African Research Journal of Education and Social Sciences, 6(1), 2019
By Kelvin Kamau Macharia
Department of Public Policy and
Administration, Kenyatta University
Author Email Address: kamauk81@gmail.com
Abstract
Recently, there has been a tremendous application of enterprise resource planning systems in large companies, government institutions and corporations. Furthermore, in developed countries, due to overwhelming challenges that have emanated from the dynamic business environment there has been need to adopt sophisticated and integrated technological applications off the shelf. This study sought to assess the influence of organizational culture on the implementation of enterprise resource planning systems in Kiambu, Kenya. The study used descriptive research design on a target population of 238 respondents. They included the head of departments and employees of the human resource, accounting and finance, supply chain management, ICT, land, housing, and physical planning in Kiambu County. The study was carried out across a sample size of 149 respondents using Stratified sampling technique and purposive sampling techniques. Quantitative and qualitative data were collected using questionnaires. Data collected were analyzed through the use of a computer application Statistical Package for Social Sciences. Based on the findings, it was established that organizational culture has a positive and significant effect on the implementation of ERP systems in Kiambu County. The study recommends that the county government of Kiambu and other county governments create a conducive organizational culture that is highly ethical with good values, procedures, and policies that can support implementation of any new technology or policy.
Keywords: Enterprise Resource Planning, ERP systems implementation, organizational culture, devolution and ERP, ERP in Counties
INTRODUCTION
Enterprise resource planning (ERP) is defined as a company-wide information system that incorporates major business functions such as accounting, human resources management, production and marketing. Introducing ERP allows companies to enjoy financial and non-financial benefits, including inventory reduction, data integration and cost reduction. Initially used for internal integration, ERP is now applied towards external integration with management executive systems and supply chain management. In fact, ERP is increasingly being recognized as a business strategy tool for improving corporate competitiveness. As a matter of fact, more small-and medium-sized manufacturers have been adopting ERP systems (Choi, 2013).
The significant growth of ERP systems has been catalyzed by the need to allow integration of various systems and their technologies that broaden business functionality due to their modular, integrated and wide enterprise functionality. Processes are automated as a result of this growth where all the functions in an organization become fully integrated in a virtual manner from basic operation to finance and making of reports. The completeness of the integrated system requires the presence of some functional modules which are core in ERP integration (Céu Alves & Matos, 2013). These may include supply chain management functions such as planning for materials, managing the supplier and purchase, and management of inventory and materials. In other cases such as human resource management, these functional modules that are core involve the recruitment processes, training, and development, management of employees, compensations and laws governing labor. In accounting and finance the modules that are core include general ledgers, accounts receivable and payables, accounting for non-current assets, billings and invoicing petty cash management.
Kenya has experienced a conglomeration in equal measure of breakthroughs and failure of ERPs. Despite the pertinent adoption of these systems, the expected feedback in terms of profitability still grapples with diminishing hopes of market share in relation to competitive advantage. More so, the public sector has continuously reported failing terribly as far as service delivery is concerned and the outcry of the ordinary citizen fails to surpass the selfish interest of political groups due to dereliction of their responsibilities.
Local research conducted by Nyagah (2006) asserts that teamwork and composition in the ERP implementer-vendor consultant partnership is a key factor influencing ERP implementation success. The research also found out that good communication and coordination between implementation partners is essential. However, Nyagah (2006) did not focus on a particular industry but based his study on the views of ERP consultants in Kenya. Mbogori (2010), argues that finances are a major factor affecting the implementation of ERP. Although the study focused on the mobile communications sector, it was a case study of a specific company and the findings cannot be generalized to the whole sector. It is in this light that this study pre-eminently focused on the fulfillment of the existing academic gaps through carrying out an assessment on the influence of organizational culture on the implementation of enterprise resource planning Systems in Kiambu, Kenya.
The adoption of ERPs is beneficial to an organization despite the time taken and resources consumed in its implementation. The systems facilitate timeliness of resources and information which then improves business processes and efficiency. In addition, the adoption allows the security and safety of information stored. As a result, organizations achieve customer satisfaction through their expansion whereby processes are scaled up. ERP adoption is tasked with the mandate of ensuring that an organization has high data security to facilitate various processes relating to growth. The benefit of this integration ensures that customer satisfaction is enhanced through the provision of timely responses and also facilitate that the customer received quality products and services within the stipulated time (Nwankpa, 2015). In addition, they allow optimum utilization of resources through proper allocation to minimize costs that are associated with wastage. Ideally, the integration of distinct functions in an organization fosters effectiveness in arriving at reliable decisions. Unification of the functionality of departments ensures that vital information is channeled not only in the right manner but also at the right time.
In the modern era, the design of ERPs shows precision in terms of elementary components that are pivotal to the entire organization. The advancement in technology over recent years has facilitated the inclusion of graphical user interfaces with clear functions that are separated. The deployment of such techniques has allowed the clients to orchestrate the manner in which the processes are automated. Interaction of the user with the multi-functional databases has fervently minimized time wastage regarding the identification of roles and responsibilities. Customized ERP technologies also include their extensions to enormous and powerful servers that contain databases with login procedures for each user courtesy of the relational database technology architecture (Parthasarathy & Sharma, 2016).
User satisfaction largely depends on the experience of an individual on the use of computers (Matende & Ogao, 2013). Higher experience renders a user with an ability to manoeuvre around specific problems and eventually come up with solutions. Such skills are important when it comes to employing ERP in any organization including increasing the magnitude of adaptability.
There is dire need to allow user participation when adopting ERP in an organization to increase their satisfaction and in return, the users feel part of the process whereby they can contribute their insights. User inclusion in the process of adoption and implementation improves the perception of control through the development of realistic expectations pertaining to the information systems. It is out of increasing user involvement that the adoption of ERP in an organization is maximized (Costa, Ferreira, Bento, & Aparicio, 2016). Additionally, the inclusion of top-level management is a critical factor in the implementation of ERP in organizations. Their support is fervent throughout the whole process ranging from the initiation of an ERP system to facilitation until implementation. The top-level management plays an important role due to their ability to make strategic decisions. There is a close positive relationship between the support of top-level management and the manner in which users perceive them especially when an organization is adopting an ERP system (Bai & Cheng, 2010).
Cultural dynamics within organizations also affect the implementation of systems within an organization and could possibly contribute to an implementation process of ERPs (Chiang, 2013). The dynamism for instance in western countries where ERPs originated, rendered culture a critical success factor in the implementation of ERP systems by organizations. For any implementation process of any ERP systems in an organization to succeed, culture should be factored in to allow easier adaptation and synchronization with the key operational departments. This calls for the systems vendors and organizations to consider those ERP systems that are compatible with the culture of an organization. Implementation success of systems heavily relies on the fitness of the system packages adopted by an organization in relation to organizational culture (Ke & Wei, 2008).
Other studies conducted by Bradley and Lee (2007) found that it is very important to conduct user training in an organization where ERP systems seek to be implemented. They concluded that there is increased user satisfaction as a result of effective training and hence improved productivity. However, this study stresses more on the end user training and development of ERP and therefore the identification of the research gap (Edmunds, Beidas, & Kendall, 2013).
Srivastava and Gips (2009) conducted their study on the expectations in adopting and managing ERP systems at the strategic level and they came up with some findings that there is disunity across functional departments among the managers (Dezdar, 2012a). This was due to failure to prioritize the needs of the entire organizations and instead focus on the overall organizational goal. For this reason, the top-level management injected little effort to the implementation of ERP systems since it was regarded as an IT project and was left in the hands of the employees in the IT department.
Evidently out of the literature reviewed, it is clear that organizational culture is very critical when it comes to implementation of ERP in any organization. Further, this forms the basis of this research. Hence, the study intended to examine the influence of organizational culture on the implementation of enterprise resource planning systems in Kiambu, Kenya.
METHODOLOGY
In this study, a descriptive research design was employed as it allowed in-depth analysis of information systems adopted and as a result, there would be an adequate rich description and proper understanding that is essential in the analysis of ERP implementation. Furthermore, the research design was advantageous as it allowed the detailed and conclusive description of the state of affairs.
The study was carried in Kiambu county government offices both at Kiambu town and Thika town. This is because of decentralization where some functions have been divided in between the two towns.
The target population consisted of the employees of Kiambu County Government working at the human resource, accounting and finance, land housing and physical planning, supply chain management and ICT departments in both offices in Kiambu town and Thika town. The target population comprised of 238 employees situated at the head offices in Kiambu Town and Thika town.
This study adopted a stratified random sampling technique in selecting the sample of study. This technique required dividing the target population into strata. The various departments used in this study represented these strata. The strata chosen sought to split the population into important functional areas relevant to the study, that is, each department used was different in the manner through which they had implemented their ERP systems (Thompson, 2012). Once the population was divided into strata, respondents were chosen randomly from these strata which were then used in the study. Hence, a sample was selected from each stratum. Stratified random sampling was useful in the sense that it enabled an in-depth examination of each department.
A simplified formula for proportion by Yamane (1967) was used in the determination of sample size. The research used this formula to calculate the sample size and this is illustrated below. In addition. A 95% confidence level and p=0.5 was assumed and Precision (e) =0.05.
The study collected primary data from sources by use of self-administered questionnaires to the respondents. Questionnaires were advantageous in the sense that were able to capture extensive and large amount of useful data to the study both in qualitative and quantitative data. Notably, these questionnaires used contained closed-ended questions used to obtain structured responses which in many cases tended to facilitate tangible recommendations.
Validity was tested by computing a correlation coefficient and use it to compare independent and dependent variables. The study applied the internal consistency technique from the scores obtained from the single test that was administered to the respondents who were not included in the sample. Cronbach’s coefficient Alpha was used to measure reliability on the questionnaires to check for internal consistency in terms of how the items were correlated. Cronbach’s Coefficient Alpha was calculated by the use of SPSS software for reliability analysis.
The quantitative data collected was compiled, sorted, classified and entered into the computer for analysis using the Statistical Package for Social Scientists (SPSS). This data was presented using tables and figures. A cross tabulation and correlation analyses were carried out to present the background information against the study variables and establish the strength of the relationship between variables respectively. In the study, there was acknowledgment in cases where ideas, thoughts and opinions were borrowed from other researchers and academic scholars.
RESULTS
Demographic Characteristics
It was established that majority of the respondents, making up employees in the human resource, accounting and finance, land housing and physical planning, supply chain management and ICT departments in both offices in Kiambu town and Thika town were male (59%) while female were 41%. Further, the findings indicate that 22% of the respondents were having a work experience below 6 months, 19% had worked for a period between 1 and 2 years while the many (59%) of them, had a work experience above 3 years. The findings also showed that majority of the participants in the study were staff in non-managerial positions that made up 66% while those in management positions were 20% and the senior officers were 14%.
Influence of Organizational Culture on Enterprise Resource Planning Implementation by Kiambu County government
This study intended to analyze the influence of organizational culture on enterprise resource planning implementation by Kiambu County government. To achieve this, study examined the descriptive statistics on impact of organizational culture, the extent to which Organizational Culture Supports Implementation of ERP before conducting a correlation and regression analyses.
Descriptive Statistics on Impact of Organizational Culture
The respondents rated statements on a scale of 1 to 5 where; 1 strongly disagreed, 2 disagreed, 3 was neutral, 4 agreed and 5 strongly agreed. The findings are presented in Table 1 which indicate that majority (80.2%) of the respondents agreed that the overall organizational culture promotes the acceptance of new culture among employees in the county, 79.1% on the other hand agreed that organizational culture is impacted at all levels of organization and individual in terms of values, 65.1% agreed that organization culture is impacted at all levels of organization and individual in terms of rules, 82.6% agreed that organization culture is impacted at all levels of organization and individual in terms of procedures and all the respondents agreed that strategic positioning of roles and their interpretation by actors result to influence of implementation of ERPs.
Table 1
Descriptive Statistics of Organizational Culture
Extent to which Organizational Culture Supports Implementation of ERP
The respondents were also asked to indicate the magnitude through which organizational culture has supported the implementation of ERP. The findings in Table 2 indicated that majority of the respondents felt that organizational culture has supported the implementation of ERP in Kiambu County to a very large extent, 27% felt it has supported to a large extent, 12% felt it has only supported to a small extent and 5% argued that organizational culture has not supported implementation at all.
Table 2
Extent to which Organizational Culture has supported the Implementation of ERP
Correlation Analysis
The findings presented indicate that organizational culture has a positive (r = .343) and significant (Sig = .001, < .05) effect on implementation of ERP systems at Kiambu County. These findings imply that better organizational culture in terms of better methodological support programs, regular monitoring, and on-going consultation leads to a significant improvement in the implementation of ERP systems at Kiambu County. Srivastava and Gips (2009) similarly established that organizational culture was very important in the implementation of a new policy in the organization.
Table 3
Correlation analysis
Regression Analysis
A regression analysis was then used to test the research objectives with the equation being Y = α + β 1X1+ e. The results for a model summary, fitness and coefficients are presented.
Model Significance
The model significance was predicted by the model ANOVA table. The test for the joint significant which is given by the F statistic is 6.783 and as observed in table 4 below, it is statistically significant at 5% level of significance. This implies that organizational culture significantly explains the implementation of ERP in Kiambu County.
Table 4
ANOVA Results
Model Coefficients
The model coefficients were used to establish the change in the implementation of ERP given a change in organizational culture. The findings for model coefficients are indicated in Table 5.
The regression findings showed that organizational culture positively and significantly affect the implementation of ERP in the county government of Kiambu (Beta = 0.310, P-value = 0.009, < .05). These imply that taking all other independent variables constant at zero, a unit improvement in organizational culture will lead to a 0.310 unit increase in implementation of ERP in the county government of Kiambu. The findings are consistent with Dezdar (2012) who argued that organizational culture was very important in the implementation of organizational policies and that when the organizational culture is not right, there is disunity and the success in implementation decreases.
Table 5
Model Co-efficients
DISCUSSION
This study sought to determine how organizational culture influences the implementation of ERP in Kiambu County Government. From the findings, 80.2% agreed that the overall organizational culture promotes the acceptance of new technology among employees, 79.1% on the other hand agreed that organization culture is impacted at all levels of organization and individual in terms of values, 65.1% agreed that organization culture is impacted at all levels of organization and individual in terms of rules, 82.6% agreed that organization culture is impacted at all levels of organization and individual in terms of procedures and all the respondents agreed that strategic positioning of roles and their interpretation by actors result to influence of implementation of ERPs. These findings are supported in a study by Bai & Cheng (2010) which established that the implementation of ERP systems always mandates a change in business process and organizational culture. Conclusively, the study found that organizational culture plays an important role during the implementation of ERP systems and consequently its success (Bai & Cheng, 2010).
The descriptive findings indicated that the organizational culture in Kiambu County is that of accepting new technology, better values, ethics, rules, and procedures. Regression findings further showed that organizational culture had a positive and significant effect on the implementation of ERP systems in Kiambu County. These findings align with a study by Nordheim, (2009) which explain that ERP is process-based, rather than function-based therefore instigating disruptive organizational changes as part of the process. Organizational culture is one of the changes that forms this process. In another study by Rabaa’i (2009), it was found that ERP technology is also known for imposing rigid norms of workflows and particular practices upon workplaces and it is well noted that ERP is dependent on changes to organizational culture.
CONCLUSION
The findings of the study led to the conclusion that better organizational culture in terms of better methodological support programs, regular monitoring, and on-going consultation leads to a significant improvement in the implementation of ERP systems in Kiambu. There is a dire need to ensure that County governments critically consider organizational culture as a factor when they are trying to implement Enterprise Resource Planning systems due to their complexity.
The study recommends that the county government of Kiambu and other county governments create a conducive organizational culture that is highly ethical, with good values, procedures, and policies which can support the implementation of any new technology or policy. Although the study focused on Kiambu County out of the 47 counties in Kenya, there exists a contextual knowledge gap and hence the need to focus on a survey of other counties to fill this gap.
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