The benefits and challenges of electronic data interchange
View/ Open
Date
2010-04-13Author
Magutu, Peterson Obara
Lelei, Joel Kiplagat
Nanjira, Ali Okiti
Type
ArticleLanguage
enMetadata
Show full item recordAbstract
Many organizations are applying Electronic Data Interchange (EDI) to improve operational efficiency, enhance
information quality, and achieve reductions in processing time of critically important business information. EDI
today represents an opportunity to improve business processes and business controls directly even though
challenges are expected. It is in light of the opportunities and challenges that this study is done, specifically focusing
on the benefits and challenges of implementation and application of EDI in Kenya considering the case of Kilindini
Waterfront Project. Data was collected from 45 managers of the firms selected using convenient sampling. The
respondents were asked about perceived benefits of EDI application and perceived challenges of EDI
implementation and application. The questionnaires were mainly hand delivered to the respondents. The data
collected was analyzed with the use of frequency tables, proportion, percentages, cross tabulations and factor
analysis using SPSS. Majority of the firms that were studied had less than 1,000 employees which may possibly
mean the firms are less labor intensive and therefore relying more on automated processes. This study also show
that most of the respondents were experienced with EDI implementation and application and therefore had the
necessary knowledge sought for. From the factor analysis carried out on the variables of the benefits of EDI
application, the deduction drawn indicates that firms that apply EDI benefited. Some of the benefits include reduced
errors, access to information, enhanced competitive capacity and improved trading partner relationship. Despite the
benefits of EDI application, it was also found that there are several challenges encountered in the implementation of
EDI. From the factor analysis carried out on the variables of the challenges in the EDI implementation, the
deduction drawn indicates some of the challenges to be lack of top management support, negative staff attitude,
inadequate IT staff training and inadequate non IT staff training. This study also indicated that there were
challenges encountered in the application of EDI. From the factor analysis carried out on the variables of the
challenges of EDI application, the deductions drawn indicate some of the challenges to be inadequate non IT staff
training, lack of trust of other EDI partners, lack of flexibility, lack of maintainability and lack of awareness of
benefits of EDI.
Citation
African Journal of Business & Management (AJBUMA) http://www.aibuma.org/journal/index.htm Vol. 1 (2010), 25 pagesPublisher
AIBUMA Publishing School of Business, University of Nairobi
Description
Benefits and challenges of electronic data interchange