Knowledge Management Capability and Enterprise Resource Planning Implementation Success in Companies Listed In the Nairobi Securities Exchange

A dissertation report Submitted to the Chandaria School of Business in partial fulfillment of the Requirement for the Degree of Doctor of Business Administration (DBA)This study was motivated by the high failure rate of ERP systems around the world during the implementation stage with most studies reporting failure rates of between 65% and 75%. Many developed countries have embraced Knowledge Management (KM) techniques with the aim of improving on the success rate. These techniques incorporate KM capabilities in the ERP implementation process and can also be applied in developing countries such as Kenya, in order to minimize implementation problems. Drawing from the resource based theory of strategy, the study investigated the relationship among KM capabilities and the implementation of ERP systems in organizations listed in the NSE in Kenya with the aim of establishing whether these organizations have embraced KM in ERP implementation. Hypotheses were derived for the study to establish the nature and extent of the relationship between KM infrastructure (comprising of culture, structure, top management support and IT support) and ERP implementation success. The study also investigated the relationship between KM infrastructure capability and KM process capability. This was a cross-sectional study which employed a survey strategy. The target population was all the companies listed in the Nairobi stock exchange. Three hundred and six (306) questionnaires were distributed to senior managers comprised of the CEOs/general managers, marketing managers, IT managers, human resources manager and the finance managers in each of the companies listed in the NSE. One hundred and eighty four (184) responses were received representing a 60% response rate. Data was cleaned and analyzed using SPSS version 20 and AMOS version 21. The study employed descriptive statistics, factor analysis, path analysis and multivariate regression analysis in structural modeling equation (SEM) to investigate the relationship among variables and measure the strength and direction of relationships between constructs. Results indicated that most of the organizations listed in the NSE lack key KM enablers for successful ERP implementations such as support from top management, appropriate structure, a conducive organizational culture and adequate IT support to enhance collaboration. The study recommends vendors of ERP systems software, academicians, policy makers and practitioners should be guided by Knowledge Management strategies for improved successful implementation outcomes