Document Type : Original Article


1 School of Industrial Engineering, Iran University of Science and Technology, Tehran, Iran.

2 Department of Industrial Engineering, Kharazmi University, Tehran, Iran.


Enterprise resources planning (ERP) systems attract many attentions from industry sector because of their ability to facilitate and integrate the enterprise operations. However, many expenses accompany the implementation of these systems and consecutive changes which doing a precise and comprehensive performance evaluation a necessary part of this process. These evaluations should consider operational and technical aspects of ERP systems to reflect the effectiveness of them toward the organization's requirements. In this paper, a two-stage data envelopment analysis model (DEA) is presented in order to evaluate the efficiency of ERP systems in such a way that the operational and the technical aspect are evaluated in the first stage and the second stage of DEM model, respectively. Based on the obtained results the ERP systems’ functionality and customizability to the client processes are the two key features that need to be considered by the providers. Furthermore, the findings of parameter sensitivity analysis of the proposed model provide deep and managerial insights into the further usability improvements of ERP systems. 


Ahn, Y. H., and Min, H., (2014). “Evaluating the multi-period operating efficiency of international airports using data envelopment analysis and the Malmquist productivity index”, Journal of Air Transport Management, Vol. 39, pp. 12-22.
Aversano, L., and Tortorella, M., (2013). “Quality evaluation of floss projects: Application to ERP systems”, Information and Software Technology, Vol. 55, No. 7, pp. 1260-1276.
Banker, R. D., Charnes, A., and Cooper, W. W., (1984). “Some models for estimating technical and scale inefficiencies in data envelopment analysis”, Management science, Vol. 30, No. 9, pp. 1078-1092.
Brehm, L., Heinzl, A., and Markus, M. L., (2001). “Tailoring ERP systems: a spectrum of choices and their implications”, In System Sciences, 2001. Proceedings of the 34th Annual Hawaii International Conference on (pp. 9-pp). IEEE.
Brzozowski, M., and Birfer, I., (2017). “Applications of MCDM Methods in the ERP System Selection Process in Enterprises”, Handel Wewnętrzny, (3 (368) Tom I), pp. 40-52.
Charnes, A., Cooper, W. W., and Rhodes, E., (1978). “Measuring the efficiency of decision making units”, European journal of operational research, Vol. 2, No. 6, pp. 429-444.
Chen, Y., and Zhu, J., (2004). “Measuring information technology's indirect impact on firm performance”, Information Technology and Management, Vol. 5, No. 1, pp. 9-22.
Chen, Y., Cook, W. D., Li, N., and Zhu, J., (2009). “Additive efficiency decomposition in two-stage DEA’, European Journal of Operational Research, Vol. 196, No. 3, pp. 1170-1176
Daneva, M., (2010). “Balancing uncertainty of context in ERP project estimation: an approach and a case study”, Journal of Software: Evolution and Process, Vol. 22, No. 5, pp. 329-357.
Das, P., and Datta, A., (2018). Performance Evaluation of Indian Information Technology-enabled Services (ITeS) Industry: An Application of Two-Stage Data Envelopment AnalysisIJAME.
Galagedera, D. U., Watson, J., Premachandra, I. M., and Chen, Y., (2016). “Modeling leakage in two-stage DEA models: An application to US mutual fund families”, Omega, Vol. 61, pp. 62-77.
Gefen, D., (2004). “What makes an ERP implementation relationship worthwhile: Linking trust mechanisms and ERP usefulness”, Journal of Management Information Systems, Vol. 21, No. 1, pp. 263-288.
Gupta, P., Mehlawat, M. K., and Mahajan, D., (2018). “Data envelopment analysis based multi-objective optimization model for evaluation and selection of software components under optimal redundancy”, Annals of Operations Research, pp. 1-24.
Huang, C. W., Ho, F. N., and Chiu, Y. H., (2014). “Measurement of tourist hotels׳ productive efficiency, occupancy, and catering service effectiveness using a modified two-stage DEA model in Taiwan”, Omega, Vol. 48, pp. 49-59.
Kao, C., and Hwang, S. N., (2008). “Efficiency decomposition in two-stage data envelopment analysis: An application to non-life insurance companies in Taiwan”, European journal of operational research, Vol. 185, No. 1, pp. 418-429.
Kitchenham, B., and Mendes, E., (2004). “Software productivity measurement using multiple size measures”, IEEE Transactions on Software Engineering, Vol. 30, No. 12, pp. 1023-1035
Koch, S., (2007). “ERP implementation effort estimation using data envelopment analysis”, Technologies for business information systems, pp. 121-132.
Kumar, V., Singh, V. B., Garg, A., and Kumar, G., (2018). “Selection of Optimal Software Reliability Growth Models: A Fuzzy DEA Ranking Approach”, Quality, IT and Business Operations, pp. 347-357.
Lall, V., and Teyarachakul, S., (2006). “Enterprise resource planning (ERP) system selection: a data envelopment analysis (DEA) approach”, Journal of Computer Information Systems, Vol. 47, No. 1, pp. 123-127.
Lee, S., Lee, K., and Kang, I. W., (2005). “Efficiency analysis of controls in EDI applications’, Information & Management, Vol. 42, No. 3, pp. 425-439.
Light, B., Holland, C. P., and Wills, K., (2001). “ERP and best of breed: a comparative analysis”, Business Process Management Journal, Vol. 7, No. 3, pp. 216-224.
Liu, D. W., and Ye, X. B., (2010). “Study on the Objectives of SCM in E-commerce Based on ERP Application”, In Applied Mechanics and Materials, Vol. 20, pp. 22-27.
Mayrhauser, A. V., Wohlin, C., and Ohlsson, M. C., (2000). “Assessing and understanding efficiency and success of software production”, Empirical Software Engineering, Vol. 5, No. 2, pp. 125-154.
Nozdrina, L., (2009). “Applying of fuzzy logic modeling for the assessment of ERP projects efficiency”, In Proc. 5th Int. Sci. Conf. Project Management: Status and Opportunities.
Parthasarathy, S., and Anbazhagan, N., (2008). “Evaluating ERP projects using DEA and regression analysis”, International Journal of Business Information Systems, Vol. 3, No. 2, pp. 140-157.
Parthasarathy, S., and Sharma, S., (2016). “Efficiency analysis of ERP packages—A customization perspective”, Computers in Industry, Vol. 82, pp. 19-27.
Shao, B. B., and Lin, W. T., (2002). “Technical efficiency analysis of information technology investments: a two-stage empirical investigation”, Information & Management, Vol. 39, No. 5, 391-401.
Somers, T. M., and Nelson, K., (2001, January). “The impact of critical success factors across the stages of enterprise resource planning implementations”, In System Sciences, 2001. Proceedings of the 34th Annual Hawaii International Conference on. IEEE.
Stefanou, C. J., (2001). “A framework for the ex-ante evaluation of ERP software”, European Journal of Information Systems, Vol. 10, No. 4, pp. 204-215.
Stensrud, E., and Myrtveit, I., (2003). “Identifying high performance ERP projects”, IEEE Transactions on Software Engineering, Vol. 29, No. 5, pp. 398-416.
Sudhaman, P., and Thangavel, C., (2015). “Efficiency analysis of ERP projects—software quality perspective”, International Journal of Project Management, Vol. 33, No. 4, pp. 961-970.
Teltumbde, A., (2000). “A framework for evaluating ERP projects”, International journal of production research, Vol. 38, No. 17, pp. 4507-4520.
Toloo, M., Nalchigar, S., and Sohrabi, B., (2018). “Selecting most efficient information system projects in presence of user subjective opinions: a DEA approach’, Central European Journal of Operations Research, pp. 1-25.
Tsai, B. H., and Chou, S. B., (2015). “Application of multiple output data envelopment analysis in interpreting efficiency improvement of enterprise resource planning in integrated circuit firms”, The Journal of Developing Areas, Vol. 49, No. 1, pp. 285-304.
Tu, H. J., and Yen, W. C., (2013). “Measuring the operating efficiency of internet channels using the two-stage DEA approach”, Asia Pacific Management Review, Vol. 18, No. 3, pp. 257-274.
Wang, K., Huang, W., Wu, J., and Liu, Y. N., (2014). “Efficiency measures of the Chinese commercial banking system using an additive two-stage DEA”, Omega, Vol. 44, pp. 5-20.
Wanke, P., and Barros, C., (2014). “Two-stage DEA: An application to major Brazilian banks”, Expert Systems with Applications, Vol. 41, No. 5, pp. 2337-2344.
Wu, J., Xiong, B., An, Q., Sun, J., and Wu, H., (2015). “Total-factor energy efficiency evaluation of Chinese industry by using two-stage DEA model with shared inputs”, Annals of Operations Research, pp.1-20.
Zickert, F., and Beck, R., (2013). “A mapping model for assessing project effort from requirements”, Information Systems and e-Business Management, Vol. 11, No. 3, pp. 377-401.