Electronic Commerce in the Kingdom of Saudi Arabia

Electronic Commerce in the Kingdom of Saudi Arabia Mutlaq B. Al-Otaibi Rasheed M. Al-Zahrani [email protected] Information Systems Department Co...
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Electronic Commerce in the Kingdom of Saudi Arabia Mutlaq B. Al-Otaibi Rasheed M. Al-Zahrani [email protected] Information Systems Department College of Computer and Information Sciences King Saud University

Abstract Electronic Commerce (E-Commerce) is a challenging field due to the many aspects it involves. In the Kingdom of Saudi Arabia (KSA), ECommerce adoption is very slow due to the existing barriers, e.g. immature complementary services and numerous possible threats. There has been a lot of interest in overcoming such barriers, both in the government and private sectors. A number of conferences, seminars, and workshops were organized by Ministry of Commerce and other private and government bodies to address different E-Commerce issues. This research is one of the first scientific studies of local E-Commerce. It assess the existing practices and the major barriers and challenges encountered

by

Saudi

businesses

in

facilitating

E-Commerce

technologies. Our investigation includes both technical and organizational issues. However, due to the size of the problem, emphasis is put on evaluating technical solutions and their providers in addition to the overall impact of E-Commerce on organizations.

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1 Introduction The success of the World Wide Web (WWW) and its applications introduced a mixture of interrelated terms in the business context, e.g. EBusiness, E-Marketplace, E-Wallet, E-Mail, and E-Commerce. Many researchers have attempted to define E-Commerce. By focusing on business transactions, E-Commerce considers the manner in which business transactions take place via different sets of information technology (IT) mechanisms [BOK2000], and [SHA2000] . From a customer-vendor relationship perspective, E-Commerce intends essentially to leverage the relationship between customers and vendors [SIM2000]. In many cases, customers tend to search in one location for their needs, and negotiate different vendors. Vendors need to understand the customers’ behaviors in order to enhance their decision making process[SIM2000], and [MAR2000]. E-Commerce describes the buying and selling of products, services, and information in a virtual environment [TUR2000].

1.1 E-Commerce Adoption Many organizations adopt E-Commerce as a response to several business drivers [TUR2000]. In many cases, they are looking either for competitive advantages, expanding marketplace, or adding more conveniences to their business [LAK2000]. Nowadays, there are many successful E-Commerce adoptions. The rapid changes in the political and technical fields are creating new business environments, in which ECommerce is considered a business carrier [LAK2000]. E-Commerce has many advantages. It lowers telecommunications cost, and reduces inventories overhead. Furthermore, it enables customers to shop (any where/any time) with more choices, and enables more Page 2 / 27

individuals to work at home, and to do less traveling for shopping, resulting in less traffic on the roads, and lower air pollution [TUR2000]. E-Commerce also expands the marketplace to national and international markets [MAR2000], allows for customization of products and services which provides competitive advantage to its implementers [TUR2000], provides consumers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons [GUT2000], facilitates competition, which results in substantial discounts [TUR2000], and enables people in developing countries to enjoy products and services that are otherwise not available to them [TUR2000]. It is strongly believed that E-Commerce could drive the global economic forces for the current century [RET2000]. Kreplin et al [KRE2000] have identified “Reality” and “Virtuality” terms; these terms distinguish traditional commerce from Electronic Commerce. ECommerce is based on a virtual (digital) business process with a virtual agent, and virtual product. Traditional commerce is a physical business process with respect to the three components. Turban et al [TUR2000] presents a three dimensional model to illustrate electronic commerce virtuality by means of working in a digital environment. Our presentation shown in Figure 1 offers a simplified distinction between traditional commerce and electronic commerce.

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Physical

Virtual

Mixed Traditional Commerce

Pure Electronic Commerce

Pure Traditional Commerce

Mixed Electronic Commerce

Physical

Agent

Product

Virtual

Physical

Virtual

Process

Figure 1 Traditional Commerce vs. E-Commerce (Adapted from [TUR 2000]).

1.2 Characteristics of KSA According to the Ministry of Commerce (MoC), the number of internet users in KSA is rapidly growing. The growth ratio was 122% in 2000. Further more KSA is classified as the biggest Personnel Computer (PC) market in the Arabic world, and it is one of the biggest growing markets in the world. The number of purchased PCs reached 223,187 in year 2000 [MOC2001]. MoC has established a dedicated committee for E-Commerce. This committee is fully responsible to deal with ECommerce requirements. It aims at preparing for the creation of suitable environment for E-Commerce to serve the global economy [MOC2001]. Saudi businessmen, in coordination with MoC, created an ECommerce consultation team to connect different Saudi businesses together, and to provide proposals and consultations in the E-Commerce field [MOC2001]. Despite the slowness of deploying E-Commerce in KSA, many local advantages can be utilized to obtain a leading position in the ECommerce world. These include geographical location, free economic Page 4 / 27

strategy, communication infrastructure, and population formation [COC2002]:  Population growth: Population growth in KSA reached 3.7% yearly. The rapid growth is tied with demands on products and services.  Basic economic elements: The basic elements of economy are available in KSA including political stability, free economic strategy, link with other international economies, private

ownership

motivation

and

communication

infrastructure.  Human resources availability: The number of Saudi professionals is not huge, but it is enough to start ECommerce. More than 50 % of Saudis are below 25. This generation can be utilized to advocate IT and E-Commerce.  Social environment suitability: many religious and social issues in the Saudi community motivate the tendency towards electronic work, especially for women.  Wide spread usage of PC in all domains of life.  Telecommunication

growth:

The

growth

of

telecommunications in KSA is remarkable. E-Commerce surveys and statistics in KSA are lacking. It is important to evaluate the current status of E-Commerce and to provide recommendations for the future. It is essential to assess the progress made in the last few years. Such an assessment will not only disclose the current challenges, weakness and achievements, but will also offer an accurate picture of our position and motivate solutions for our inherent problems and recommendations to push E-Commerce forward in the right direction. This study reveals threats and opportunities that should be seriously addressed by Saudi organizations, if they are to survive the Page 5 / 27

consequences of globalization and open markets. The remainder of this paper is organized as follows. Section 2 explains the objectives and style of this research. Section 3 describes out study tool’s design. Then, section 4 offers high level results about our sample. Section 5 analyses the detailed results of our survey and section 6 attempts to present some correlations and interesting results discovered by applying some advanced analysis tools. Section 7 is summarizes the paper and provides future research dimensions in this domain.

2 Research Methodology The main objective of our research is to assess the current status of E-Commerce in KSA. This assessment includes the following items: (1)

Evaluating

E-Commerce

contributions

in

serving

organizations including: a) Satisfying strategy. b) Economics of scale. c) Customer satisfaction. d) Performance measurements within organization. (2)

Evaluating E-Commerce solution providers’ role in serving organizations.

(3)

Evaluating the impact of complementary services.

(4)

Evaluating adoption of modern technologies.

(5)

Evaluating adherence to standards.

(6)

Examining possible threats facing organization due to ECommerce adoption.

(7)

Measuring the tendency of Saudi organizations to adopt new technologies (e.g. agents, components) and planning future extensions. Page 6 / 27

In order to achieve the above objectives, our research requires information on technological and organizational aspects of organizations. Some aspects may be acquired from the web portals. However, there are other technology and business questions that can only be answered by the relevant people in an organization. Our assessment is based on a descriptive survey as a research methodology. Acquired data is organized by Microsoft access and presented systematically to draw valid and accurate conclusions. For analysis, SPSS is used. Microsoft excel is also used to overcome some drawbacks of SPSS. Our research focuses on large organizations (the first to embark and use E-Commerce technologies). Chamber of Commerce and Industry in Riyadh listed the top 100 Saudi companies 2001 [TOP2001] ranked according to their assets. We assess joint stock companies, government owned companies, and limited liability companies as our minimal society. We exclude governmental organizations. We covered 91 organizations located in three KSA areas (Riyadh area, western area, and eastern area).

3 Study tool design This study is based on a data capturing tool (questionnaire), which is designed for surveying Saudi organizations. This section addresses the design approach of this tool. Our questionnaire consists of many clustering variables and dimensions. The first six questions are general questions about surveyed organizations and they are variables that cluster organizations into different groups. The remaining questions represent other E-Commerce dimensions. The questionnaire design has been Page 7 / 27

judged by three specialists. It was amended and adjusted to achieve a more consistent design. A first version was distributed to some 15 organizations. Feedback received from those organizations was used to further improve our design.

3.1 Clustering variables The basic variables in this study are used for analysis purposes. They cluster the study sample based on the date of organization establishment, its legal status, nature of business, overall annual budget, and IT department investment in relation to its overall annual budget, and number of PCs in the organization. They provide an overview of organizations size, business, and IT relevance.

3.2 E-Commerce dimensions E-Commerce related questions compose the core dimensions of this study. These dimensions are business strategy, E-Commerce benefits for the organization, E-Commerce solution providers, E-Commerce complementary services, E-Commerce threats, modern technologies, and standards.

3.2.1 Business strategy dimension Business strategy dimension is presented by two questions. The first question asks about E-Commerce importance in an organization. Actually, this question points to the actual use of E-Commerce, i.e. whether it used for actual business or just for advertising? Another asks about business strategy status. It can be complemented with previous one Page 8 / 27

that asks about organization’s planning period. This is used as a double checking on business strategy to avoid false answers. Another question in business strategy dimension asks about coupling with E-Commerce practice and depends on the existence of a business strategy. Another dependent question asks about the causes of ECommerce not being coupled with business strategy.

3.2.2 E-Commerce benefits’ dimension E-Commerce benefits are assessed through many elements, such as satisfying customer, declining inventory overhead, speeding up transaction processing, reducing transaction cost, increasing Return-OnInvestment (ROI), market share growth, market availability, and reducing the need for manpower.

3.2.3 E-Commerce solution providers’ dimension Questions in this dimension evaluate E-Commerce solution providers’ (ECSP) quality of services, such as maintenance, bandwidth, hosting, trust, security, software quality and effectiveness, network reliability, hardware quality, training level, and manpower quality. Another one asks to judge those services in relation to their cost.

3.2.4 Complementary services’ dimension Here, we evaluate the impact of complementary services on ECommerce adoption in the organization. These services include unreliability of postal and delivery services, absence of governmental regulations, absence of support from security organizations, lack of financial organizations involvement, and absence of governmental Page 9 / 27

infrastructure to support e-Commerce.

3.2.5 E-Commerce threats’ dimension E-Commerce threat evaluation consists of 10 elements. These are financial fraud, malicious site misquoting as legitimate site, intellectual property threats, credit card information disclosures, personal information threats, sites hacking (content), applications hacking (software), client machines hacking (systems), and communications hacking.

3.2.6 Modern technologies’ dimension Two questions represent modern technologies dimension, each of which consists of 5 elements. The first question evaluates awareness about modern technologies. These technologies include agents, mediators, CORBA, ontology, etc. The second evaluates the relevance of each of these technologies to the organization, even if it is not using them right now.

3.2.7 Standards dimension Three questions represent standards dimension. The first asks about importance of standards. The second asks about the type of standards used. The third question asks about activities that are standardized within the organization.

4 Results overview In this section, summarized results are presented together with illustrations and discussions of those results. Due to space limitations, only partial results are offered in this paper. Full details can be obtained Page 10 / 27

from [ALO2003]. Descriptive analysis offers summary statistics on several dimensions in a single table. Descriptive analysis computes sample size, mean, minimum, maximum, standard deviation, etc. Table 1 presents statistics on Saudi organizations survey. Some dimensions have sub-dimensions, e.g. E-Commerce Solution Providers. Findings presented in the remainder of the paper focus on E-Commerce issues. This should not undermine other results that are not strongly highlighted.

Descriptive Statistics

E-Commerce benefits ECSP effectiveness ECSP cost E-Commerce threats Complementry services Technologies awareness Technologies relevancy Valid N (listwise)

N 31 17 17 31 32 91 87 16

MIN 14 12 9 9 10 5 5

MAX 40 50 44 41 25 25 25

Mean 28.00 29.94 26.35 29.84 16.75 11.95 15.10

Std. Deviation 6.02 11.80 10.55 5.91 3.95 4.96 5.08

Table 1 – Dimensions statistics for Saudi organizations survey. Looking at minimum, maximum, mean, and standard deviation values, it is possible to initially evaluate such dimensions. Mean of ECommerce benefits is 28 in the range of (8 – 40) which is equivalent to 70 %. The standard deviation is 6.02, which is relatively acceptable. Standard deviation presents the amount in which values vary from their mean. In this case, values vary in the range of 6 from 28. Thus, ECommerce is beneficial.

Finding # 1

E-Commerce is beneficial for Saudi businesses.

The mean value of E-Commerce solution provider’s (ECSP) effectiveness is 30 in the range of (1 – 50). This is equivalent to 60 %. Standard deviation is 12 and it is considered very high. Values vary so Page 11 / 27

much from their mean. Thus, E-Commerce Solution Providers provide reasonable services. In addition to this, ECSPs quality of service vary greatly from one provider to the other. The ECSPs’ cost dimension had a mean value of 26.35 in range of (10-50) which is 53 %, but with a high standard deviation of 11. This means that their cost is affordable and when cost is related to the quality of service, it is regarded reasonable.

Finding # 2

E-Commerce Solution providers effectiveness is acceptable and their cost is reasonable in comparison with their quality of services.

The mean value of E-Commerce threats is 30 in the range of (9-45) that is equivalent to 70 %, with a standard deviation 5.91. This deviation means that most Saudi organizations agree on the threats of E-Commerce.

finding # 3

E-Commerce possible threats facing Saudi ECommerce

practices

are

numerous

and

dangerous.

E-Commerce Complementary Services’ impact resulted in a mean value of 17 in the range of (5- 25) that is equivalent to 70 %, with 3.94 standard deviation which is relatively acceptable.

Finding # 4

E-Commerce complementary services in KSA are

immature

and

they

negatively

affect

tendency towards E-Commerce adoption or limit its actual implementation.

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Modern Technologies awareness in Saudi organizations is limited. The mean value is 12 in the range of (5-25), which is 48%, with a standard deviation of 4.96, which is relatively high. There is definitely no wide-spread adoption of such technologies. However, their relevance to Saudi organizations was evaluated positively, having a mean value 15.10 in the same range (5-25), which is equivalent to 60 %, with standard deviation 5.08.

finding # 5

E-Commerce

modern

technologies

have

considerable relevance to Saudi businesses even though they are not widely adopted.

5 Frequency analysis The Frequency analysis provides statistics and graphical displays that are useful for describing many types of dimensions and variables. Immediate indications can be realized form a quick look at frequency figures. Only partial results and discussions are presented in this paper. Further details can be obtained from [ALO2003].

5.1 Sample variables As characteristics of surveyed organizations, clustering variables differentiate between our organizations sample. It is obvious that the majority of our sample companies are established between 1960 and 1990, with above 100 million overall annual budgets, which invest more than 20 % of their overall annual budget on IT, which have between 100 and 500 PCs. Most of the organizations in the sample are large companies with huge IT investment. Page 13 / 27

Additionally, the majority of organizations in our sample have organizational web sites (93.4 %). As a core objective of our research, we found that E-Commerce is not widely adopted. Most of the Saudi organizations did not adopt E-Commerce (67 %). The prime barriers of E-Commerce adoption will be discussed in the coming sections.

Finding # 6

67 % of Saudi organizations do not adopt ECommerce.

Table 2 summaries the details of the study sample in this survey. The mode value is the most frequently occurring (dominant) value. If several values share the greatest frequency of occurrence, each of them can be regarded as a mode. For example, companies established between 1960 and 1999 are 63.7%, which is a mode since it is the highest value. Only 11% of them were established before 1960 and 25% were established after 1990.

Variable

Mode

Percentage

Date of organization establishment

Between 1960 - 1999

63.7 %

Overall annual budget

Above 100 million

38.5 %

IT budget with overall budget

> 20 %

31.9 %

Legal status

Limited liability

53.8 %

Business nature

Services

45.1 %

Number of PCs

Between 100 and 500

28.6 %

Having web site

Have a web site

93.4 %

E-Commerce adoption

Do not adopt

67 %

Table 2 - Summary of the study sample.

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5.2 E-Commerce and business strategy dimension E-Commerce and business strategy issues are summaries Table 3.

Element

Mode

Percentage

E-Commerce importance

Important

79 % a

Status of business strategy

Well-known to all members

53 %

Planning period

Five years

48 %

E-Commerce coupling

Partial coupling

55 %

Table 3 - Summary of business strategy dimension.

Finding # 7

E-Commerce is important for Saudi business (79 %). But its coupling with business strategy is partial (55 %).

5.3 E-Commerce benefits dimension Table 4 summaries the details of E-Commerce benefits in this survey. Except increasing ROI, other benefits of E-Commerce were tangible and measurable in the majority of organizations.

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Element

Mode

Percentage

Satisfying customers

Effective

65 % a

Declining inventory overhead

Effective

64 % a

Speeding transaction processing

Effective

48 % a

Reducing transaction cost

Effective

61 % a

Increasing ROI

Sufficient

48 %

Market share growth

Effective

55 % a

Market availability

Effective

55 % a

Reduce the need for manpower

Sufficient

35 %

Table 4 - Summary of E-Commerce benefits dimension.

5.4 E-Commerce Solution Providers dimension Details of E-Commerce Solution Providers (ECSP) effectiveness are presented Table 5.

Element

Mode

Percentage

Maintenance quality

Sufficient

79 % a

Bandwidth quality

Strong

64 % a

Hosting quality

Strong

61 % a

Trust quality

Strong

61 % a

Security quality

Sufficient

62 % a

Software quality and effectiveness

Very strong

59 % a

Network reliability

Strong

92 % a

Hardware quality

Very strong

50 %

Training level

Strong

53 % a

Manpower quality

Strong

65 % a

Table 5 - Summary of ECSP effectiveness. Page 16 / 27

Figures shown in Table 5 affirm the conclusion reached earlier that E-Commerce Solution providers effectiveness is acceptable and their cost is reasonable in comparison with their quality of services.

5.5 Complementary services dimension Table 6 summaries the details of the impact of E-Commerce complementary

services

on

E-Commerce

adoption

in

Saudi

organizations. As illustrated, two thirds of the organizations believe that itemized factors have middle impact on their E-Commerce adoption decision, except lack of financial bodies involvement in supporting organizations. Many financial issues needed for E-Commerce (e.g. linkage between banks and ISPs to allow direct debit/credit of accounts) are not yet formalized in KSA.

Element

Mode

Percentage

Lack of postal and delivery service

Middle impact

63 %

Absence of governmental regulations

Middle impact

69 %

Absence of policing support

Middle impact

63 %

Lack of financial organizations involvement

High impact

58 %

Absence of E-Commerce infrastructure

Middle impact

66 %

Table 6 - Summary of E-Commerce complementary services.

5.6 E-Commerce threats dimension E-Commerce threats- related aspects are listed in Table 7.

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Element

Mode

Percentage

Financial fraud

Middle dangerous

64 % a

Malicious misquoting

Middle dangerous

73 % a

Intellectual property threats

Middle dangerous

58 %

Credit card information disclosures

Middle dangerous

48 % a

Personal information threats

Middle dangerous

42 %

Site hacking

Dangerous

55 % a

Application hacking

Middle dangerous

81 % a

Client machines hacking

Less dangerous

50 % a

Communication hacking

Middle dangerous

74 % a

Table 7 - Summary of E-Commerce threats evaluation.

Site hacking is seen by 55% of the community as a dangerous threat. In fact this is the most dominating type of IT crimes in the recent years in KSA, see [ALG2002]. Except client machine hacking which is considered less dangerous by the majority of organizations, other aspects are classified as middle dangerous. This implies that Saudi organizations do not see E-Commerce as a safe practice. This is an alarming result, and it should trigger immediate actions by both government and private sector authorities involved in E-Commerce support. In particular, there is a serious need for legislations and law enforcement policies from the government, while ECSPs should provide more secure services and should invest in community awareness programs for this purpose [ALG2002].

Finding # 8

The majority of Saudi organizations have real concerns about the security of E-Commerce.

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5.7 Standards dimension Table 8 summaries the details of the standards dimension in our survey. The three questions evaluating this dimension reflect high maturity with respect to community awareness of the role on standards in IT.

Element

Mode

Percentage

Standards importance

Important

96.70 %

Type of standards

International standards

59.34 %

Standardized activities

Data interchange

65.93 %

Table 8 - Summary of E-Commerce standards evaluation.

Finding # 9

Standards are regarded important by almost all Saudi organizations, especially international standards in data interchange and system communication and interoperation.

5.8 Modern technologies dimension Two questions in our survey evaluate the importance and the relevance of modern technologies that serve E-Commerce. Table 9 summaries the results of those technologies. It is clear that a large number of organizations did not hear about mediators and ontology. Agents, software components and distributed object technologies are known but never used in the majority of Saudi organizations. The mode value offered in this summary does not give the whole picture. For example, 33% of the sample know about agents, but never use them. 23% others never know about this technology. The total is 55%. Similar figures exist Page 19 / 27

for other technologies. Full details are available in [ALO2003].

Element

Mode

Percentage

Agents awareness

Know about it, but never use it

33 %

Components awareness

Know about it, but never use it

36 %

Ontology awareness

First time hearing about it

57 %

Mediators awareness

First time hearing about it

40 %

Distributed object

Know about it, but never use it

31 %

commuting awareness

Plan to adopt it

31 %

Agents relevancy

Middle relevant

29 %

Components relevancy

Middle relevant

30 %

Ontology relevancy

Irrelevant

29 %

Mediators relevancy

Middle relevant

37 %

Distributed object

Middle relevant

32 %

commuting relevancy Table 9 - Summary of modern technologies dimension.

Additionally, agents technology has an acceptable relevance to Saudi businesses. 29% say it is middle relevant, 15% say it is relevant and 24% believe it is less relevant. Components, mediators and distributed object technologies received a similar evaluation. Ontology, on the other hand, was not seen as a relevant technology by majority of organizations. Those figures mean that Saudi organizations are not well aware about new technological trends. In fact, this also can be seen an indication that E-Commerce is not being taken seriously, because serious organizations try to adopt up-to-date facilities to enhance their ECommerce practices. Page 20 / 27

Finding # 10

Saudi organizations are not well aware about new technological trends in E-Commerce.

6 Crosstabs and Chi-Square test analysis In this section, we present results obtained by correlating some variables in our survey. Due to space limitations, only partial results are given here. In fact, discovering the relevance of relations between the large number of variables in this study is a time consuming and continuing task. The Crosstabs analysis forms two-way and multi-way tables and provides a variety of tests and measures of association for twoway tables. The structure of the table and whether categories are ordered determine what test or measure to use. Crosstabs’ statistics and measures of association are computed for two-way tables only. When specifying a row, a column, and a layer factor (control variable), the Crosstabs analysis forms one panel of associated statistics and measures for each value of the layer factor (or a combination of values for two or more control variables). Chi-Square tests the hypothesis that the row and column variables are independent, without indicating strength or direction of the relationship. We use Pearson chi-square in our evaluation.

6.1 E-Commerce adoption Crosstabs analysis and Chi-Square test are performed for ECommerce adoption and provide a variety of tests and measures of association with adopted organizations characteristics, e.g. legal status, business nature. Page 21 / 27

6.1.1 Legal status Chi-Square test for E-Commerce adoption and legal status value is (0.052). This means that here is no statistical significant relation between E-Commerce adoption and organizations legal status. Crosstabs table for E-Commerce adoption and legal status is illustrated in [ALO2003]. It shows that limited liability companies form the majority in adopting ECommerce where 14 out of 49 limited liability companies adopted ECommerce. But, in comparison with those who did not adopt ECommerce, joint stock companies are more advancing in this domain where 12 out 23 adopted E-Commerce.

Finding # 11

Saudi joint-stock companies are more advancing in E-Commerce adoption than other types of companies.

6.1.2 Business nature Chi-Square test for E-Commerce adoption and business nature value is (0.415). So, there is no statistical significant relation between ECommerce adoption and business nature. Services companies are adopting E-Commerce more than other types of companies, since 12 services companies out of 40 adopted E-Commerce. But, in the banking industry, 7 banks adopted E-Commerce out of 12, which makes banks more likely to adopt E-Commerce in comparison with other industries.

Finding # 12

Saudi banks are more likely adopting ECommerce than other Saudi organizations. Page 22 / 27

In fact, our study illustrates that there is no relationship between various clustering variables of organizations and their tendency towards E-Commerce adoption.

6.2 E-Commerce importance Crosstabs analysis and Chi-Square tests are also performed for ECommerce importance to provide a variety of tests and measures of associations with organizations characteristics, e.g. overall annual budget. We tested these variables, without indicating strength or direction of the relationship.

6.2.1 Overall annual budget Chi-Square test for E-Commerce importance and organization overall budget value is (0.015). We are 95 % confident that the relation between E-Commerce importance and organization overall annual budget has a statistical significance.

Finding # 13

There is a statistically significant relationship between

E-Commerce

importance

and

organizations budget at the (0.05) level. ECommerce importance increases when the budget increases.

6.2.2 Planning period Chi-Square test for E-Commerce importance and planning period value is (0.001). Consequently, we are 99 % sure that the relation between E-Commerce importance and planning period has a statistical Page 23 / 27

significance. Crosstabs table for E-Commerce importance and planning period shows that E-Commerce is important for organizations that plan for five or more years [ALO2003].

7 Conclusion and further work 7.1 Conclusion In KSA, IT and communication growth are substantial. Technology effectiveness is essential in E-Commerce success. However, human, economic, and other organizational issues must be taken into account as well. In this study, we evaluated the current status of E-Commerce in KSA. E-Commerce is very important for Saudi corporations, but is less important for middle size and small companies. Most Saudi organizations that have EDI and E-Commerce use international standards, but only few have adopted E-Commerce. However, E-Commerce adoption is influenced by immature complementary services and numerous possible threats. E-Commerce modern technologies are not widely adopted, even though they are highly relevant to Saudi businesses. Saudi E-Commerce Solution Providers are not effective in the domain, but their cost is reasonable in comparison with their quality of service. The evaluation of current status reveals opportunities that should be seriously tackled by Saudi organizations, if they are to survive the consequences of globalization and open markets. There should be an immediate implementation of a governmental infrastructure to support ECommerce, e.g. addressing, postal and delivery services, standards, regulations, legislations, etc. This requires more privatization of some governmental organizations and more private sector involvement in EPage 24 / 27

Commerce.

7.2 Further work As mentioned earlier, our work in [ALO2003] has addressed other issues not covered in this paper. Performing advanced analysis on the data captured in that research after integrating it with the results reached in this paper will definitely yield interesting results.

References [ALG2002] Mohammed Al-Qasem, Rasheed Al-Zahrani, “IT laws in KSA: reality, hope and obstacles”, proceedings of the third workshop of national IT plan on IT Laws, Riyadh, 2002. [ALO2003] Mutlaq Al-Otaibi “Assessing the Current Status of Electronic Commerce in the Kingdome of Saudi Arabia”, M.Sc Thesis, King Saud University, Riyadh, 2003. [BOK2000] Book M., et al, "Realizing an integrated electronic commerce portal system", proceeding of AMCIS, 2000, California. [COC2000]

Economic research and studies department, Council of Saudi chamber of commerce and industry, Riyadh, October 2000.

[GUT2000] Guttman R., et al, “Agent-mediated Electronic Commerce: A Survey”, Knowledge Engineering Review, 2000. [HAC2000] Hackney R., et al, “SPECS: a new approach to strategic planning for E-Commerce systems”, proceeding of AMCIS, 2000, California. Page 25 / 27

[KRE2000] Kreplin K., et al, “Real supply chain and virtual enterprise“, proceeding of ICEIS, 2000, Stafford, UK. [LAK2000] Lakshmi I., et al, “An Overview of Commercial Web Site Development Issues”, proceeding of AMCIS, 2000, California. [MAR2000] Maamar Z., et al, "A Meeting Infrastructure to support ECommerce", proceeding of AMCIS, 2000, California. [MOC2001] “Towards the future of E-Commerce in KSA”, Ministry of commerce, Saudi Arabia, November 2001. [MOH2002] Al-Gasem M and Al-Zahrani R, “IT Legislations in KSA: Reality, Hope and Obstacles”, Proceedings of the 3rd workshop of NITP, Riyadh, 2002. [RET2000]

Retschitzegger W., et al, “Towards Modeling of DataWeb Application – a Requirements’ Perspective”, proceeding of AMCIS, 2000, California.

[SCH2001] Schneider G., et al, “Electronic commerce – Second annual edition”, Course technology a division of Thomson Learning Inc., 2001, Canada. P. 03-25, 35-75. [SHA2000] Shankaranarayan G., et al, "Conceptualizing Architecture for E-Business systems", proceeding of AMCIS, 2000, California. [SIM2000] Simone C., et al, "Electronic intermediaries as marketing agents", proceeding of ICEIS, 2000, Stafford, UK.

[TOP2001] “Top 100 Saudi companies 2001”, Chamber of commerce and industry, Riyadh, General administration for research and training, Information center.

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[TUR2000] Turban E., et al, “Electronic commerce – a managerial perspective”, Prentice-Hall, Inc., 2000, New Jersey, USA, P. 03-329.

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