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World Applied Programming, Vol (3), Issue (3), March 2013.

101-107
ISSN: 2222-2510
2013 WAP journal. www.waprogramming.com

Ranking of Iran's Informatics Companies Based on EFQM


and Fuzzy System
Hossein Safari

Abdol Hossein Jafarzadeh

Alireza Faghih

Associated Professor,
Faculty of management,
University of Tehran
hsafari@ut.ac.ir

M.S. Candidate of Industrial


Management, University of
Tehran

M.S. Candidate of Industrial


Management, University of
Tehran

Mohammad Reza Fathi


Phd Candidate of Industrial
Management, University of
Tehran

Abstract: One of the important problems in operation research is ranking of some alternatives basis on some
criteria. This case categorized in the Multi Criteria Decision Making methods. This paper investigated on the
ranking of Iran's Informatics companies. Imprecise Information and uncertainty in this industry lead us to avoid
from traditional techniques. Then we developed a methodology consist of three components: design a metric for
measuring performance of a company, developing fuzzy rule-based system, and finally evaluating and ranking of
Informatics companies. For design of metric, EFQM and system model have been used. According to proposed
metric, two factors consider for evaluating of companies: current efficiency and potential growth. Then outputs of
fuzzy system are the final score of every company that is the basis of company ranking, and situation of companies
in the above factors.

Keywords: EFQM, Fuzzy System, Informatics Companies

I. INTRODUCTION
A common problem in operations research involves comparing a set of alternatives to determine which is best that
is named decision making. Decision making often takes place in a fuzzy environment where the information available is
imprecise or uncertain. For fuzzy decision problems of prioritizing or evaluating a finite set of alternatives involving
multiple criteria, the application of fuzzy set theory to multicriteria analysis models under the framework of utility theory
has proven to be an effective approach (Carlsson et al., 1996; Chen et al., 1992; Dubois et al., 1994; Murakami et al., 1983;
Zimmermann, 1987; Zimmermann, 1996; Zimmermann, 2000; Baldwin et al., 1979; Bortolan et al., 1985; Cheng, 1998;
Grzegorzewski, 1998; Kim et al. 1990; Lee et al. 1988; Liou et al., 1992; Modarres et al., 2001; Pomares, 2000).Fuzzy
ranking is a topic that has been used in this case and studied by many researchers (Bortolan et al. 1985; Chang et al. 1994;
Chen et al., 1992; Fortemps et al. 1996; Lee et al., 1988; Zhu et al., 1992). But It seems to have been proposed first by Jain
(Jain, 1976). More researches are belong to Wang and Kerre (Wang et al., 2001), Dubois and Prade (1999, 1982), Li and
Lee (1987), Nakamura (2000), and Tseng et al. (1988), give an extensive investigation of fuzzy ranking methods based on
various classification schemes. Although most fuzzy ranking methods in the literature produce satisfactory results for clearcut problems, they may generate counter-intuitive outcomes or are not discriminatory enough under certain circumstances
(Berkan et al., 1997; Setnes et al., 1998; Geraedts et al., 2001). In addition, most of them require considerable
computational effort, which is obviously not desirable for handling large-scale fuzzy multicriteria analysis problems. It is
evident that a fuzzy ranking method that can produce rational ranking results using sound logic and simple computations is
desirable for practical fuzzy decision problems.
In this paper, we propose a practical methodology to rank different Iran's Informatics companies. According to
proposed methodology, fuzzy rule based system was used. Finally, two kinds of ranking presented through it to point out
situation of a company in detail.
The rest of the paper is organized as follows: the research methodology is explained in Section 2. This section has
an associated example. The results are shown in Section 3. Some concluding remarks are made in Section 4.

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II. METHODOLOGY
Basically, methodology of this paper is consisted of three stages: design a metric for examining of companies,
design a fuzzy system, and data analysis.

II.1 Design a metric for examining of companies


Many tools, methods and models have been developed world wide in order to give measurement of organization
performance. In Europe, the Model for Business Excellence, issued by the European Foundation for Quality Management,
has gained broad acceptance among both profit and non-profit making organizations (Geraedts, 2001). The EFQM business
excellence model was developed in 1989 by 14 multinationals grouped in the European Foundation of Quality Management
to improve the quality of management in Western Europe. The EFQM model is used to measure and improve the overall
quality of an organization. One of the essential characteristics of the EFQM-model is that the model distinguishes RESULT
AREAS (Results the organization has achieved-WHAT), and ORGANIZATION AREAS (Management of the
organization-HOW) (Westerveld, 2003). With this model organizations can evaluate their progress towards Total Quality.
The EFQM Model for Business Excellence consists of nine distinctive areas, each representing a different aspect of the
organization.
These nine areas are subdivided into areas concerned with what results have been achieved (Results) and areas
concerned with how these results have been achieved (Enablers). As a no prescriptive framework the Quality Award can be
used to assess an organization's progress towards achieving sustainable excellence in all aspects of performance. It is based
on the premise that `Customer satisfaction, People employee) satisfaction and Impact on Society are achieved through
leadership driving policy and Strategy, People Management, Resources and processes, leading ultimately to excellence in
Business Results (European Foundation for Quality Management) (Grzegorzewski, 1998). Figure 1 shows the nine areas
and how they are related to each other. The Model for Business Excellence serves as a useful framework within which to
structure quality improvement efforts because of its integrated cycle for continuous improvement. The cycle begins by
carrying out a self assessment to see what Results are achieved at a given moment. Based on these findings, organizations
can decide what improving actions must be taken to strengthen one or several Enablers, in order to achieve better results
next time. For example: if an organization wants to improve People (employee) satisfaction, it has to strengthen People
Management and also perhaps Leadership, and Policy and Strategy. This can be realized by improvement actions in these
particular areas.
People
Results

People

10%

Leadership
10%

Strategy
10%

Resources and
Partnerships
10%

10%

Processes,
Products
and
Services
10%

Customer
Results

15%

Key
Results
15%

Society
Results
10%

Enablers 50%

Results 50%
Figure 1. EFQM model

In this paper, for the ranking of Informatics companies, two factors were considered: current efficiency and
potential growth. If a company has a good situation in the both factors, it will have high rank. Current efficiency defines as
performance of a company, based on different aspects of organization, in the 2010 and potential growth is the growth rate of
performance for five years (2006, 2007, 2008, 2009, and 2010).
According to the different ranking throughout the world e.g. Furtune, Business week, Financial Post, Information
Week, Industry Week, Forbes, Financial Times, Asia week, and Canadian Business, the best criteria of companies ranking
are financial criteria. Some of them are Return on Investment, Return on Assets, Sale and Income per person, and so on. But

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Hossein Safari et al. World Applied Programming, Vol (3), No (3), March 2013.

here we used soft organizational variable. For identification of these variables, EFQM model was used. But its classification
of components was changed. In this paper, we mixed EFQM and System model. EFQM has nine components (Figure 1) and
System model has three components of input, process and output. Figure 2 shows mapping of system model on the EFQM.
People
Results

People

Strategy
Leadership

Processes,
Products and
Services

Resources
and
Partnerships

Input

Customer
Results

Key
Results

Society
Results

Process

Output

Figure 2. Mapping of system approach on the EFQM model

Then through three questionnaires, data will collect from three components of input, process and output based on
current efficiency and potential growth.

II.2 Design a Fuzzy System


Fuzzy Logic is simple on its roots and has also the possibility fusing linguistic values to describe the input and
output of the system, thus improving the understandability of the system [9]. Many real world problems can be represented
as complex fuzzy systems which may involve a large amount of fuzzy data, fuzzy variables and fuzzy relationships. Fuzzy
logic has been used extensively to model these systems in many application areas, ranging from engineering, science and
medicine to environmental planning and social sciences (Zenik et al., 2001).
While mathematical models are based on algebraic operations (equations, integrals), logic models rely on logictype connectives (and, or, if-then), often with linguistic parameters, which give rise to rule-based and knowledge-based
systems. Fuzzy logic models can combine both these types of modeling via the fuzzification of algebraic and logical
operations (Berkan, 1997). For some applications, fuzzy systems often perform better than traditional systems because of
their capability to deal with non-linearity and uncertainty. The main reason is that while traditional systems make precise
decisions at every stage, fuzzy systems retain the information about uncertainty as long as possible and only draw a crisp
decision at the last stage. Another advantage is that linguistic rules, when used in fuzzy systems, would not only make tools
more intuitive, but also provide better understanding and appreciation of the outcomes. However, the complexity arisen
from information uncertainty makes it more difficult for a human to understand the way these systems work, especially how
to interpret the implication of the imprecision of each variable on its interaction with other variables, and how the
propagation of such imprecision affects the level of confidence in the outcomes at every stage. This understanding is
required not only by the users of these systems, but also by their designers who seek for ways to optimize the systems (Binh
et al., 2005).
Initially, fuzzy modeling was introduced as an approach to building models based on expert knowledge in a
linguistic form (Zadeh, 1973; Mamdani, 1977). Later on, the focus gradually shifted toward methods for constructing fuzzy
systems from data and applying them in areas like data mining, pattern recognition and systems identification (Hellendoorn
et al., 1997). In such applications, fuzzy approaches serve as an alternative or complement to other inductive methods,
including neural networks, machine learning or statistical inference techniques. The most prominent feature that
distinguishes fuzzy systems from black-box methods is their transparency and interpretability.
A fuzzy system is an approximator that consists of a set of IF-THEN type rules, each of which has a premise and a
consequent part. In standard fuzzy systems, the consequent part is a scalar. A more general class of fuzzy systems includes
the functional fuzzy systems, which are usually referred to as the TakagiSugeno (TS) fuzzy systems. In such systems, the
consequent part is a crisp function, which gives the approximator the ability to incorporate knowledge about the model. [26]
Fuzzy models are suited for explaining solutions to users, especially to those who do not have a strong
mathematical background. The linguistic interpretability and transparency of fuzzy models constructed from data therefore
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became important research items in the literature (Setnes et al., 1998; Setnes et al., 2000; Valente, 1999; Pomares et al.,
2000; Jin , 2000).
There are three common classes of fuzzy logic models: information processing models which describe
probabilistic relationships between sets of inputs and outputs; control models which control the operations of systems
governed by many fuzzy parameters; and decision models which model human behavior by incorporating subjective
knowledge and needs, using decision variables (Binh et al., 2005). Here, we have used the first kind of model for ranking of
Iran's Informatics companies. The architecture of fuzzy system is as figure 2.
Level 1

Level 2

Level 3

Input
Process

Fuzzy Rule Based


System1

Current Efficiency

Output
Fuzzy Rule Based
System3

Final Score

Input
Process

Fuzzy Rule Based


System2

Potential Growth

Output

Rank 2

Rank 1

Figure 3 (1). Architecture of fuzzy system of system

This system has three subsystems that distributed throughout three levels. Rules of the third subsystem are pointed
out in the figure 3. This system has been run in the Fuzzy Tech software.

Figure 3 (2). Rules of Subsystem 3

According to above system, we can show performance of a company in two forms. The first form is related to the
Rank 1 that is output of fuzzy system as a crisp number. This number is basis of companies ranking. But we can present
more detailed information about companies through Rank 2. In the Rank 2, performance of a company will be show
through two characters. According to figure 3, value of CF and PG is divided to five parts that every part related to a

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Hossein Safari et al. World Applied Programming, Vol (3), No (3), March 2013.

symbol. For example, if performance of a company be A*, it means that CE of this company is very high and PG is
medium.
Very Low

CE
PG

E
--

Low

Medium

D
-

High

C
*

B
+

Very High

A
++

Figure 4. Different division of CE and PG

II.3 Example
One of the studied companies is Dadehpardazi. Its collected data is as the following table.

Table 1. Data of Dadepardazi


Current Efficiency
Input
Process
Output
6815
26
14089

Input
0.0091

Potential Growth
Process
Output
13.5
-0.0249

According to the outputs of FuzzyTech software, CF is 0.25, PG is 0.0121 and Final Score is 0.0576. So
performance of this company is D--. Figure 4 shows value of CF, PG, and Final Score of Dadehpardazi in three dimension
plot.

Figure 4. Performance of Dadehpardazi

III. MODEL EVALUATION RESULTS AND DISCUSSION


Founded in the system structure discussed previously, this section investigates performance of 15 Iran's
Informatics companies. Table 2 presents results of company ranking.

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Hossein Safari et al. World Applied Programming, Vol (3), No (3), March 2013.

Table 2. Ranking of Iran's Informatics Companies

Comp
any
Co 1
Co 2
Co 3
Co 4
Co 5
Co 6
Co 7
Co 8
Co 9
Co 10

Current Efficiency
Input Process Output
658
26.5
59462
6815
26
14089
1129
31
5800
590
20.5
6701
607.25
26
6526
122.25
15
4861
170
21.5
2410
333.5
20.5
1875
105
30
1400
312.75
35.5
1707

Potential Growth
Input
Process Output
0.9119
8
0
0.0091
13.5
-0.025
0.114
12
-0.06
0.1216
5
0.76
0.65
11
0
0.2519
2
-0.03
0.5365
5
1
0.3214
5.5
0.16
0.2335
6
-0.25
4.7916
8
0

CF

PG

0.11
0.25
0.0484
0.0473
0.0389
0.0279
0.0143
0.0126
0.0136
0.0103

0.1333
0.0121
0.0808
0.0748
0.1028
0.0956
0.25
0.1380
0.0661
0.0639

Final
Score
0.1333
0.0576
0.0484
0.0473
0.0389
0.0283
0.0177
0.0159
0.0136
0.0103

Rank
1
2
3
4
5
6
7
8
9
10

DD-E-E-E-E-E-E-E-E--

IV. CONCLUSION
In this paper, we interested in using a new methodology based on fuzzy system to rank Irans Informatics
companies. According to the suggested conceptual model, two factors of current efficiency and potential growth are used to
evaluate and rank companies. But for both factors, with system approach, three fields are defined: input, process, and
output. Then designed fuzzy system has three levels and three subsystems. Two kinds of ranking were developed to
evaluate every company. The first ranking is the basis of companies ranking and the second one present detail information
about companies and their rank. According to results of this research, the best three Irans Informatics companies are: ASR
e Danesh, DPI, and Iran Data System.

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