The use of online systems has become firmly in many academic and non-academic institutions in developing countries. It was for this reason that The Open University of Tanzania (OUT) has adopted the use of the online enrolment system on receiving, processing, and issuing admissions to its prospective students. The aim of this study was to assess the impact of online systems on the delivery of service to prospective students and employees at the OUT. In this end researcher specifically aimed to understand challenges, effects, and required improvements to eliminate challenges faces users of the system. This descriptive study used stratified random sampling to obtain a sample of 392 applicants and 87 employees. An online survey was used to collect data from respondents. Findings revealed that poor internet and network connectivity, delay in feedback, out-dated content, frequent power cuts, poor user help, language barrier, and high cost of internet bundles are challenges which hinder the maximum usability of the system at OUT. Furthermore, findings show that the online enrolment system improved service delivery in various ways, such as speedup the admissions processes, reduction of travelling costs to students, and it allows staff and faculties to have more access to applicants and students' records than before. Based on study findings, it can be concluded that the online enrolment systems have positive impacts on enhancing service delivery at the OUT. However, the proposed design for the mobile application version of the system, which has been explained in details in this study, will not only reduce many challenges found by this study but also improve system’s services.