An Investigation into the Challenges Facing Implementation of Enterprise Resource Planning in the Dairy Industry in Kenya (A Case of Selected Dairy Firms)

Abstract

In recent years there has been an increase in using Enterprise Resource Planning (ERP) systems in large companies and government corporations mainly in developed countries. While there is wide adoption of ERP systems in Western economies, developing countries lag far behind. However, due to recent economic growth, developing countries such as Kenya are increasingly becoming major targets of ERP vendors. There is an urgent need for understanding ERP implementation issues in developing countries, as ERP systems are still in their early stages in these countries. They face additional challenges related to economic, cultural and basic infrastructure issues. On the other hand, the dairy industry has faced tremendous growth since its inception and has gone through various changes in terms of liberalization therefore increasing competition for milk and milk products. Information management enables organizations in the dairy industry to survive the complex, turbulent and competitive business environment. This study investigated the challenges facing ERP implementation in the dairy sector. The target population of the study was the senior staff in the leading milk processors in Kenya. The researcher sampled 50 respondents from the ICT, marketing, production and business development departments that are concerned with strategies formulation and implementation. Primary data was collected using a semi-structured questionnaire consisting of open and closed ended questions. The questionnaire was administered through drop and pick-later method to the target population. Secondary data was collected through reading the existing material like the brochures and books. The data was coded and entered into Statistical Package for Social Science (SPSS) and descriptive analysis. Measures of central tendency were applied on the data and the findings, conclusion and recommendations of the study derived. Data was presented using bar graphs, percentages and frequency tables. The study found that in regard to employee knowledge and skills, majority of the respondents had diploma and university level of education, therefore they reported that were able to utilize the ERP model in their organizations. Majority agreed that some preparation were done before implementing the modals. The study established that majority of the employees reported of the stakeholders involvement in the ERP implementation, especially in offering technical expertise. On organization resources majority of the respondents reported that their organization devoted resources to the Implementation process. The main resources provided were financial related. Majority of the respondents reported that their organization had adopted customer oriented culture, majority cited poor data storage as a main organization cultural aspect the ERP implement ion was meant to address. Majority reported that ERP has helped in regulating production line and inventory database therefore improving the organization culture in terms of efficiency. The study therefore 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.