Impact of Use of ERP in Manufacturing Companies in Kenya

Abstract

Enterprise Resource Planning (ERP) systems are configurable information systems packages that integrate information and information-based processes within and across functional areas in an organization. ERP systems promise seamless integration of all the information flowing through the organization. There are numerous whitepapers and case studies in the Internet that describe the benefits of ERPs and how these systems have positively impacted on businesses. Other studies indicate that many organizations have failed to achieve the benefits they expect from ERP implementations. Acquisition of ERP systems often lead to huge financial investments that could adversely affect an organization's performance. It is therefore important for organizations to be able to evaluate their needs for ERPs before investing in them. Equally, it is imperative that organizations be able to evaluate the impact of these systems on their performance. This research study carried out a survey on 16 manufacturing companies in Kenya. Using a previously developed framework for evaluating ERP acquisition, the study identified important factors that influence ERP adoption in Kenya. The research identified factors affecting implementation and utilization of ERP. The study used empirical methods to research on impact of ERP on manufacturing companies in Kenya. The research findings show that at organizational level, ERP has very positive impact on the performance of the companies. At employee level, results show that ERP is instrumental in improving user productivity. The research determined pertinent factors affecting adoption as well as implementation and utilization of ERP systems. This study provides an understanding of impact of ERP systems and highlights factors affecting acquisition and implementation of these systems.