Evaluation of the Effects of SaaS on SMEs in Nairobi County, Kenya

Abstract

SMEs in Kenya form the majority of enterprises in Kenya providing close to 80% of Kenya’s employment. Although they are the majority they perform dismally contributing very poorly to the country’s Gross Domestic Product (GDP). GDP is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. Past statistics indicate that three out of five businesses fail within the first few months of operation and those that continue, 80 per cent fail before the fifth year. This means that there is a sustainability issue among small to medium-sized enterprises (SMEs). If SMEs adopted information and communications technology (ICT) solutions their sustainability would increase, but the main challenge SMEs face with implementing ICT solutions is the high cost of implementation and maintenance. The purpose of this research was to evaluate the effects of SaaS on SMEs in Nairobi County, Kenya to find out if SaaS was affordable and if it improved the SMEs. The effects that were evaluated were end user effects, economic effects and functional effects. Literature review of SMEs, SaaS and the effect that SaaS has on SMEs in various countries was done. The study which followed the explanatory research design evaluated 35 SMEs in Nairobi County, Kenya. This number was identified through a sample formulae. The data collected through a questionnaire was then analyzed and indicated that SaaS use had positive end user, economic and functional effects on SMEs. The study then recommended that SMEs in Nairobi County, Kenya, should be encouraged to use SaaS as it would improve their performance.