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

Dhanapal Durai Dominic Panneer Selvam (), Sarit Maitra, P Parthiban and Abdul Zubar Hameed
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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

International Journal of Information Technology & Decision Making (IJITDM), 2021, vol. 20, issue 04, 1153-1187

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.

Keywords: Information technology; vendor selection; analytic hierarchy process; structural equation modeling; banking and financial services industry (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1142/S0219622021500346

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