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Optimizing ERP readiness improvements under budgetary constraints

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  • Ahmadi, Sadra
  • Yeh, Chung-Hsing
  • Martin, Rodney
  • Papageorgiou, Elpiniki

Abstract

An organization needs to be ready before implementing a complex enterprise resource planning (ERP) system. To achieve this aim, organization has to address two questions: (1) “is the organization sufficiently ready to accept an ERP system” and (2) “what is the most cost effective plan for improving the readiness, if the organization is not sufficiently ready?”. To estimate the current readiness an organization must consider the interrelationships between influential readiness factors and find the best improvement plan as a multi-objective trade-off between the two objectives of maximum readiness and lowest cost. In this paper we demonstrate how to calculate the readiness, and then solve the multi-objective optimization problem. We estimate readiness by using fuzzy cognitive maps to include all the complex causal relationships between factors. We solve the multi-objective optimization problem by using the NSGA-II evolutionary algorithm. The final result is a set of optimal improvement plans where an organization can choose which plan suits it the best.

Suggested Citation

  • Ahmadi, Sadra & Yeh, Chung-Hsing & Martin, Rodney & Papageorgiou, Elpiniki, 2015. "Optimizing ERP readiness improvements under budgetary constraints," International Journal of Production Economics, Elsevier, vol. 161(C), pages 105-115.
  • Handle: RePEc:eee:proeco:v:161:y:2015:i:c:p:105-115
    DOI: 10.1016/j.ijpe.2014.11.020
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    References listed on IDEAS

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