Enterprise Resource Planning System Integration and Performance of Commercial Banks in Embu County, Kenya
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Date
2025-04
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Kenyatta University
Abstract
Commercial banks serve as fundamental growth engines for the economy. However, they encounter continuous challenges throughout their system infrastructure base, transaction security systems, and delivery of services and data communication networks. The existing system deficiencies create unsatisfied customers while increasing operational expenses alongside reduced financial results. Research shows insufficient evidence about Enterprise Resource Planning (ERP) systems integration's effects on banking efficiency. Researchers studied the effects of ERP system integration on commercial bank performance within Embu County of Kenya. The research design consists of a description, and the study measures ICT employees in ten commercial banks. The study population comprises 240 employees in software engineering, database administration, network administration, and application development departments. The stratified random sampling method chose a representative group of 60 respondents. Qualified data was obtained through established questionnaires, which led to descriptive and inferential statistical assessments. Operational success in the banking sector depends heavily on two factors: data communication performance (β=0.368, p<0.05) and service delivery efficiency (β=0.326, p<0.05). This study establishes that Transaction Security (β=0.224, p<0.05) and System Infrastructure (β=0.148, p<0.05) bring positive impacts on bank performance but with reduced magnitude. The research shows that well-developed ERP systems improve security protection and information dependability, building customer confidence and making organizations more resilient to operational disruptions. The analysis shows that ERP architecture fails to enhance every organizational competency, as first believed. Research indicates that ERP systems become effective in digital banking by requiring strategic deployment and ongoing enhancement despite providing foundational organizational structures. The findings only make assertions that directly correspond to statistical evidence, thus eliminating hypotheses that predict improvement in organization-wide efficiency. To achieve ERP integration success, commercial banks should allocate funds for cybersecurity measures, optimize data communication channels, and continuously update their infrastructure to improve performance. Financial institutions must implement an ERP solution with multi-phase deployment that matches operational requirements. After implementing ERP tactics, future studies must analyze both organizations' prospects for financial stability and customer service standards. The research fills important gaps in ERP system adoption, adding to banking digitalization research while giving policymakers, banking executives, and IT professionals practical advice about operational effectiveness using technology improvements.
Description
A Research Project Submitted to the School of Business, Economics, and Tourism in Partial Fulfillment of Requirements for the Award of the Master of Business Administration Degree (Management Information System of Kenyatta University, April 2025.
Supervisor
Josphat Kyallo