Article

A Comparative Analysis of Asia-Pacific Journal of Management

Research and Innovation

Multi-criteria Decision Models

12(3&4) 250–270
© 2017 Asia-Pacific
Institute of Management
for ERP Package Selection for SAGE Publications
sagepub.in/home.nav
Improving Supply Chain Performance DOI: 10.1177/2319510X16688988
http://apjmri.sagepub.com

Indranil Ghosh1
Sanjib Biswas1

Abstract
Advancement in information and communication technology (ICT) has turned information as one of the key organisational resources
for managing business operations. In this information age, one of the key strategic considerations for achieving competitive advantage
involves an information intensive supply chain management (SCM), integrating all the activities and partners beyond the enterprise
boundaries. Enterprise resource planning (ERP) forms the backbone of such extended enterprises. There has been a growing interest
of the organisations to invest in the ERP solutions. However, selection of an appropriate ERP package plays a critical role in achieving
the business objectives. In this article, we have identified the criteria for selecting an appropriate ERP package. Further, we have used
different multi-criteria decision analysis (MCDA) methods for ranking of the alternative ERP packages to select a suitable one. A
comparative analysis has been carried out. Some future scopes of work have also been highlighted.

Keywords
Enterprise resource planning (ERP), multi-criteria decision analysis (MCDA), supply chain management (SCM), Decision-making Trial
and Evaluation Laboratory (DEMATEL), exploratory factor analysis (EFA)

Introduction operations across the entire value chain. In order to mitigate

Over the last few decades, organisations across the globe
have witnessed a transformational change in business
operations. The definition of competitive advantage has
undergone radical modification due to sublime growth in
technology and the changing nature of the global market.
Over the years, the organisations have been confronted
with shorter product life cycle, challenges of disruptive
innovations, requirements for supreme quality and service
along with the pressure imposed by the fleeting lead time.
In order to operate fast while being flexible and economi-
cal, the focus of the organisations has been shifted from the
efficiency of the individual operations to the effectiveness
of the entire system. In the present age, the competitive
strategy essentially focuses on building the dynamic capa-
bilities of a supply chain while operating in a volatile
business environment. This stimulates the importance of
having collaboration and integration of all the business
business risks while operating in the uncertain business
environment, collaborative supply chain management (SCM)
has become one of the key enablers of success today.
The advent of web 2.0 has put forward an unprecedented
opportunity in front of the organisations to operate with
data-driven insight and take informed strategic decisions. It
enables the organisations to quickly respond to the changes
by taking appropriate decisions on time and avail new
opportunities while operating as an extended enterprise.
The electronic supply chain management (e-SCM) provides
a platform for the members of the supply chain to share the
information on time to operate collaboratively in the global
marketplace for achieving business objectives. This has
been reflected in the substantial investments in the
information technology (IT) made by the organisations
over the years. The enterprise resource planning (ERP) is
an integrated system which provides support to all the core

1 Assistant Professor, Calcutta Business School, Diamond Harbour Road, Bishnupur, West Bengal, India.

Corresponding author:
Sanjib Biswas, Assistant Professor, Calcutta Business School, Diamond Harbour Road, Bishnupur 743503, 24 Parganas (South), West Bengal, India.
E-mail: sanjibb@acm.org
Ghosh and Biswas
business processes across the entire supply chain. It enables
the organisations to integrate various business processes
across the extended enterprise for consolidation and
optimisation of the resources (Mabert et al., 2003). In
essence, ERP helps to share information and knowledge
among the members of the supply chain for improving the
efficiency and effectiveness of the business operations,
reduction of cost and better governance (Aladwani, 2001).
It aims to bring synergy among different processes to
harmonise cross-organisational applications and procedures
(Wier, Hunton, & HassabElnaby, 2007). In effect, it
facilitates an uninterrupted flow of the functional
information, which in turn enhances the capability of the
supply chain and improves its performance. Embracing the
benefits of ERP, organisations can elevate their competitive
capabilities and withstand business risks imposed by the
uncertain business environment.
In this article, we have highlighted the importance of
the ERP system in the context of supply chain perfor-
mance and competitive advantage. We have summarised
different criteria for selecting an appropriate ERP package.
By conducting an exploratory factor analysis (EFA), we
have listed appropriate criteria for ERP package selection.
Based on those criteria, we have applied multi-criteria
decision analysis (MCDA) techniques like Technique for
Order of Preference by Similarity to Ideal Solution
(TOPSIS), Decision-making Trial and Evaluation Labo-
ratory (DEMATEL) and Measuring Attractiveness by a
Categorical Based Evaluation Technique (MACBETH) to
rank different commonly available ERP packages. Here,
we have presented a comparative analysis of the results
obtained from different MCDA techniques to arrive at an
appropriate decision. The future scope of work is also
included.
The remainder of this article is organised as follows.
The next section discusses the importance of ERP vis-à-vis
supply chain performance. The section after that reviews
the importance of ERP package selection and different
criteria for selection. The ‘Selection of criteria’ section
presents the results of EFA for selecting the appropriate
selection criteria for ERP package selection. In section
‘Ranking of ERP packages using DEMATEL and TOPSIS
methods’, ranking of the commonly used ERP packages
based on the selected criteria is carried out using TOPSIS
and DEMATEL methods. In ‘Ranking of the ERP packages
using MACBETH method’ section, the ranking is carried
out using MACBETH technique. The next section presents
the comparative analysis of the rankings using different
methods. Finally, the last section concludes the article
while mentioning the future scope of work.
Impact of ERP on Supply Chain
Performance
The rise in technology and the changing nature of the
competition have transformed the concept of business
251
excellence. Balancing of the operations, enhancement of
productivity, quality of the products and services, and
reduction in the cost are no longer the order winners. These
criteria have become mere order qualifiers. Ensuring
capability to promise what the customers want such as
variety in the products and services, faster and convenient
delivery, innovative products and services at affordable
cost have opened up a new frontier in business excellence.
The present age is witnessing the competition among the
supply chains instead of the organisations. Experts believe
that the survival of the organisations in the coming age
shall depend on the ability of harmonisation, that is, with
the ability to operate with a network of the networks.
Hence, it invokes transformational change in the perceived
meaning of SCM. The scope of SCM has been broadened
up with the advent of the network economy (Arthur, 1996).
Vertical excellence has been outplayed by the horizontal
synergy. The fundamental concept of the supply chain as a
single entity consisting of all the functional areas such as
purchasing, manufacturing and distribution, responsible
for providing value-added products and services to the
customers (Christopher, 1992), has been elevated to a
much wider perspective. Supply chain in the present age
represents the network of businesses and synchronisation
of relationships (Lambert & Cooper, 2000) in order to meet
the demands of the ever-changing market in a customised
and transparent way (Jensen, 1999) at the pace at which the
business world is evolving (Brown & Eisenhardt, 1998). In
essence, SCM is the integration of the core business
processes across the entire chain. The crucial considerations
for this integration include: (i) identification of critical
supply chain members; (ii) identification of the processes
to be linked; and (iii) identification of the nature and level
of integration (Lambert, 2006).
Fine (1998) argued that effective supply chain design
unifies the chains of different dynamic capabilities instead
of fostering collaboration among different organisations.
This dynamic view of supply chain well reflects the
evolving nature of SCM, consistent with the changing
nature of the markets. In this context, the author compared
the rate of change in the products, processes, technologies
and organisational dynamics with the clock speed (referred
as industry clock speed). According to him, the prime
supply chain design commensurates with superlative SCM.
Essentially, there are three perspectives for effective supply
chain design: (i) organisational supply chain that
emphasises on the value-added activities being performed
across the chain; (ii) capable supply chain which identifies
key business capabilities and competence; and (iii)
technology supply chain which focuses on key technologies
(Fine, 1998). Kashyap (2011) recognised supply chain
design as a core competency. The order-winning supply
chain strategy has two essential considerations: efficiency
for supplying functional products by performing physical
252 Asia-Pacific Journal of Management Research and Innovation 12(3&4)
functions and responsiveness for supplying innovative
products by carrying out the market mediation functions
while maintaining the agility (Cheung, Cheung, & Kwok,
2012; Fisher, 1997).
With the development in information and communica-
tion technology (ICT), SCM has witnessed a paradigm
shift. There has been a growing use of ICT in integrating
the business operations like procurement, manufacturing
and logistics to provide value-added products and services
to the end customers (Kovacs & Paganelli, 2003). Data is
being generated from every operation across the supply
chain. Biswas and Sen (2016) summarised the types and
nature of the data generated by different operations in
a typical supply chain. This necessitates the importance
of the information in the context of a data-driven supply
chain. Sharing of information among the members of a
supply chain simplifies the operations, brings flexibility in
the operations, reduces cost, enhances the speed of the
operations and, more importantly, enables the organisa-
tions to take appropriate decisions on time. ERP assists the
organisations in executing the strategic supply chain objec-
tives, which in turn enables to achieve competitive advan-
tage (Choy, Lee, & Lo, 2003). In their study, Tam, Yen and
Beaumont (2002) emphasised the integration of ERP and
SCM for effective communication and information flow
among the partners of a supply chain to overcome the bar-
riers of natural boundaries. In fact, the integration of ERP
and SCM is natural in nature, which requires strategic con-
siderations and managerial support (Tarn et al., 2002).
Kumar and Van Hillegersberg (2000) presented ERP as an
integrated, configurable information system, which inte-
grates the cross-functional business processes and shares
the information across different divisions and stages within
and outside the boundaries of the organisation. This essen-
tially improves the efficiency and flexibility. In essence,
it provides a seamless integration of all the business
processes on a single information system platform. The
organisations can leverage this cross-functional integra-
tion for achieving inclusive business growth and thus,
ERP plays as a critical success factor for the organisations
(Palaniswamy & Frank, 2000).
However, Chang et al., (2008) mentioned that although
the organisations are aware of the benefits of using an
ERP system, it is equally important to select the appropri-
ate partner for enhancing the efficiency and effectiveness
of SCM performance while operating in a complex busi-
ness environment. They carried out a study on a transna-
tional textile firm in Taiwan to assess the competitive
advantage derived out of having an ERP system in place,
from the perspective of SCM. The authors advocated
that integration of supply chain operations on the ERP
platform enables the partners to streamline business opera-
tions for providing timely and value-added services to the
customers.
The internal operations and business decisions mostly
get affected by the external factors while operating in a
turbulent business environment. Thus, the critical success
of the organisations largely depends on their abilities to
cope up the uncertainties prevailing over the global envi-
ronment. In this context, Tam et al. (2002) suggested that
the performance of ERP system should not be measured
stand-alone, rather that must be judged based on the activi-
ties of the supply chain. In other words, SCM performance
has a linkage with the effectiveness of the ERP system.
The supply chain performance indicators play a signifi-
cant role in governing the activities pertaining to SCM to
support the objectives of the supply chain and provide the
basis for long-term decisions and future course of actions
(Aramyan et al., 2007; Taylor, 2004). In the process, the
performances of the supply chain partners are integrated to
achieve goal congruence for satisfying the needs of the
end customers while the feedbacks from the end customers
are being addressed and dynamic capabilities are being
assessed (Wisner, Tan, & Leong, 2008). Stavrulaki and
Davis (2010) asserted that by setting key performance indi-
cators cross-organisational activities can be defined, ana-
lysed and improved to achieve sustainable business growth.
The basic objectives are to identify and eliminate waste,
reduce cycle time, improve quality and generate a supply
chain surplus (Gunasekaran & Ngai, 2004). In essence,
performance measurement evaluates the efficiency and
effectiveness of the system based on pre-defined metrics
(Gunasekaran & Kobu, 2007). The SCM performance is
reflected on multiple dimensions. Thus, a single measure is
not sufficient enough to assess the performance (Asadi,
2012). In this context, Wong and Wong (2008) mentioned
the importance of treating the entire supply chain as a
whole entity while measuring its performance for accom-
modating multiple inputs and outputs to the system.
Kashyap (2011) mentioned that an ERP system is an
integral part of the SCM. It is evident from the empirical
study on the Taiwanese IT firms carried out by Su and Yang
(2010) that ERP improves overall competence of SCM.
These benefits stem from operations, business processes
and management, and strategic planning and control.
An ERP system enhances the visibility and transparency
across the supply chain. It enables to operate with more
customisation of the products and services and more stand-
ardised processes and information. Essentially, ERP inter-
mingles the back-office operations with the front-office
activities. However, the performance of an ERP system is
often limited by the attributes like flexibility, functionality
beyond transactions and modularity (Akkermans et al.,
2003). Thus, one of the factors essential for successful
implementation of ERP is the selection of suitable package.
Kashyap (2011) mentioned that not all ERP packages are
suitable for all the organisations. The ERP package suitable
Ghosh and Biswas 253

for a particular organisation may not be suitable for the
other organisations, even if it has the same scale of opera-
tions. It is imperative to make a wise choice of the package
which best suits the needs of the organisations.
We have further tested a small structural model to
explore the nexus between ERP package selection and
supply chain process performance in the Indian industrial
sector to validate the related literature. The conceptual
model is portrayed in Figure 1.
Standard partial least squares (PLS) model have been
executed to determine path coefficients between ERP
package selection, delivery lead time and quality. The
results are narrated in Table 1.
Fitness statistics of the above model are presented in
Table 2.
GFI, CFI and NFI values are greater than 0.9 and
RMSEA value is less than 0.05. The value of AGFI is also
very close to 0.9. Hence, it is very apparent that ERP
package selection plays a pivotal role in the supply chain
process performance.
ERP Package Selection:
Importance and Criteria
Selection of ERP package and implementation essentially
requires the integration of IT and business knowledge.
ERP implementation includes a set of interrelated activities
such as analysis of the requirement and the business pro-
cesses, selection of the appropriate package, customisa-
tion of the ERP functionalities aligned to the business

Figure 1. Structural Model

Source: Constructed using M-MACBETH software.

Table 1. Statistics of Structural Model

Comparison to
Path Estimate t-Value Critical Value Significance Inference
ERP package selection and 0.93 6.153 6.153>1.96 ** ERP package selection is positively associated
delivery lead time with delivery lead time
ERP package selection and quality 0.78 7.152 7.152>1.96 ** ERP package selection is positively associated
with quality.
Source: Authors’ own creation.
Note: ** Significant at 0.01 level.

Table 2. Fitness Measure

Chi-square/degree of
freedom GFI AGFI CFI NFI RMSEA
2.715 0.91 0.88 0.93 0.94 0.032
Source: Authors’ own creation.
254 Asia-Pacific Journal of Management Research and Innovation 12(3&4)

objectives and support services. Researchers and practi-
tioners have argued that in many instances the organisa-
tions failed to reap the benefits of ERP due to inappropriate
choice of the package and service partners within the
constraints of time and budget. Berchet and Habchi
(2005) conducted a deeper study on ERP implementation.
According to them, ERP system must enable the organisa-
tions to achieve collaboration, efficiency, transparency and
real time control, but strategic alignment is also required.
Over the years, researchers and practitioners have con-
ducted studies to find out the criteria to select an appropri-
ate ERP package in different contexts. Table 3 exhibits the
contributions of the researchers in finding out the influenc-
ing factors for ERP package selection.
In essence, the selection criteria are broadly related
to (i) system (technical features like modularity, function-
ality, etc. system requirements & implementation issues,
security, maintenance, cost, etc.); (ii) support (vendor
support, reputation and quality, technical skills of the
employees, expert opinions, etc.); and (iii) use (ease of
implementation, application possibilities, flexibility, com-
patibility with other applications, user-friendliness, custo-
misation, etc.). Bueno and Salmeron (2008) mentioned that
there is a strong interrelation between ERP selection crite-
ria and expectations out of the selected ERP package.
However, Ratkevičius, Ratkevičius and Skyrius (2012)
argued that there are no standard selection criteria for ERP
packages. They emphasised on the contextual require-
ment and functionality. This is supported by the arguments
made by several other researchers as they felt that no ERP
package alone can fulfil all the business objectives and
functional requirements (Hong & Kim, 2002; Teltumbde,
2000; Wei et al., 2005).
Selection of Criteria
In order to identify the key criteria for ERP package
selection process, primary survey has been conducted in
the Indian context through a detailed questionnaire. A total
1686 Indian Micro, Small and Medium Enterprises

Table 3. Criteria for ERP Package Selection

Criterion Authors
Cost Keil and Tiwana (2006); Kumar, Maheshwari and Kumar (2002); Kumar, Maheshwari and Kumar
(2003); Wei, Chien, & Wan (2005); Ayaǧ and Özdemir (2007); Bueno and Salmeron (2008);
Teltumbde (2000); Baki and Cakar (2005)
Reliability Keil and Tiwana (2006); Kumar et al. (2002); Kumar et al. (2003); Wei et al. (2005); Ayaǧ and
Özdemir (2007); Bueno and Salmeron (2008); Nah and Delgado (2006); Baki and Cakar (2005)
Functionality Keil and Tiwana (2006); Wei et al. (2005); Ayaǧ and Özdemir (2007); Han (2004); Nah and
Delgado (2006); Liao et al. (2007); Teltumbde (2000); Baki and Cakar (2005)
Technical factors Kumar et al. (2002); Kumar et al. (2003); Ayaǧ and Özdemir (2007); Han (2004); Rao (2000);
Teltumbde (2000); Baki and Cakar (2005)
Modular integration Kumar et al. (2002); Kumar et al. (2003); Bueno and Salmeron (2008); Baki and Cakar (2005);
Scalability Han (2004)
Ease of customisation Baki and Cakar (2005); Wu (2008)
Ease of use Keil and Tiwana (2006); Kumar et al. (2002); Kumar et al. (2003); Wei et al. (2005); Ayaǧ and
Özdemir (2007)
Set of applications Bueno and Salmeron (2008)
Ease of implementation Keil and Tiwana (2006); Teltumbde (2000); Baki and Cakar (2005); Bueno and Salmeron (2008)
Implementation time Wei et al. (2005); Bueno and Salmeron (2008); Baki and Cakar (2005)
Compatibility with allied Kumar et al. (2002); Kumar et al. (2003); Baki and Cakar (2005); Wu (2008)
organisational system
Availability of business practices Kumar et al. (2002); Kumar et al. (2003)
Fitment with organisational Kumar et al. (2002); Kumar et al. (2003); Bueno and Salmeron (2008); Nah and Delgado (2006);
processes Hong and Kim (2002)
Flexibility Wei et al. (2005); Ayaǧ and Özdemir (2007); Teltumbde (2000)
Vendor support Wei et al. (2005); Ayaǧ and Özdemir (2007); Han (2004); Verville and Halingten (2003)
Vendor reputation Keil and Tiwana (2006); Kumar et al. (2002); Kumar et al. (2003); Wei et al. (2005); Liao et al.
(2007); Verville and Halingten (2003); Teltumbde (2000)
Ghosh and Biswas 255

Criterion Authors
Vendor’s technical capability and Wei et al. (2005); Liao et al. (2007); Verville and Halingten (2003); Baki and Cakar (2005);
credentials Teltumbde (2000)
Hardware requirement Bueno and Salmeron (2008)
Administration Teltumbde (2000)
Consultancy support Baki and Cakar (2005)
Credibility of the system Bueno and Salmeron (2008); Nah and Delgado (2006)
Trust Bueno and Salmeron (2008); Rao (2000)
Knowledge/Skill Bueno and Salmeron (2008); Rao (2000)
Planning Bueno and Salmeron (2008)
Training and education Bueno and Salmeron (2008)
Organisational culture Bueno and Salmeron (2008)
Company size Bueno and Salmeron (2008)
Organisational strategy Bueno and Salmeron (2008); Liao et al. (2007); Teltumbde (2000)
Affordability Rao (2000)
Risk Teltumbde (2000)
Source: Authors’ own creation.

(MSME) organisations were approached out of which 364 Table 4. Sample Information
(21.59 per cent) organisations responded. Due to inadequate
Feature Percentage (%) Frequency
information and missing data, we excluded 41 (2.43 per
cent) samples which resulted into 323 (19.16 per cent) Workforce of the organisation
number of valid samples. Once the responses were received, *Less than or equal to 20 10.53 34
*Between 21 to 50 19.81 64
EFA was utilised to detect the key criteria (Table 4).
*Between 51 to 100 23.84 77
*Between 101 to 500 25.08 81
*More than 501 20.74 67
Exploratory Factor Analysis (EFA) Type of ownership
EFA attempts to discover a smaller subset of factors *New business 19.81 64
(Demsar et al., 2013) by analysing the correlation present *Franchised 34.67 112
*Family business 28.79 93
in the original data set to identify the highly correlated ones *Others 16.72 54
and put them under the umbrella of a new one. EFA is also Status of the firm
referred as dimension reduction technique. There are two *ISO 9001 Certified 69.35 224
steps in EFA process: factor extraction and factor rotation. *Planning to be ISO Certified 30.65 89
Principal component analysis (PCA), principal axis Annual Revenue
factoring (PAF), alpha factoring (AF), etc. are the methods *Rs. 50 Lakh to 5 Crore 14.55 47
*In between Rs. 5 Crore to 20 17.96 58
that are applied to carry out factor extraction process in
Crore 28.79 93
general. We have utilised PCA in our study to serve the *In between Rs. 20 Crore to 50 38.70 125
purpose. Theoretically, using PCA n number of factors or Crore
components can be extracted if number of original items *More than 50 Crore 21.05 68
are present in factor analysis. However, a smaller number Manufacturing Process 40.87 132
of factors, say k << n are extracted that account for the *Continuous 38.08 123
maximum variance in the data. Then factor rotation is *Batch/Repetitive
*Job-shop
usually performed for the betterment of solution by
checking the factor loadings. Varimax and equinox rotation Source: Authors’ own.
methods have been used here. Initially, Kaiser–Meyer– Since the KMO statistic value is greater than 0.8 and
Olkin (KMO) statistic and the Bartlett’s test of sphericity the significance associated with Bartlett’s test of spheri-
are computed to validate whether the data set is suitable city is less than 0.05, inference can be drawn that the data
for factor analysis or not. The results are displayed in set is appropriate for EFA. As discussed earlier, total six
Table 5. components have been extracted using PCA accounting
256 Asia-Pacific Journal of Management Research and Innovation 12(3&4)

Table 5. Test for Suitability for Factor Analysis

Kaiser–Meyer–Olkin (KMO) of sampling adequacy 0.875

Bartlett’s test of sphericity approx. chi-square 12316.423

df 1139
Significance (p-value) 0.000
Source: Authors’ own creation.

Table 6. Findings of EFA (Varimax Rotation)

Extraction Sums of Rotation Sums of Squared

Initial Eigenvalues Squared Loadings Loadings (Varimax)
% of Cumulative % of Cumulative % of Cumulative
Components Total Variance % Total Variance % Total Variance %
1. 5.63 19.58 19.58 5.63 19.58 19.58 5.74 19.15 19.15
2. 5.07 17.63 37.20 5.07 17.63 37.20 5.31 17.72 36.87
3. 4.56 15.86 53.06 4.56 15.86 53.06 4.75 15.85 52.72
4. 3.34 11.61 64.67 3.34 11.61 64.67 3.81 12.71 65.43
5. 2.56 8.90 73.57 2.56 8.90 73.57 2.89 9.64 75.08
6. 1.67 5.81 79.38 1.67 5.81 79.38 1.78 5.94 81.04
7. 0.88 3.06 19.58 5.63 19.58 19.58 5.74
8. 0.65 2.26 37.20 5.07 17.63 37.20 5.31
9. 0.57 1.98 53.06 4.56 15.86 53.06 4.75
10. 0.48 1.67 64.67 3.34 11.61 64.67 3.81
11. 0.39 1.36 73.57 2.56 8.90 73.57 2.89
12. 0.36 1.25 79.38 1.67 5.81 79.38 1.78
13. 0.32 1.11 19.58 5.63 19.58 19.58 5.74
14. 0.31 1.08 37.20 5.07 17.63 37.20 5.31
15. 0.29 1.01 53.06 4.56 15.86 53.06 4.75
16. 0.26 0.90 64.67 3.34 11.61 64.67 3.81
17. 0.24 0.83 73.57 2.56 8.90 73.57 2.89
18. 0.21 0.73 79.38 1.67 5.81 79.38 1.78
19. 0.2 0.70 19.58 5.63 19.58 19.58 5.74
20. 0.18 0.63 37.20 5.07 17.63 37.20 5.31
21. 0.16 0.56 53.06 4.56 15.86 53.06 4.75
22. 0.13 0.45 64.67 3.34 11.61 64.67 3.81
23. 0.11 0.38 73.57 2.56 8.90 73.57 2.89
24. 0.09 0.31 79.38 1.67 5.81 79.38 1.78
25. 0.06 0.21 19.58 5.63 19.58 19.58 5.74
26. 0.03 0.10 37.20 5.07 17.63 37.20 5.31
27. 0.01 0.03 53.06 4.56 15.86 53.06 4.75
Source: Authors’ own creation.

for nearly 80 per cent variation of the total data. Items We have outlined the summary of the extracted criteria
with loading values less than 0.5 were discarded from and their respective constituent items for package selection
further analysis. Tables 6 and 7 exhibit the findings in the Indian context in Table 8.
of EFA.
Ghosh and Biswas 257

Table 7. Findings of Equimax Rotation

Rotation Sums of Squared Loadings (Equimax)

Total % of Variance Cumulative %
5.74 18.95 18.95
5.31 17.42 36.37
4.75 15.98 52.35
3.81 12.54 64.90
2.89 9.51 74.41
1.78 5.91 80.31
Source: Authors’ own creation.

Table 8. Description of the Criteria

Criteria Description Items

Vendor support Vendor support is highly desirable during the entire 1. Service level agreement
process of ERP implementation. Their active collaboration 2. Professionalism
acts as a key driver of ERP implementation success. 3. Stability
4. Customer base
External factor Package selection is highly influenced by various external 1. Market feedback
factors. Package’s market perception, consultants’ 2. Reports of consultants
feedback, etc. should be considered before final selection. 3. Number of successful implementations in other
organisations.
Technical features Depending upon the needs of the organisation, 1. Real time enquiries and reporting functions
functionality requirement of ERP package is decided. 2. Modularity
However, there are few pre-requisite technical features 3. Multilanguage and multicurrency support
which are essential for any ERP packages. Packages 4. Customizable
must be carefully rated against these features for their 5. Ease of usage
candidature of selection. 6. Integration capability with different platforms
and data
ERP cost As the majority of ERP packages is extremely costly 1. Implementation cost
themselves, packages must be chosen that account for the 2. Maintenance cost
least cost of implementation, maintenance, extension, etc. 3. Adoption and extension cost.
activities.
Security The packages’ selection process is heavily affected by 1. Audit trailing ability
security features. As ERP shares a common database, 2. Password protection
proper authorisation and security aspects are extremely 3. Access control
critical for smooth daily operations.
Ease of Once the selection process is over, the Implementation 1. Data backup capability
implementation process commences. So packages that have comparatively 2. Interface with other packages
higher flexibility in various phases of the overall 3. Integration with other utilities.
implementation process, should be chosen in order to
result in commercial success.
Source: Authors’ own creation.

We have outlined the summary of the extracted criteria
and their respective constituent items for package selection
in the Indian context in Table 8.
Factor loadings of the constituent items under individual
factors and corresponding reliability scores have been
reported in the following Table 9.
Ranking of ERP Packages Using
DEMATEL and TOPSIS Methods
Once the criteria of package selection process in the Indian
context have been identified, the next step is to study their
interactions to evaluate their importance in the package
selection process. We have adopted MCDA framework to
serve the purposes. DEMATEL method and TOPSIS have
been used separately to evaluate the criteria importance or
weight values and final ranking of packages, respectively.
The working principles of the methods and findings obtained
from them have been explained later in this section.
Due to ever-increasing complexity of performance
measurements, which is one of the most important pro-
cesses in the management literature, and as its measure-
ment is critical for judging the success or failure of a firm,
MCDA techniques have recently been in the limelight of
258 Asia-Pacific Journal of Management Research and Innovation 12(3&4)

Table 9. Statistics of EFA homogeneous groups in a preference

order.
Factor Cronbach’s Ranking: Rank the alternatives of A from best to
Constructs Items Loadings Alpha
worst.
Vendor 1. Service level 0.8526 0.8971
support agreement 0.8138
In the process of ranking, it is very critical to carefully
2. Professionalism 0.7769
3. Stability 0.7540 assess and assign the weights of the criteria based on which
4. Customer base alternatives are ranked. As stated, we have deployed
External 1. Market feedback 0.8642 0.8742 DEMATEL for the problem considered.
factor 2. Reports of 0.8027
consultants 0.7866
3. Number Findings of DEMATEL Methodology
of successful
implementations in It was developed by the Science and Human Affairs
other organisations. Programme of the Battelle Memorial Institute of Geneva
Technical 1. Real time enquiries 0.8539 0.8446 between 1972 and 1976 to critically study and explore
features and reporting 0.8326 complicated real life problems through assessing the causal
functions 0.7741
interrelations between factors/criteria related to the said
2. Modularity 0.7358
3. Multilanguage and 0.6826 problem by construction of a network relations map (NRM;
multicurrency support 0.6537 Zhou, Huang, & Zhang, 2011). It basically is a multivariate
4. Customizable data analysis tool that applies classical matrix algebra to
5. Ease of usage examine complex causal models to distinguish between
6. Integration cause and effect group of factors (Hsu, 2012). It also
capability with
provides digraphs for visualisation of contextual
different platforms
and data relationships and to assist decision-makers in strategy
ERP cost 1. Implementation 0.7781 0.8029 formulation. It has been used to identify the critical success
cost 0.7435 factors of product development in different context as well
2. Maintenance cost 0.7261 (Fekri, Aliahmadi, & Fathian, 2009; Shinno & Hashizume,
3. Adaption and 2002). The computational steps of DEMATEL in the
extension cost.
context of ERP package selection are elucidated below:
Security 1. Audit trailing ability 0.8163 0.7847
2. Password 0.7589 Step 1. Calculate the average matrix: Experts were
protection 0.7317 asked to indicate the degree of direct influence between
3. Access control any two package selection criteria by an integer score
Ease of 1. Data backup 0.8210 0.8342 ranging from 0 to 4, representing no influence, low
implementation capability 0.7972 influence, medium influence, high influence and very
2. Interface with 0.7683 high influence, respectively in order to construct the
other packages
3. Integration with
initial direct influence matrices. A non-negative matrix
other utilities ^ X k = [x kij] h can be obtained for each expert review where
Source: Authors’ own creation.
xij denotes the measure to which the kth (1 ≤ k ≤ H ) expert
evaluates direct effect of criteria i on criteria j. An average
research. MCDA techniques are tailor-made to cater a sys- matrix (A= [aij]) incorporating opinions from every expert
tematic and deterministic approach to tackle complex real can be computed as
world decision-making problems composed of several
1 (1)
intertwining and incommensurate criteria. Roy (1990) a ij = | H xk 
H k = 1 ij
argued that solving MCDA problems and searching for an
optimal solution are clearly two distinct measures; the
prime focus of MCDA is to assist decision-makers (DMs), Step 2. Compute the normalised initial direct-relation
evaluate the complex judgements and to carefully analyse matrix: The normalised initial direct-relation matrix (D) is
data involved in their problems, and advance towards an determined by normalising the average matrix (A) in a
acceptable solution. The entire process is subdivided into manner so that the elements of D can take values between
three parts, a set of alternatives, A, is evaluated to produce 0 and 1. It is constructed as
a final decision result:
D = A # S, (2)
Choice: Choose the best alternative from A.
Sorting: Sort the alternatives of A into relatively where S is measured as
Ghosh and Biswas
1 Findings of TOPSIS Method
S= (3)
max 1 # i # n | j = 1 a ij
n
Step 3. Compute the total-relation matrix: The total-
relation matrix (T) is computed as
T = D + D 2 + D 3 + ..... + D p = D (I + D +
D 2 + . ... . + D p - 1) [(I - D) (I - D) -1]
= D (I - D p) (I - D) -1 .(4)
When p " 3, D p = 0 then T = D ^ I - Dh-1(5)
where I is the identity matrix.
If r and c are (n × 1) and (1 × n) vectors representing the
sum of rows and columns of matrix T, then ri, sum of ith
row in T, measures the direct and indirect effects triggered
by criteria i on rest of the criteria. On the contrary, Cj, sum
of jth column, is the sum of influences that criteria j has
received from the rest. When i = j, the sum (ri + ci) represents
the total influence given and received by the criteria in the
system. Basically the magnitude of the expression (ri+ci)
represents the degree of influence of criteria i in the system.
Whereas the net contributing effect of criteria i in the
system is measured by the expression, (ri – ci). If (ri – ci) is
positive, then it belongs to cause group of criteria, while a
negative (ri – ci) value implies that the same criteria is being
dominated by others in the system.
Step 4. Construction of digraph: In order to generate the
digraph for visualisation of interactions among the criteria,
a threshold value is computed as the average of all the
elements of the total-relation matrix (T). Computation of
threshold value is essential to filter out some negligible
effects. The effects which are greater than the threshold
value are displayed in the digraph. The obtained total-
relation matrix (T) is shown in Table 10.
Total influence levels (ri + ci), net influence levels (ri –
ci), ranking based on total influence levels and groups
based on net influence levels of individually identified six
criteria based on total-relation matrix (T) are mentioned in
Table 11. Criteria having positive net influence levels have
been categorised into cause group, while others with
negative net influences into effect group. Magnitude of
interactions between any two criteria is actually represented
by the corresponding entries of the total-relation matrix.
Interaction levels greater than the threshold value are
considered to be the significant ones and are indicated by
an arrow in the digraph as shown in the Figure 2. Importance
or weight values of individual criteria are fixed according
to the values of total influence level (ri + ci) for ranking the
packages using TOPSIS method. Criteria are ranked based
on total influence levels (ri + ci) as well. Ties are broken by
considering the net influence levels (ri – ci).
259
Introduced by Hwang and Yoon (1981), The TOPSIS
method presents a useful framework to rank the alterna-
tives in multiple-criteria decision-making problem. The
basic principle of the TOPSIS is quite simple and intuitive:
it measures alternatives’ distances to predefined ideal and
anti-ideal points first and then, aggregate the separate dis-
tance information to reach overall evaluation results. The
salient features of TOPSIS and its successful applications
in the improvement of manufacturing competitiveness and
strategic vendor selection are reported in the works of
Shyura and Shih (2006), respectively. In our study, experts
from industrial sectors have been appointed to rate 10 ERP
packages, predominantly used in the Indian context,
against 6 key criteria for ranking purpose. The names of the
packages have not been revealed here for confidentiality of
information.
The procedural steps of TOPSIS are summarised as
Step 1. For a MCDM problem having n alternatives and
m criteria, a matrix (X) can be constructed based on the
priority scores assigned to each alternative on each attribute
and is denoted by
(6)
X = ^ X ij hnxm
The importance weight values (wj) of the attributes are
determined without violating the following constraint:
| m  (7)
j=1
w j = 1, where j = 1, 2,3, ......m.
Step 2. The normalised decision matrix is obtained
subsequently applying the following equation:
rij = x ij / (| k = 1 x 2kj) - 0.5 j = 1, 2, ...m; i = 1, 2, ....n.(8)
n
Step 3. Next, the weighted normalised decision matrix is
calculated as
Vij = w j rij; j = 1, 2, ...., m; i = 1, 2, ....., n.(9)
Step 4. The Positive Ideal Solution (PIS) and Negative
Ideal Solution (NIS) values are determined by equations x
and y, respectively:
A + = (v 1+, v 2+, (ev n+) = {(max i{v ij}
(10)
| j ! B), (min i {v ij} | j ! C)}
A - = (v 1-, v 2-, (v n-) = {(min i{v ij}
(11)
| j ! B), (max i {v ij} | j ! C)}
Step 5. The separation measures of each alternative from
the PIS and NIS in terms of Euclidean distance is calculated
as
260 Asia-Pacific Journal of Management Research and Innovation 12(3&4)

Table 10. Total-relation Matrix

Vendor External Technical Ease of

Criteria Support Factor Features ERP Cost Security Implementation
Vendor support 0 0.4 0.4 0.4 0.2 0.4
External factor 0.1875 0 0 0.2 0 0.4
Technical 0.375 0.6 0 0.8 0.6 0.6
features
ERP cost 0.375 0.2 0.6 0 0.4 0.4
Security 0.1875 0.4 0.2 0.4 0 0.2
Ease of 0.1875 0.4 0.2 0.6 0.2 0
implementation
Source: Authors’ own creation.

Table 11. Total Effect, Net Effect, Rank and Group of Individual Criteria

Criteria ri + ci ri – ci Rank Group

Vendor support 3.1125 0.4875 3 Cause
External factor 2.7875 –1.2125 5 Effect
Technical features 4.375 1.575 1 Cause
ERP cost 4.375 –0.425 2 Effect
Security 2.7875 –0.0125 4 Effect
Ease of 2.5875 –0.4125 6 Effect
implementation
Source: Authors’ own creation.

Figure 2. Digraph

S +i = $ | j = 1 (v ij - v +j ) 2 . ; i = 1, ...., n(12)
m 0.5 preferred and least preferred feasible solutions. The ranking
of the packages based on the TOPSIS method is given in
Table 12.
S -i = $ | j = 1 (v ij - v -j ) 2 . ; i = 1, ...., n(13)
m 0.5

Step 6. Finally, the relative closeness of a particular Ranking of the ERP Packages Using
alternative (Ti) to the ideal simulator, can be expressed MACBETH Method
by
s -i MACBETH is one of the MCDA approaches, which is
Ti = + (14) based on multi-attribute value theory. MACBETH is an
(s i + s -i ) interactive pairwise comparison approach to form a quan-
The set of alternative is sorted in a descending order based titative value model based on qualitative value judgements
on the relative closeness values, indicating the most (Bana e Costa & Vansnick, 1999). It consists of a set of
Ghosh and Biswas 261

Table 12. Ranking of the ERP Packages Using TOPSIS Method alternative with respect to two reference levels. The upper
reference level is treated as good and is assigned a value of
Packages Aggregate Score Ranking
100, whereas the lower reference level is considered as
Pkg 1 0.5177 1 neutral and is assigned a score of 0. However, these do not
Pkg 2 0.4816 4 necessarily ascertain any conclusion on the best or the
Pkg 3 0.4932 2 worst performance of the alternatives for a particular
criterion.
Pkg 4 0.4547 8
Step 2. In this step, the ordinal performance scale is
Pkg 5 0.4727 6 converted into a proportional cardinal scale for comparing
Pkg 6 0.4768 5 the performances of all the alternatives with respect to all
Pkg 7 0.4371 10 the decision criteria. In order to carry out such operation,
Pkg 8 0.4883 3
one (n x n) matrix is constructed for each criterion where n
is the number of performance levels assigned to that crite-
Pkg 9 0.4639 7 rion where the performance levels follow the descending
Pkg 10 0.4430 9 order according to their importance from left to right and
Source: Authors’ own creation. from top to bottom. Next the decision-maker needs to put
qualitative judgements regarding the difference of attrac-
tiveness between two alternatives at a time. In MACBETH
techniques that are applied to investigate the performance method, there are seven semantic scales such as no, very
of a number of alternatives, having multiple criteria and weak, weak, moderate, strong, very strong and extreme on
conflicting objectives based on a set of decision criteria continuum to map the difference of attractiveness where,
expressed in a qualitative form (Bana e Costa & Oliveira, no represents the indifference of attractiveness between the
2012). In this technique, two criteria are compared based alternatives and extreme signifies that one alternative is
on the difference of attractiveness at a time with qualitative extremely attractive over the other. However, it is to be
judgements. This method not only allows the decision- noted that if two alternatives are equally attractive as per
makers to check the consistency of the judgements but also the consideration, they are assigned with no. This (n x n)
allows improving the judgements in the case of inconsist- matrix is also called the matrix of judgement. The judge-
ency. Consistent judgements are then transformed into ments are then checked for consistency. The tool
MACBETH scale based on linear programming models. M-MACBETH automatically verifies the consistency and
Finally, based on the overall weighted scores, the alterna- notifies if there is any consistency suggesting possible
tives are ranked according to the degree of attractiveness. alterations. After that the consistent judgements are con-
M-MACBETH is a tool developed using linear program- verted into proportional cardinal scales. The mathematical
ming algorithm, which supports the MACBETH method. explanation is given below.
Notation:

Steps of the MACBETH Method Li: Performance levels; i = 1, 2, 3… n

Karande and Chakraborty (2014) applied the MACBETH
method to propose a facility selection model. The basic
steps of the aforesaid method as described below are based
on the summarisation made by Karande and Chakraborty
(2014) following the concept given by Bana e Costa and
Vansnick (1999) and Bana e Costa, Corrêa, De Corte and
Vansnick (2002).
Step 1. The first step involves the formation of a value
tree based on the decided relevant set of decision criteria.
The numbers of alternatives are entered as options into the
system. After that the possible performance levels of the
alternatives for each criterion are entered on an ordinal
scale. In this context, the decision-maker needs to assign a
set of reference levels with respect to each such criterion.
The minimum number of reference levels is two such as
the upper reference level and the lower reference level.
Each alternative is assigned with a performance score,
which represents the relative attractiveness of the
L+: Upper reference level for the criterion Cj
L–: Lower reference level for the criterion Cj
Cj: Any particular criterion; j = 1, 2, 3 …. n
Ak : Any particular alternative or option.
Wj: Weight for the criterion Cj
V (Li): Value of the performance level Li, that is,
MACBETH score; V (Li) ϵ [0,100]
H: Strength, where H ϵ {0, 1, 2, 3, 4, 4, 5, 6}
Let us consider five performance levels L1, L2, L3, L4
and L5. Let us consider L1 as good and L5 as neutral and the
preference of importance as L1> L2> L3> L4> L5. Therefore,
V (L1) = 100 and V (L5) = 0 and V (L1) > V (L2) > V (L3) >
V (L4) > V (L5). The next step requires comparison of the
strengths of performance of the levels. For n number of
reference levels, there can be maximum n (n-1)/2 number
of comparisons. If the decision-maker does not assign any
strength, it is notified by positive in the cell of the matrix
under consideration.
262 Asia-Pacific Journal of Management Research and Innovation 12(3&4)

Let us consider the performance levels for a particular V (A k) = | j = 1 w j $ V ^C j h,

n

criterion that are arranged in a matrix as depicted by Table (20)

13. In the next step, the comparison of the strengths of
performance is carried out based on the scales as mentioned
earlier.
V ^L 1h - V ^L 2h = Ha,(15)
where α denotes the coefficient necessary to satisfy V (Li)
ϵ [0,100].
The MACBETH scores are calculated by solving the
related equations for all the performance levels.
From Table 13, we can obtain the equations as
V ^L 1h - V ^L 2h = 5a(16)
V ^L 2h - V ^L 3h = 4a(17)
V ^L 3h - V ^L 4h = 3a(18)
V ^L 4h - V ^L 5h = 2a(19)
On solving, we get, α = 7.14, V (L2) = 64.26, V (L3) = 35.7,
V (L4) = 14.28, and we know that V (L1) = 100 and
V (L5) = 0.
In this way, the quantifications for all the criteria are
carried out.
Step 3. In this step the performances of different
alternatives are assessed with respect to different criteria.
This table is called table of performances. In this case, the
relative criteria weights are set based on the judgements of
the decision-makers or the experts.
Step 4. In this step, the overall weighting table is
constructed and finally the table of scores is obtained,
which ranks different alternatives based on the overall
scores. Here, the logic of additive value model is followed.
As per this model, the overall global score of a particular
alternative Ak is given by
where | j = 1 w j = 1 and V ^ L+h = 100,V ^ L-h = 0
n
Results: Ranking based on MACBETH
Method
Here, we use the MACBETH method for ranking of some
commonly used ERP packages based on pre-qualified
selection criteria. For carrying out the analysis, we have
used the software M-MACBETH, version 2.4.0 as a tool.
The criteria are listed in the Table 14.
Based on these criteria, a value tree is constructed which
is shown in Figure 3. The performances of all the alternative
ERP packages are expressed in the form of ordinal, that is,
qualitative form. In our case, we have 10 alternative
packages to compare. Thus, the number of options is 10.
Among the aforesaid criteria, all the criteria are beneficial
in nature except the criterion of ERP cost, which has a non-
beneficial nature, that is, if the cost of the package is high,
organisations treat this as a less attractive one. Karande and
Chakraborty (2014) followed degree of seven ordinal
performance levels such as very good (VG), good (G),
medium good (MG), fair (F), medium poor (MP), poor (P)
and very poor (VP) to compare the performance of the
alternatives as used by Li, Yamaguchi and Nagai (2007)
while solving a supplier selection problem. Here, we also
use this scale in our analysis. For all the beneficial criteria,
the performance levels are organised in the descending
order of their attractiveness, that is, VG is treated as upper
reference level and VP is considered as lower reference
level, whereas for the non-beneficial criterion it follows the
opposite order.
The next step involves the mapping of the difference of
attractiveness among the ordinal performance measures
between two alternatives at a time by the decision-makers.
The differences of attractiveness of the performance levels
based on the aforesaid semantic scales for the criteria, ERP
cost and technical features are shown in the Figures 4–7
respectively. It is seen from the Figure 4 that the
performance level VP is very weakly attractive to P, in case

Table 13. Strengths of the Performance Levels for the

Criterion Cj
Table 14. List of Criteria
Performance
Levels L1 L2 L3 L4 L5 Criterion Description

L1 (Good) No Very Positive Positive Positive C1 ERP cost

strong C2 Technical features
L2 No Strong Positive Positive C3 Security
L3 No Moderate Positive C4 External factor
L4 No Weak C5 Vendor support
L5 (Neutral) No C6 Ease of implementation
Source: Authors’ own creation. Source: Authors’ own creation.
Ghosh and Biswas
Figure 3. Value Tree Representing the Criteria
Source: Constructed using M-MACBETH software.
of ERP cost criterion. The consistency check for the
judgements is conducted next, and it is found to be
consistent. Also, based on the differences of attractiveness,
the ordinal performance levels are converted into
proportionate cardinal MACBETH scales following linear
programming models. For example, from Figure 6 the
converted MACBETH scales of the performance levels for
the criterion of technical features can be calculated as
follows:
V(VG) – V(G) = α, V(G) – V(MG) = α, V(MG) – V(F)
= α, V(F) – V(MP) = α, V(MP) – V(P) = α and V(P) –
V(VP) = α, where, V(VG) = 100 and V(VP) = 0 for the
criterion of ERP cost. On solving, we get α = 16.67, V(P) =
16.67, V(MP) = 33.33, V(F) = 50, V(MG) = 66.67 and
V(G) = 83.33.
The same methodology is followed to quantify the
ordinal performance levels for all the other criteria.
In our study, we have 10 alternative ERP packages to
compare and rank them based on their performance scores
for selecting the appropriate one. In order to set relative
weights for the different criteria to construct the table of
performances for the alternative ERP packages, a team
of six decision-makers was formed. The team consisted of
industry experts and subject experts from academia. In our
case, we considered the average of mapping scores
suggested by different experts of the team as the
performance of an alternative ERP package with respect to
a particular criterion. Figure 8 represents the table of
performances, which shows all the alternative ERP
packages and their performance requirements with respect
to the criteria for evaluation. M-MACBETH calculates
the criteria weights in the same way quantification of the
ordinal data is done. In this table of performances,
the decision-makers set the performance level requirement
with respect to each criterion for the alternatives. The
263
attractiveness of each criterion with respect to another is
judged using the above-mentioned seven-point scale. The
judgements are then checked for consistency. After that, in
order to judge the performances of all the alternative ERP
packages with respect to the criteria, corresponding criteria
weights are calculated, and finally the overall weighting is
carried out based on the opinions of the decision-makers.
Figure 9 exhibits the weighting references and Figure
10 presents the overall weighting judgements for all the
alternatives based on the available criteria. A consistency
check is performed and the result was found to be con-
sistent. M-MACBETH software calculates the overall
attractiveness scores for all the alternative ERP packages
as calculated by using the equations mentioned earlier.
Figure 11 exhibits the overall attractiveness scores for the
alternatives.
Table 15 shows the ranking of the ERP packages based
on the overall quantified cardinal scores. However,
criterion-wise ranking of the ERP packages is also shown
in Figure 12. It can be seen that package number 1 is ranked
first, whereas the package number 7 is at the last position.
Therefore, the ranking follows the order as Pkg. 1–3–8–
2–6–4–5–9–10–7. After that sensitivity analysis was
carried out to check the stability of the results and the
analysis where the criteria weights were changed for testing
whether such deliberated constrained changes put any
significant impacts on the obtained results. In our example,
C1 has the maximum weight. The effect of variation in the
weight of C1 on the overall rankings of the alternative ERP
packages is tested in the form of sensitivity analysis. Here,
the weight of the criterion C1, that is, the ERP cost varies
consistently, while adjusting the difference over the other
criteria weights. Figure 13 shows the results of the
sensitivity analysis with respect to the criterion C1. It can
be seen that Packages 1 and 2 remain the first two choices
while having no impact on Package 10 as the last choice.
264 Asia-Pacific Journal of Management Research and Innovation 12(3&4)

Figure 4. Comparison of Performance Levels for the Criterion ERP Cost

Source: Constructed using M-MACBETH software.

Figure 5. MACBETH Scale for the Criterion ERP Cost

Source: Constructed using M-MACBETH software.

Figure 6. Comparison of Performance Levels for the Criterion Technical Features

Source: Constructed using M-MACBETH software.

Ghosh and Biswas 265

Figure 7. MACBETH Scale for the Criterion Figure 8. MACBETH Table of Performance
Technical Features

Source: Constructed using M-MACBETH software. Source: Constructed using M-MACBETH software.

Figure 9. Weighting References

Source: Constructed using M-MACBETH software.

Figure 10. Overall Weighting Judgements

Source: Constructed using M-MACBETH software.

266 Asia-Pacific Journal of Management Research and Innovation 12(3&4)

Figure 11. Overall Attractive Scores of the Alternative ERP Packages

Source: Constructed using M-MACBETH software.

Table 15. Overall Ranking of the ERP Packages Figure 12. Criterion-wise Ranking
Package No. Overall Score Ranking
1 94.79 1
2 85.18 4
3 93.76 2
4 83.83 6
5 78.95 7
6 84.39 5
7 71.12 10
8 90.48 3
9 73.61 8
10 71.47 9
Source: Authors’ own creation.

Source: Constructed using M-MACBETH software.

Similarly, the sensitivity analyses for all the other
criteria are carried out. It can be seen that the results
obtained out of MACBETH analysis are quite consistent
and acceptable, which withstand the variations in the
weights assigned to different criteria.
After that a robustness analysis was also conducted. In
the real world, decision-making is most often required to
deal with incomplete or uncertain information. The robustness
analysis reveals the effect of the data uncertainty on the
results given by a particular model (Bana e Costa, De
Corte, & Vansnick, 2012). Figures 14 and 15 represent the
result of the robustness analysis.
From Figure 15, it is evident that if in the local
information table, the cardinal scale value for the criterion
C2 is increased to ± 4 per cent, the model will no longer
have enough information to determine the relative
attractiveness between the packages 2 and 6, but it does not
have an impact on the best choice given by the model.
Thus, it can be concluded that the results are consistent and
the model is robust.
Comparative Analysis
It is seen from the above analyses that the results are
comparable in nature and show consistency in the findings.
Ghosh and Biswas
Figure 13. Sensitivity Analysis with Respect to the Criterion C1
Source: Constructed using M-MACBETH software.
To carry out the comparative analysis of the obtained
rankings by DEMATEL–TOPSIS and MACBETH
frameworks, Spearman’s rank correlation test has been
applied to two sets of rank alternatives. The result of
Spearman’s rank correlation test is shown in Table 16.
As the correlation coefficient is greater than 0.9 and
highly significant, it can be concluded that rankings
obtained from two different MCDA frameworks are
consistent. Hence, the usage of both these methods for ERP
package selection is well justified.
Conclusion
This article has highlighted the importance of selecting an
appropriate ERP package in the context of SCM perfor-
mance. First, we have discussed the impact of ERP on the
performance of a supply chain. Then, a survey of the exist-
ing literatures has been made to review the factors involved
in the ERP package selection. Then, we have conducted an
Table 16. Spearman’s Rank Test
Spearman’s Rank Correlation Coefficient Significance
0.964 **
Source: Authors’ own creation.
Note: ** Significant at 0.01 (2 tailed).
267
EFA to identify the criteria for selecting an appropriate
ERP package. Advanced MCDA techniques like
DEMATEL–TOPSIS and MACBETH have been per-
formed to rank the alternative ERP packages. We have
done a comparative analysis of the results obtained from
these MCDA methods. As it has been found, the results are
consistent in nature. Since the impact of proper ERP
package selection on both commercial success of ERP and
supply chain performance is quite immense, the applica-
tion of the presented research framework is justified. It is
very hard to find research studies reporting the usage of
EFA, DEMATEL–TOPSIS and MACBETH simultane-
ously for ERP package selection. However, future research
studies can be made on the application of different MCDA
techniques to rank the performance indicators of a supply
chain. Further studies can be made to analyse and estimate
the impact of ERP on supply chain performance. Analysis
can be made on the applications of ERP in optimising
supply chain performance. Finally, MACBETH is still
not a widely used technique. This technique can further
be applied to solve other multi-criteria based strategic
decision-making problems pertaining to SCM or any other
areas of management.
268 Asia-Pacific Journal of Management Research and Innovation 12(3&4)

Figure 14. Robustness Analysis (At Cardinal Scale ± 0% for All Criteria)

Source: Constructed using M-MACBETH software.

Figure 15. Robustness Analysis (At Cardinal Scale ± 4% for the Criterion C2)

Source: Constructed using M-MACBETH software.

Note: ▲ Represents ‘dominance’; + represents ‘additive dominance’.
Ghosh and Biswas
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