Investigating E-Procurement Barriers within Six Saudi Arabian SMEs Name

414 Pages·2017·6.15 MB·English

Title : Investigating E-Procurement Barriers within Six
Saudi Arabian SMEs

Name : Ahmed Altayyar

This is a digitised version of a dissertation submitted to the University of
Bedfordshire.
It is available to view only.
This item is subject to copyright.
Investigating E-Procurement Barriers within Six Saudi Arabian SMEs
Ahmed Altayyar

Abstract
This study aims to investigate factors affecting the adoption of e-procurement in Saudi
Arabian SMEs. The study adopted the Gunasekaran and Ngai (2009) model as a theoretical
framework and foundation for the research to investigate current status and readiness,
perceived benefits, perceived barriers, perceived critical success factors and perceived
future organisational performance. Through an extensive literature review and detailed
data analysis, the study extended the model to incorporate perceived cultural and external
factors that were found to be necessary for the adoption of e-procurement in Saudi Arabian
SMEs. Through case studies and AHP analysis, the proposed model elements were validated
and prioritised in the Saudi Arabian context.

Three different methods were adopted for data collection. First, an exploratory study was
conducted to understand the current status of e-procurement and provide an overview of
the factors that affect the adoption of e-procurement using the Gunasekaran and Ngai
(2009) model.Second, a detailed survey was conducted to find the relative importance of
various factors related to each of the five elements of the Gunasekaran and Ngai (2009)
model. Third, detailed interviews were conducted across four selected SMEs to gain an
insight into the factors that affect the adoption of e-procurement.

The results of the exploratory study were helpful in identifying perceived factors that affect
the adoption of e-procurement. Detailed survey analysis using AHP validated the theoretical
framework and the relevance of the factors of the Gunasekaran and Ngai (2009) model.
However, some of the factors were found to be more important than in the Gunasekaran
and Ngai (2009) model, while others were less important.

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Results of the qualitative study (interviews) found additional factors that were relevant to
each of the five elements of the GN model. They further suggested that “Current e-
procurement activities” was an additional factor in the “current status and readiness”
element and “Increased transparency” was an additional factor in the “perceived benefits”
element. Similarly, the analysis of the qualitative results found two additional factors in the
“perceived barriers” element (i.e. absence of e-procurement specific laws and regulations
and lack of trust in the electronic transfer of funds), three additional critical success factors
(i.e. cost-benefit analysis of the solution, technical maturity of the marketplace and user-
friendliness of the solution) and two additional factors in perceived future organisational
performance (i.e. strategic alliance and networking and knowledge management and data
warehousing).

Further, analysis of the qualitative findings revealed two additional elements (i.e. perceived
external and perceived cultural factors). The study thus suggests that organisational culture,
cultural inertia and business culture of the country are three important cultural factors that
are perceived to affect the adoption of e-procurement, while government support, having
one’s own postal addresses and delivery services, providing secure and trustworthy online
payment options, low cost and high speed internet connection, suppliers’ willingness and
readiness, pressure from competitors, policy and regulations are the seven important
perceived external factors that affect the adoption of e-procurement in Saudi Arabian SMEs.

The results of the qualitative data analysis led to the development of an extended
Gunasekaran and Ngai (2009) model to incorporate perceived culture and perceived
external factors. The study has significant implications in terms of further e-procurement
research for SMEs in Saudi Arabia and also its adoption in the developing world in general.

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Dedication
I would like to dedicate this PhD to my late mother, who always prayed and
wished for my success. I wish she was alive. She would have been extremely
proud of my accomplishment. I hope she can see and feel my happiness from
paradise and I always remember her in my prayers.

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Acknowledgements
First and foremost, grand thanks to ALLAH (the Almighty) for giving me the knowledge,
strength and endurance to accomplish this PhD. I believe that I accomplished this uphill task
because of the prayers, help and support of many important people in my life and I would
like to express my heartfelt thanks to all of them. Although I can’t mention all of them here,
I must extend special thanks to the following.
First, I would like to thank my great Father, Dr. Rashid Altayyar, for his countless prayers and
moral and financial support. I can hardly find the words to thank him. Secondly, I appreciate
my elder brother, Dr. Hamad Altayyar, for his great moral support, encouragement and
assistance. I would like extend my sincere gratitude to my director of studies Dr. John
Beamon-Kerridge, because without his sincere guidance, support and dedication, I could not
have accomplished this PhD. I would also like to thank the study respondents from across all
four SMEs for their valuable time and responses. Finally, thanks to all my friends and
colleagues who encouraged and stood by me throughout this PhD.

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DECLARATION

I declare that this thesis is my own unaided work. It is being submitted for the degree of Doctor of Philosophy
at the University of Bedfordshire.

It has not been submitted before for any degree or examination in any other University.

Name of candidate: AHMED ALTAYYAR Signature:

Date:

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CHAPTER ONE ............................................................................................................................................ - 11 -
1. INTRODUCTION AND BACKGROUND ................................................................................................ - 11 -
1.1 RESEARCH BACKGROUND .......................................................................................................................... - 12 -
1.2 SIGNIFICANCE OF STUDY AND RESEARCH CONTRIBUTION ................................................................................. - 14 -
1.3 AIM AND OBJECTIVES ............................................................................................................................... - 16 -
1.4 RESEARCH QUESTIONS ............................................................................................................................. - 16 -
1.5 OVERVIEW ON RESEARCH METHODOLOGY .................................................................................................... - 17 -
1.6 THESIS OUTLINE ...................................................................................................................................... - 18 -
1.7 SUMMARY ............................................................................................................................................. - 19 -
CHAPTER TWO ........................................................................................................................................... - 20 -
2. LITERATURE REVIEW ......................................................................................................................... - 20 -
2.1 INTRODUCTION ....................................................................................................................................... - 20 -
2.2 EVOLUTION OF PROCUREMENT .................................................................................................................. - 21 -
2.3 EVOLUTION OF E-PROCUREMENT ............................................................................................................... - 24 -
2.4 E-PROCUREMENT TECHNOLOGIES .............................................................................................................. - 29 -
2.5 ADOPTION OF E-PROCUREMENT ................................................................................................................. - 31 -
2.6 E-PROCUREMENT MODEL ......................................................................................................................... - 46 -
2.7 OVERVIEW OF DIFFERENT INNOVATION ADOPTION MODELS ............................................................................ - 48 -
2.8 GUNASEKARAN AND NGAI MODEL: ATHEORETICAL FRAMEWORK ..................................................................... - 52 -
2.9 CURRENT STATUS AND READINESS OF SMES FOR E-PROCUREMENT .................................................................. - 55 -
2.10 PERCEIVED BENEFITS ........................................................................................................................... - 60 -
2.11 PERCEIVED BARRIERS OF E-PROCUREMENT .............................................................................................. - 63 -
2.12 CRITICAL SUCCESS FACTORS .................................................................................................................. - 66 -
2.13 PERCEIVED FUTURE ORGANISATIONAL PERFORMANCE ............................................................................... - 73 -
2.14 CULTURAL ASPECTS, E-PROCUREMENT ADOPTION AND THEORETICAL FORMWORK ........................................... - 78 -
2.15 THE CONCEPT OF SME ........................................................................................................................ - 89 -
2.16 SUMMARY......................................................................................................................................... - 96 -
CHAPTER THREE ......................................................................................................................................... - 97 -
3. RESEARCH METHODOLOGY .............................................................................................................. - 97 -
3.1 INTRODUCTION ....................................................................................................................................... - 97 -
3.2 RESEARCH PHILOSOPHY ............................................................................................................................ - 98 -
3.3 RESEARCH STRATEGY ............................................................................................................................... - 99 -
3.4 RESEARCH APPROACH ............................................................................................................................ - 100 -
3.5 RESEARCH PROCESS ............................................................................................................................... - 104 -
3.6 DATA COLLECTION ................................................................................................................................. - 105 -
3.7 QUANTITATIVE RESEARCH ....................................................................................................................... - 107 -
3.8 RELIABILITY AND VALIDITY OF TESTING ....................................................................................................... - 109 -
3.9 JUSTIFICATION OF SAMPLE SIZE (SIX SELECTED SMES) .................................................................................. - 112 -
3.10 ANALYTICAL HIERARCHY PROCESS (AHP) .............................................................................................. - 114 -
3.11 QUALITATIVE RESEARCH .................................................................................................................... - 124 -
3.12 SUMMARY....................................................................................................................................... - 131 -
CHAPTER FOUR ........................................................................................................................................ - 132 -
4. INDIVIDUALS’ EXPERIENCES ON E-PROCUREMENT IN SAUDI ARABIAN SMES: AN EXPLORATORY STUDY -
132 -
4.1 INTRODUCTION ..................................................................................................................................... - 132 -
4.2 OBJECTIVES OF THE EXPLORATORY STUDY .................................................................................................. - 133 -
4.3 RESEARCH METHODOLOGY OF THE EXPLORATORY STUDY .............................................................................. - 133 -
4.4 DATA ANALYSIS AND DISCUSSION ............................................................................................................. - 134 -
4.5 SUMMARY ........................................................................................................................................... - 139 -

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CHAPTER FIVE .......................................................................................................................................... - 140 -
5. DATA ANALYSIS AND FINDINGS OF PERCEIVED E-PROCURMENT BARRIERS IN SAUDI ARABIAN SMES ... -
140 -
5.1 INTRODUCTION ..................................................................................................................................... - 140 -
5.2 CASE1 - AHMED BAMAROOF ................................................................................................................... - 141 -
5.3 CASE2 - KA (KHATIB&ALAMI) ................................................................................................................. - 142 -
5.4 CASE3 - AL-MARAM .............................................................................................................................. - 143 -
5.5 CASE4 – AL-AMAZON ............................................................................................................................ - 143 -
5.6 CASE 5:NWWC ................................................................................................................................... - 144 -
5.7 CASE 6:IUT ......................................................................................................................................... - 145 -
5.8 OVERALL AVERAGE PRIORITY OF PERCEIVED BARRIERS ACROSSALL SMES AND (CR) .......................................... - 146 -
5.9 SUMMARY ........................................................................................................................................... - 147 -
CHAPTER SIX ............................................................................................................................................ - 148 -
6. CASE STUDIES ................................................................................................................................. - 148 -
6.1 WITHIN-CASE STUDIES (INTRODUCTION) ................................................................................................... - 148 -
6.2 CROSS-CASE ANALYSIS (INTRODUCTION) ................................................................................................... - 221 -
6.3 SUMMARY ........................................................................................................................................... - 239 -
CHAPTER SEVEN ....................................................................................................................................... - 240 -
7 DISCUSSION .................................................................................................................................... - 240 -
7.3 INTRODUCTION ..................................................................................................................................... - 240 -
7.4 QUANTITATIVE FINDINGS ........................................................................................................................ - 240 -
7.5 QUALITATIVE DATA FINDINGS ................................................................................................................... - 247 -
7.6 EXTENDING THE GUNASEKARAN AND NGAI (2009) MODEL ........................................................................... - 293 -
7.7 SUMMARY ........................................................................................................................................... - 319 -
CHAPTER EIGHT ....................................................................................................................................... - 321 -
8 CONCLUSION .................................................................................................................................. - 321 -
8.3 RESEARCH AIM AND OBJECTIVES REVISITED ................................................................................................. - 321 -
8.4 OVERVIEW OF RESEARCH PROCESS AND METHODOLOGY ................................................................................ - 322 -
8.5 EXPLANATION OF HOW THE STUDY HAS MET ITS OBJECTIVES ........................................................................... - 323 -
8.6 CONTRIBUTIONS TO KNOWLEDGE ............................................................................................................. - 325 -
8.7 ACADEMIC IMPLICATIONS ....................................................................................................................... - 327 -
8.8 PRACTICAL IMPLICATIONS ....................................................................................................................... - 328 -
8.9 RESEARCH LIMITATIONS AND RECOMMENDATIONS ...................................................................................... - 329 -
8.10 DIRECTIONS FOR FUTURE RESEARCH ..................................................................................................... - 330 -
REFERENCE .............................................................................................................................................. - 332 -
APPENDIX A.1: CBC 2014 - EXPLORATORY STUDY- ATINER'S CONFERENCE PAPER SERIES ......................................... - 389 -
APPENDIX A.3: CERTIFICATE OF FIRST CONFERENCE .............................................................................................. - 392 -
APPENDIX B.1: JGAIBE 2015 – PUBLISHED PAPER IN ACADEMIC JOURNAL ............................................................... - 393 -
APPENDIX B.2: CERTIFICATE OF SECOND CONFERENCE ........................................................................................... - 394 -
APPENDIX C.1: CERTIFICATE OF THIRD CONFERENCE ............................................................................................. - 395 -
APPENDIX D.1: INVITATION OF COMPANY 1 ........................................................................................................ - 396 -
APPENDIX D.2: INVITATION OF COMPANY 2 ........................................................................................................ - 397 -
APPENDIX D.3: INVITATION OF COMPANY 3 ........................................................................................................ - 398 -
APPENDIX D.4: INVITATION OF COMPANY 4 ........................................................................................................ - 399 -
APPENDIX D.5: INVITATION OF COMPANY 5 ........................................................................................................ - 400 -
APPENDIX D.6: INVITATION OF COMPANY 6 ........................................................................................................ - 401 -
APPENDIX E.1: AHP QUESTIONNAIRE ................................................................................................................ - 402 -
APPENDIX F.2: PRIORITIES OF AHP .................................................................................................................... - 409 -
APPENDIX G.1: SEMI-STRUCTURED - INTERVIEW ................................................................................................... - 410 -

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List of Figures and Tables
TABLE 1: SOURCE: ANDERSON AND GAILE-SARKANE (2015).................................................................... - 43 -
SOURCE: SINGH AND THOMAS (2002) ................................................................................................. - 47 -
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WORK FLOW IN ADOPTION OF E-PROCUREMENT IN SMES (SOURCE: GUNASEKARAN AND NGAI 2009) .......... - 53 -
KEY CULTURAL FACTORS IN E-PROCUREMENT ADOPTION .......................................................................... - 85 -
SOURCE: JEG.ORG.SA REPORT 2015 .................................................................................................. - 91 -
FIGURE 1: INTERNET MARKET EVALUATION (SOURCE: CITC ANNUAL REPORT, 2013 ................................... - 95 -
FIGURE 2: BROADBAND MARKET EVALUATION (SOURCE: CITC ANNUAL REPORT, 2013 ) ............................ - 96 -
FIGURE 3.1: ADOPTED FROM KETOKIVI AND CHOI (2014) ..................................................................... - 102 -
FIGURE 3.2: SOURCE (HUSSEY& HUSSEY 1997) .................................................................................. - 103 -
TABLE 3.2: ADVANTAGES OF QUALITATIVE AND QUANTITATIVE METHODS (COLLIS AND HUSSEY, 2003) ........ - 106 -
TABLE 3.3: (STEPS TO DEVELOP A COMPREHENSIVE QUESTIONNAIRE) ADAPTED FROM ALFAADHEL (2010) ... - 110 -
TABLE 3.4: ADOPTED FROM AL-FAWAZ(2012) ................................................................................... - 115 -
FIGURE 3.3: ADOPTED FROM AL-FAWAZ (2012) ................................................................................. - 117 -
FIGURE 3.4: CONSISTENCY VALUES (CV) SOURCE( SAATY, 1980) ............................................................ - 119 -
TABLE 6.5: CALCULATE THE SUM OF ALL VALUES .................................................................................. - 120 -
TABLE 4.1: TOTAL NUMBERS OF RESPONDENTS FROM EACH COMPANY .................................................... - 134 -
TABLE 4.2: RESPONSES ON CURRENT STATUS AND READINESS OF COMPANIES .......................................... - 135 -
TABLE 4.3: RESPONSES ON PERCEIVED BENEFITS OF COMPANIES ............................................................ - 136 -
TABLE 4.4: RESPONSES ON PERCEIVED BARRIERS OF COMPANIES ............................................................ - 137 -
TABLE 4.5: RESPONSES ON CRITICAL SUCCESS FACTORS FOR E-PROCUREMENT ADOPTION ........................... - 138 -
TABLE 4.6: RESPONSES ON PERCEIVED FUTURE ORGANISATIONAL PERFORMANCE ..................................... - 139 -
TABLE 5.1:IMPORTANT ELEMENTS OF BR(AHMED BAMAROOF) ............................................................. - 141 -
TABLE 5.2:IMPORTANT ELEMENTS OF BR(KA) ..................................................................................... - 142 -
TABLE 5.3:IMPORTANT ELEMENTS OF BR(AL-MARAM) ........................................................................ - 143 -
TABLE 5.4: IMPORTANT ELEMENTS OF BR(AL-AMAZON) ...................................................................... - 143 -
TABLE 5.5: IMPORTANT ELEMENTS OF BR (NWWC) ............................................................................ - 144 -
TABLE 5.6: IMPORTANT ELEMENTS OF BR(NWWC) ............................................................................ - 145 -
TABLE 5.7: OVERALL AVERAGE PRIORITY OF PERCEIVED BARRIERS ACROSS ALL SMES AND CONSISTENCY RATE (CR)
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TABLE 6.1: CURRENT STATUS AND READINESS FOR THE ADOPTION OF E-PROCUREMENT IN AHMED BAMAROOF ..... -
151 -
TABLE 6.2: PERCEIVED BENEFITS OF E-PROCUREMENT ADOPTION IN AHMED BAMAROOF .......................... - 153 -
TABLE 6.3 PERCEIVED BARRIERS TO E-PROCUREMENT ADOPTION IN AHMED BAMAROOF ........................... - 157 -
TABLE 6.4: CRITICAL SUCCESS FACTORS FOR THE ADOPTION OF E-PROCUREMENT IN AHMED BAMAROOF ..... - 158 -
TABLE 6.5: FUTURE ORGANISATIONAL PERFORMANCE AS A RESULT OF E-PROCUREMENT ADOPTION IN AHMED
BAMAROOF .................................................................................................................................... - 161 -
TABLE 6.6: CURRENT STATUS AND READINESS OF K&A FOR E-PROCUREMENT ADOPTION .......................... - 170 -
TABLE 6.8: PERCEIVED BARRIERS TO E-PROCUREMENT ADOPTION IN K&A ............................................... - 176 -
TABLE 6.9: CRITICAL SUCCESS FACTORS FOR E-PROCUREMENT ADOPTION IN K&A .................................... - 179 -
TABLE 2.10: IMPACT OF E-PROCUREMENT ADOPTION ON PERCEIVED FUTURE ORGANISATIONAL PERFORMANCE IN
K&A - 183 -
TABLE 6.11: CURRENT STATUS AND READINESS OF AL-MARAM FOR E-PROCUREMENT ADOPTION ............... - 189 -
TABLE 3.12: PERCEIVED BENEFITS OF E-PROCUREMENT ADOPTION IN AL-MARAM.................................... - 191 -
TABLE 6.13: PERCEIVED BARRIERS TO THE ADOPTION OF E-PROCUREMENT IN AL-MARAM ......................... - 193 -
TABLE 6.14: CRITICAL SUCCESS FACTORS FOR THE ADOPTION OF E-PROCUREMENT IN AL-MARAM .............. - 195 -
TABLE 6.15: THE IMPACT OF E-PROCUREMENT ON FUTURE PERFORMANCE IN AL-MARAM ......................... - 197 -
TABLE 6.16: CURRENT STATUS AND READINESS FOR E-PROCUREMENT ADOPTION IN AL-AMAZON .............. - 201 -
TABLE 6.17: PERCEIVED BENEFITS OF E-PROCUREMENT ADOPTION IN AL-AMAZON .................................. - 203 -

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TABLE 6.18: PERCEIVED BARRIERS TO E-PROCUREMENT ADOPTION IN AL-AMAZON ................................... - 205 -
TABLE 6.19: CRITICAL SUCCESS FACTORS FOR THE ADOPTION OF E-PROCUREMENT IN AL-AMAZON ............. - 207 -
TABLE 6.20: FUTURE IMPACT OF E-PROCUREMENT ADOPTION IN AL-AMAZON ......................................... - 209 -
TABLE 6.21: CURRENT STATUS AND READINESS ACROSS ALL FOUR SMES ................................................. - 221 -
TABLE 6.22: QUALITATIVE COMPARISON OF THE FOUR SMES ................................................................ - 223 -
TABLE 6.23: QUANTITATIVE ANALYSIS OF PERCEIVED BENEFITS ACROSS THE FOUR SMES .......................... - 224 -
TABLE 6.24: PERCEIVED BENEFITS – COMPARATIVE QUALITATIVE ANALYSIS ............................................. - 226 -
TABLE 6.25: PERCEIVED BARRIERS TO E-PROCUREMENT ADOPTION – QUANTITATIVE COMPARISON ACROSS ALL
FOUR SMES ................................................................................................................................... - 227 -
TABLE 6.26: PERCEIVED BARRIERS – QUALITATIVE ANALYSIS ................................................................. - 229 -
TABLE 6.27: CRITICAL SUCCESS FACTORS ............................................................................................ - 231 -
TABLE 4.28: PERCEIVED CRITICAL SUCCESS FACTORS – QUALITATIVE ANALYSIS ......................................... - 231 -
TABLE 6.29: PERCEIVED FUTURE ORGANISATIONAL PERFORMANCE – QUANTITATIVE ANALYSIS .................... - 233 -
TABLE 6.30: FUTURE ORGANISATIONAL PERFORMANCE – QUALITATIVE ANALYSIS ...................................... - 234 -
TABLE 6.31: PERCEIVED CULTURE FACTORS – QUALITATIVE ANALYSIS ..................................................... - 235 -
7. TABLE 6.32: PERCEIVED EXTERNAL FACTORS – QUALITATIVE ANALYSIS ........................................... - 238 -
FIGURE 7.1: EXTENDED GUNASEKARAN AND NGAI (2009) MODEL ......................................................... - 299 -
FIGURE 7 .2: PERCEIVED CULTURAL ELEMENTS OF THE EXTENDED MODEL ............................................... - 301 -
FIGURE 7.3: PERCEIVED EXTERNAL ELEMENTS OF THE EXTENDED MODEL................................................. - 305 -
FIGURE 7.4: CURRENT STATUS AND READINESS ELEMENT OF THE EXTENDED MODEL ................................. - 307 -
FIGURE 7.5: PERCEIVED BENEFITS ELEMENT OF THE EXTENDED MODEL ................................................... - 309 -
FIGURE 7.6: PERCEIVED BARRIERS ELEMENTS OF THE EXTENDED MODEL ................................................. - 311 -
FIGURE 7.7: PERCEIVED CRITICAL SUCCESS FACTORS OF THE EXTENDED MODEL ........................................ - 315 -
FIGURE 7.8: PERCEIVED FUTURE ORGANISATIONAL PERFORMANCE ELEMENTS OF THE EXTENDED MODEL .... - 318 -

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