Effect of enterprise resource planning (ERP) systems on performance of county governments in North Rift Economic Bloc, Kenya

Abstract

Devolution is a tool that brings government services closer to the people. Several countries are devolving functions having the intentions of improving service delivery, enhance governance, accountability and increase equity. However, Kenya devolution was found to be an ambitious program, counties are facing challenges in enhancing devolved service delivery. In addition, Despite the efforts by the National Government to improve adoption of information communication technology (ICT) projects at county level through Authority, adoption of Enterprise resource planning (ERP) projects at county level is yet to be implemented. Thus, the general objective of the study was to establish the effect of ERP systems on the performance of County governments in county governments in North Rift Economic Bloc (NOREB). The specific objectives of the study were to determine the effect of supply chain management (SCM) module on the performance of County governments, effect of customer relationship management (CRM) module on the performance of County governments, effect of human resources management (HR) module on the performance of County governments and effect of financial management (FM) module on the performance of County governments. The study was informed by Control Theory (Cybernetics) and Institutional Theory. The study employed explanatory. The study targeted 1,640 permanent employees from ICT and finance ministries from six counties in the North Rift region in Kenya. These included: Nandi, Uasin Gishu, Elgeyo Marakwet, Trans Nzoia, Baringo and West Pokot Counties. Simple random sampling techniques were used to select a representative sample of 321 employees from the six County governments. The study collected primary data using a structured questionnaire. To measure the reliability, the Cronbach Alpha technique was employed. The data was analyzed and presented using descriptive statistics such as mean scores and standard deviation to determine the distributions of the variables. In addition, to further determine the power of the study model, the study regressed the variables using multiple regression model. The findings in have showed that integration of ERP in the SC (β1 = 0.102, p = 0.015), integration of the ERP system into the CRM module (β2 = 0.156, p = 0.004), integration of the ERP system in the HRM module (β3 = 0.218, p < 0.001) and integration of the ERP system in the FM module (β4 = 0.491, p < 0.001) have a positive and significant effect on county performance, Thus, the study inferred that ERP in CRM, HRM, SCM and financial is key determinants in performance of county government. Therefore, the study recommends that all the departments in the organization that are yet to be integrated should be integrated to reap the benefits of integration. The study also recommends that all public organizations should adopt ERP with the aim of improving their efficiency.