ENTERPRISE RESOURCE PLANNING AND PROJECT
IMPLEMENTATION IN STATE REGULATORY AGENCIES IN KENYA
BY
CORNELIUS MIROWE D53/CTY/PT/33259/2014
A RESEARCH PROJECT SUBMITTED TO THE SCHOOL OF BUSINESS IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION (PROJECT
MANAGEMENT OPTION) OF KENYATTA UNIVERSITY
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DECLARATION
This project is my original work and has not been presented in any other University for the award of a degree.
Signature ……… Date ………
Cornelius Mirowe Management Science Department
SUPERVISOR
I confirm that this project was carried out by the candidate under my supervision as the appointed university supervisor.
Signature……… Date………..
Dr. Paul K. Sang
Management Science Department School of Business
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DEDICATION
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ACKNOWLEDGEMENT
To God the most merciful be glory and honour for His support throughout the entire study and my life wholly. I would also like to express my sincere gratitude and appreciation to the following people whose support and involvement made this study a resounding success:
My Supervisor Dr. Paul Sang, for his immense inspiration and tirelessly reviewing my work and ensuring a methodical approach to the study and offering a very incisive critique on this work. His thorough review of my research project greatly enhanced my appreciation of critical success factors for ERP implementation. My sincere appreciation also goes to my lecturers, colleagues and staff of KU for the assistance extended to me in one way or the other.
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TABLE OF CONTENTS
DECLARATION... ii
DEDICATION...iii
ACKNOWLEDGEMENT ... iv
LIST OF TABLES ...viii
LIST OF FIGURES ... ix
LIST OF ACRONYMS AND ABBREVIATIONS ... x
OPERATIONAL DEFINITION OF KEY TERMS ... xi
ABSTRACT ... xii
CHAPTER ONE ... 1
INTRODUCTION... 1
1.1 Background of the Study ... 1
1.2 Statement of the Problem ... 9
1.3 Objectives of the Study ... 10
1.3.1 General Objective ... 10
1.3.2 Specific objectives ... 10
1.4 Research Questions ... 11
1.5 Significance of the Study ... 11
1.6 Scope of the Study ... 12
1.7 Limitations of the Study... 12
1.8 Organization of the Study ... 13
CHAPTER TWO: LITERATURE REVIEW ... 14
2.1 Introduction ... 14
2.2 Theoretical Review ... 14
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2.3.1 Top Management Support and Project Implementation ... 18
2.3.2 Project Planning and Project Implementation ... 19
2.3.3 Technological Adoption and Project Implementation ... 20
2.3.4 Monitoring and Evaluation and ERP Projects Implementation ... 21
2.4 Summary of Literature and Research Gaps ... 23
2.5 Conceptual Framework ... 28
CHAPTER THREE: RESEARCH METHODOLOGY ... 29
3.1 Introduction ... 29
3.2 Research Design... 29
3.3 Target Population ... 29
3.4 Sample and Sampling Technique... 30
3.5 Data Collection Methods ... 30
3.6 Pilot Test ... 30
3.6.1 Validity ... 31
3.6.2 Reliability ... 31
3.7 Data Analysis ... 31
3.8 Ethical Considerations ... 34
CHAPTER FOUR : RESEARCH FINDINGS AND DISCUSSION ... 35
4.1 Introduction ... 35
4.2 Response Rate ... 35
4.3 Demographic Information ... 36
4.4 Descriptive Statistics ... 39
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CHAPTER FIVE :SUMMARY, CONCLUSIONS AND
RECOMMENDATIONS ... 56
5.1 Introduction ... 56
5.2 Summary of Major Findings ... 56
5.3 Conclusions ... 58
5.4 Recommendations ... 59
5.5 Areas for Further Study ... 60
REFERENCES ... 61
APPENDICES ... 65
Appendix I: Introduction Letter ... 65
Appendix II: Questionnaire... 66
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LIST OF TABLES
Table 2.1: Summary of Literature and Research Gap ...26
Table 3.1: Operationalization and Measurement of Study Variables ...33
Table 4.1: Response Rate ...35
Table 4.2: Years Worked ...37
Table 4.3: Project Implementation ...41
Table 4.4: Responses on Top Management Support ...43
Table 4.5: Responses on Project Planning ...45
Table 4.6: Responses on Technological Adoption ...47
Table 4.7: Responses on Monitoring and Evaluation ...49
Table 4.8: Bivariate Correlation ...51
Table 4.9: Regression Model Fitness ...52
Table 4.10: Analysis of Variance (ANOVA) ...53
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LIST OF FIGURES
Figure 2.1: Conceptual Framework ...28
Figure 4.1: Gender of the Respondents...36
Figure 4.2: Level of Education ...37
Figure 4.3: Position of the Respondents ...38
Figure 4.4: Age of the Respondents ...39
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LIST OF ACRONYMS AND ABBREVIATIONS AMR Advanced Marketing Research
CSFs Critical Success Factors ERP Enterprise Resource Planning
ICTs Information and Communication Technologies
IT Information Technology
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OPERATIONAL DEFINITION OF KEY TERMS
Enterprise Resource Planning: It refers to the system and software package being used in firms for managing daily company operations and tasks, such as accounts, procurement, project management and manufacturing. ERP helps in integration of all activities and processes within and across the departments in a firm.
Technology Is the scientific knowledge used in practical ways in industry, for example in designing new methods /machines.
Training Ways in which current and new employees are impacted with skills and knowledge about their jobs and tasks to carry out in the organization.
Infrastructure: An information technology infrastructure is everything that supports the flow and processing of information in an organization including hardware, software, data and network components.
Project planning: Is a discipline for stating how to complete a project within a certain timeframe, usually with defined stages, and with designated resources.
xii ABSTRACT
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CHAPTER ONE INTRODUCTION 1.1 Background of the Study
Nowadays, business design, individuals thoughts on the efficiency and reliability of information sharing and service provision in organizations has been greatly been altered by the use of information and communication technologies (ICTs) (Bhatnargar & Apikul, 2006). In fact according to a survey in 2011 by PWC (2012) many business owners want to use technology to attain business efficiency and at the same time be distinct. Organizations seek technology to innovate, automate, empower and collaborate so as to stand out against competitors. The idea of adopting information technology (IT) for competitive business advantage is nowadays a public platitude. The benefit of using information technology differ, from having improved strategies of efficiency and effectiveness in carrying out commercial duties, to significant replacements in the organizational design Chung, Hsu, Tsai and Huang (2012) proposed that major changes in type of job and the business design are greatly required for proper implementation of information technology. He surmises that information technology will in the future be the fundamental pillar of corporations. A high implementation of IT is a key factor in creating an efficient and effective business performance management system (Chung, Hsu, Tsai & Huang, 2012).
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Managing projects to implement information systems is challenging. Many companies succumb to project failure due to various reasons. Both public and private organizations alike have been victims of information systems project failure (Kerzner & Kerzner, 2017). While this is true there have been some success stories where the organization benefits that a successful implementation system brings in terms of efficiency and effectiveness. Most projects fail to meet expected requirements in normal projects success criteria’s: scheduling, budgeting, and performance criteria’s. Although projects are increasingly called for, most fail in meeting expectations. Such use of technology is in integration and convergence of corporate data in a bid to make operations efficient. This has led to many companies seeking superior information systems to provide real time data and decision making systems for instance ERP systems. As Addo & Helo (2011) put it, ERP systems enables the company make whole each of the fundamental business so as to enhance quality while upholding competitive position but with unsuccessful adoption of the system, the expected gains of enhanced productivity won’t be experienced (Addo & Helo, 2011). ERP is a wide information system that directs organizational activities information, align transactions to ensure performance, ensure optimization using universally accepted practices. ERP has the potential to cover the entire value chain under a cohesive platform supporting management decisions, information access, process support and improvements.
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functions of their components by improving and developing new better functionalities to aid in business activities, this include automating sales, managing supply chain, orders handling, data storage, repair and maintenance among others. The current study sought to assess the ERP aspects in projects execution on parastatals in Kenya. Parastatals in the country are founded in regards to the law of State Corporations Act chapter 446 in Kenya’s laws, which allow them to conduct activities and focus on certain duties so as to better services to customers. Nevertheless this study prioritized on the 25 regulatory corporations.
1.1.1 Enterprise Resource Planning
Enterprise resource planning system refers to business operation softwares made up of connected components of comprehensive applications that are beneficially used, when properly installed, to direct and operate business activities in the firm (Boykin, 2009). These components are mostly made of developed commercial software and equipment to help in financial accounting, sales and distribution, materials control, human resource, production planning and software related manufacturing, supply chain, and customer data (Boykin, 2009). The mentioned components are able to enhance and influence the continuity and distribution of information to all supply chain activities(both within and outside) in a firm (Al-Mashari & Zairi, 2008).Additionally, an ERP software may be employed to assist better the supply structure process by reducing rotational period (Gardiner et al., 2010). Although it had previously been focused mainly on businesses that demand much capital, it has lately been widened to include other sectors.
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the remaining 12% accounts for the rest of the world (AMR, 2008). Nevertheless, due to today’s financial spark in most upcoming nations , Most of this countries have turned out to be most suitable clients for large ERP vendors, directly forcing an increase in ERP system implementations (Huang and Palvia, 2001; Avgerou, 2008; Otieno, 2010). Investigating the influence of ERP softwares on organizations in developing countries should attract the attention of both practitioners and scholars as they portray new distinct circumstances and environment in ERP implementation in developed countries (Roztocki & Weistroffer, 2011).
According to Gardiner et al. (2010) many factors have been pointed out by various authors as determinants of ERP system adoption and implementation. The main factors that play a vital role that are given much attention include: the top management support, organization resources, user involvement and participation and organisational culture. The ERP software market has become one of today’s largest IT investments worldwide. A recent survey predicts that the spending on ERP reached $166 billion in 2012 (Kiarie, 2017). It continues to be one of the largest, fastest-growing and most influential players in the application software industry in the next decade (Albano et. al, 2009).
There are several reasons why a continued growth of ERP projects is to be expected (Stensrud, 2009) the ERP vendors are continuously expanding the capabilities of their packages by adding functionality for new business functions such as sales force automation, supply-chain, order management, data warehousing, maintenance repair- and-overhaul, etc. The ERP vendors are transitioning to Web-based applications. This may lead to faster flow of information in the logistics chain, and therefore, many ERP customers will require these Web-based ERP systems. Dezdar and Sulaiman (2009) reviewed 95 journal articles on this topic, published within the period of 1999 to 2008, and developed a systematic compilation of Critical Success Factors (CSFs) that consists of 17 different broad categories..
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unsuccessful implementations in SMEs. These exhibited factors for companies that were successful in their ERP system implementation included operational process discipline, small internal team, project management capabilities, external end user training, management support, and qualified consultants.
Zhang et al. (2005), after researching on factors that affect ERP implementation in China, came up with an outline made up of four factors: “Organizational Environment, User Environment, System Environment and ERP Vendor Environment”. Proper Project Management is found under Organizational Environment. Mooheba et al. (2010) did a comparison on CSFs between the nations in developing and developed economies and discovered that not many differences exist between the two groups of countries. Although ERP systems were initially developed and implemented in developed countries, they found out that firms located in developing nations also adopt these systems. As their study showed, project management presents similar benefits to organizations from both developing and developed nations. They also realized that firms in developing countries highly depend on ERP vendors as compared to the other countries.
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Odhiambo (2013) went forward attempting to realize the factors influencing the implementation of the system as a strategic approach by Equity bank. The study focused its research on the resource- based view theory and Mayer’s contingency theory. A case study approach was implemented for the study. The interviewees were departmental heads from the various departments of the bank. The results of the study revealed and confirmed critical factors in the implementation of the enterprise resource planning approach. These factors included: system design, system selection, training of staff and change management process. The study furthermore uncovered some of the challenges faced in the implementation of the approach, this included: loss of information during data migration, high system interdependence, low staff motivation and high cost overruns due to underestimation of resources during planning. The study recommended increased staff involvement in system design, adequate system selection, appropriate training and education of the staff proper change management during transition and allocation of adequate resources for the implementation. The study concluded that the implementation of ERP system approach by the Equity Bank Limited approach was an approach that most institution should consider investing in, however much attention should be focused towards the crucial factors that impact successful implementation. The above mentioned factors were confirmed to be indeed critical and needed to be considered by institutions currently implementing or were intending to adopt the enterprise resource planning system as a strategic approach.
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internal organization factors influenced acceptance of ERP implementation. These factors included: top management commitment, clarity of goals, management of organization goals, reorganization of business processes, user involvement in the ERP, proper and opportune education and training of workers, open and continuous communication, competency of the project management team and effective project planning. The study revealed that external factors influenced acceptance of ERP implementation. These factors included competent external consultants to train users, provide support by the vendor and correctness of data analysis. The study found that most of the respondents were of the opinion that of staff engagement to establish their fears about the ERP system was the major factor that would enable management to overcome end users resistance to ERP implementation. The study recommended the need for ILRI management to capitalize on its internal organization strengths so as to be able to leverage on them in order to enhance ERP implementation, especially in cases where such internal factors relate to employees.
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recommended that there is need for planning and consensus to enhance the success of ERP projects implementation in Kenyan Insurance sector.
1.1.3 State Regulatory Agencies
Parastatals (local state corporations) in Kenya are established in accordance with the law of State Corporations Act chapter 446 of the laws of Kenya, and provided the rights to run and concentrate on specific mandates in order to improve service delivery to the public. Even though they are under a Board of Directors or similar authoritative body that controls the daily operations, they perform their duties in accordance with the laws and oversight of specific Ministries under which they are established (GOK, 2012).
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subsidies equaled to Ksh. 14.2 billion. By 1994, the subsidies paid to parastatals took 5.5 % of the GDP. The state of inflation locally then mirrored shortages financed by the Central Bank of Kenya (CBK). Different methods were implemented to counter this problems, they included negotiations between parastatals and government in an attempt to make clear the latter’s goals and set expectations, introduce competition and improve accountability to clients, provision of incentives like increased salaries and benefits to employees in regards to performance and better employee training . None of these methods was completely successful. Due to the failure of the methods, the local government looked ahead to privatization of most parastatals (Masika, 2012). One major strategy was implementation of the Enterprise resource planning ERP systems for their operations.
1.2 Statement of the Problem
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Several studies have been conducted on ERP implementation in different contexts. For instance: Gajic, Stankovski, Ostojic, Tesic and Miladinovic (2014) study evaluated the impact of ERP implementation critical success factors–a case study in oil and gas industries. Madapusi and D'Souza (2012) study examined the influence of ERP system implementation on the operational performance of an organization. Motwani (2016) study examined the impact of Enterprise Resource Planning (ERP) implementation process on user’s performance. Karimi (2017) study examined the effects of Enterprise Resource Planning Implementation on Organizational Performance in the Transport Industry in Kenya. According to the researcher, in regards to knowledge obtained, very few studies focusing on critical success factors of ERP project implementation in Kenya have been undertaken especially in state regulatory agencies in the country. This study will therefore go forward seeking to fill this knowledge gap by assessing the influence of ERP on the implementation of projects in government regulatory institutions in Kenya.
1.3 Objectives of the Study 1.3.1 General Objective
The general objective of this study was to assess the influence of ERP on project implementation in state regulatory agencies in Kenya.
1.3.2 Specific objectives
i. To establish the influence top management support on project implementation in state regulatory agencies in Kenya.
ii. To determine the influence of project planning on project implementation in state regulatory agencies in Kenya.
iii. To evaluate the influence of technological adoption on project implementation in state regulatory agencies in Kenya.
11 1.4 Research Questions
i. What is the influence of top management support on project implementation in state regulatory agencies in Kenya?
ii. What is the influence of project planning on project implementation in state regulatory agencies in Kenya?
iii. What is the influence of technological adoption on project implementation in state regulatory agencies in Kenya?
iv. What is the influence of project monitoring and evaluation on projects implementation in state regulatory agencies in Kenya?
1.5 Significance of the Study
This research publication is great importance to different stakeholders. This include, state corporations themselves, the workers and other employees, the local government, scholars and other researchers.
1.5.1 Management of State Corporations
The study can assist the policy developers understand the CSFs of ERP implementation. Owing to its heavy investment, it is important for the policy developers to know what to avoid during implementation and what to encourage. The study findings provided insight to the government on the ERP implementation and enabled benchmarking and implementation in the other parastatals. The study would provide useful information that would help the management of state corporations in execution of ERP projects and the strategy to enhancing a successful realization of ERP projects in firms.
1.5.2 Employees
12 1.5.3 Researchers and other scholars
Academicians and researchers interested in the subject will use findings and publications from this study as a source of reference when conducting their own research and as a foundation for conducting deeper research. Finally the study can be used to identify areas for further study.
1.5.4 The Government
The value of the study was three-fold; value to policy, value to practice and value to theory building. The government and other institutions concerned with policy formulation and implementation cannot downplay the contribution of this.
1.6 Scope of the Study
This study aimed to understand critical success factors on ERP project implementation in state regulatory agencies in Kenya. The study targeted managerial staff since they are in charge of ERP project implementation in state regulatory agencies in Kenya. The selected organizations cut across the key sectors of the economy, for instance Transport, Manufacturing, Energy, Agriculture, Education, Health and ICT. The study recognizes that ERP implementation is very complex and involves all the company's activities at every management level to include all the business processes. Although several factors may influence ERP projects implementation, this study focused only on four critical factors that includes; top management support, project planning, technological infrastructure, project monitoring and evaluation, as these are viewed as successful implementing measures by the ERP users either directly or indirectly.
1.7 Limitations of the Study
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with all potential respondents and clarify to them the scope of the study and its significance to the organization.
The respondents were also unwilling to give responses due to fear of the unknown and in that the information collected may be used to intimidate them or print a harmful image about them or their respective corporations. Some respondents even turned down the request to fill questionnaires. This was mitigated by obtaining a letter of introduction from Kenyatta University and NACOSTI, which assured the respondents of the academic purpose of the study and that it would be treated with maximum confidentiality.
1.8 Organization of the Study
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CHAPTER TWO LITERATURE REVIEW 2.1 Introduction
This chapter contains systematic assessment of literature by different authors on critical success factors and ERP project implementation. In this particular context, literature review will involve systematic identification, location and scrutiny of the records containing materials related to the topic. The chapter also outlines the theoretical framework that supports the study variables.
2.2 Theoretical Review
Theoretical review is the analysis of theoretical foundations that supports any study. A theoretical research bases its findings on available theories and hypothesis; meaning, practical application does not exist in the research, while an empirical research bases its findings on the verification by means of experiments, experiences and observations. This study was founded on both theory and empirical literatures. Ensuing are the theories upon which this study was founded upon. They are pinto’s model of project management, project life cycle model, technology acceptance model and resource based theory.
2.2.1 Pinto’s Model of Project Management
Between the years of 1987 and 1990, Pinto and many other authors released a variety of writings on critical success factors. He went on to document the popular and globally known 10 critical success factors. Pinto made use of a fifty-item instrument known as Project management Profile (P.I.P) used to evaluate a project’s score on each of the ten factors while compared to over 400 projects studied. The 10 critical success factors identified by Pinto (1986) are listed as follows:
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technology and expertise to accomplish the specific technical action steps, Client acceptance – the act of “selling” the final project to its intended users, Monitoring and feedback – timely provision of comprehensive control information at each stage in the implementation process, Communication – provision of an appropriate network and necessary data to all key actors in the project management and troubleshooting – ability to handle unexpected crises and deviations from plan” (Pinto, 1986).
The initial seven factors can be presented in a steady critical manner, but the remaining three factors should by all means be presented at all point during implementation. Specific factors are stressed upon throughout the project as it goes along its life cycle. The first three factors (mission, top management support and schedule) are connected to the “planning phase” of project management while the remaining seven are involved with the execution stage of the project life cycle. Both strategic and tactics are crucial for proper and effective project management, thus their need changes along with the project throughout its life cycle. At the early stages Strategic issues are of the most important while tactical issues are important when finalizing. It’s imperative for a good project manager to have the ability and know how required to successfully shift between strategic and tactical considerations throughout the project as it goes forward (Pinto, 1986).
Pinto’s model of project management is an essential theory in this study as it helped in understanding the critical success factors and how well project teams can take into consideration these factors when executing projects. As a result, a good knowledge of critical success factors model ensures timely completion and acquisition of the project and also ensures that it satisfies expectations.
2.2.2 Project Life Cycle Model
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costs and project value (Brown, 1998). The next and third stage is project execution phase, in this stage the involved teams produce the deliverables as the managers monitor and directs the project delivery process. The final fourth stage according to this model is the evaluation phase (also known as a Post-Implementation Review)”. During this stage the project is evaluated in an attempt to determine its general achievement and evaluate if the advantages desired were actually realized (Brown, 1998).
The model was an essential theory in the study as it helped in understanding how project teams can be totally successful as the understanding of the project life cycle is applicable to project management. Therefore an understanding of the project life cycle are useful at ensuring that resources are well coordinate to achieve predictable results. This theory addresses two variables in this study namely; project planning and project monitoring and evaluation.
2.2.3 Technology Acceptance Model (TAM)
Davis’ (1989) TAM is extensively looked upon for reference on the topic of individuals’ approval of technology. The models, perceived usefulness (PU) and perceived ease of use (PEOU) encourages an individual’s orientation in relation to system exploitation, this affects a person’s ability to manipulate the system, and need for the system hence directly ascertaining real system usage.
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Demographic variables such as environment are also the precedents that cause the assumed effectiveness and generally recognized ease of use. Hence, TAM is founded on both crucial perceptive factors such as perceived usefulness and perceived ease of use. TAM is extensively employed in information technology researches. This is seen on the research carried out by (Mohammad, 2009) in which he pointed out that TAM is very popular model for explaining and predicting system use.
Overaly original TAM model concentrates on the specific 'user' of a software, with the idea of 'perceived usefulness', with extra additions to introduce more parts to expound on user 'perceives' 'usefulness', while ignoring the necessary and important social procedures of IS creation and installation, while failing to consider whether technology is in fact of benefit, and the social repercussions associated with Information Systems use (Bagozzi, 2007). TAM was measured and tested by carrying field and laboratory studies. According to Adams et al. (1992) the variables perceived ease of use and usefulness were looked into to examine their authenticity and reliability. This theory supports the study since it gives the reasons as to why organizations and individual adopt new technologies. This theory addresses the third variable of the study on technological adoption.
2.2.4 Resource Based Theory
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Resources such as adequate finance are required for effective project planning and its implementation in a fast paced business setting (Wade & Hulland, 2004). The interchanging abilities that involve processes, ways of handling and controlling capital in value addition that allows organizations to direct its actions in enhancing effectiveness. An organization equipped with necessary capital resource is required to have greater effect on the operability of project planning competent leadership. Resource based theory was too appropriate as it elaborates how resources controlled by an organization are to be considered in facilitating the planning which oversees the overall objectives of certain projects. This theory addresses the first variable on top management support.
2.3 Empirical Literature Review
2.3.1 Top Management Support and Project Implementation
Novo, Landis and Haley (2017) study investigated on leadership and its role in the success of project management. The study was carried out to discover project manager skills together with its competency in leadership and how they can lead to project success. The study results revealed that leadership traits are directly related with the project manager competency. Similarly, the project managers leadership skills and project success is strongly correlated
Buba and Tanko (2017) study examined the influence of project leadership on quality performance of construction projects. A total of 43 questionnaires were distributed to 3 key groups of respondents who included Quantity Surveyors, Builders, and Architects who were project managers in Nigeria. It was established that the ability of a project manager in giving direction is the best leadership style and contributes to the best artistic quality of the project and also leads to better inter-functional relationships.
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members relationships. The study also revealed that teamwork spirit has a statistical significance influence on project performance.
Anantatmula (2010) study investigated on the role of project manager leadership in improving project performance. Structural Modeling (ISM) by Warfield (1973) was used to determine the association between the variables. Questionnaires were used to collect data. The study targeted 69 professionals in project management together with project practitioners in which data was collected through email and telephone calls. The findings show that the ultimate purpose of the project manager is to ensure trust in managing in administering outcome and leadership in projects has vital role in guaranteeing trust.
2.3.2 Project Planning and Project Implementation
Serrador (2013) study investigated the impact of planning on project success-a literature review. The literature in project management, and to a lesser extent in general management, is reviewed to find the reported link between planning and project success. Overall, the literature points to a strong link between planning and project success. A summary of the available studies shows unexpectedly consistent empirical results for the correlation of planning quality and success. The literature appears to be generally consistent showing an average value of R 2 = .33 correlation with efficiency and R 2 = .34 for overall project success. This indicates a significant impact if we compared to the reported approximate 20-33% recommended planning effort.
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Ciutiene and Meiliene (2015) study examined main factors influencing efficient planning of international projects: sample of high schools international projects. here were 50 experts selected for evaluation of international projects efficient planning. Questionnaire data were processed and analyzed using package of statistical data analysis SPSS 14 and programme package Microsoft Excel. The study established that the biggest influence on efficiency of international projects planning is done by factors determining efficiency of project planning and factor of macro-environment.
2.3.3 Technological Adoption and Project Implementation
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Perumal, Hassan and Bakar (2011) study examined the influence of technology: factors motivating project management team successfully. This paper explored the relative importance of technology usage as one of the motivational factor concerning in the area of communication within the project team, team work and efficiency. Project success not only relying on organization process and structures, but technologies gives a higher impact that keeps the team motivated all the time. A properly integrated technological system ideally will take into account the impact on the organization as well being one of the motivating factors for the whole project team.
2.3.4 Monitoring and Evaluation and ERP Projects Implementation
The interpretation of project Monitoring and Evaluation (M&E) has significantly changed with time to reflect the pattern swings which take place in managing of assignments (Nyonje, Ndunge, & Mulwa, 2012). Naidoo (2011) indicates that suitable job monitoring and evaluation facilitates the foundation for evidence-based project management decisions. Monitoring and evaluation as a management role itself, is made up of four key activities: Planning, Training, Baseline surveys and Information systems (Ogula, 2002). Other scholars (Maddock, 2009; Roza, 2013) as well confirmed the same.
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Monitoring involves describing and providing details on the state of the project at specific times in relation to certain targets and expectations (Nyonje, Ndunge, & Mulwa, 2012). Evaluation is the gradual and objective examination of a project. It provides proof as to why objectives may not be achieved. It also aims to bring forward and expound on causality concerns (Ogula, 2002). When functionally employed, monitoring and evaluation become inherent parts of project management (Nuguti, 2009).
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planning for monitoring and evaluation encompasses all the aspects needed to quickly detect presence or lack of proper progress.
Reports analyzed also paint an image that shows existence of major factors to be considered in M&E planning : Brignall and Modell (2010) categorizes these factors s into resources - how much finance and period will be required to undertake the activities. Capacity - does the project have internal capacity to conduct the suggested monitoring and evaluation activities? Other considerations brought forward and also proclaimed by Armstrong and Baron (2012) are Feasibility- Are the suggested procedures realistic and implementable? Timeline - Is the suggested time period suitable to conduct the activities? Ethics - What are the ethical considerations and disputes engaged with execution of the planned tasks, and is there a back up plan in set aside for tackling those considerations? With these considerations in mind, M&E planning is said to have been fully undertaken in terms of coverage so as to provide an overview on direction of the project during implementation.
2.4 Summary of Literature and Research Gaps
Critical success factors (CSF) are largely used in the information systems arena. CSFs can be comprehended as crucial areas in implementation where every process must be efficient and effective to achieve success. Earlier studies discovered several CSFs for ERP implementation. The Following are the most common CSFs as pointed out by several scholars.
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support, visioning, and planning for setting up an ERP system. In their document, ERP package selection, communication, process management, training and education, project management, legacy system management, system integration, system testing, and cultural as well as structural changes were emphasized for implementation. Furthermore they outlined performance evaluation and advised on ways to control the evaluation of the system.
Nah et al. (2012) presented five major success factors based on the chief information officers ‘view , they are top management support; the presence of a project champion; ERP teamwork including the composition of the team; project management including a change of management program; and culture. Most researchers also insist on organizational fit, internal restructuring, and pre-implementation attitudes (Hong and Kim, 2007; Ke and Wei, 2008; Morton and Hu, 2008). Ehie and Madsen (2011) broke down the ERP implementation process into five major phases: project preparation, business blueprint, realization, final preparation, and go live and support. Project management principles, feasibility/evaluation of ERP projects, process re- engineering, top management support, cost/budget, and consulting services are pointed out and ascertained as critical factors in the implementation of ERP software. Sarker and Lee (2010), in their paper, indicated that “three key social enablers – strong and committed leadership, open and honest communication, and a balanced and empowered implementation team are crucial in ERP implementation success”.
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Table 2.1: Summary of Literature and Research Gap Author Title of the
document
Research Design/ Model
Conclusion Gaps identified
Mohme d, & Mohme d, (2015)
Critical Success
Factors For
Enterprise Resource Planning Implementation Success A survey design
The most important
success factors for ERP implementation success are Project management, Technological
infrastructure and
Commitment and support of top management from the eight factors studied.
The current study
focused on four key variables of successful implementation of ERP
Ndege
(2016)
Critical Factors For Enterprise Resource Planning Projects
Implementation:
A Case Of
Insurance Sector, Kenya
descriptiv e survey design
The study concluded that there is a correlation between the strategic factors, critical factors and cultural factors for ERP projects implementation. The study recommended that there is need for planning and consensus to improve the success of
ERP projects
implementation in Kenyan Insurance sector.
The current study
focused on the impact of
project management
practices on ERP
implementation. It was limited to four factors i.e
management support,
effective communication, technological
infrastructure and
extensive education and training
Karimi, (2014)
An
Investigation
Into The
Challenges Facing
Implementation of Entreprise Resource Planning In The Dairy Industry In Kenya
descriptiv e survey design
The study concludes that
all the independent
variables namely;
knowledge and skills, organization resources, stakeholders involvement and organization culture
have a positive
relationship and therefore
significant to the
implementation of ERP model in the dairy sectors in Kenya
The current study
focused on four factors i.e. management support, effective communication, technological
infrastructure and
extensive education and training
Kimutai
(2014)
Assessment Of The Effect Of Enterprise Resource
Planning On
Performance Of Organisations
Within The
Descripti ve case study
The study concludes that ERP had an effect on organizational
performance. It helped achieve organizational
effectiveness and
efficiency
The current study
focused on four factors i.e. management support, effective communication, technological
infrastructure and
27
Agro-Processing
Industry In
Kenya: A Case
Study of
KTDA
Factories In
Bomet County
training
Moham ed, (2014).
Challenges Of Enterprise Resource Planning (ERP) Strategy
Implementation
By Firms In
Kenya
Descripti ve Survey
The research shows that ERP implementation was a very delicate and yet crucial matter for most
organizations. The
challenges faced during
implementation varied
from one organization to the other but the most common were the length
and complications of
system integration and customization.
This study sought to find out the challenges that
firms in Kenya
experienced in
implementing ERP
strategy and how they handled those challenges.
The current study
focused on the impact of
project management
practices on ERP
implementations to
ensure that it becomes a success.
Mugo (2014)
Effective Implementation of Technology Innovations in Higher
Education Institutions: A
Survey of
Selected
Projects in
African Universities
Explorato ry study
The results showed that
monitoring and
evaluation, top
management,
organizational culture, team leadership, financial motivation, organizational climate and innovation efficacy were important determinant to technology implementation
effectiveness. Technology
framing, innovation
environment and
innovation attributes were found to be underlying
issues in technology
implementation.
The current study
focused on four factors i.e management support, effective communication, technological
infrastructure and
28 2.5 Conceptual Framework
A conceptual framework is a research instrument meant to assist a researcher in gaining awareness and understanding of the subject under study and to effectively communicate it. When undoubtedly presented it helps a researcher to understand subsequent findings. Furthermore it expounds and shows the likely correlation between the dependent and independent variables (Smyth, 2004).
Independent Variables Dependent Variables
Figure 2.1: Conceptual Framework Source: Author (2016)
Top management support Clear direction/goals Resources allocation Manpower allocation
Project implementation Time
- Stipulated timelines Cost/Project Budgets
- Estimated budget Scope
- Limited to intended users
Project planning Clear vision
Clear work plan and timelines
Project design
Monitoring and
Evaluation
Oversight committee
Project appraisal
Timely and efficient disbursement of the funds Technological Adoption Adequate IT resources
Network infrastructure
29
CHAPTER THREE
RESEARCH METHODOLOGY 3.1 Introduction
This chapter outlines the methodologies that were implemented in carrying out the study. This included the research design, population, data collection tools and technique, data analysis methods and presentation. This research methodology aimed at ensuring the researcher obtained sufficient data, processed the data and interpreted the results.
3.2 Research Design
Research design is the laid out plan to facilitate collection, measurement and analysis of the data. The study made use of a descriptive and correlational research design. Descriptive survey designs are used in preliminary and exploratory studies, to allow researchers to gather information, summarize, presents data and interpret it for the purpose of clarification (Saunders Lewis, & Thornhill, 2009). The correlational research design in general, examined the covariation of two or more variables. These research designs thus enable the researcher to access the effects on the applicability of critical success factors such as top management support, project planning, technological adoption and monitoring and evaluation on project implementation. Further since correlation research enables covariation between variables this design thus ensures that the covariation between applicability of critical success factors and ERP project implementation was established.
3.3 Target Population
30 3.4 Sample and Sampling Technique
The study sample was made up of all state regulatory corporations in Kenya. A census was employed to encompass all the 25 corporations. Given that the sample size was relatively minimal, hence the study sample was from the entire 25 corporations as indicated in the presidential taskforce reforms and in Appendix III. This approach therefore constituted census sampling and further the sample from the 25 corporation firms in Kenya was purposively selected. From each corporation three respondents were selected who included project manager or the equivalent, Business development manager or similar individual and operational manager or the equivalent totaling to 75 employees. This was because strategic decision in relation to strategy implementation was done by the management staff and hence the choice of management employees. 3.5 Data Collection Methods
This study mainly relied on primary data which was gathered using self-administered questionnaires consisting of both closed and open ended questions. A questionnaire was a pre-planned drafted set of questions which the respondents give feedback to which are frequently given with strongly outlined choices. A likert scale questionnaire was also included. Likert scales measure perception, attitude, values and behavior (Upagade & Shende, 2012). The main advantage of using the questionnaire was to uphold privacy promised to the respondent so as to directly enhance and facilitate the sincerity of the information given out.
3.6 Pilot Test
31 3.6.1 Validity
Mugenda (2008), define validity as “the accuracy and meaningfulness of inferences, which are based on the research results”. In order to test and facilitate the validity of the questionnaire, the researcher randomly chose two top management employees and research supervisor and went through the questionnaire with them. This attempted to determine the content validity of the questionnaire. Remarks and reactions from both the managers and supervisor were evaluated and integrated to improve the validity of the questionnaire.
3.6.2 Reliability
Reliability refers to the repeatability, stability or internal consistency of a questionnaire (Jack & Clarke, 1998). Cronbach’s alpha was used to test the reliability of the measures in the questionnaire (Cronbach, 1951). Reliability is a measure of the extent to which study tools yields consistent results or data after repeated trials under similar conditions with the same subjects (Mugenda, 2008). It, in short, is the consistency of measurement. A measure is only said to be reliable if an individual’s score on the same test given more than once is similar. Ten questionnaires, which constituted 10% of the accessible population, was piloted by distributing them to employees that were not added to the final study sample.
The ten questionnaires were then later coded and responses input into SPSS which generated the reliability coefficient. The researcher used the most common internal consistency measure known as Cronbach’s Alpha (α) which was generated by SPSS. It highlights the level to which a set of test items can be treated as measuring a single latent variable. A coefficient of 0.7 was recommended for a newly developed questionnaire.
3.7 Data Analysis
32
For quantitative data the study used Statistical Package for Social Sciences (SPSS) software to produce both the descriptive and the inferential statistics. Descriptive statistics is the analysis of data that assists in describing, presenting or briefly showing data in a helpful ways such that, for example, patterns might be obtained from the input. It however, does not enable researches to make any conclusions beyond the analyzed data nor arrive at conclusions regarding any hypotheses that might have been made. They are just but brief ways to describe data. Descriptive analysis includes use of frequencies, trends and percentages.
Inferential statistics is mathematical methods that uses probability theory to deduce (infer) the characteristics of a population out of the analysis of the properties of a data sample drawn from the same population. It carries out precision and reliability of the inferences drawn, this study used regression analysis and correlation tests. The study findings were presented using tables, and figures to briefly show a distinct image of the results.
Regression analysis was adopted to demonstrate effect of independent variables on dependent variable. According to Mugenda (2008), the regression method is effectively implemented to analyse the extent of association involving two variables. Regression analysis was hereby used to find out the connection amongst the dependent and the independent variables. the model took the following form;
Y =β0 + β1X1 + β2X2 + β3X3 + β4X4 +ɛ
Where;
Y = Project Implementation X1 = Top Management Support
X2 = Project Planning
X3 = Technological Adoption
33
βii= 1….4 measure of the sensitivity of the dependent variable (Y) to unit change in
the predictor variables X1, X2, X3 and X4.
ɛ = is the error term which captures the unexplained variations in the model.
Table 3.1: Operationalization and Measurement of Study Variables
Type of variable
Variables Measurement Scale Data
collection method Dependent ERP project
implementation
Time
- Stipulated timelines Cost/Project Budgets
- Estimated budget Scope
- Limited to intended users Nominal /Ordinal Scale Structured questionnaire
Independent Management Support
Clear direction/goals Resources allocation Manpower allocation
Nominal /Ordinal Scale Structured questionnaire Independent
Project planning Clear vision Clear work plan and timelines
Project design
Nominal /Ordinal Scale Structured questionnaire Independent Technological Adoption
Adequate IT resources Network infrastructure System security
Nominal /Ordinal Scale Structured questionnaire Independent
Monitoring and Evaluation
Oversight committee Project appraisal Timely and efficient
34 3.8 Ethical Considerations
This study ensured that issues concerning confidentiality, respect for human dignity among respondents/participants and data collections are observed. To observe confidentiality, respondents were protect
35
CHAPTER FOUR
RESEARCH FINDINGS AND DISCUSSION 4.1 Introduction
The study strived to assess the ERP aspects on project implementation in state regulatory agencies in Kenya. Specifically the study sought to establish the influence of top management support, project planning, technology and project monitoring and evaluation on ERP projects implementation in state regulatory agencies in Kenya. The chapter presented all the research findings and outcomes of the study objectives using previously stated techniques. Analysis of the data dwelt on specific objectives where identified patterns were carefully analyzed, expounded and inferences deduced. The chapter begins with an introductory analysis of the data before going ahead to analyze the study variables.
4.2 Response Rate
Out of the 75 questionnaires administered, 58 were filled and returned. Results indicate that the majority (77%) of the questionnaires were returned. This response rate was considered adequate for further statistical analysis because it was over 60% which is recommended and indicated as good by Mugenda (2008). This study took cognizance of the above scholars’ recommendations. Response rate of the study is presented in Table 4.1
Table 4.1: Response Rate
Response rate Frequency Percent
Returned 58 77%
Unreturned 17 23%
Total 75 100%
36 4.3 Demographic Information
4.3.1 Gender of the Respondents
The study sought to establish the gender of the respondents. Results shown in Figure 4.1 indicate that the majority (61%) were male while (39%) were female. The findings support that public sector is a male dominated field.
Figure 4.1: Gender of the Respondents Source: Author (2017)
4.3.2 Level of Education
37 Figure 4.2: Level of Education
Source: Author (2017)
4.3.3 Experience of the Respondents
The study sought to find out the number of years which the respondents had worked within the organization. Table 4.2 shows that 36.2% of the respondents indicated that they had worked for the organization between 3 to 5 years while 31% indicated between 1 to 2 years and 29.3% indicated more than 5 years. The findings indicate that the respondents had worked long enough in the firms therefore had sufficient knowledge about the issues that the researcher was hoping to obtain.
Table 4.2: Years Worked
Years worked Frequency Percent
less than one year 2 3.4
1 to 2 year 18 31
3 to 5 years 21 36.2
More than 5 years 17 29.3
Total 58 100
38 4.3.4 Position of the Respondents
The study sought to determine the positions the respondents held in the organization. The study findings on Figure 4.3 illustrate that 43.1% of the respondents were operations manager, 34.5% were project managers while 22.4% were business development manager. The findings imply that the respondents were in management, this serves to benefit the researcher as project management decisions are handled mostly by the management and they are the key drivers in project implementation which without their support the project cannot take its course.
Figure 4.3: Position of the Respondents Source: Author (2017)
4.3.5 Age of the Respondents
39 Figure 4.4: Age of the Respondents
Source: Author (2017)
4.4 Descriptive Statistics
This sub section presents the descriptive statistics for the study variables. For purposes of this study, the percentage of responses on “agree” &“strongly agree” and those on “disagree” & “strongly disagree” were combined to represent the degree to which the respondents agreed or disagreed respectively to the sub-constructs of all variables.
For the purpose of this study, Means greater than 1 and less than 1.5 implied that the respondents agreed to the statements to no extent. Means greater than 1.5 and less than 2.5 implied that the respondents agreed to the statements to a little extent. Means greater than 2.5 and less than 3.5 implied that the respondents agreed to the statements to a moderate extent. Means greater than 3.5 and less than 4.5 implied that the respondents agreed to the statements to a greater extent. Means greater than 4.5 implied that the respondents agreed to the statements to a very great extent.
4.4.1 Project Implementation
40
of the respondents agreed that the ERP project implementation was completed on time, 67.2% agreed that the ERP project was completed according to the budget allocated and 81% agreed that the ERP project was implemented by the targeted clients. In addition, 81% of the respondents agreed that the project had greatly been of benefit to the users and 58.7% agreed that they were satisfied with the procedure by which involved projects were implemented. Finally, 38% of all the respondents disagreed that the projects do not or have minimal difficulties with technical start-up because they are easily accepted by clients without hesitation. The aggregate mean score for project implementation stands at 3.60 which imply that the respondents agreed to a moderate extent in regards to ERP project implementation of state regulatory corporations in Kenya. This further implies that the ERP projects were completed on time, according to the budget allocated and was used by the intended clients, however this was to a moderate extent implying that the firms are still slow in project implementation.
41 Table 4.3: Project Implementation
Statement Strongly
disagree Disagree Neutral Agree
Strongly
agree Mean The ERP project
implementation was completed on time.
1.7% 22.4% 25.9% 27.6% 22.4% 3.47 The ERP project was
completed according to the budget allocated.
3.4% 6.9% 22.4% 53.4% 13.8% 3.67 The ERP project is used by
intended clients. 3.4% 10.3% 5.2% 51.7% 29.3% 3.93 The project has directly
benefited the intended users 5.2% 3.4% 10.3% 44.8% 36.2% 4.03 I am satisfied with the
process by which the projects are implemented.
3.4% 20.7% 17.2% 32.8% 25.9% 3.57 The projects have no or
minimal technical start-up problems because they are readily accepted by intended users.
12.1% 25.9% 29.3% 20.7% 12.1% 2.95
Aggregate Score 4.9% 14.9% 18.4% 38.5% 23.3% 3.60 Source: Author (2017)
For purposes of this study, the percentage of responses on “agree” &“strongly agree” and those on “disagree” & “strongly disagree” were combined to represent
the degree to which the respondents agreed or disagreed respectively to the
sub-constructs of project implementation.
4.4.2 Top Management Support and ERP Project Implementation
42
management ensured allocation of sufficient funds needed for the projects. Finally, 68.4% of the respondents agreed that management ensured allocation of sufficient manpower needed for the projects and 69% agreed that management ensured allocation of sufficient time needed for the projects. The mean score for this section was 3.70. The findings imply that before implementation, ERP projects should get necessary sanctions and commitment from executive managers. The findings showed that the organizations’ managers should readily offer absolute support and commitments to the project so as to ensure its success. Additionally, management must also facilitate and ensure proper communication of the plans so that they are known and apprehended by the whole company.
43
Table 4.4: Responses on Top Management Support
Statement Strongly
disagree
Disa gree
Neutr
al Agree
Strongly
agree Mean There is a clear direction of
ERP implementation within the organization
3.4% 13.8
% 20.7% 32.8% 29.3% 3.71 Top Management provides
Expertise in ERP Implementation
12.1% 3.4% 22.4% 39.7% 22.4% 3.57 Management strive to reveal
the fulfillment of short-term deliverables to the beneficiaries
1.7% 13.8
% 24.1% 43.1% 17.2% 3.6 Management encourages
people’s creativity and resourcefulness in the projects
6.9% 15.5
% 24.1% 27.6% 25.9% 3.5 Management was responsive
to the requests for additional resources, when the need arose
3.4% 19.0
% 12.1% 43.1% 22.4% 3.62 Management ensures
allocation of sufficient funds needed for the projects
5.2% 3.4% 31.0% 22.4% 37.9% 3.84 Management ensures
allocation of sufficient manpower needed for the projects
7.0% 3.5% 21.1% 42.1% 26.3% 3.77 Management ensures
allocation of sufficient time needed for the projects
3.4% 1.7% 25.9% 29.3% 39.7% 4 Aggregate Score 5.4% 9.3% 22.7% 35.0% 27.6% 3.70
Source: Author (2017)
For purposes of this study, the percentage of responses on “agree” &“strongly
agree” and those on “disagree” & “strongly disagree” were combined to represent
the degree to which the respondents agreed or disagreed respectively to the
44
4.4.3 Project Planning and ERP Project Implementation
The study sought to evaluate the influence of project planning on ERP projects implementation in state regulatory agencies in Kenya. Results on Table 4.5 indicate that 70.7% of the respondents agreed that their organization always set clear purposes for the projects, 65.5% agreed that their managers had the ability to anticipate short-term disruptions and 65.5% agreed that their organization deshort-termined the starting and finishing dates of ERP implementation. Sixty seven point two (67.2) percent of the respondents agreed that the management allocated of a budget of ERP design and implementation, 60.4% agreed that their organization outlined a transparent vision for ERP designing and implementation and 74.1% agreed that their organization aimed at achieving strategic advantage through the work plan. The aggregate mean score for project planning stands at 3.77 which imply that the organizations had well laid down strategy plan with clear vision and mission statements to help achieve the organizations goals and objectives.
45 Table 4.5: Responses on Project Planning
Statement Strongly
disagree Disagree Neutral Agree
Strongl
y agree Mean Our organization always
sets clear purposes for the projects
6.9% 6.9% 15.5% 41.4% 29.3% 3.79 Our managers have the
ability to anticipate short-term disruptions
3.4% 12.1% 19.0% 34.5% 31.0% 3.78 Our organization
determines the starting and finishing dates of ERP implementation
3.4% 27.6% 3.4% 36.2% 29.3% 3.6 The management allocate
of a budget of ERP design and implementation.
0.0% 10.3% 22.4% 36.2% 31.0% 3.88 Our organization outlines
a clear vision for ERP
designing and
implementation
0.0% 6.9% 32.8% 41.4% 19.0% 3.72 Our organization aims to
achieving strategic advantage through the work plan.
0.0% 6.9% 19.0% 56.9% 17.2% 3.84
Aggregate Score 2.3% 11.8% 18.7% 41.1% 26.1% 3.77 Source: Author (2017)
For purposes of this study, the percentage of responses on “agree” &“strongly agree” and those on “disagree” & “strongly disagree” were combined to represent
the degree to which the respondents agreed or disagreed respectively to the
sub-constructs of project planning.
4.4.4 Technological Adoption and ERP Project Implementation
46
ERP system security in their organization, 41.4% agreed that there were issues of confidentiality to unauthorized personnel and 51.8% agreed that there are no sufficient measures to retrieve lost data. Finally, 48.3% of the respondents agreed that the cost of the system security exceeds the monetary benefits accruing from the system. The aggregate mean score for technological adoption stands at 3.49 which imply that the respondents agreed to a moderate extent that technological adoption influences ERP project implementation of state regulatory corporations in Kenya. However the respondents agreed to a moderate extent since some of the organizations had no adequate technological infrastructure to facilitate ERP project implementation. The findings imply that IT infrastructure is the most important component for successful ERP implementation as it demands knowledge to enable anyone involved to solve problems within system and adequate resources of networking infrastructure. The findings further imply that the organization ensured that there was well laid out technological infrastructure and ERP technical team was effectively trained on all ERP processes to facilitate easier ERP project implementation.
