX flexibility criteria, DELI delivery criteria, RP relativity priority, CRP criteria relative priority

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right-hand-side (RHS) value is an increased amount over total service expenditures of 30,252 (see Table 1).
XB 1 d1 d1 2; 520

XS 5 d13 d13 1; 313

25

13

XS 6 d14 d14 1; 082

26

Sub-goal 2: Supply an appropriate budget for information facilities (see Table 1).
XB 2 d2 d2 2; 088

Priority 3. (P3): Revenue resource goal (G3) has two sub-goals. Sub-goal 1: Achieve total revenue increase from the current level in terms of profitability and sustainability in the health-care system. The RHS value is an increased amount over total service revenue amounts of 31,124 (see Table 1).
XR 1 d15 d15 2; 860

14

Priority 2. (P2): Manpower resource goal (G2) has two sub-goals. Sub-goal 1: Meet the effective utilization of the required human resource level (see Table 2).
XH 1 d3 d3 37

27

15 16 17 18 19 20

XH 2 d4 d4 166

Sub-goal 2: Achieve the increased profitability level of 340. This amount is the difference between the expected increase in revenue (2,860) and the expected increase in expenditure (2,520).
XR 2 d16 d16 340

XH 3 d5 d5 10

28

XH 4 d6 d6 39

Priority 4. (P4): Capacity resource goal (G4) has three sub-goals. Sub-goal 1: Meet the current capacity of 16,500 (see Table 3).
A A A A 0:7XA 1 0:7X2 0:7X3 0:8X4 0:8X5

XH 5 d7 d7 53

XH 6 d8 d8 13

A A A 0:8XA 6 0:4X7 0:4X8 0:4X9 A A 0:5XA 10 0:5X11 0:5X12 d17

Sub-goal 2: Achieve the payroll increase agreement by certain percentage points required from the current salary level (see Table 2). That is, the RHS values are the sum of the current salary amount plus the salary increase proportion.
XS 1 d9 d9 4; 053

d 17 16; 500 29 Sub-goal 2: Meet the hospital resource utilization capacity to handle a total capacity of 9,000 patients in OB/GYN/Pediatrics, 3,500 in surgery, and 4,000 in internal medicine (see Table 3).
A A A XA 1 X4 X7 X10 d18

21

XS 2 d10 d10 11; 645

22

30

d 18
XS 3 d11 d11 914

9; 000 31

23
A A A XA 2 X5 X8 X11 d19

XS 4 d12

d 12

1; 460

24

d 19

3; 500

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A A A XA 3 X6 X9 X12 d20

271

32

Objective function
Minimize : Z P1 P 3
2 X i1 16 X i15

d 20

4; 000

Sub-goal 3: Meet the hospital admission capacity goal of 15,000 expected new patients in three divisions.
A A A A A A A XA 1 X2 X3 X4 X5 X6 X7 X8 A A A XA 9 X10 X11 X12 d21 d21

d i d i P 2 d i d i P 4

14 X i3

d i di

21 X d i d i i17

P5 d 22 d23 d24 d24

15; 000 33 Priority 5. (P5): Admissions resource goal (G5) has three sub-goals. Sub-goal 1: Minimize the under-achievement of the goal of 70% admission for residential patients (FVRP and RVRP) in total visits.
A A A A 0:3XA 1 0:3X2 0:3X3 0:3X4 0:3X5 A A A 0:3XA 6 0:7X7 0:7X8 0:7X9

Therefore, the integrated MCDM model for strategic ERP in the health-care system is to minimize the value of the objective function subject to goal constraints 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, and 36, satisfying the preemptive priority rules.

Table 5 Analysis of decision variables and its solutions Decision variables Solution values 1,800 900 850 5,700 1,900 2,100 1,500 400 550 2,500 800 1,200 2,520 2,088 37 166 10 39 53 13 4,053 11,645 914 1,460 1,313 1,082 2,860 340

0:7XA 10

0:7XA 11

0:7XA 12 d22 0

34 Sub-goal 2: Minimize the over-achievement of the 30% admission goal for non-residential patients (FNRP and RNRP) in total visits.
A A A 0:3XA 1 0:3X2 0:3X3 0:3X4 A A A 0:3XA 5 0:3X6 0:7X7 0:7X8 A A A 0:7XA 9 0:7X10 0:7X11 0:7X12

d 23 0 35 Sub-goal 3: Meet the 60% goal for revisit patients (RVRP and RNRP) in total visits.

A A A 0:6XA 1 0:6X2 0:6X3 0:4X4 A A A 0:4XA 5 0:4X6 0:6X7 0:6X8 A A A 0:6XA 9 0:4X10 0:4X11 0:4X12 d 24 d24 0

36

XA 1 XA 2 XA 3 XA 4 XA 5 XA 6 XA 7 XA 8 XA 9 XA 10 XA 11 XA 12 XB 1 XB 2 XH 1 XH 2 XH 3 XH 4 XH 5 XH 6 XS 1 XS 2 XS 3 XS 4 XS 5 XS 6 XR 1 XR 2

272 Table 6 Analysis of the objective function for strategic ERP Goal priority P1 P2 P3 P4 P5 Output values 0 0 0 11,925 3,860 Goal achievement Fully achieved Fully achieved Fully achieved Not achieved Not achieved Deviational variablesa

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d 17 3; 025 d 18 2; 500 d 19 500 d 20 700 d 21 5; 200 d 22 890 d 23 890 d 24 2; 080

All other deviational variables are zeros

Analyses and discussion Model results

Priority 3 (P3) is the revenue planning goal (G3) with two sub-goals of total revenue increase rate and profitability fulfillment. This priority is fully satisfied, since P3 =0. The related deviational variables (d 15 , d15 , d16 , and d16 ) are zero. Priority 4 (P4) is the capacity planning goal (G4) with three sub-goals: the accommodation level, hospital utilization, and hospital admissions level. This priority is not fully satisfied, since P4 =11,925. The related deviational varia bles are not zero (d 17 3; 025, d18 2; 500, d19 500, d20 700, and d21 5; 200). Priority 5 (P5) is on admissions for residential patients d22 , admissions for non-residential patients d 23 , and admissions for revisit patients (d 24 and d24 ). This priority is not fully satisfied, since P5 =3,860. The related devia tional variables are not zero (d 22 890, d23 890, and d24 2; 080). Sensitivity analysis

The proposed model is solved by optimization-based software packages, AB:QM [32] and Management Scientist [33] with minor modifications (e.g., salary amounts, capacity, and admissions demand numbers are adjusted for the software format) to satisfy software requirements. The solution is derived after 43 iterations. The possible solutions are enumerated at the first goal priority level and reduced at each subsequent goal priority level until overall goal satisfaction is no longer achieved. Tables 5 and 6 illustrate the computer solution of the model results. The financial planning goal (G1) is the most important goal in this MCDM model for strategic ERP in the healthcare system. Priority 1 (P1) has two sub-goals: prepare appropriate funds for both service expenditure (d 1 and d1 ) and information facilities d2 and d2 ). This priority is fully satisfied, since P1 =0. All related deviational variables are zero (d 1 , d1 , d2 , and d2 0). Priority 2 (P2) with manpower planning goal (G2) has two sub-goals: manpower utilization and payroll increase agreement. This goal is fully satisfied, since P2 =0. All positive and negative deviational variables d 3 ; d3 ; d 4 ; d 4 ; . . . ; d14 ; d14 are zero.

Sensitivity analysis is an evaluation method that is used once a satisfying solution has been found. This analysis provides management with potential alternatives based on how the acceptable result is affected by changes in the input data. Two aspects are highlighted in this study: (1) analysis of the goal conflict and (2) changes in priority level. This analysis can be utilized to resolve complicated problems at less cost. The elements in this problem are approximated at best, which makes it necessary to evaluate more than one business scenario. Table 7 illustrates goal conflicts among the selected goal priorities. Priorities P4 and P5 are relatively not sensitive due to the ranges of 890 and 2,967 in d 22 and 2,080 and 3,467 in d . Thus management may not need to be 24 concerned about a goal conflict between two goals in this study situation. Table 8 shows the change in the objective function. In the original goal settings, each sub-goal is equally important within a certain priority level. For the sensitivity analysis perspective, the strategic task force team agrees to make different priorities to each sub-goal. Based on the

Table 7 Analysis of goal conflicts Goal conflicts P4 P4 P4 P4 P4 P4 vs. vs. vs. vs. vs. vs. P5 P5 P5 P5 P5 P5 Related variables Allowable increase 890.00 890.00 890.00 2,080.00 2,080.00 2,080.00 Allowable decrease 2,966.66 2,966.66 2,966.66 3,466.66 3,466.66 3,466.66 Marginal substitution rate (0.2, (0.2, (0.2, (1.2, (1.2, (1.2, 1.2) 1.2) 1.2) 1.3) 1.3) 1.3)

d 22 d 22 d 22 d 24 d 24 d 24

vs: XA 1 vs: XA 2 vs: XA 3 vs: XA 4 vs: XA 5 vs: XA 6

J Med Syst (2011) 35:265275 Table 8 Analysis of effect by changes in objective function for strategic ERP Revised priority P1 =0 P2 =0 P3 =0 P4 =0 P5 =0 P6 =0 P7 =12,095 P8 =3,700 P9 =3,300 P10 =890 P11 =890 P12 =2,080 Goal achievement Fully achieved Fully achieved Fully achieved Fully achieved Fully achieved Fully achieved Partially achieved Partially achieved Partially achieved Partially achieved Partially achieved Partially achieved

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relationship. Thus, most health-care managements give the patient care indicators preemptive goals, placing less emphasis on effective and efficient resource allocation. However, proper management of admissions, capacity, financing, manpower, and revenue will enhance the level of patient satisfactionthe most important key performance indicator of the todays health-care setting.

Concluding remarks Health-care business environments are rapidly changing, and increasingly involve global, multifarious, and complex decision-making problems. The emerging health-care environment in Korea provides new business markets to management. The recent application of the MCDM model in health-care organizations and other managerial areas take advantage of opportunities to establish a strategic plan and to take action in real-world settings. The MCDM model, in particular the combination of GP and AHP, may certainly represent one of the most useful planning tools in aiding health-care decision-making processes for enterprise resource planning (ERP) adoption strategy under multiple-criteria decision-making situations. The reason for this is that satisfying behavior makes sense when an organization can pursue sufficiently satisfying profits to overcome potential competition to stave off possible regulations, or to thwart pressures from the demands for higher wages. Thus, the satisfying principle is substantially meaningful in analyzing competitive and other environmental situations faced by the system. The principal contributions of this case study in academia and in practice are as follows: (1) the MCDM model improves a practical way for strategic ERP adoption decision, considering both financial and non-financial business factors, (2) healthcare ERP planning studies enhance long-term organizationwide issues including admissions, capacity, financing, and manpower resources, which can be applied in a limited fashion to the previous studies, and (3) the study proposes an integrated MCDM model that most previous ERP studies in health-care settings have not explored. However, some limitations should be realized. The commercialized software employed in this case study may not always fit into all health-care business settings. Some of the data employed in this study had been slightly modified to meet a software system requirement, even though the modified data did not degrade the overall solution. The decision-making groups in the health-care organization accepted the final results as both valid and feasible for the implementation of strategic resource planning in their realworld situation. The health-care organization embarked on its strategic ERP adoption plan with its ongoing base. The effects and outcomes from this model will be scrutinized over the next two or three fiscal years. The future ERP agenda will be

new scenario, goals have a total of 12 priorities. Among the 12 priorities, the first six goals are fully achieved, since P1 to P6 are all zeros. In this decision-making model, a non-dominated solution has been sought. A non-dominated solution is defined in the following manner: a feasible solution to a multicriteria decision-making problem is non-inferior, if no other feasible solutions derive an improvement in one objective without creating a trade-off in another objective. Regardless of the weighting structures and the goals, this model can lead to inferior, sub-optimal solutions. These solutions are not necessarily the optimal ones available to the decision-maker. Opportunity costs are given as well as the increases and decreases in the values of the coefficients and the right-handside elements. Management can determine in advance what will happen if the outcome deviates from the overall objectives. In this case study, management can use the information from the solutions to alter their decision variables as any plan can come up with the new satisfying solution. The MCDM model for this case study gives decisionmakers the ability to improve business performance and productivity through appropriate decision-making techniques. More appropriate MCDM models can be established by decision-making groups with diverse organizational views in decision-making processes. With this perspective, the MCDM model can be one of the most promising options, increasing core business competition in the new market environment. The MCDM model in a health-care system is presented and analyzed to aid total ERP scheme. The health-care system in this study considers the proposed planning as a potential business strategy. Since patient safety and quality of care are primary indicators in health-care settings, patient care indicators and management indicators are usually considered as a trade-off

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reassessed in order to compare it with the proposed ERP decision-making model. The strategic plan predicated on the proposed MCDM model will provide the management with significant insights by which appropriate process planning will be established. It will also enhance the level of patient

satisfaction and other stake-holders needs (considering patient safety and quality of care), leveraging up competitive advantages of this health-care organization. Thus, the organization currently reviews all these proposals as valid alternative strategies.

Appendix

Table 9 Excel-based AHP results of criteria and resources in ERP strategy FIN COST FIN MAN CAP REV ADM QUAL FIN MAN CAP REV ADM FLEX FIN MAN CAP REV ADM DELI FIN MAN CAP REV ADM CR Rank MAN CAP REV ADM RP CRP 0.121 1 1/2 2 1/2 1/3 1 1/2 1/4 1/2 1/4 1 2 1/2 1/4 1/3 1 1/2 1/2 3 3 0.300 1 2 1 2 1/2 1/2 2 1 1/2 1/2 1/3 1/2 1 1/2 1/3 1/2 2 1 1/2 3 1 0.269 2 1/2 1/2 1 2 1/4 4 2 1 2 1 2 2 1 1/2 1/2 2 2 1 5 1/2 0.151 4 2 2 1/2 1 1/2 2 2 1/2 1 1/2 4 3 2 1 1 1/3 1/3 1/5 1 1/2 0.179 3 3 2 4 2 1 4 3 1 2 1 3 2 2 1 1 1/3 1 2 2 1 0.102 5 0.254 0.183 0.278 0.209 0.076 0.269 0.399 0.241 0.100 0.171 0.090 0.417 0.280 0.362 0.162 0.088 0.108 0.193 0.235 0.159 0.117 0.369 0.121 5.067 0.015 5.161 0.036 5.056 0.012 max 5.068 CR 0.015

FIN financing resource, COST cost criteria, MAN manpower resource, QUAL quality criteria, CAP capability resource, FLEX flexibility criteria, REV revenue resource, DELI delivery criteria, ADM admission resource, RP relative priority, CRP criteria relative priority, max the smallest eigenvector of a matrix A, CR consistency ratio

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