Electronic Data Interchange Adoption in Saudi Arabia Thesis Presentation

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Electronic Data Interchange Adoption in Saudi
ArabiaThesis Presentation

• Dr. Mohammed A. T. Al-Sudairy
• Assistant Professor
• Business Department
• Faculty of Economics Administration
• King Abdul Aziz University, Jeddah
• E-mail MAS_at_KAAU.EDU.SA

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Presentation Layout

• Introduction
• EC and EDI
• Methodology
• Findings
• Conclusion

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Inter-Organisation Systems

• IOS are networked IS and are used by two or more
  separate organisations to perform a joint
  business.
• ISO are highly automated with very limited human
  interaction.
• IOS enables trading parties to be more responsive
  to dynamic business environments by providing
  timely information sharing.

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Inter-Organization Systems

• Electronic Data Interchange (EDI)
• Electronic Commerce (EC)
• Electronic Fund Transaction (EFT)
• Electronic Mail (E-mail)
• Electronic Form (EF)
• Integrated Massaging and
• Shared Database

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Electronic Commerce

• EC is the handling of business transaction over
  communication networks.
• EC is not enabling technology but it is simply
  conducting business electronically through
  enabling technology such as EDI, VANs and
  Internet.

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Electronic Data Interchange

• EDI is the electronic transmission of business
  data between or within firms in structured,
  computer processable data format, which permits
  information to be transferred without re-key from
  computer application in one location to computer
  application in the other location.

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EDI Components

• EDI Standards
• Communication Standards
• EDI Software
• EDI Networks

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Sender
Receiver
Application
Application
Translator
Translator
Communication Software
Communication Software
VAN
EDI Network
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Translating from a Human Readable to a
Machine Readable Standard Format
Quantity Unit No. Description
Price 1 CSE 6900 CELLULOSE
SPONGES 12.75 12 EA P450
PLASTIC PAILS .457
4 EA 1640Y YELLOW DISH DRAINER
.95 1 DZ 1507 6 PLASTIC FLOWER
POTS 3.00
From
ANSI X12 FORMAT IT111CSE12.75VC6900 IT12
12EA.457VCP450 IT134EA.95VC1640Y IT1
41DZ3VC1507
To
Application systems e.g. accounts system
EDI Translator
ANSIX12 Invoice
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EDI Interface
Application System
Application Interface
Application System
EDI Translator
Application System
Communications Interface
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Communications Interface
EDI Interface
Application System
EDI Translator
Application Interface
Application System
Application System
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EDI Benefits

• Reduced overhead costs
• Reduction in labour
• Increased accuracy
• Improved communications and management control
• Improved inventory control
• Enabled retailers to be more responsive to
  consumer needs

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Motivation Factors

• Strategic
• Better communication with trading partner
• Remaining competitive
• Butter customer service
• Reducing stock

• Operational
• Quick response access to information
• Increase data accuracy

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EDI Barriers

• Difficulty of a cost/benefit evaluation
• The need to keep in use two information systems
• Standardisation
• Externalities of EDI applications can overstep
  the firms boundaries and modify the business and
  market perspective from competition to
  collaboration.
• Resistance to change.

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The Ned for EDI in SA

• To participate in international free trade
• To liberalise trade and economic
• To become a member of WTO

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Objective

• The objectives of the study were to
• Explore EDI usage in the retail market develop
  EDI user and non-user profiles
• Identify benefits realised by EDI uses and the
  difficulty of using EDI
• Identify reasons for not using EDI by non-user

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Objective

• Identify influencing factors, which affect EDI
  users decision to use the technology and which
  hinders non-users decision to use the technology
• Assist retail managers to be aware of the
  benefits and barriers of EDI and the
  contributions that it could make to their
  operations

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Research Contribution

• To fill the gap in the literature on developing
  countries in general and Saudi Arabia in
  particular.
• The implementation of EDI in Saudis retail
  industry is a big task for an organisation to
  undertake. The researcher will assess the
  obstacles facing EDI implementation.

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Research Contribution

• Provide information to management to assist in
  making a decision as to the readiness to adopt
  EDI.
• Present empirical evidence on the status of
  information technology in general and EDI in
  particular in the retail industry in Saudi
  Arabia.

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The Study Questions

• Do retailers in Saudi Arabia use EDI or not?
• If YES
• What are the motivations to use EDI?
• What are the benefits realised?
• What are the influential factors to use EDI?
• If NO
• What are the reasons not to use EDI?
• What are the influencing factors?

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The Study Questions

• Do organisational, IT and pressure variables
  affect EDI use by Saudi retailers?
• What is the status of IT in the retail market in
  Saudi Arabia (MIS department, type of computer,
  computer usage, top management support)

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Factors influencing the Decision to use EDI

• Organization size
• External Pressure
• Competitors
• Local customers or suppliers
• Overseas customers or suppliers

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Operational variables
IT variables
Organizational Variables
EDI Adoption
EDI Adopter
EDI Non-Adopter
Benefits
Barriers
Reasons
Barriers
Reasons
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The validity and reliability

• Validity was tested for
• content and construct.
• Reliability was measured by
• the test - retest method and
• internal reliability
• all measures indicated adequate validity and
  reliability.

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Statistical Techniques

• Descriptive statistics frequencies, percentages,
  and cumulative percentages
• Cross tabulation
• Chi-square test
• Mann-Whitney U test (t-test)
• Kendalls tau test.

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Methodology Sample

• An Exploratory Study
• Surveymethodology selected for this study is by
  survey.
• Questionnaire
• The Sample
• 297
• 40
• Response
• 126 (37)
• 34 use EDI
• 92 None user

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Finding / Pressure

• Local Suppliers
• 7
• Local Customers
• 7
• Overseas Suppliers
• 26
• Overseas Customers
• 5

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Hypotheses Results

• Variables Chi-Q Sig
• Organization size 2.27 0.32
• Competitors use EDI 7.26 0.02
• Pressure local sup 3.25 0.07
• Pressure overseas sup 12.3 0.00
• Pressure local custm. 20.88 0.00
• Pressure overseas custm. 3.00 0.08

p lt 0.001 Very highly significant p lt
0.01 Highly significant p lt 0.05 Significant p
gt 0.05 Not significant
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EDI Barriers in SA

• The lack of MIS staff
• An inadequate training program
• An unsatisfactory communication lines
• Poor awareness about EDI
• Standardized business operating procedure

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IT Barriers

• Lack of technical expertise either by
• Service providers or
• Organizations the users
• Shortage of technical skilled employee
• Lack of technical support by IT suppliers
• Lack of Knowledge about IT

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Finding

• Job Title
• 47 MIS Manger
• 17 CEO
• 15 MIS Employee
• Annual Sale
• 42 25-199 MSAR
• 41 gt200MSAR
• 17 lt25 MAR

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Closing

• Government
• Education
• Promoting
• Employment
• Leading
• Private
• Need to be computerized
• Treat IT as a competitive weapon
• Joint venture and strategic alliances

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Methodology

• This is a descriptive study and the methodology
  selected for this study is by survey.
• A questionnaire was designed to collect data in
  response to the queries raised by the study.
• A large-scale cross-sectional questionnaire was
  used to generate meaningful data for this study.