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Electronic Data InterchangeElectronic Data Interchange
Adoption in Saudi Arabia Adoption in Saudi Arabia
Dr. Mohammed A. T. Al-SudairyAssistant Professor
Business DepartmentFaculty of Economics & Administration
King Abdul Aziz University, JeddahE-mail [email protected]
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Presentation LayoutPresentation Layout
Introduction
EC and EDIMethodology
Findings
Conclusion
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Inter-Organization SystemsInter-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 CommerceElectronic 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 CommerceElectronic Commerce
CategoriesCategories
Business to Business (B2B)
Business to Consumer (B2C)
Business to Government (B2G)
Government to Consumer (G2C)Consumer to Consumer (C2C)
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Electronic Data InterchangeElectronic Data Interchange
EDI is the electronic transmission of business data between or within firms in
structured, computer processable dataformat, which permits information to betransferred without re-key from
computer application in one location tocomputer application in the other location.
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EDI Standards
Communication Standards
EDI Software
EDI Networks
EDI ComponentsEDI Components
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Translator Translator
Application Application
Communication
Software
Communication
SoftwareVAN
Sender Receiver
EDI Network
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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:
To:ANSI X12 FORMAT
IT1*1*1*CSE*12.75**VC*6900
IT1*2*12*EA*.457**VC*P450
IT1*3*4*EA*.95**VC*1640Y
IT1*4*1*DZ*3**VC*1507
Translating from a “ Human Readable” to a
“Machine Readable Standard Format
Application systems
e.g. accounts system
EDI
Translator
ANSIX12
Invoice
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Communications
Interface
EDI
Translator
Application
InterfaceApplication
System
Application
System
ApplicationSystem
EDI Interface
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Communications
Interface
EDI
Translator Application
InterfaceApplication
System
Application
System
ApplicationSystem
EDI Interface
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EDI BenefitsEDI BenefitsReduced overhead costs
Reduction in labour
Increased accuracyImproved communications and
management control
Improved inventory control
Enabled retailers to be more responsive toconsumer needs
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Motivation FactorsMotivation Factors
Operational
Quick response &
access to informationIncrease data accuracy
Strategic
Better communication
with trading partner Remaining competitive
Butter customer service
Reducing stock
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EDI BarriersEDI Barriers
Difficulty of a cost/benefit evaluation
The need to keep in use two information
systemsStandardisation
Externalities of EDI applications can
overstep the firm’s boundaries and modifythe business and market perspective fromcompetition to collaboration.
Resistance to change.
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The Ned for EDI in SAThe 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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Factors influencing theFactors influencing the
Decision to use EDIDecision to use EDIOrganization size
External Pressure
– Competitors
– Local customers or suppliers
– Overseas customers or suppliers
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Methodology & SampleMethodology & Sample
An Exploratory Study – Survey
Questionnaire
The Sample – 297
– 40
Response – 126 (37%)34 use EDI92 None user
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Business Type
0
5
10
15
20
D i s t r i b u t e r
A p p l i a
n c e
S u p
/m r k C a r
D a i r y
D e p
/s t o r e
F u r n
i t u r
P h a r m a c i s t s
S t a t i o n
e r y
S u p e s t o r e
F
o o d
C o s m e
t i c s
T
o y s
C o t h
i n g
O t h e r s
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Finding / PressureFinding / Pressure
Local Suppliers – 7
Local Customers
– 7
Overseas Suppliers – 26
Overseas Customers – 5
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Hypotheses ResultsHypotheses Results
Variables Chi-Q SigOrganization 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
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EDI Barriers in SAEDI 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 BarriersIT Barriers
Lack of technical expertise either by – Service providers or
– Organizations the users
Shortage of technical skilled employee
Lack of technical support by ITsuppliers
Lack of Knowledge about IT
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ClosingClosing
Government – Education
– Promoting
– Employment – Leading
Private –
Need to be computerized – Treat IT as a competitive weapon
– Joint venture and strategic alliances