A Management Research Project Submitted in Partial Fulfillment of the Requirements of the Degree of Master of Business Administration (mba) Faculty of Commerce, University of Nairobi

In the past five years, many companies in Kenya have invested a lot o f capital in information systems that range from transaction processing systems to complex interorganisational systems. Companies have implemented information systems on the belief that they will provide organisations with needed tools for information resource management. One of the systems that companies have invested in is the Enterprise Resource Planning systems (ERPs). Most companies in Kenya are making frantic efforts to implement ERPs, which are being marketed as a perfect solution to the organisational problems o f information management. The companies that have implemented ERPs have undergone a lot of positive changes while others may have had the worst o f the experiences. Against this background, the research study sought to evaluate the challenges that companies that have implemented ERPs in Kenya and the vendors o f ERP solutions have faced in their quest to implement ERPs in Kenya. The focus o f the study was on all companies that had implemented the ERPs by March 2002 as well as vendors o f ERPs in the country. Twenty-eight companies that had implemented ERPs and eight vendors of the software were studied. Primary data for the study was collected using questionnaires. All the companies surveyed indicated that the cost of ERP systems was a major challenge. The companies felt the cost of software, hardware as well as costs incurred in maintenance and training of users was too high. Companies also felt that many of them had not fully realised the benefits and demands/ requirements o f the systems while some found the systems too complex to manage.