Enterprise Resource Planning and Business Operations of Small and Medium Enterprises in Nairobi - Kenya

Abstract

The Enterprise Resource Planning (ERP) systems have gained significant attention in recent years as a means to enhance business operations and competitiveness, particularly for Small and Medium Enterprises (SMEs). This study aimed to assess the trend and extent of ERP adoption among SMEs, determine the challenges experienced by SMEs, and establish the relationship between these challenges and Sustainable Business Operations (SBOs) benefits derived from ERP implementation. A mixed-methods approach was employed in the study, combining a comprehensive literature review with a structured online questionnaire administered to a sample of SMEs in Nairobi, Kenya. The questionnaire covered various aspects of ERP adoption, including adoption trends, business challenges faced, and benefits experienced by the organizations after ERP adoption. The data collected was analysed using descriptive statistics, correlation analysis, linear regression analysis, and comparative analysis. The findings revealed that ERP adoption among SMEs in Nairobi is steadily increasing, with a significant number of organizations implementing ERP systems to streamline their business operations. The study identified several challenges encountered by SMEs, including regulatory compliance challenges, resource constraints challenges, organizational culture challenges and supply chain complexity challenges. Furthermore, a strong relationship was observed between overcoming these challenges and reaping SBOs through ERP implementation. These findings contribute to the existing body of knowledge on ERP adoption in SMEs by shedding light on the specific challenges faced by SMEs in Nairobi and their impact to business operations derived from ERP implementation. The implications of the research findings are twofold - firstly, they provide valuable insights for SMEs considering ERP adoption, enabling them to anticipate and address potential challenges to enhance the success of their implementation projects. Secondly, the findings offer guidance to policymakers and ERP vendors in developing strategies and support mechanisms to facilitate and optimize ERP adoption among SMEs. Overall, this study contributes to a better understanding of ERP adoption in SMEs in the context of Nairobi, Kenya. The findings provide valuable insights for business practitioners, researchers, and policymakers seeking to harness the potential of ERP systems to drive operational efficiency and competitiveness in the SME sector