An Evaluation of the Extent and Impact of the Application of Enterprise Resource Planning (ERP) Systems in the Kenya Construction Industry a Case Study of Nairobi County

Abstract

The performance of construction projects depends on how best resources are managed. Lack of effective resource management through planning techniques is likely to lead to higher project7costs, schedule overruns,7and poor7quality. The goal of this research was to evaluate the extent and impact of ERP systems in Kenya's construction industry. This study mostly employed a survey research approach, through the use of questionnaires to gather information from contractors. The survey achieved 59% response rate from the contractors. The study location was Nairobi County, and the target population was NCA 1-3 contractors. Random sampling was used in identifying the 123 respondents. Descriptive statistics, linear regression analysis, thematic analysis, Pearson's correlation analysis, and Spearman's correlation analysis were used in analyzing the data collected. The study concluded that, though majority (74%) of the contractors were familiar with the ERP systems, the uptake of these tools was very low. Oracle prime projects was established to be the most adopted software, followed by sage 200, Vista, Epicor project management and Maestro. Additionally, there were two more softwares identified by the respondents that were not listed in the questionnaire. This included In4Velocity and Focus softnet. The major challenges that hinder the adoption of these tools and techniques were established to be: high cost of acquisition, complexity to master usage, and lack of formal training of project participants. The research established that the usage of ERP systems as a management tool significantly improves construction project performance. The study recommends that firms be sensitized to the use of ERP systems to enjoy the benefits of reduced project completion period, quality improvement, as well as improved project cost control. The study further recommends that institutions of higher learning that train manpower for the construction industry be encouraged to train on the use and benefits of ERP systems. This will lead to improvement in the efficiency of the management of construction projects.