Enterprise Resource Planning Transformation Effect On Employee Productivity In Geothermal Development Company, Nairobi City County, Kenya

ABSTRACT

The transformational aspect of an ERP entails the re-engineering of the organizational business process and the influence of necessary critical factors for the radical transformation. The general objective of this study was to determine the relationship between ERP Transformation and Employee Productivity in Geothermal Development Company, Nairobi City County, Kenya. The specific objectives of the study were to assess the effect of business process re-engineering on employee productivity, to determine the influence of critical success factors on employee productivity, to analyze the effect of organizational change on employee productivity and to find out the impact of business functions on employee productivity in Geothermal Development Company, Nairobi City County, Kenya. The study was guided by the ERP Scorecards Benefits Theory, which generated a framework that explained the direct and indirect contributions of the ERP transformation. A Cross-sectional survey was used to provide an in-depth understanding of the association of the variables in context. The population of this study were 840 employees of GDC who were based at the organization’s headquarters in South C. The target population were some of the key organizational informants comprising of Executive, Senior, Middle and Lower level management from both the business and technological (IT) part of the organization who have been in constant interaction with the system. This study utilized both the stratified random sampling and simple random sampling technique in selecting 336 personnel from the population of GDC employees. Data was collected using questionnaires and the opinion of scholars and experts in ERP Transformation was sought to establish the validity of the research instruments. Reliability of the questionnaire was evaluated using the Cronbach alpha test, which provided an acceptable threshold of 0.593. Data was analyzed using descriptive statistics and inferential statistics in the form of correlation tests and regression analysis. Only 300 respondents submitted their questionnaires which gave a response rate of 89.2% and deemed representative. The study findings indicated that Organizational Change and Business Functions were statistically significant predictors of Employee Productivity and therefore, the most influential determinants of success in an ERP Transformation. The variables were significantly correlated where R (coefficient of correlation) was a positive correlation of 0.36 indicating that the measures of ERP Transformation were moderately related to Employee Productivity. The regression analysis revealed that there was a significant relationship between Employee Productivity and ERP Transformation as indicated by a significance level of 0.00 (P value was less than 0.05) which contradicted previous findings from correlation analysis. Thus, it was important to test the significance of each predictor. It was concluded that ERP Transformation explains 13% of the variation in Employee Productivity and this was attributed to Organizational Change and Business Functions which were significant predictors of Employee Productivity. This means that organizations should not implement ERP with a view of enhancing Employee Productivity and recommends that management should strive to identify the other key factors that explain 87% of the variation in Employee Productivity to achieve a higher level of performance in the organization. This study further recommends that performance in the public sector should be integrated with management activities to ensure that it is part of the wider longterm organizational goals and leads to optimal benefits in the organizations.