An investigation of the challenges facing enterprise resource planning systems (erps) implementation in Kenya

Abstract

In the past five years, many companies in Kenya have invested a lot of capital in information systems that range from transaction processing systems to complex inter­ organisational systems. Companies have implemented information systems on the belief that they will provide organisations with needed tools for information resource management. One of the systems that companies have invested in is the Enterprise Resource Planning systems (ERPs).

Most companies in Kenya are making frantic efforts to implement ERPs, which are being marketed as a perfect solution to the organisational problems of information management. The companies that have implemented ERPs have undergone a lot of positive changes while others may have had the worst of the experiences. Against this background, the research study sought to evaluate the challenges that companies that have implemented ERPs in Kenya and the vendors of ERP solutions have faced in their quest to implement ERPs in Kenya. The focus of the study was on all companies that had implemented the ERPs by March 2002 as well as vendors of ERPs in the country.

Twenty-eight companies that had implemented ERPs and eight vendors of the software were studied. Primary data for the study was collected using questionnaires. All the companies surveyed indicated that the cost ofERP systems was a major challenge. The companies felt the cost of software, hardware as well as costs incurred in maintenance and training of users was too high. Companies also felt that many of them had not fully realised the benefits and demands/ requirements of the systems while some found the systems too complex to manage.

Vendors concurred with companies that had implemented the systems on the cost issue and indicated that this had put off many companies that had intentions of implementing the systems. However, they noted that ERPs are not that complex to manage. Vendors too had had a share of their problems with companies for whom they had implemented the systems. The companies take too long to pay them while others do not honour contracts. They too noted that many of the staff ofthe companies that had implemented ERPs are never ready to accept the new systems hence the resistance during implementation and use of the systems.

Despite the challenges that companies that have implemented ERPs and vendors have encountered, a number of companies have successfully implemented the ERPs and attribute their increased efficiency and better management of their resources to the ERP system. Most of the companies that have implemented the systems are in the manufacturing and allied sector followed by those in the service industry. Vendors too are determined to reach more companies as they aspire to market ERPs to many more companies, especially those in the service industry. There is still a market for ERP systems in Kenya as many more companies are moving towards integrating their business functions.