Influence of Stakeholders' Engagement Practices on Performance of System Applications Products for Oil and Gas Upgrade Project at Kenya Pipeline Company Nakuru Depot

Abstract

System Applications Products for Oil and Gas (SAP IS-OIL) is the impetus in the Oil and Gas industry towards enhancing operational efficiency and improve overall performance. The current literature on normative and instrumental justifications of stakeholder value creation remains mostly inconclusive, particularly on the practicality of the stakeholders' engagement practices on the performance of such projects. The primary objective of the study was to determine the influence of stakeholders' engagement practices on the performance of SAP IS-OIL software upgrade project at Kenya Pipeline Company, Nakuru depot. The study was founded on stakeholders' theory, social contract theory and resource dependency theory while adopting descriptive research design. A census was conducted with the respondents being depot managers of 91 oil companies at KPC Nakuru depot. A structured questionnaire was used to collect data. The findings revealed that monitoring stakeholder engagement had the most significant influence (β=0.397; p=0.000) followed by the variable making project information transparent to stakeholders (β =0.315;p=0.001) then keeping stakeholders involved (β =0.235;p=0.015) and finally treating stakeholders as partners (β =0.222;p=0.020). The study concludes that when stakeholders are adequately involved in choosing the project, acceptance of the project outcome is achieved as it enhances relationship building which is paramount in decision making process. Moreover, effective communication as well as managing their expectations especially taking into account their concerns and interests are crucial in achieving project goals.  Furthermore, keeping stakeholders involved in the entire project cycle has a significant influence on the performance of SAP IS-OIL software upgrade project. Therefore, engaging stakeholder during project identification secures confidence of project team and averts lack of project ownership risk. Also, stakeholder's involvement during planning phase incorporates ideas which are essential during project implementation. Furthermore, making project information transparent to stakeholders has a significant influence on the performance of SAP IS-OIL software upgrade project. This means that effective communication of project information to the stakeholders builds a well-established relationship based on mutual trust having the interest of project outcome. Finally, it is crucial to have a project management plan outlining the various stakeholders as it facilitates how to engage stakeholders by establishing a framework to meet the needs and expectations. The study recommends that there is a need to have a mechanism in place to ensure adequate training of all the relevant stakeholders and an established closed-loop communication channel during the project phases. Also, a framework should be established to incorporate creative content to promote a trust-based relationship in project phases. the project management team should involve all the relevant stakeholders in the entire project cycle. The project team needs to ensure project information is made transparent to the relevant stakeholders by appropriate and timely communication. Finally, monitoring stakeholders' engagement is crucial to the performance of SAP IS-OIL upgrade project hence should be prioritized by the project management team.