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Composite Techniques of Structural Equation Modeling and Analytic Hierarchy Process for Information Technology Vendor Selection

Author

Listed:
  • Dhanapal Durai Dominic Panneer Selvam

    (Dept. of Cis, Universiti Teknologi Petronas, Malaysia)

  • Sarit Maitra

    (KSG Analytics Pte LTD, Singapore)

  • P Parthiban

    (Dept. of Production Engineering, Nit Tiruchirappalli, India)

  • Abdul Zubar Hameed

    (Industrial Engineering Department, Kind Abdul-Aziz University, Jeddah, KSA)

Abstract

This paper had developed an effective information technology (IT) vendor selection model for banking & financial services industries (BFSI). For any business, profitability and growth depends on the right vendor selection in their purchase process. This paper identifies ten most influencing and important criteria with 43 sub-criteria to comprehend the vendor selection process. Furthermore, the authors developed a vendor selection score model using Structural Equation Modelling (SEM) and Analytic Hierarchy Process (AHP). This article intends to inform practice and conclude with practical recommendations to BFSI for vendor selection. The proposed composite technique identified the most eligible vendor to meet up with the buyer’s strategies. This article suggests the most desirable vendor for the required benefit. Vendor 1 (Silverlake) with a score of 44% promised to be the most recommended one that also performed consistently in the sensitivity test.

Suggested Citation

  • Dhanapal Durai Dominic Panneer Selvam & Sarit Maitra & P Parthiban & Abdul Zubar Hameed, 2021. "Composite Techniques of Structural Equation Modeling and Analytic Hierarchy Process for Information Technology Vendor Selection," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 20(04), pages 1153-1187, July.
    • Handle: RePEc:wsi:ijitdm:v:20:y:2021:i:04:n:s0219622021500346
    DOI: 10.1142/S0219622021500346
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