Implementation Evaluation Modeling of Selecting ERP Software Based on Fuzzy Theory

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1 Implementtion Evlution Modeling of Selecting ERP Softwre Bsed on Fuzzy Theory Xukn Xu 1, Ydong Jing 1 nd Zheng Shi 2 1 Informtion Mngement Deprtment, Chngzhou Cmpus, Hohi University, Chngzhou , Jingsu, P.R. Chin 2 Mngement Deprtment, Chngzhou Cmpus, Hohi University, Chngzhou , Jingsu, P.R. Chin Abstrct. Selecting ERP softwre is key strtegy for enterprises to fully succeed in ERP prctice. In this pper, the problem of Chinese medium-sized nd smll enterprises softwre selection is lck of scientific nd relible choosing method, which is mentioned firstly. By combining the fetures of medium-sized nd smll enterprises, specil ERP softwre vlution index system is estblished bsed on the servicebility nd designing thought of ERP softwre. Next, more efficient nd precise evlution model is provided by mens of fuzzy evlution while the subordintion degree of property indexes nd numerl indexes re defined ccording to different judges weight. Furthermore, fuzzy synthetic evlution mtrix hs been modeled. Compred with the trditionl evlution method, this model improves in precision nd complexity, which cn leds to n impersonl ERP softwre selection tht s more precise nd scientific. Finlly, cse of n enterprise ERP softwre selection hs been provided. Keywords: Enterprise resource pln, Softwre, Fuzzy theory, Evlution model, Selection 1. INTRODUCTION Recently, Chinese enterprises hve been in gret development nd expnd their scles lot. With the improving of the informtion technology, more nd more enterprises wke up to the importnce of it nd consider it s bsic tool to upgrde their mngement level. The significnt role of ERP (Enterprise Resource Plnning) in enterprises mngement ttrcts public ttention. Severl Chinese enterprises hve strted to construct ERP projects, but the prcticl efficiency is not good becuse of mny resons such s the shortge of scientific nd relible choosing method. ERP (Enterprise Resource Plnning) is synthetic project nd the lrge integrte mngement informtion system for modern enterprises [1]. It combines informtion technology nd dvnced mngement theories together to optimize the resource, reduce the storge rte nd cost, nd shorten the production cycle, which becomes to the necessry mens for enterprises existing nd developing in the fierce mrket competitions of informtion times. Executing ERP softwre is system project. In the initil stges of it, selecting of ERP softwre becomes to be the min prt of the

2 728 Xukn Xu, Ydong Jing nd Zheng Shi process to execute ERP softwre under the precondition of completing mking nlysis on enterprises nd mrket demnd. It cn influence the finl result nd the future profits while it is the bsis to ensure the enterprises trget reliztion on strtegy nd specil demnds. In nother word, synthetic evlution method with scientific, impersonl nd numerl is significntly necessry to mke the creful considertion nd compre of the selecting of ERP softwre s well s the bsis to mke sure the succeeding of ERP estblishing nd the enterprises trgets. According to the prcticl nd fuzzy theory, this pper provides specil ERP fuzzy evlution method for medium-sized nd smll enterprises, which cn estblish better evlution system to sort nd clculte the index. In word, this method cn support medium-sized nd smll enterprises on relible theory nd decision-mking to select ERP softwre. 2. THE SITUATION OF ERP SOFTWARE SELECTION All Bsed on the ltest report, more thn 90% enterprises in chin re mediumsized nd smll enterprises nd their contribution hve tken over 40% on ntionl GDP, which become to the most ctive prt of the ntionl economy. Becuse of the mrket competition nd the demnd of themselves developing, their strong wishes of informtion construction tend to more urgent. The ppliction of ERP becomes the min strtegy for most medium-sized nd smll enterprises to improve their mngement level nd the production cpbility. But how to mke the selection is hrd problem for them to mke the decision, nd the success of informtion construction nd enterprises existing will be influenced directly by it s well[2]. Medium-sized nd smll enterprises hven t pid enough ttention to the evlution of ERP selection. Though there re some evlutions methods tried to study this problem but just from the spect of numerl mesurement, which cn t relize the optimiztion for enterprises resource. Nowdys, more thn ten kinds of ERP softwre vilble in the mrket nd every of them hs their different technicl fetures nd pplicble environment. Therefore, selecting the proper ERP softwre is n importnt decision for enterprises to mke. Recently, Chinese enterprises ccept numerl nlysis s the bses to mke ERP softwre selection, but it cn t reflect their efficient level bout the evlution structure. Bidding invittion nd bidding selection re two min methods be used nd both of them nlysis questions from mcroscopicl point of view. In ppliction, bidding invittion &selection nd experts judgment re included to invite nd select the bidding of ERP softwre. For some extent, they re impersonl nd imprtil. But, becuse ERP system is intngible, which cn t be defined well by precise specifictions nd stndrds. It is hrd to get sme evlution result of ERP softwre selection. But for the method of experts judgment, it is lck of the considertion of enterprises trget. Every expert cn t do judgment of ERP softwre under the sme precondition nd the judgment result tends to be influenced by personl opinion, so it is sid this evlution method is limited.

3 Implementtion Evlution Modeling of Selecting ERP Softwre Bsed on Fuzzy Theory 729 Under the sitution bout selecting of ERP softwre for medium-sized nd smll enterprises, more relible nd logicl Selecting of ERP softwre is in gret need. This new method cn solve the problems both in clssic mthemtics model, mesurement nd mke sure the optimiztion to their enterprises. There re lot of fctors cn influence selecting of ERP softwre nd some of them cn t be clculted by precise vlue. These fctors cn reflect the different subjective opinion mong different people. In other word, they hve mbiguous property. Therefore, estblishing fuzzy bsed evlution method of ERP softwre selection is significnt under current informtion sitution [1, 2]. 3. THE PRINCIPLE OF ERP SOFTWARE 3.1 Confirming the Significnce of Selecting of ERP Softwre Selecting of ERP softwre is defined s specil evlution strtegy only for certin medium-sized nd smll enterprise but not for ll enterprises. So the selected ERP softwre should be the most proper one but not the most expensive one. 3.2 Index Setting Principle in ERP Softwre Selection In order to successfully evlute different ERP softwre, the reltive evlution stndrds which be clled s evlution index system must be set up, nd the selecting of these evlution index should be up to the following principles. (1)Adptbility principle: Bsed on the dptbility to medium-sized nd smll enterprises, evlution index system should represent the fetures of the evluted subject from spects of mngement, technology nd efficiency. (2)Reltivity principle: Evlution index should represent the correltive nture property between evluted subjects nd its purpose. (3)Arrngement principle: Setting evlution index should precisely represent the domintive reltionship mong different levels. Every index should hve definite intention to consist of logicl nd resonble evlution system on hierrchy rottion. (4)Conciseness principle: Scope of index system should be pproprite. The index which hs gret influence to the evluted subject should be subdivided into the subindex nd vice vers to sve worklod. (5)Mesurbility principle: Significnce of index should be definite nd clculted to ensure the comprbility nd mneuverbility mong different indexes. (6)Independency principle: Evlution indexes should keep the minimum correltion between every two indexes. In other words, it is mutully exclusive nd hs no ny effect mong them.

4 730 Xukn Xu, Ydong Jing nd Zheng Shi 3.3 Evlution Index System of ERP Softwre During the evlution of ERP softwre selection, evlution indexes should be confirmed on the investigtion nd nlysis of medium sized nd smll enterprises bses insted of personl opinion [3]. The evlution index system cn be nlyzed nd clculted into three levels s figure 1. Figure 1. Evlution Index System 4. INTRODUCTION OF FUZZY EVALUATIONS MODEL Ambiguous clcultion cn hndle the imprecise mbiguous input informtion nd effectively reduce the demnd of sensitivity nd precision. Besides, it cn sve storge nd ctch the min conflict during the informtion processing to mke sure their multifunction nd stisfction. This model is specil working method bsed on fuzzy theory[4]. Figure 2. Ambiguous Decision-Mking Theory Ambiguous decision-mking system is consisted of technology bse, decisionmking system, fuzzy input connection nd removes fuzzy output. Technology bse includes mbiguous if-then rule bse nd dt bse. Ambiguous rule of rule bse defines nd provides the reltive experts experience or technology while dt bse defines the subjection function within mbiguous rule. According to these principles nd the decision-mking process, decision-mking system cn led to resonble output nd result, such s the evlution vlue of certin project. Ambiguous input

5 Implementtion Evlution Modeling of Selecting ERP Softwre Bsed on Fuzzy Theory 731 connection cn successfully trnslte the input into the corresponding mbiguous lnguge of subjection function s well s the removing fuzzy connection cn do it reversely. Fuzzy evlution model tkes mbiguous rule s bses nd hs the cpbility of deling with mbiguous informtion. The reson of tht is this evlution model cn express people s experience nd knowledge by mens of computer, which cn evlute the softwre more scientific, precise nd impersonl[5,6]. 5. BUILDING FUZZY EVALUATION MODEL OF ERP SOFTWARE SELECTION Fuzzy evlution model of ERP softwre selection is consisted of evluted object, evlution purpose, evlution index system & weight, fuzzy evlution nd so on. 5.1 Evluted Objects The evluted object of ERP softwre should be the dptble softwre to mediumsized nd smll enterprises. This kind of softwre cn prove the enterprises benefits nd chieve the expected strtegy trget, which cn relize the dvnced mngement thought of the enterprises by softwre ppliction. This pttern cn increse the efficiency nd reduce costs. There re three sections re included in ERP softwre. They re mngement thought, ERP mnufcture nd consulting services [6]. 5.2 Evlution Purposes The finl purpose of fuzzy evlution model is to select the most proper ERP softwre for n enterprise nd relize the optimiztion. Besides, the evlution cn led helthy developing of ERP softwre nd help the softwre developer to do stricter control during the softwre developing to perfect ERP softwre nd improve the enterprises benefits [7]. 5.3 Evlution Index System & Weight During the ERP softwre selection, series of evlution index system should be set up nd mke the modeling nd evlution by fuzzy theory. Bsed on the principle of dptbility, system, ppliction, combintion between numerl indexes nd property indexes, nd referred to the evlution stndrd of ISO/IEC 9126 nd the Wlters&McCll three-tier softwre qulity metrics model, evlution index nd their respective weights hve been discussed widely nd shown s the following tble 1.

6 732 Xukn Xu, Ydong Jing nd Zheng Shi Second-level nd Weight Prcticl Degree to Enterprises A10.25 Function of ERP Softwre A20.2 Technology of ERP Softwre A30.15 Property of ERP Softwre A40.1 Price of ERP Softwre A50.2 Mintennce &Service of ERP Softwre A60.1 Tble 1. Indexes nd Weights of ERP Softwre Selection Evlution Result nd Weight Third-level Index nd Weight Best Better Good Qulified Unqulified Cpitl Support Degree A Process Redesign Degree A Employee Eduction DegreeA Bsic Dt Adequte Degree A Prcticl Degree of Softwre Mngement A210.3 Stisfction Degree of Current FunctionA Stisfction Degree of Developing FunctionA230.2 Stndrdiztion of Finncil Softwre A Softwre Modulriztion Degree A31(0.30) System Opening A Dt Bse Property A Running Effectively A Difficulty Degree of Updte nd Metiness A Operting Convenience A System Security A Trcing Property A Fult-tolernce Cpbility A Functionl expnding Property A Softwre Purchsing Cost A Reltive Hrdwre Cost A Consulting CostA Softwre Modifying Cost A Trining Cost A Stndrd of Softwre Development A61(0.3) Adequte Degree of Technicl Mteril A Softwre Service Level A Softwre Stbility nd upgrding A64(0.3) Fuzzy Evlution Modeling In fuzzy evlution model, mbiguous collection is presented by uniform evlution collection V{best, better, good, qulified, unqulified}. The second-level index collection is A{A1,A2,,An} s well s the third-level index collection is Aij={Ai1, Ai2 Ai3,,Aij}. In this pper, A={enterprises prcticl degree A1, prctice of ERP softwre A2, technology of ERP A3, property of ERP softwre A4, price of ERPsoftwreA5, reputtion nd service level of ERP softwrea6}. In this

7 Implementtion Evlution Modeling of Selecting ERP Softwre Bsed on Fuzzy Theory 733 system, the index I is described by the evlution vector Ri={Ri1, Ri2 Ri3, Ri4, Ri5} nd every index hs five evlution levels. Let s suppose the collection F(X) is consisted of the whole mbiguous collection nd U is index set while V is remrk set. If u i U, then J : U ( U V ), J ( U ) ( ri (1), ri ( 2 ),..., ri ( m )). This mpping is clled fuzzy evlution mpping[4,8] Accurte the Fuzzy Input Vlue Every third-level evlution index is found by using subjection function, the formul is: r ( k) ij Where: (k) n ij is the popultion of remrks 5 l 1 5 ij 5 n ( k) l1 n ( l) ij n ij ( l) is the totl popultion per group rij ( l) r (l) i 1 =1 ij [0,1] For exmple, the weight of second-level index degree of current function stisfction cn be defined by clculting the subordintion degree bout every evlution collection. After investigting twenty medium-sized nd smll enterprises in Chngzhou of Chin, the gthered informtion includes issues of ERP softwre, such s function nd property nd price nd mintennce of ERP softwre, prcticl degree to enterprises, etc. According to sttistic of 20 different evlution collections nd the bove indexes of ERP softwre selection, the evlution result of best, better, good, qulified, unqulified respectively re 14, 3, 2, 1, nd 0. Therefore, the evlution vlue of every evlution item cn be determined by it. The degree of excellent is The degree of better is The degree of good is The degree of qulified is The degree of unqulified is 0. The sme wy cn be used to get every index weight in figure 4-1 nd reflect the influence degree to ERP softwre selection.

8 734 Xukn Xu, Ydong Jing nd Zheng Shi Setting up Index Evlution Mtrix Bsed on the fuzzy vlue, every expert cn give evlution vlue to every secondlevel evlution index, which cn be presented by Si=s i1, s i2, s i3,,s ik. Let s supposed the index of softwre modulriztion degree of ERP softwre is 0.3. Then, founded by the weight bse of figure 4-1, p p p p p w w, w,..., w ) nd w 1. i ( i1 i2 il l m1 im Referred to the principle of mximum subordintion degree, this index vector cn be expressed by 0,1,0,0,0. If the index of degree of softwre modulriztion is 0.6 then the corresponding index vector is 1,0,0,0,0. Every second-level evlution index Ai includes j third-level evlution index. Combined with the every weight nd the clculted vector of second-level evlution index, the evlution vector Ai cn be found by fuzzy synthetic evlution [6,9]. R11 R12 R1 k A i = wi1 wi2... wij R 21 R22 R2 k R j1 R j2 R jk Where stnds for rithmetic opertor Evlution mtrix is described s following k A= k k j1 j2 j3 j4 jk Fuzzy Clcultion of Evlution Mtrix Every According to the weight of second-level evlution index w=(w 1,w 2,w 3,,w k ) nd the subordintion degree of the third-level evlution index by experts judge, the originl experts nlysis mtrix cn be clculted, nd the second-level evlution index mtrix cn be got by fuzzy operting the eight of the third-level index, then which cn led to the clcultion of the first-level evlution index mtrix B[10]. The result mtrix of fuzzy evlution is presented s following: B=W A,

9 Implementtion Evlution Modeling of Selecting ERP Softwre Bsed on Fuzzy Theory k k B= w 1 w 2 w 3 w k k j1 j2 j3 j4 jk Where B stnds for the result mtrix of fuzzy evlution, The result mtrix of fuzzy evlution cn be found s B=(b 1,b 2,,b k ). For the convenient compre mong different selections, the finl result mtrix of fuzzy evlution should be trnslted to specific vlue by giving the different weight to remrk collection. Weights cn be described s Q={q1,q2,q3,q4,q5}. Where: q i ( K 1 i) 100 K K=5 Then: Q={100,80,60,40,20} The evlution mong different selection cses cn be nlyzed by the bove method nd get the corresponding b vlue (b=bq T ). Supposed there re totlly p selection cses of ERP softwre selection nd b refers to the finl evlution result [3, ( i) 5, 10], every evlution result is rnked s concluded tht the selection cse (i) should be the best. b b ( j)... b ( l), then it is 6. APPLICATION OF EVALUATION MODEL Tke n idiogrphic cse for exmple. Supposed there re three ERP softwre selecting decisions to medium sized nd smll enterprise where the decision numbers seprtely re S1, S2 nd S3. For the decision S1, the user representtives, mngers of this enterprise nd experts mke the evlution such s the second-level enterprises prcticl degree nd give the scores to its third-level index by subjection principle. After tht, the evlution mtrix cn be got s R 1, nd fuzzy multiply with the weight to get the second-level index vector A A = Every second-level index vector cn be clculted by its second-level index nd six second-level index vector cn mke up of second-level index evlution mtrix A s following

10 736 Xukn Xu, Ydong Jing nd Zheng Shi A= Then the mtrix B is found s: B=V A= Through the fuzzy evlution, result mtrix is found s B nd mke the clcultion b (s1) =76. The sme wy cn be used to nlyze the other two selecting decision b (s2) =53.3 nd b (s3) =45.2. A rnk of the result cn be given s following: b (s1) >b (s2) >b (s3) Therefore, mong the three ERP softwre, Bsed on the bove fuzzy evlution model, it is concluded tht decision S1 is the best ERP softwre selecting decision to this enterprise. 7. PROSPECTING ERP softwre is kind of mngement system with highly complexity nd synthesis nd it is significnt for enterprises to select proper ERP softwre. Besides the considertion of the mngement thought of the softwre, softwre technology, expending property, mintennce property nd implement cost[11], the dptbility of this ERP softwre is more necessry to be considered. In this pper, this ERP softwre selection model pys lots ttention to reduce the mn-mde mistke nd del with the importnt element of ERP softwre by rithmetic to mke sure the results cn be clculted more conveniently nd precisely, which cn successfully give the relible decision support to enterprises mngers. With the development of informtion technology, the softwre development trends to network nd intelligence so the evlution index system nd their eights should chnge correspondingly to ensure the evlution result more scientific, precise nd impersonl, which cn dvnce the development level of ERP softwre, enhnce its prcticl property nd optimize the ERP softwre ppliction in medium-sized nd smll enterprises [12]. REFERENCES 1. Y. Zhou nd B. Liu, ERP theory nd its ppliction (Chin Mchine Press: Beijing, PK, 2003). 2. Y. Li, X. Lio, nd H.Z. Lei, A knowledge mngement system for ERP implementtion, Syst. Res. Behv. Sci.. Volume 23, pp , (2006). 3. Y. Go nd J. Su, Reserch of ERP Selecting Bsed on the FAHP Method, Sttistics nd Decision. Volume 2, pp.42-44, (2005).

11 Implementtion Evlution Modeling of Selecting ERP Softwre Bsed on Fuzzy Theory P. Liu nd M. Wu, Fuzzy theory nd its ppliction (Publishing House of Ntionl University of Defense Technology: ChngSh, 2000). 5. L.A. Zdeh, Fuzzy Sets nd systems, Interntionl Journl of Generl Systems. Volume 17, Number 2 & 3, pp , (1990). 6. Z. Zhou, Reserch of ERP index, Enterprise Economics. Volume 5, pp.20-22, (2002). 7. S. Wng nd M. Xin, Study on synthetic evlution method of softwre qulity, Computer Engineer nd Design. Volume 23, Number 4, pp.16-18, (2002). 8. C.E. Bozdg, C. Khrmn, nd D. Run, Fuzzy group decision mking for selection mong computer integrted mnufcturing systems, Comput. Ind.. Volume 51, pp.13 29, (2003). 9. D.F. Li nd J.B. Yng, Fuzzy liner progrmming technique for multi-ttribute group decision mking in fuzzy environments, Inform. Sci.. Volume 158, pp , (2004). 10. A.L. Jensen, Building web-bsed informtion system for vriety selection in field cropsobjectives nd results, Computer nd Electronics in Agriculture. Volume 32, pp , (2001) 11. C.C. Wei, C.F. Chien, nd M.J.J. Wng, An AHP-bsed pproch to ERP system selection, Int. J. Prod. Econom.. Volume 96, pp.47-62, (2005). 12. J. Xie, N. Cui, nd R. Chen. Fuzzy evlution model nd its ppliction of selecting ERP softwre, Journl of Huzhong University of Science nd Technology. Volume 30, Number 5, pp.37-40, (2000). 13. M. Morisio, nd A. Tsoukiàs, IusWre, methodology for the evlution nd selection of softwre products, in Proc. of IEE Proceedings Softwre Engineering (1997), pp I. Vlhvs, I. Refnidis, I. Stmelos, nd A.Tsoukiàs, ESSE: n expert system for softwre evlution, Journl of Knowledge Bsed Systems. Volume 12, pp , (1999).

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