Investigating e-procurement barriers within six Saudi Arabian SMEs

Thesis submitted for the degree of Doctor of Philosophy at the University of Bedfordshire.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. 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