8-2-01edi adoption in sa1 electronic data interchange adoption in saudi arabia dr. mohammed a. t....
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8-2-01 EDI adoption in SA 1
Electronic Data Interchange Electronic Data Interchange Adoption in Saudi ArabiaAdoption 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
IntroductionEC and EDIMethodologyFindingsConclusion
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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 Commerce Electronic Commerce Categories Categories
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 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 Standards
Communication Standards
EDI Software
EDI Networks
EDI ComponentsEDI Components
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TranslatorTranslator
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 FORMATIT1*1*1*CSE*12.75**VC*6900IT1*2*12*EA*.457**VC*P450IT1*3*4*EA*.95**VC*1640YIT1*4*1*DZ*3**VC*1507
Translating from a “ Human Readable” to a “Machine Readable Standard Format
Application systemse.g. accounts system
EDI Translator
ANSIX12Invoice
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CommunicationsInterface
EDITranslator
ApplicationInterfaceApplication
System
ApplicationSystem
ApplicationSystem
EDI Interface
8-2-01 EDI adoption in SA
CommunicationsInterface
EDITranslator
ApplicationInterface
ApplicationSystem
ApplicationSystem
ApplicationSystem
EDI Interface
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EDI BenefitsEDI BenefitsReduced overhead costsReduction in labourIncreased accuracy Improved communications and
management controlImproved inventory control Enabled retailers to be more responsive to
consumer needs
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Motivation FactorsMotivation Factors
OperationalQuick response &
access to informationIncrease data accuracy
StrategicBetter communication
with trading partnerRemaining competitiveButter customer serviceReducing stock
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EDI BarriersEDI Barriers
Difficulty of a cost/benefit evaluationThe need to keep in use two information
systemsStandardisationExternalities of EDI applications can overstep
the firm’s boundaries and modify the business and market perspective from competition 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 economicTo become a member of WTO
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Factors influencing the Factors influencing the Decision to use EDIDecision to use EDI
Organization size
External Pressure– Competitors– Local customers or suppliers– Overseas customers or suppliers
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Methodology & SampleMethodology & SampleAn Exploratory Study
– SurveyQuestionnaireThe Sample
– 297– 40
Response – 126 (37%)
34 use EDI 92 None user
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Business Type
0
5
10
15
20D
istr
ibut
er
App
lian
ce
Sup
/ mrk
Car
Dai
ry
Dep
/ stor
eF
urni
tur
Pha
rmac
ists
Stat
ione
ry
Supe
stor
e
Foo
d
Cos
met
ics
Toy
s
Cot
hing
Oth
ers
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FindingFinding
Job Title– 47% MIS Manger– 17% CEO– 15% MIS Employee
Annual Sale– 42% 25-199 MSAR– 41% >200MSAR– 17% <25 MAR
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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 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
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EDI Barriers in SAEDI Barriers in SA
The lack of MIS staffAn inadequate training programAn unsatisfactory communication linesPoor awareness about EDIStandardized 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 employeeLack of technical support by IT
suppliersLack 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