Barriers of E-Commerce and E-Government in Saudi Arabia

Fahad Alharby Abstract
MSc in CMT with software systems for e-business and WWW 2005/2006
Barriers of E-commerce and E-government in Saudi Arabia
By F. M. Al-Harby
Project Supervisors: Dr. Rami Qahwaji, Dr Mark Goodall
The ways for undertaking business are quickly shifting. The Internet and
associated advances in Information Technology (IT) considerably affect countries in
general and customers and financial services in particular. The increasing value of E-
commerce represents a watershed event for the global markets. The principle of this
dissertation has been to produce a study to look at the barriers of E-commerce
implementation in Saudi Arabia.
E-commerce can enhance the velocity of money in an economy. In a developing

economy with an elementary information infrastructure, implementation of E-commerce
needs adjustment and development. E-commerce in the Kingdom of Saudi Arabia is facing
many barriers. Within Saudi Arabia; there is a segment of the population with no access to
the Internet. Access to the Internet is hindered by the poor infrastructure and high costs
associated with Internet service.
In order to accomplish the point of this study, a vast literature review was
done, with a questionnaire which was used as the data collection tool. To achieve this,
a questionnaire from a middle class Saudi family, acting as a sample, has been carried
out. I have focused on the perception of E-commerce. This dissertation has been
organized into six chapters. An introduction to this study, problem statements and
research question were presented in chapter one. The second chapter was devoted to a
literature review. The research methodology was discussed in the third chapter. Data
presentation and analysis were done in chapter four and five, respectively, finally,
recommendations and conclusions in the last chapter.

Fahad Alharby Abstract
With respect to the findings, I conclude that the Saudi citizens looked at E-
commerce positively. Their attitude and views toward E-commerce were positive so
that they found that E-commerce would be an opportunity rather than a challenge or
even a threat for Saudi society. They believed that E-commerce would affect their
society and, thus, their country should embrace E-commerce. Lack of national
telecommunications and Internet costs and lack of government legislation and
regulation were infrastructure requirements which they found that the Saudi society
required. They were well equipped with hardware and software but lagging in other
supportive sectors such as logistics. Traditional attitudes and views about the
companies and scarcity of skilled staff were cited as other major obstacles which
would hinder Saudi Arabia to embrace E-commerce.
The synthesis of these study findings can be extracted into recommendations. One is
that both investments in infrastructure and citizen knowledge are required if a government
desires to support the implementation of E-commerce, and improvement of standards,
policies, and enforcement mechanisms to assure the dependable operations of E-commerce.

Fahad Alharby Acknowledgements
By the grace and mercy of God, first, I would like to express my great appreciation to
my supervisors Dr. Rami Qahwaji and Mr. Mark Goodall. They have always been supportive
and kind to me. Their inspiration, understanding, tolerant advice and encouragement have
made my studying a great learning experience and they will never be forgotten.
Second, I dedicate this dissertation to my wife, my parents, and my children:

Mohammed and Dema. They gave me encouragement, and support. They provided me with
strength, dreams, courage, and determination to move through the final stages of this
dissertation. I also dedicate this dissertation to my boss, the General Manager of the national
centre for financial and economic information, Mr. Mohammed Alnfaie, for his generous,
encouragement, and support.
Finally, I would like to thank all who have contributed to my graduate studies during
the last two years.

Fahad Alharby List of Acronyms
List of Acronyms
ADSL Asymmetric Digital Subscriber Line
AOL America Online
ARAMEX Arab Logistics Company
ATM Asynchronous Transfer Mode
AT&T American Telephone & Telegraph
B2B Business-to-Business
B2C Business-to-Consumers
B2G Business-to-Government
BT British Telecom
C2B Consumer-to-Business
C2C Consumer-to-Consumers
DDN Digital Data Network
DHL A company provides international shipping of documents and

freight
EDI Electronic Data Interchange
EFT Electronic Funds Transfer
GCC Gulf Cooperation Council
GDP Gross Domestic Product
HP Hewlett-Packard Company
ISOC Internet Society
IPPS Internet Petroleum Product Sale
ISP Internet Service Providers
IT Information Technology

Fahad Alharby List of Acronyms
KACST King Abdul-Aziz City for Science & Technology
LPG Liquefied Petroleum Gas
MCI Microwave Communications Inc.
NAP‟s Network Access Points
NCDC The National Centre for Digital Certification
NSF National Science Foundation
OECD Organization for Economic Co-operation and Development
PKI Public Key Infrastructure
PSTN Public Switched Telephone Network
SAMA Saudi Arabian Monetary
SADAD Saudi Electronic Payments Systems Project
SaudiEDI Saudi Electronic Data Interchange
SDH Synchronous Digital Hierarchy Network
STC Saudi Telecom Company
TADAWUL Saudi Stock Market
UAE United Arab Emirates
UPS United Parcel Service, Inc.
URL Uniform Resource Locator
WWW World Wide Web

Fahad Alharby Table of contents
TABLE OF CONTENTS

Fahad Alharby Table of contents

Fahad Alharby List Of Figures

Fahad Alharby List of Tables

Fahad Alharby Chapter 1 Introduction and background
INTRODUCTION AND BACKGROUND
1.1 Introduction
This first chapter is intended to give background information about the area of
research. First a brief background discussion regarding E-commerce and E-
government toward costumers and citizens, then an overview of the Internet in Saudi
Arabia. This is followed by a statement of the problem, leading to the research
objectives, research question, delimitations for this dissertation and finally, the
structure of the dissertation and the project management plan.
1.2 Background
1.2.1 Introduction to E-commerce

The definition of E-commerce is very wide and can be interpreted in different
ways by different people. E-commerce has many definitions which include business
process, communications and online services. It can be defined as “buying and selling
over digital media” while buying can be left out if the business procedures are
electronic, in addition, the selling process is electronic (Mariga, 2003). E-commerce
can be more clearly explained as electronic production via public or private networks
as well as E- banking, E- publishing, and E-service. During the use of E-commerce
technology, businesses can split information by electronic means and manage services
online in order for customers to obtain services from the businesses (Kotzab &
Madlberger, 2001).
E-marketing is the extension and adjustment of marketing policies in the
World Wide Web (WWW) environment as a division of E-Commerce and contains all
aspects that have an effect on a web site‟s proficiency, like the idea, the structure, the
content, the implementation, the interface, the maintenance, the promotion and the
advertising (Krishnamurthy, 2004). While extra businesses and supplementary
businesses are using the web to carry out their business, there is concern about some
issues such as efficiency, usability, easy navigation and a high-quality of supporting
services becoming crucial and influencing their achievement (Ancarani, 2002). A
particular significant problem that arises is that web users are faced with too many
options.
Barriers of E-commerce and E-government in Saudi Arabia -1-

1.2.2 Introduction to E-government

E-government is often defined as “e-business of the state”. This is reasonable
because both E-business and E-government use similar infrastructure, hardware and
software as well. Nevertheless, there are obvious differences between the business
models of the public and private sector, which give good reason for dealing with E-
government as a research area of its own (Gisler M., Gunter M. & Spahni D., 2001).
E-government is sometimes defined as citizen‟s services and re-engineering

with technology. Another point of view shows E-government as a fundamental
transformation of government and governance at a scale not witnessed since the
establishment of the industrial age (Aichholzer G. & Schmutzer R., 2000). From a
technological point of view, e-government is the use of technology to increase the
access to, and delivery of, government service to benefit citizens, business partners
and employees (Deloitte Research, 2000).
Even though there are many definitions of E-government, the real

government‟s objectives are certain: maintaining collective security, administering
justice, providing the institutional infrastructure of the economy, certifying that vital
social capital is improved during developments in education and health and through
strong families and communities (Dawes S.S., Bloniarz P.A., & Kelly K.L., 1999).
1.2.3 The Internet in Saudi Arabia

The Internet, E-commerce and the use of E-government are new not only to
the Middle East countries but to the world. The new technology of the World Wide
Web (WWW) in 1993 enabled the use of the internet backbone by a large range of
users with little or no technical skills. The Internet was officially made available in
Saudi Arabia in 1997, the Saudi Arabian government spent two years building a
centralized control system before contribution it for public service in February 1999.
Services such as online banking have only been available in Saudi Arabia since
2001(Alfuraih, 2002; Lee, 2001). Establishing this service was late contrasted to other
countries in the Middle East such as Kuwait, Egypt, United Arab Emirates, Bahrain
and Lebanon. However, Internet technologies have required new laws and regulations,

some of which have bring new burdens to governments and financial institutions and.
Table 1.1 illustrates the enhance of Internet users in Saudi Arabia.
Survey Saudi Arabian growth in Internet users
Dabbagh 1999 (Pastore, 1999d) 112,500 Internet users were estimated in 1999
TELC2000 (TELC, 2000) 115,00 Internet users were estimated in 1999
2.2 million Internet users were predicted in
2004
Wmrc2001 (Dutta & Coury, 577,800 Internet users in 2001 (3% of the
2001) population)
Madar2002 (Madar Research, 1.6 million Internet users were estimated in
2002) 2002 (6.81% of the population)
4.48 million Internet users were predicted in
2005
Table 1.1: Growth of Internet Users in Saudi Arabia
(Almogbil, 2005;Madar Research, 2002; TELC, 2000; Dutta & Coury, 2001; Pastore, 1999d)
The laws relating to E-commerce and E-government in Saudi Arabia are all quite
new. Customer preferences, needs for protections, and user-friendliness are mostly
unknown. Government departments and companies that offer online services in Saudi
Arabia face cultural challenges. Infrastructure support for online services is also new
(Almogbil, 2005).
Online services consumers depend on Internet technologies for immediate

access to their requirements and financial and information resources. The security of
these resources is presently the issue of important centre of attention. To have
competitive, proficient, and protected online access, government, companies and
institutions must implement laws, principles, and procedures that permit the business
to function well and protect information assets. The online services in Saudi Arabia is
still in its early steps, Saudi government, companies and banks require to run at or
above the services level of successful domestic and international players (Reuters,
2000).
Interpretations, response, feedback and survey items should be taken in the
background of the Saudi culture. It is expected that several of the problems considered
will reveal thoughts and ways which difference strongly with Western views. The
Middle East countries are unique because they consist of a group of nations that have
common ideologies of Islam and language (Almogbil, 2005). They can contrast,

nevertheless, in their strategies and government due to loyalty to separate Islamic

traditions and sects (Lieb, 1999). The enthusiasm for this study mostly approaches
from the required to identify how the unique country of Saudi Arabia has adapted to
Internet technology and E-commerce.
In Saudi Arabia, young people are exposed to modernity during media and
travelling overseas and have various identities across different occupational, regional,
national, tribal and geographic groups (Yamani, 2000). Hermida referenced a Harvard
Law School report in 2002, which stated there were more than 2,000 web sites
blocked by the Saudi government. The Saudi Arabian government control Internet
traffic by using a central proxy servers conducted by King Abdul-Aziz City for
Science and Technology (KACST). Most of these blocked web sites was sexually
explicit or had religious content, as the rest were about women, drugs, and Western
culture. In most countries the main Internet business happened via pornographic sites,
but these sites were forbidden in Saudi Arabia along with other web sites that have
sensitive political or religious views against the Saudi Arabian government or Islamic
law (Almogbil, 2005; LEE, 2001). However, it is unique for a country to block sites
in sequence to preserve Islamic principles and prevent people‟s beliefs from being
influenced (Hermida, 2000).
1.3 Statement of the problem
E-commerce and the use of E-government in the Saudi government and industries
are in the very initial stages. The Internet usage is dramatically growing in the country
and many government departments and companies have an Internet presence on the
net. A few companies provide elementary Internet services.
For the traditional Saudi government and companies, the require to adapt to the
new E-commerce opportunities not only involves direct cost, in the form of extensive
investments in the new information technologies, but as well the indirect costs of
having to adjust their active business models. Saudi companies should to revamp their
business procedures, which direct several different internal conflicts. An internet
business threatens other traditional paths and so be likely to meet with strong battle
within the company. Many Saudi companies can avoid this problem immediately by

not passing on to the consumer during electronic distribution. Some companies may
pursue a dual strategy and attempt to make balance the traditional distribution
channels and online services (Porter, 2001).
The procedures, technologies, and ways of E-commerce and E-government have

been constructed up overpoweringly in a Western cultural background. Saudi Arabia
has been implementing vigorous information infrastructures. Nevertheless, the
cultural infrastructure in Saudi Arabia is fairly different from that of the Western
world. Roth predicted in 2001, based on a report from Pyramid Research, that Internet
users in the Middle East region, will flow over the next five years, but foreign entrants
would have to go through major cultural obstacles. Therefore, there are additional
aspects in particular the cultural differences, which must be considered in order to
adopt E-commerce and E-government in Saudi Arabia. (Almogbil, 2005). The effects
of E-commerce and E-government are the subjects of deep debate in Saudi Arabia,
and a prospective study to explore and investigate the barriers of E-commerce and the
use of E-government in Saudi Arabia is underway.
1.4 Research Objectives

The main goal of this research is to identify the barriers and challenges in
adopting E-commerce and E-government in Saudi Arabia. This identification of
barriers will occur through examining the Saudi Arabia cultural infrastructure, as
analyzed through customer‟s experiences, legal requirements, and the information
technology infrastructures, in addition to studying the current situation and the
benefits of E-commerce.
1.5 Research Question

In Saudi Arabia, a range of major factors impact on the usage and implementation
of E-commerce and E-government. These factors include consumers, government,
companies, technical personnel, managing and legal law. This study is intended to
address the main question which is “What are the barriers and challenges facing E-
commerce and E-government in Saudi Arabia”. This question will be discussed in
chapters four and five which will include the data collection and analysis.

1.6 Delimitations
Due to limitations in time as well as finances, it would be impossible to cover
all aspects of E-commerce and E-government. I will not cover the design and the
execution of E-commerce, nor will I put E-commerce applications to the test.
1.7 Structure of the Dissertation
As can be seen in Figure 1.1 below, this dissertation consists of six chapters. By
now, the reader is already familiar with the content of chapter one which consisted of
an introduction and background discussion followed by the statement of the problem,
the research objectives with research question and their limitations. Chapter two will
consist of a literature review. Chapter three will illustrate how the research was
conducted and which methodological choices were made, in addition to motivations
for these choices. This is followed by chapter four where the collected empirical data
will be presented. This data is then compared with the concepts outlined through an
analysis in chapter five. In the final chapter the conclusions and recommendations
will be proposed as well as suggestions for further research.
INTRODUCTION AND BACKGROUND
LITERATURE REVIEW
RESEARCH METHODOLOGY
DATA PRESENTATION
DATA ANALYSIS
CONCLUSIONS AND
RECOMMENDATIONS
Figure 1.1 Structure of the Dissertation

1.8 Project Management Plan

Project Management Plan is strongly recommended from a best practices point of
view, in sequence to successfully and professionally manage the time, schedule, and
quality of the project. The Project Management Plan can be viewed as a "roadmap",
which will facilitate the project team to deliver the project without any delay with the
quality which they expected. Table 1.2 shows the project management plan:
Week June July August September

1 1-First formal meeting on 1-Begin writing 1-Time available to
Thu 6th. introduction make amendments,
2-Submit the completed and 2- Questioner response correct errors, tidy up
signed 1st Review Form to presentation
Dr Ugail 2-Aim to submit final
3-Fix the title and the main dissertation by Sep 8th
objectives.
4-Web based research
2 1-Literature review 1-Second formal
2-Review of the meeting/submit the
methodology(looking at the completed and Second
questioner design) Review Form to Dr
Ugail
2- Begin writing
Literature review
3- Questioner response
3 1-Literature review 1-Analysis of
2- Begin questioner design questioner response
2-Evalute results
3- Begin writing
methodology section of
dissertation
4 1-First meeting with the 1-Complete questioner 1-Write up results and
supervisor. design findings
2-Discuss the main 2-Select sample for 2- Write up
objectives of the project and questioner distribution conclusion/Appendix
how the project will conduct 3-Literature review(if still to 3-Proofreading and
3-Begin web science search complete) check references
4-Finish web search (if still
to complete)
Table 1.2 Project management plan

Chapter 1: References
Aarabi N., Bromideh A., (2006). The impact of e-commerce on the Iranian insurance
companies. Master thesis. Lulea University of Technology.
Aichholzer G., Schmutzer R., (2000). „Organizational Challenges to the Development

of Electronic Government‟, DEXA 2000, IEEE Press, pp. 379-383.
Almogbil. A., (2005). Security. Perceptions and Practices: challenges facing adoption
of online banking in Saudi Arabia. Ph.D. Dissertation. The George Washington
University, May 2005.
Cabello D. B., Ravula U. K. (2006). Public E-services toward citizens. Master thesis.
Lulea University of Technology.
Dawes S.S., Bloniarz P.A., Kelly K.L., (1999). „Some Assembly Required: Building a
Digital Government for the 21st Century‟, Retrieved June 11, 2006 from:
http://www.ctg.albany.edu/publications/reports/some_assembly/some_assembly.pdf.
Deloitte Research, (2000). „At the Dawn of e-Government: The Citizen as Customer‟
from:http://www.deloitte.com/dtt/cda/doc/content/at_the_dawn_of_egovernment%28
1%291.pdf. Retrieved June 21, 2006.
Gisler M., Gunter M., Spahni D., (2001). „Minitrack E-government‟, Proc. of the 34th
Hawaii International Conference on System Sciences, IEEE Press.
Kotzab, H. & Madlberger, M. (2001). “European retailing in e-transition? An

empirical evaluation of web-based retailing – indications from Austria”, International
Journal of Physical Distribution and Logistics Management, Vol. 31, No. 6, pp.440-
462.
Krishnamurthy, S. (2003). “E-Commerce Management: Text and Cases, Louiseville:

Transcontinental Printing, Inc.”, ISBN 0324152523.
Mariga, J. (2003). Managing E-commerce and mobile computing technologies.

Hershey, PA, USA Idea Group Inc., p. 3.
Pastore, M. (I999d). Saudi Arabia Gets Wired. July 21, 1999. Retrieved June 20, 2006,
from http://www.clickz.com/showPage.html?page=151061
Reuters. (2000). Saudi banks embark on Internet race. Arabia.com Dubai. August 23.
2000. Retrieved June 23. 2006 from
http://www.arabialink.com/Archive/GWDigests/GWD2000/GWD_2000_08_28.htm
Roth, A. (2001). Middle East Web Could Draw U.S. Bankers. Credit Collections
World-May 30, 2001. Retrieved June 21, 2006 from
http://www.creditcollectionsworld.com/news/053001_4.htm

TELC. (2000). TELC. Telecommunication: Mutually Exclusive. Retrieved June 23,

2006, from http://www.insight-publications.com/saudi/saudi/saudi-sl2.html
Yarnani, M. (2000). Changed Identities: The Challenge of the New Generation in

Saudi Arabia. Brookings Institute Press. September 1, 2000.

Fahad Alharby Chapter 2 Literature Review
LITERATURE REVIEW
2.1 Introduction
The literature review has been divided into ten sections starting with a brief
introduction. The second section focuses on Internet and E-commerce. The third
section focuses on the impact of globalization on E-commerce. The fourth section
deals with Socio-cultural changes as well as text and language. The fifth section
produces an overview of the history of Saudi Arabian Financial Systems, followed by
the sixth section which considers telecommunication access and connectivity. In the
seventh section I focus on the Education systems role as well as address the human
resources plans. Regulation and Deregulation and Logistics are in sequence in
sections eight and nine. Next, the successful E-commerce experiment in Saudi Arabia
which is provided by Saudi Aramco, Finally, experience of E-commerce and E-
government in the Middle East countries, using the example of the United Arab
Emirates.
2.2 Internet and E-commerce

Internet and E-commerce are gradually becoming one of the most significant
drivers of strategic change for governments and business. Similarly, it is likely to
have a considerable impact on our lives. Shops, companies and banks are looking for
approaches to influence the Internet and the technique of E-commerce for improved
revenues, enhanced productivity and a larger customer base with loyalty for their
products.
The expansion of E-commerce is a complicated and methodical engineering of

society, not only concerned with the creation of the arrangement of information but
furthermore depending on financial systems such as commercial credit, payment
gateways in the Internet, identification, forwarding system infrastructure, standards,
tax system, perform and adjusting of relative laws and the framework of the system.
In other words, it depends on two important aspects, one is the construction of the
market environment and policies and the other is the broad application of technology.
The centre of attention in the early stages of the Internet was on selling goods
to customers (business-to-consumers or B2C). Now, the focus is changing toward
commercial clients (business-to-business or B2B). The B2B division is expected to be
the most significant focus of Internet sharing in the future (SwissRe, 2004). Internet
Barriers of E-commerce and E-government in Saudi Arabia 10

technologies have consequences not only for distribution, but for the control of a
company‟s whole business processes too. The more the production process relies on
the processing of information, the greater the potential for alteration. Thus, E-
commerce is currently understood to mean the utilizing of communication and
information technologies, and particularly the Internet, to incessantly enhance an
organization‟s business processes. It indicates the seamless application of
communication and information technology from its point of origin to its end point
beside the whole value chain of business processes conducted electronically and
designed to enable the achievement of a business objective. These processes possibly
will be partial or complete and may include B2B, in addition to B2C, C2B
transactions and even (consumer-to-consumer C2C) (Wigand, 1997).
2.2.1 E-commerce technologies

It is thought that the most hopeful area of E-commerce is not dealing with
customers but the computerization of purchase and sale transactions from B2B.
During the last decade, most companies have used proprietary electronic data
interchange (EDI) systems for this reason; nowadays they are turning to the Web and
extranets. There are many commerce and merchant Web server systems that are
accessible. They usually offer a Web storefront, generally among some sort of on-line
catalogue support, and a means for taking orders. Several of these systems connect to
financial networks to complete payment processing. Companies such as BT, AOL,
MCI, and AT&T offer web hosting services that process E-commerce transactions for
companies that are not ready to operate their own E-commerce web sites (Tokuro,
2003).
Putting all of the processes related with E-commerce together needs further
software and tools. For instance, software presenting interfaces among Web servers
and the company‟s databases and E-payment systems. E-payment systems use
technologies such as electronic funds transfer, credit cards and smart cards, also new
Internet-based payment systems to pay for services and goods electronically. It‟s
desirable to use software to monitor and track web site usage for marketing analysis
(Werner, 2003).

2.2.1.1 Electronic data interchange
EDI is the electronic transmission of commerce information among the

computers of trading collaborators, for example companies, financial institutes,
government agencies and customers. EDI is a proficient technique for trading
collaborators to exchange the information required to manage business. In order to
process information proficiently, the computer systems of trading partners are
required to be capable of communicating. Business partners should have a common
format for their data. Trading partner‟s computer systems also have to be physically
linked, via a public or private network, a dedicated telecommunications line, or
standard telephone lines and modems. EDI can produce considerable savings in
money and time compared with exchanging information by other means such as
printing, handling, and mailing documents.
2.2.1.2 Imaging
Imaging includes many technologies for electronically managing and storing

documents as well as making the information accessible, in spite of whether that
information originated in electronic form or paper. Also, when storing documents,
imaging systems can organize documents with easy access. There are many benefits
of imaging such as enhanced workflow, further timely responses to information
requests, along with reduced costs for filing, retrieving paper documents, and storing.
Imaging can make documents available twenty-four hours a day, seven days a week,
to multiple users, even users in remote sites. Moreover, unlike paper files, documents
saved electronically are rarely missing or lost.
2.2.1.3 Electronic Mail

An E-mail system allows individuals or computer systems to send messages or
documents by computer. E-mail is a simple method to exchange unstructured
information, such as descriptions of extraordinary conditions at risk or suggestions for
underwriting improvements. Such exchanges are possible within an E-mail system or
between separate E-mail systems.

2.2.1.4 Electronic Funds Transfer
Electronic funds transfer (EFT) is a low-cost technique for automatically

transferring money by computer systems. Businesses and customers can use EFT to
make a deposit in their bank account or payment to transfer money to the account of a
creditor. Many companies have for years used EFT to collect premium payments.
2.2.2 Major types of E-commerce

E-commerce can be generally classified into four categories: business-to-
business (B2B), business-to-consumer (B2C), customer-to-business (C2B) and
consumer-to-consumer (C2C). A brief discussion on these main types of E-commerce
is given in table 2.1 below (Cornall et al. 2000):
E-commerce type Example
B2B: has been in use for a few years and A typical example is Cisco
is more commonly known as EDI. B2B (www.cisco.com), the supplier of
generally involves big companies Internet hardware, where both buyers and
transferring all their business purchasing suppliers can deal online.
and sales to the Web.
B2C: allows sellers to contact more A well known B2C example is the virtual
customers and can collect bookshop Amazon.com.
comprehensive, focused information
about them, enabling sellers to target
them more efficiently. This is where the
customer accesses the system of the
supplier. It remains a two-way function
however and is usually done solely via
the Web.
C2B: enables consumers to move For example travellers can bid for airline
towards businesses. Consumer to tickets on www.priceline.com
Business is a growing field where the
consumer requests a particular service
from the business.
C2C: allows customers to interact with other A famous example is eBay where individuals
customers. These web sites are typically can bid for goods from other individuals.
some form of auction web site. The customer
lists items for sale with a commercial auction
web site. Other consumers access the web
site and place bids on the preferred items.
The web site then offers a link between the
seller and buyer to complete the deal. The
web site supplier usually charges a
transaction cost.

In table 2.2 broad types of E-commerce are given, this is a general form of the
essential areas of E-commerce activity mentioned above.
Government Business Consumer
Table 2.2: E-commerce and broader Internet applications, Source: OECD
Most Governments around the world, such as Saudi Arabia are starting to
reorganize the running of public procurement systems equivalent to 10 per cent of
their Gross Domestic Product (GDP) through the net, opening the view of sizeable
business-to-government (B2G) transactions. The technology is also being utilized by
governments for the transmission or disturbed of information (G2B) (G2C) to lower
the cost of payment systems (C2G) and enhance convenience, and by businesses to
manage after sales service and to increase direct consumer marketing (OECD, 2000).
2.2.3 Benefits of E-commerce

E-commerce is broadly believed to offer extensive growth and cost saving
opportunities. It attracts massive interest worldwide from different areas of the
economy including government, legal and law, colleges and universities, and industry
institutes. The potential of E-commerce has been recognized by governments
throughout the world many of which have developed strategies to smooth the progress
of the adoption of E-commerce. The potential benefits of E-commerce for sellers and
buyers are summarized in table 2.3.

Benefits to Sellers Benefits to Buyers
Expanded access to trading Expanded access to trading

partners and market reach partners and support services
Increased marketing and sales Improved sourcing and

profile procurement process
Enhanced customer contact and Enhanced supplier relationships

service (contact and service)
Reduced cost of sales, technical Lower purchasing prices
documentation, and customer through improved price
service costs transparency and comparison
Reduced transaction Reduced procurement costs
handling/processing costs
Reduced working capital and Reduced operating costs and
inventory requirements maverick spending
Competitive advantages through Improved efficiencies and
improved efficiencies and process transaction flow, visibility and
planning control
Table 2.3: Potential benefits of E-commerce, Source :(Aarabi N., Bromideh A.( 2006) Moodley (2003).
2.2.4 Limitations to E-commerce
E-commerce has been built on the power of the private sector rather than on
government or institutional initiatives, and the E-commerce companies will continue
to drive the development. Nevertheless, there is considerable scope for collaboration
at all stages to eliminate barriers to the development of E-commerce. The limitations
of E-commerce are both technical and non-technical, as pointed out by Turban et al.
(2002) in table 2.4:
Technical limitations Non-technical limitations

These include problems pertaining to The most important problem is the cost of
1-security developing E-commerce; moreover, privacy
2-reliability and security are an important concern when
3-telecommunications it comes to customer-business relationships.
4- software In reality the E-commerce industry has had
5-integration of E-commerce applications an extremely hard period trying to convince
with existing databases customers that electronic business is as
6-conflict between E-commerce applications secure as any other commerce. One more
and certain operating systems issue lies in persuading customers to do
business with machines, while some
consumers prefer to touch goods, such as
clothes and to be in no doubt of the
dependability of the item they are buying.

The greatest difference between technical and non-technical limitations is that

technical limitations most of the time can be solved with spending sufficient money,
while non-technical limitations are more complicated to modify while they involve
things that cannot be altered without difficulty such as people‟s attitude, resistance to
change, faceless transactions and lack of trust.
In this research, I‟ll focus on E-commerce application in Saudi Arabia which

is facing several difficulties including the lack of coordination among the public and
the private sectors in order to structure and progress the E-commerce environment.
Other barriers include an absence of payment solutions as well the small international
credit cards. On the other hand, awareness is still obstructing the consideration of the
E-commerce idea; moreover there is a lack of trust about on-line payment and privacy,
and a lack of legal protection against fraud. Furthermore, there is inadequate
infrastructure such as Internet literacy, lack of Internet connection outside big cities
and the high cost of Internet rates whether dial-up or broadband access. Another
barrier is the lack of legislation concerning electronic indication besides the
inadequate authorized conduct of E-commerce application in Saudi Arabia. However,
logistics facilities in Saudi Arabia are still resisting E-commerce development.
2.2.5 E-commerce Risks

At whatever time customers use online services such as online shopping or
online banking, transactions should be encrypted, thus no one, other than the customer
and the company or the bank, can notice or recognize the transactions. To assess the
security of E-commerce web sites, MsMoney.com Inc. (2002) anticipated the
following three steps in table 2.5:
(1) When connecting to the logon page at the bank's or E-commerce web site, the
start of the URL should indicate "https" and not "http." This indicates that data is
being encrypted.
(2) In the status bar of the browser, located at the underneath of the page, a
symbol should show. This, as well, indicates that data is being encrypted.
(3) You may as well locate an image on the site that states, “Click to Verify."
VeriSign is a leading provider of Internet trust services, and its insignia is
confirmation that your bank is certified as a secure domain. There are other trusted
services besides VeriSign, such as Thawte and GTE Cyber Trust.

2.2.6 Internet in the Middle East and GCC countries

The number of Internet users are estimated to raise more rapidly in Gulf
Cooperation Council (GCC) countries than other Middle East countries as Kamali (2002)
forecasted as shown in Figures 2.1 Within a period of three years, the increase in the GCC
countries has roughly doubled. GCC countries are considered to be the largest Internet
community in the Middle East region. (Madar Research Group, 2003).
Internet Penetration
Aug 2002 - End of 2005
25%
20%
15%
10%
5%
0%
World Average Middle East GCC
Aug-02 10% 2.54% 9.23%
End of 2005 15.70% 8% 19.76%
Aug-02 End of 2005
Figure 2.1 Internet Penetration: Middle East and GCC vs. World
2.2.7 Building trust in online transactions in Saudi Arabia
In the research published in 2001, Wakefield recognized that consumers be

required to trust the web site of the electronic market in order to complete their
electronic payment. However, if they do not feel secure, then they will not complete
any kind of electronic payment. As well he mention, "Trust in a Web vendor is an
important variable for the completion of an online transaction, and consumers who
trust are more likely to exhibit positive online purchase intention". In truth, when
online customers had a high confidence in the web site's security, they shopped via
the net which improved the usage of credit cards. He also recognized a direct link
among banks and online shopping: if the trust in any of them is missing, then they
would together be affected.
A study presented by Alyabis (2000) discussed the use of the Internet and E-
commerce in Saudi Arabia. The participant results were as follows, in table 2.6.

The percentage of participants The purpose of using the Internet
93.3% used the Internet for e-mail

68.9% used the Internet for personal research
64.4% used the Internet for searching for
information about products
20% used the Internet for shopping
48.9% used the Internet for online chatting

33.3% use the Internet to buy magazines and
books
28.9% use the Internet to buy computers and
software
4.4% use the Internet to buy clothes
22.2% use the Internet for travel
Table 2.6: the use of the Internet and E-commerce in Saudi Arabia (Alyabis 2000)
In the same study, security and E-commerce continued to be unified. Most of

the respondents (75.5%) think that security is very significant for business institutes in
order to make certain of secure transmission via the Internet. Approximately four
respondents out of five (79.6%) thought that the IT infrastructure in Saudi Arabia was
weak, which was one of the most important barriers preventing companies from
developing E-commerce. E-commerce remains critical for businesses because it
provides another channel through which to sell their products and provide services.
A study conducted by Wang (2001) focused on the personality characteristics

affecting a possible online consumer‟s attitude toward E-commerce and their plan to
buy over the Internet. In addition, Wang determined that there was an optimistic
connection between the individual characteristics and attitudes of the respondents
towards using E-commerce web sites. Also, he noted that the respondent's
demographic group greatly influenced this attitude.

2.3 Globalization and their impact on E-commerce
The movement of globalization is obvious as people are gradually more

related to each other around the world. The flow of money and information across
geographic and cultural divides occurs more rapidly than ever. Within a limited
timeframe goods and services can be bought and sold in all parts of the world.
Globalization is a source of optimism and apprehension, where the mainly open
nations are the leaders of its advance. The growth of communications technology and
Internet usage indicates further globalization in the near future, while the embrace of
globalization varies widely from country to country (Yusuf, 2001). Globalization
demonstrates the economic, political, and cultural environment of the present age.
According to the World Bank report (The World Bank, 2000), the Middle East
countries have to go ahead to be more integrated with the global economy. The
integration progress has fluctuated among these countries, in trade and international
finance and information technology
In fact, the financial and retail services industry has been controlled more or
less as a domestic industry with very little international focus. Barriers such as tax,
government regulation, and cultural issues have barred the expansion of E-commerce.
On the other hand, global cost efficiencies, driven by economies of scale and
comparative advantage, are driving globalization.
2.3.1 New Entrants

Over the last three decades, the majority of the industries, in almost every
country, have seen many new entrants such as foreign companies, banks and building
societies. In Saudi Arabia, seven foreign banks and four foreign retailer firms have
ventured into the Saudi market. Other new potential competitors have the opportunity
to enter new companies into this competition. For example, other retail companies in
Europe and the USA, such as Gean, Carefoure and Safeway, are entering the retailer
market. In many cases retailers have formed alliances with traditional retailer
companies and asset management companies similar to that formed between Wall-
Mart and ASDA.

2.4 Socio-cultural changes in the Middle East

Nowadays, a cultural shift from the traditional generation to modern is
creating a new demand for growth in this business and structural changes in
employment patterns. For example, more flexible working and periods of
unemployment are creating a new type of consumer with different customer
behaviours and requirements.
Ghashghai and Lewis (2002) have expected that the Internet can produce a lot
of modernization within developing countries, especially in the Middle East. It
could present "enhanced business opportunities including cross-border
opportunities; better information in crucial areas such as health, agriculture, and
commerce; improved education; and increased news and entertainment." They found
that it is simple to identify the Middle Eastern leaders and government's beliefs by
reading available literature; however it is hard to decide the beliefs the people have
internalized. On the other hand, the Internet can generate problems, such as
disbursing Western political ideas, distributing pornography, or making it easier for
dissident individuals and organizations to communicate within a region known for
its political unrest. In most conservative and Arab countries, including Saudi Arabia,
governments are aggressively using firewalls to potentially block the spread of
pornography and offensive content from being seen or downloaded by Internet users.
There are issues of tailoring E-commerce web sites to suit a particular

audience. Websites need to be designed for the particular audience it wishes to target.
Across the globe there are many different languages, customs and cultures. There are
more developing countries coming online. Some may be illiterate, have a language
barrier, and have no experience of modern technology, and therefore technology
should not be complicated. It must be made more users friendly. It should be as
simple to use as a mobile phone.
Capurro (2000) has illustrated some of the core ethical issues of the
information society in this century which combines the technical and socio-cultural
issues of the information society through using the categories of the observatory on the
information society as orientation:

-“Globalization: The digital divide inside a community and/or country as well as

between countries, regions, and whole continents is the major issue in this field.
- Privacy and Confidentiality: These are big issues, particularly with
regard to a world market that, as eBay and Amazon show, has basically
different coordinates from political to geographical ones. There is a basic
dynamic interaction between a culture of information-sharing and one of
information protection. This creates an ethical tension between confidence and
control or between methods of information distribution and information
encryption.
- Content Regulation: This is one of the trickiest issues because of the specific
qualities of information, such as its volatility, its easy worldwide distribution and
its non-consumption after its use.
- Universal Access: This issue concerns the question of growth and
coordination of a decentralized and interactive system that is being
monitored and influenced by various actors and global players such as the
hardware and software industry, the National Science Foundation (NSF), the
Internet Society (ISOC), the W3-Constorium, various United Nation Agencies
and non-governmental organizations, private groups of all kinds, etc” (Capurro
2000).
Having analyzed the legal, social and economic impact of E-commerce it is

apparent that E-commerce is here to stay. E-commerce has become an integral part of
the modern day business. Even mature businesses have had to make the switch over to
the modern electronic world or risk being left behind. E-commerce can start off as
simple as having a web site for selling products but it can also stretch far beyond that
through to complex electronic supply-chains and inventory management systems.
Many companies have become over-night successes through the efficient use of E-
commerce. However, as was demonstrated when the dot com bubble burst back in
2000, having an internet business is not sufficient. The key is still to follow the basic
rules of business. The seller must have a good product and a target consumer base that
are willing to buy it. Without consumers, E-commerce is nothing more than a
collection of computer software and hardware.

2.4.1 Text, Language and Culture
Most Saudi business web sites use dual language Arabic and English. In my
view, the most remarkable feature of the Saudi web site text is its exclusivity.
Utilizing Arabic at the start makes contact with reader and directly sets it apart from
the vast majority of the non-Arabic audience: the signs and symbols are unfamiliar to
the point of being meaningless. Thus, it is also conceivable that not just the language,
but the alphabet and script, are also meaningless to most non-Arabic audiences. In
most Saudi web sites whether government or business, the English translation is
available which is competent and understandable: obviously, the purpose is to express
meanings which are „permissible‟ to the non-Arabic reader in a way which is
unambiguous and without any difficulty in understanding.
The extensive increase in the use of E-commerce applications has led software
companies to identify that an important part of their revenues are coming from non-
English countries. This detection, jointly with the saturation of the Western market,
triggered efforts to adapt the companies‟ products to the requirements of non-English
markets. Software localization techniques were built to adjust software written in one
language for members of one culture to another language and for members of another
culture (Keniston, 1999).
The obligation that software be required to fit the cultural context of the user
has been generally accepted. Nevertheless, this context has been defined solely in
terms of the requirements concerning the user interface. Taylor (1992) answered the
question "What then needs to be encapsulated in this concept of cultural context?” by
listing the following locales, i.e., the collections of all the conventions that
characterize a particular culture or user community: transliteration, hyphenation,
spelling, collation, national conventions (numbers, currency, time and date), and
colour (op. cit.). Hall adds such elements as messages, terminology, and positioning
of windows, tables and graphs (Hall, 1999).
To summarize this section, governments and organizations make considerable

efforts to defend their languages. Nevertheless, the issue is, whether or not they in fact
address the deeper issue of the impact of E-commerce applications or in general web
sites, on the society and its values. Accepting the need for software localization, or

even the fit to a particular culture, the interface is an aspect that is clearly important
but possibly not the most significant. So, there is more to culture than language just as
there is more to software than interface.
2.5 The History of Saudi Arabian Financial Systems
Currently, the Saudi Arabian financial system consists of various sorts of

banks, the Saudi government controlled Saudi Arabian Monetary Agency (SAMA),
the private commercial banks, the specialized credit institutions, and the stock market
(Tadawul).
2.5.1 The Central Bank: Saudi Arabian Monetary Agency (SAMA)
Before 1952, Saudi Arabia had no official monetary system; the people used
silver coins or foreign currencies as an exchange medium of circulation for their
trades. In fact, there was a big resistance from religious people against the
establishment of a banking system for the reason that banking interest is against
Islamic laws (the Shari'ah). On the other hand, while the need for a banking system
became obvious when pilgrims visiting holy places in Saudi Arabia needed to
exchange money, the first foreign bank was started in 1927. The 1950's brought an
increased need to form foreign and domestic banks, particularly with the revolution of
the oil industry which continued to develop considerably on an annual basis
(Almogbil, 2005; Money and Banking, 1992).
The Saudi Arabian Monetary Agency (SAMA) was established in 1952, it was
intended to serve as a regulatory agency and act as the government's bank. In the
1960's, SAMA produced banking regulations to advance increase the banking
industry. Riyal, the Saudi currency, was initially dispersed in 1972. SAMA and
commercial banks play important parts in upgrading and developing the Saudi's
banking technology such as ATMs, stock trading, and electronic clearing (Money and
Banking, 1992).

2.5.2 Saudi Arabian Commercial Banks

Saudi Arabia has twelve private commercial banks. These commercial banks
offered complete banking services to individuals, as well as to private and public
enterprises. Eight of these banks were originally owned by Saudis, while the others
were joint ventures with foreign banks. All of these banks offer a high quality of
online banking services for their clients (Almogbil, 2005; Money and Banking, 1992.
2.5.3 The Saudi Arabian Stock Market (Tadawul)

The Saudi Arabian stock market, created in 1983, was essentially designed for
domestic long-term investors. Nowadays, most investors use online services which are
provided by their banks to buy and sell stocks, the Tadawul system presents a successful
E-business portal in Saudi Arabia.
Figure 2.2 Screenshot of the Saudi stock market home page
2.5.4 The National Centre for Digital Certification (NCDC)
The National Centre for Digital Certification presents an integrated method for
running the public key infrastructure (PKI). It is a protection integrated system for
controlling the security keys used for attaining information privacy, verification of
users' identities, certifying data reliability against tampering and alteration, and using
digital signatures. Leading these functions rest electronic services such as E-
government and E-commerce. By this security structure all sorts of web users would
be able to execute electronic transactions in full protection, reliability and
creditability.

2.5.5 Electronic Transactions Act
Currently, the electronic transactions process is under review and will

presently be available. It plans to systematize electronic transactions and provide an
organized structure for accomplishing the next objectives in table 2.7 (NCDC, 2005).
(1) Drawing up rules for using technology in the electronic transactions and
signatures to reinforce confidence in these transactions and signatures and to
facilitate their use in both the public and private sector, by reliable electronic
records.
(2) Confirmation of electronic transaction usage on both local and international levels
to be utilized in all fields such as trade, medicine, education, E-government, E-
payment and other applications.
(3) Elimination of any obstacles facing the electronic transactions and signatures.
(4) Curtailing cases of misuse and fraudulent opportunities, such as forgery of
electronic transactions and signatures.
Source: The National Centre for Digital Certification (2005)
2.5.6 Electronic Data Interchange, International Trade Sector

Currently, the Ministry of Finance performs the Saudi Electronic Data
Interchange Project (SaudiEDI), the goal of this project is to provide swiftness and
transparency to the dealing out of B2B and B2C transactions, by focusing on the
international trade areas such as import, export and electronic trade services.
2.5.7 Electronic Payments Systems Project (SADAD)

The E-Payments Project is identified by SAMA as “SADAD”. This project
spotlights G2B and B2B transactions and is expected to be completed by the end of
2006. This project is one of the main requirements for the performance of E-
Government and E-commerce.
2.6 The telecommunications Access

The telecommunications companies in any country hold the physical
infrastructure such as wires, fibre optics, and switching equipment. Internet Service

Providers (ISP's) lease access to the Internet from these telecommunications

companies. The ISP‟s are connected through the Network Access Points (NAP's).
Utilization of the Internet requires some skills and technology. These include having
electricity, a communications line such as a telephone, a modem, TV cable, satellite,
and a certain level of fluency in English since more than 80% of the WWW resources
are written in English (Ghashghai & Lewis, 2002). Nevertheless, to meet the
requirements of those users whose interpretations or understanding of English is
minimal, there is often a demand on web page designers to incorporate non-verbal
cues, such as pictures or arrows.
Internet service departments in King Abdul-Aziz City for Science and
Technology identified the following three main issues in table 2.8 to increase
penetration in Saudi Arabia (Almogbil, 2005; Al-Furaih 2002).
“Raising Internet awareness: government and non-government organizations
should be aware of the benefits that Internet technology can bring to them and to
their clients. Most of the organizations now have informative web sites in which
they put information about the organization and other information of importance
to their clients. Some are more advanced than others, but they are already saving
time and effort for themselves and their clients. The next step is to start moving
to E-government and digital signatures and other advanced technologies. Parents
should be made aware of the benefits that the Internet could bring to their kids
and their education. Some parents still look at the Internet as a waste of time!
Internet access prices are very high in Saudi Arabia; these are currently the highest
by a wide margin in the region. This discourages users from staying online for longer
periods At the same time; it encourages other means of illegal access, mainly satellites.
Prices should go down if Internet applications, local content, and more penetration are
to be achieved.
Local Regulations should be adopted to promote E-commerce and the use of the
Internet. Currently there are several initiatives for new laws for E-commerce, PKI
implementation and E-government.”
A number of social and infrastructure constraints against adopting online

services in the Arab world countries were cited by Jordan Times (2001). Although
many companies and banks may have the technical capability of offering online
services, they must overcome these constraints:
- Telecommunications infrastructure in some countries remains deficient.

- Internet penetration in the region is still relatively low.

2.6.1 Connectivity
The communication infrastructure in Saudi Arabia is controlled and operated
by the Saudi Telecom Company (STC) that is based on four main networks (Alfuraih,
2002):
- ATM network: provides connectivity to the Internet backbone in Saudi

Arabia, which covers most of the country and is used to connect the
ISP's with KACST and with their dialup and ADSL clients.
- DDN (Digital Data Network): is used for connecting ISP's with

their leased-lines customers; it is also used by some organization to
connect branches.
- PSTN (Public Switched Telephone Network): is used for dialup

and ADSL customers.
- SDH (Synchronous Digital Hierarchy) network: provides

telecommunication services and international connectivity.
2.7 Education systems role
Nowadays, The Ministry of Education in Saudi Arabia is starting its plan to

install a million computers in schools over the next five years, establish computer
learning all over the country, and link young learners to the Web. Lending at
preferential terms will also be provided to teachers and staff at all the education
systems in Saudi Arabia for the purchase of around sixty thousand additional
computers for their personal use.
However, information technology skills and English language are a high

priority and they are being taught from an early grade in all private schools and most
public schools. Furthermore, currently every one of the high school and college

students are required to attend computer training class, and there is a national exam
that includes a computer literacy component. Furthermore, all college students are
required to learn at least one computer language, JAVA is one of most popular
computer languages in Saudi Arabia. In addition, The Ministry of Labour has also
embarked on its plan to create a new information technology job and to qualify a
thousand employees.
2.7.1 Human resources
A skilled employee is important for the development of E-commerce

applications, and that in turn requires an educational infrastructure organized in the
direction of creating skilled and qualified employees in order to suit the enterprise of
E-commerce.
The literacy rate in Saudi Arabia is about 79%, and is considered too high in
comparison to neighbouring countries. Furthermore, about 22% of employees in
Saudi Arabia have higher education certificates and about 19 thousand are holders of
post-graduate degrees. The well-educated and trained employees gave Saudi Arabia
an advantage of being ready to establish an E-commerce environment.
Nowadays, there are 27 public and private universities in Saudi Arabia

offering degrees in different areas related to information technology, and that assist in
producing well qualified employees in the computer field. However, there are many
intermediate colleges and vocational institutions also graduating students with degrees
related to information technology. In my view, it is worth mentioning that the high
salaries and the small supply of information technology graduates could be considered
as a disadvantage to E-commerce implementation in Saudi Arabia.
2.8 Regulation and Deregulation
Customer protection and the global influence of regulatory systems indicate

that there is rising anxiety to present more regulation and particularly professional
guidance. Adam et al. (1999) confirmed that "Intellectual property, taxation, law

enforcement, ubiquitous cryptography, and contractual issues are all unsettled in the
growing E-commerce industry." These involve governments regulating E-commerce.
There are three issues which ought to be considered from a legal point of view: data
protection, computer crime, and copyright protection (Caelli, Longley, & Shain, 1989).
Data protection deals with an organization's legal responsibilities regarding the
storing and processing of personal data. Computer crime concentrates on illegal
computer use, implying the direct participation of computers in a crime. Copyright
protection focuses on ownership of intellectual assets, payment for use, and restricting
copying these materials (Caelli, Longley, & Shain, 1989).
The capability of law to keep up with the developments in technology is not

always adequate. The cultural differences between technological and humanistic
cultures normally produce a lack of education, especially when it comes to
understanding the law from different professions. Also, it is not easy to categorize
under which law a new technical product should fall (Saarenpaa, 1999).
2.8.1 Smart Card Project

Currently, recent technology has been demonstrated such as the smart card
which is rapidly growing around the world, because people appreciate their multiple
applications. They have a high storage capacity and a processor that allows each card
to execute some complex functions. Moreover, their virtual lifespan is reasonably
long. The Ministry of the Interior has taken a great concern in this technology in the
first years of its coming into being. The ministry executed the smart card project
which led to changing the traditional civil affairs ID with a smart card ID. Afterwards,
the project aims to integrate into one card, some of the other government cards such
as the driving license and family card. There is also the electronic passport application
which is considered a state-of-the-art technology solution worldwide.
2.9 Logistics
Saudi Post, UPS, Aramex, and DHL are the four authorised important logistics
in Saudi Arabia. Saudi Post handles and delivers goods and letters to any point in the
World. Recently, they established a new service with a new management to provide a
good service. UPS is a provider of express package delivery, freight forwarding,

logistics and other transportation services. Another authorized company is Aramex

which has a global network and spans more than 250 countries and is managed by
high technology and tracking systems. One of the most popular mail companies in
Saudi Arabia is DHL which is the global market leader of the international air
express industry. It offers express deliveries, as well E-commerce logistics solutions.
Furthermore, its network links over 120,000 destinations in 228 countries.
Mail systems in Saudi Arabia are understood to be slow and undependable.

Using this service with E-commerce would negatively impact the latter. In addition,
the address location system in Saudi Arabia is still not formed in an efficient and
useful way. Such adaptation or even a new system of marking the address location is
immediately required in order to facilitate E-commerce applications. Recently, Saudi
post established a new service which it called “Wasel” to deliver goods and letters to
their customer‟s home instead of collecting it from the local post office. This service
will cover the entire nation over the next five years.
Figure 2.2 Screenshot of the new Saudi Post home page
Although Saudi Arabia is a big country and covering a large area of the
Arabian Peninsula, I believe that E-commerce will be helpful to decentralization and
removing any geographical distances between companies and their consumers.
2.10 Successful E-commerce web sites in Saudi Arabia
Beside the successful online services which most Saudi Banks offer for their
clients, many large and leading Saudi companies in the oil, petroleum gas, and

petrochemical sectors have already introduced advances in E-commerce systems. For

instance, Sabic and Saudi Arabian Aramco which has established Internet Petroleum
Products Sales (IPPS) for Liquefied Petroleum Gas (LPG). This E-commerce
application automates the current manual LPG tender sales process, and the company
can thereby maximize productivity from the sale of propane and butane. IPPS allows
the companies marketing and sales department to electronically publish LPG sales
tenders to particular consumers and permits the customers to review published tenders
and submit offers and permits the company to inform consumers whether their offers
were received and accepted.
As a result of the opportunities obtainable by E-commerce, most major

companies in the oil, petroleum, and gas sector today consider E-commerce as a very
important business process; sharing information and knowledge tools for increasing
efficiency and productivity.
Online
services
link
Figure2.3 Screenshot of Saudi Aramco home page
Another successful electronic service is the E-omrah Project which is

presented by the Ministry of Hajj. This project aims to organize the procedure of
issuing Omrah visas electronically. Electronic visa applications are to be submitted
through the Internet to Omrah agents overseas. These applications will be
electronically processed by the Ministries of Hajj, Interior and Foreign Affairs. Visas

are thus issued within 24 hours. This service is presently used worldwide.
2.11 Experience of E-commerce and E-government in the Middle
East countries: the example of the United Arab Emirates
2.11.1 Background
United Arab Emirates (UAE) has the greatest telecommunication services

between neighbouring countries. It applies the newest technologies in telephone and
Internet services. The utilizing of credit cards and the Internet is increased; payment
gateways and on-line security solutions are accessible. Moreover, human resources
are having reasonable abilities in order to run E-commerce.
Oblivious of the fact that the E-commerce in UAE is suitable, minimal E-

commerce operations are occurring. Some companies and institutions have web sites,
but real on-line transactions are not happening to a large extent, either locally or
worldwide. In addition, some on-line stores are mostly for advertising and marketing,
it is one more approach to undertaking business.
The implementation of E-commerce in UAE is affected by many issues. One

of them is cultural resistance, which delays consumers in using the Internet for
business with the virtual market. Furthermore, language is considered another issue of
obstruction as local inhabitants relate more to Arabic web sites and that in turn
requires changing the language of foreign sites into Arabic. One more influencing
issue is trust, as many customers have lack of trust, and they are worried about using
credit cards and the leakage of their private information. In addition, there is the
absence of legal mechanisms to protect transactions and customers from on-line
fraudsters.
Dubai demonstrates enthusiasm towards E-commerce and E-government. The Dubai

government has launched three important initiatives (E-govUAE 2006):
(1) Dubai Internet City

Dubai Internet City is the first whole information technology and

telecommunications centre in the world that has been established within a free trade
zone. Dubai Internet City offers the latest, ready-to-operate, completely serviced
office space catering to the exact requirements of today‟s new economy companies.
Nevertheless, sales and incomes are exempt from any type of taxation.
Companies can also get land on rent of up to fifty years and build their own offices.
Sun Microsystems supplied the server platforms, cabling, and other related active
components. Furthermore, Siemens was the project integrator. Dubai Internet City is
the biggest information building in the Middle East region, and has the largest
generation Internet protocol telephony system in the world. Oracle, Microsoft and HP
have already identified their long-term objectives.
(2) E-government invitation

The E-government project aims to link all government agencies with each
other, as well as with citizens, via the Internet, in order to facilitate government
services. Some government institutes have already moved their transactions to the net;
they are offering E-services to their people such as traffic fines which can be paid via
the Internet by logging in to the Dubai Police Web Site.
(3) Tejari.com On-line shopping mall
Tejari.com is an E-business community that permits companies to do business

deals using all purchasing ways through the Internet. It allows companies to obtain
savings by increasing strategic initiation for most business requirements, and permits
companies to expand their market reach, enter a worldwide supply base and
immediately divide information.
2.11.2 Infrastructure
2.11.2.1 Telecommunications Access
The telecommunications infrastructure in UAE is known as the best along

with neighbouring countries. “Etisalat” is the only provider of telecommunications

access which is mainly managed by the Dubai government. This company is capable
of building an E-commerce environment. However, telephone services are high
quality and are accessible by realistic cost. It offers data services such as Electronic
Mail Network, Integrated Services Digital Network (ISDN); and the Asymmetric
Digital Subscriber Line (ADSL), as well as Asynchronous Transfer Mode (ATM).
Etisalat is the only Internet service provider (ISP) which provides a number of
services such as leased lines and web hosting services (E-govUAE 2006).
Recently, Etisalat has launched the “Comtrust” unit to offer an E-commerce

solution. It supplies technology that supports building trust and confidence between
the residents in E-commerce. Comtrust presented the proficient and cost-effective
technique of performing B2G and B2C. Comtrust offers secure E-commerce services
using digital signature and Public Key Infrastructure (PKI).
2.11.2.2 Financial Systems
Most UAE banks provide E-banking services for their clients. The Emirates
Bank International (EBI), which is 80% government owned, is the first bank in UAE
that provides full E-banking services and provides a payment gateway. However,
most banks still don‟t offer an Internet payment gateway.
2.11.2.3 Government legislation
Despite the complete infrastructure presented to provide E-commerce, there

are no new laws and legislations that are in force to govern E-commerce. New laws
and regulations are required in order to employ E-commerce. In addition, the Central
Bank is having a plan to present a law to manage payment and regulate E-commerce.
2.11.2.4 Logistics
Logistics services in UAE might be ranked at a high level. The delivery of

mail and goods are attained by advanced cargo and custom services where customs
and cargo procedures are carried out electrically. This consecutively meets the needs

of E-commerce delivery of goods and services. On the other hand, the Department of
Post and Customs in Dubai has moved from a paper-based institution to computer
based. “E-Mirsal” is a web-based application that has been introduced at the
Department of Post and Customs. “E-Mirsal” contacts with the Department of Post
and Customs by air, sea and land cargo agents.
2.11.2.5 Human Resources
The government of Dubai has launched Internet University that offers courses
in E-commerce and some other related courses in order to build up good skills in the
computer world. This will make IT qualified people available at any level.
Furthermore, some colleges and vocational schools offer E-commerce courses in their
programme of study. Nevertheless, the IT technicians in UAE are mostly from India.
2.12 Summary of the Literature Review

In this section, a brief summary of the “Literature Review Chapter” is

presented. The literature review is mainly focused on Internet and E-commerce, and
the main barriers facing adoption of E-commerce in Saudi Arabia. Thus, the literature
review chapter is arranged as follows. An introduction to this chapter is presented in
the first section and the second section considers the Internet and E-commerce, an
introduction to E-commerce, technologies of E-commerce, major types of E-
commerce, benefits of E-commerce, limitations and barriers to E-commerce and the
risk of adopting E-commerce. This section has been finished by underlining the trust
of online transactions. In the second section, there is the impact of globalisation on E-
commerce, followed by the Socio-cultural changes, covering the history of the Saudi
Arabian financial systems, and the role that they instituted, take a signification part in
this chapter. The telecommunications access and connectivity is discussed in the sixth
section which is followed by an overview of the Education systems plan. In the next
two sections are Regulation and Deregulation and Logistics. Next, the successful
experiment of E-commerce in Saudi Arabia which was provided by Saudi Aramco,
the leading company in the oil sector, finally, the experience of E-commerce and E-
government in the Middle East countries, using the example of the United Arab
Emirates.
Aarabi N., Bromideh A., (2006). The impact of e-commerce on the Iranian insurance
Adam. N. R., Dogramaci, O., Gangopdhyay, A., & Yesha, Y. (1999). Electronic
Commerce, Technical, Business, and Legal Issues. New Jersey: Prentice Hall PTR.
Al-Furaih, I. (2002). Internet regulations; the Saudi Arabian experience. Retrieved

July 8, 2006, from http://inet2002.org/CD-ROM/lu65rw2n.
Almogbil, A. (2005). Security. Perceptions and Practices: challenges facing adoption

Alyabis, F. (2000). Examining the impact of Internet electronic commerce on

commercial organizations in Saudi Arabia. Ph.D. Dissertation. University of Northern
IOWA, December 2000

Caelli, W., Longley, D., & Shain, M. (1989). Information Security for Managers. New
York: Macmillan.
Capurro, R. (2000). Ethical challenges of the information society in the 21st century.
International Information and Library Review. Retrieved July 10, 2006, from
http://www.capurro.de/EEI21.htm
Cornall, Monica J; Jolif, Nicolas; Anirnashahun. Ade H; Athwal, Gurpreet S., (2000).
“E-Actuaries,” Presented To the Staple Inn Actuarial Society. Retrieved from
http://www.sias.org.uk/papers/e-actuaries.pdf
E-govUAE (2006). E-government in UAE Retrieved Aug 16, 2006, from

http://www.government.ae/gov/en/index.jsp
Ghashghai, E. & Lewis R. (2002). Issues Affecting Internet Use in Afghanistan and
Developing Countries in the Middle East. RAND. Retrieved July 11, 2006, from
http://www.rand.org/publications/IP/IP231/
Hall, P. (1999). Software Internationalization Architectures. Decision Support

Systems for Sustainable Development in Developing Countries. G. E. Kersten, Z.
Mikolajuk and A. Yeh, Eds., Boston, Kluwer: 291-304.
ISO 7498-2. (1989). Information Processing systems -Open Systems Interconnection-

Basic Reference Model - Part 2: Security Architecture, International Standards
Organization
Jordan Times. (2001). Arab banks facing the challenge of online banking. 10 June.
Retrieved July 14, 2006, from http://www.jordanembassyus.org/06112001003.htm
Keniston, K. (1999). "Language, Power, and Software." MIT Program in Science,
Technology, and Society, Retrieved July 12, 2006, from
http://stuff.mit.edu/people/kken/papers1/Language%20Power%20Software.htm.
Money and Banking. (1992). Country Study & Country Guide for Saudi Arabia.
(December).
Moodley, Sagren, (2003)."The Status of B2B E-Commerce in the South African

Manufacturing Sector: Evolutionary or Revolutionary?" The Southern African
Journal Of Information And Communication, Issue No 3.
MsMoney.com. (2002). What is Internet Banking? Retrieved July 8, 2006, from

http://www.msmoney.com/mm/banking/onlinebk/what_is.htm
OECD, (2000). "E-Commerce: Impacts and Policy Challenges," Organization for

Economic Co-operation and Development, OECD Economic On-look.
Saarenpaa, A. (1999). Law, Technology and Data Technology. Judicial Academy of

Northern Finland. Retrieved July 7, 2006,
from http://www.urova.fi/home/oiffi/julkaisut/lawtech.htm

SwissRe, (2004). "World Insurance in 2003: Insurance Industry on the Road to

Recovery," (New: Statistical Appendix, Updated February 2005), Sigma No. 3. Zurich.
Taylor, D. (1992). Global Software. Developing Applications for the International

Market. New York, Springer Verlag.
The World Bank. (2000). Poverty in Age of Globalization. Retrieved July 16, 2006,
from
http://www1.worldbank.org/econmipolicy/globalization/docuuments/povertyglobaliza
tion.pdf
Tokuro. Matsuo, (2003). ''A Study on Electronic Commerce Support Systems Based
On Users' Preferences", Msc. Dissertation, the Japan Advanced Institute Of Science
and Technology
Turban. E. And King, D., (2003). "Introduction to E-commerce," Prentice

Hall USA. 61- Turban. E., King; D., Warkentin, M. And Chung, H. M., (2002),
"Electronic Commerce: A Managerial Perspective" International Edition,
Prentice Hall, USA.
U.S.-Saudi Arabian Business Council. (2002). the Saudi Arabian Economy. Retrieved
July 8, 2006, from http://www.us-saudi-business.org/015-052_Chapter%202.pdf
Wakefield, R. L. (2001).A Determination of the Antecedents of Online Trust and

Evaluation of Current Web Assurance Seals. Ph.D. Dissertation. The University of
Mississippi. May 2001.
Wang, S. (2001).Individual/ Organization Characteristics and Intension to Adopt

E-Commerce: A Study Based on Innovation Adoption Theory. Ph.D. Dissertation, the
Chinese University of Hong Kong. July 2001.
Werner, Ulrich, (2003). ''Business Information and Communication Systems."

Outward Oriented Information Systems. Retrieved July 10. 2006. from http://
www.ulrichwerner.com/ba303/documents/71.html.
Wigand. R. T. (1997). "Electronic Commerce: Definition, Theory and Context"

The Information Society, 13 (1), 1-16.
Yang, Z. (2001). Measuring e-service quality and its linkage to customer loyalty.
Ph.D. Dissertation. New Mexico State University, December 2001.
Yusuf, S. (2001). Globalization and the Challenge for Developing Countries, World
Bank, DECRG, June 2001. Retrieved July 7, 2006, from
http://econ.worldbank.org/files/221/0_wps2618.pdf.

Fahad Alharby Chapter 3 Research Methodology
RESEARCH METHODOLGY
3.1 Introduction
This chapter deals with the methodology planned for the existing study. Through this
chapter, I summarize the methodology to be used in this research and the hypothetical
basis behind the approaches and their definitions for the understanding of the readers.
It begins with the intention of applying research methodology in this study, followed
by the associated methods and techniques used for the gathering data. The
methodology chapter includes discussion research design and approach, research
strategy, research design, and finally reliability and validity.
3.2 Research Approach

While the most important purpose in this research is to obtain a general view
of the major barriers facing E-commerce implementation in Saudi Arabia and in
particular, to what extent the Saudi society will be affected by adoption E-commerce
technology and their readiness. I am concerned in knowing further about what
different aspects associated to E-commerce. These ambitions may indicate that I
should use questioner and address a small population in order to express and evaluate
different factors controlling this embracement of E-commerce in Saudi Arabia. Thus
of these explanations, a questioner is satisfying this research requirements, while I
carry out study on figures not on behaviours. So, the research purpose and research
question reveal that the research in this study is principally descriptive and rather
clarifying, as it is my objective to explain the area of research and draw some
conclusion and recommendation from the collected data. It is descriptive as I would
attempt to give explanation the findings by answering the research question.
3.3 Research Strategy

Research question are considered the most central condition for differentiating
with different strategies. “What”, “where”, and “who” questions are probable to
favour survey, histories and conduct experiment as the favourite research strategies.
Nevertheless, the intention of this research is to answer this question: What are the
barriers and challenges facing E-commerce and E-government in Saudi Arabia? Due
to this fact a survey is anticipated as the research strategy. Furthermore, while the goal

of this research was to gather the answers from small sample of middle class family in
Saudi Arabia, I have essentially chosen questioner as a research strategy.
3.4 Research Design

Developing the research design is the next step. A research design is the logic
that links the data to be collected and conclusion to be drawn to the preliminary
question of the research (Yin 2003). It is a preparation by which the approach is to be
conducted.
3.4.1 Type of Data
In general, there are two types of data used in researches. At first, primary data
which is known as data that is collected for a particular study, mainly in response to
an exacting problem, for the first time. While secondary data is the data that already
exists, like literature review, which has been earlier assembled for some studies
(Aarabi N., Bromideh A., 2006). In my point of view, the most common method of
collecting primary data is during both methods surveys and literature review.
However, this research used both methods to gather primary data.
3.4.2 The Questionnaire

There are two essential requirements for the questionnaire. These are
relevancy and accuracy. Designed for a questionnaire to be relevant, just required data
is gathered. Accuracy is acquired by having as high validity and dependability as
probable (Zikmund 2003). Once designing the questionnaire, lots of attempt was set
into the use of language, hence that technological terminology used would not be
transferred into the questionnaire. The respondents, who were a sample middle class
Saudi family, could become confused if the terminology used were to lie outside their
knowledge.
3.4.3 Sample Selection
The people selected to respond to a questioner are a critical component of any

research. They are typically called a sample, which is a smaller group selected from a
larger population. The target sample of this research is a middle class Saudi family. This
population consists of twelve members.

3.5 Reliability
Reliability means whether the research tools which are the questionnaire are
unbiased in their outcome, and be able to evaluate the similar result when used on the
occasions and applied on the similar issue of object. Moreover, a good quality level of
reliability means that the research tools present the same data time after time on each
occasion that it is used. As we know, this dissertation started with an extensive
literature review. The literature review came across several relevant articles was from
several authors doing a research in E-commerce issues, which meant that I covered
the area of E-commerce surroundings. This would recommend that bias, by looking
only one writer and reading only about one subject, be held at a minimum level.
4.6 Validity
The validity feature revolves around how good the questionnaire is capable to
calculate what it is intended to calculate. It is significant that the validity is good
quality, because if the study does not measure what it is supposed to measure, the
results are useless. Focusing on the content of the questions was done to improve the
validity. Each question and its relevant items were subject to examination in sequence
to observe if it was necessary to ask it. As the length of the questioner was important,
I had to prioritize the questions. In sequence to present the respondent with an easy
start, I put questions of general nature at first. These questions explain the
respondents' position, such as background information, which they simply could
answer. Following to this beginning I asked about their views about E-commerce
implementation in their country.
Finally, I have presented the questionnaire on experience researchers, such as

my supervisor who had quiet a long experience in research, to make this questioner
more reliability and validity. As well I tried to avoid any sort of biasness and to be
very objective.

rd
Yin, Robert, K., (2003). “Case Study Research: Design and Methods,” 3 edition,
Thousands Oaks California: Sage Publications.
Zikmund, William, (2003). “Essentials of Marketing Research,” USA: Thompson

South-Western.

Fahad Alharby Chapter 4 Data Presentation
DATA PRESENTATION
4.1 Introduction
The main spotlight of this chapter is on data presentation, data analysis and results of
the questionnaire about the major obstacles of adoption of E-commerce in Saudi
Arabia. The structure of the current chapter will be based on the sequential order of
the questionnaire in order to present the data at hand and provide the results of the
questionnaire. This chapter includes the answers to all questions cited in the
questionnaire. I will follow the structure of the questionnaire and I will present each
part separately in different sections. Tables and figures will be used to make data
easy to understand and better to compare.
4.2 Part one: personal profile

In this part, I have asked the respondents to give us their socio-demographic
information. Three items were included in this part and the main idea of this section
was to describe the personal profile of the sample. These included: gender, age, and
education level. In the subsequent section I will explain them further.
4.2.1 Gender and age

In this part, there were two items which are the gender and the age of
respondents. The distribution over the samples is shown in Figure 4.1 which shows
the total distribution of the respondent‟s ages.
30%
25% Under 18
18-25
20%
26-35
15% 36-50
10% Over 50
5%
0%
Figure 4.1: Total age distribution of respondents

The average age of respondents of this questionnaire is about 28 years. And I
got responded from six men and six women. The distribution of males and females in
this questionnaire reflects the distribution of the inhabitants of Saudi Arabia.
According to the last census which was published on the ministry of planning Web
site (www.planning.gov.sa/statistic), the percentage of men and women respectively
is 52% and 48%, and more than half of the population is under 25 years old.

4.2.2 Education level

An educational level of the respondents is the other item, which is
incorporated in the first part of the personal profile. In general, the level of education
varies from pre secondary to postgraduate. In this questionnaire, about 50% of the
respondents are University students, in both male and female groups. Moreover, more
than 17% of the respondents are post-graduate. Figure 4.2 visualizes the level of
education in the sample.
Postgraduate
17% Pre secondary Pre secondary
25% Secondary
University
University Secondary
8% Postgraduate
50%
Figure 4.2: Distribution of the educational level of respondents
4.3 Part two: attitudes and views

Four questions were integrated in this part. I have asked the respondents to
give us information about their attitudes and views toward E-commerce and their
familiarity with it. Essentially, this part focused on the attitude of the respondents to
the effects of E-commerce on their society, their awareness of E-commerce, the
importance of E-commerce to their society and to what extent they are acquainted
with the perception of E-commerce. In the following section I will discuss each of
these further.
4.3.1 Familiarity with the concept of E-commerce

In general, all participants of this survey are familiar with the Internet by
spending at least 13 hours per week on the Internet, whether using a broadband or
dial-up connection. The second item in this part was the assessment of the familiarity
of the respondents and their acquaintance with E-commerce in general. In other words,
to what extent the respondents are familiar with the concept of E-commerce. Figure
4.3 visualizes answers to this question.

Very Much
Much
So-so
Low
Very Low
0% 20% 40% 60% 80% 100%
Figure 4.3: Respondents' familiarity with E-commerce
By looking to Figure 4.3, about 75% of respondents are somewhat familiar

with the concept of E-commerce. While approximately 25% of the respondents
declared that the extent of their familiarity with E-commerce is low or very low.
4.3.2 Effects of E-commerce on Saudi society

The third item in this part concerns the effects of E-commerce on their society
from the respondents‟ point of view. The main idea behind this question was to know
what they believed about the general effects of E-commerce on Saudi Arabia. In other
words, to what extent will E-commerce affect our society? The respondents‟ answers
to this question are shown in Figure 4.4.
Very Much
Much
So-so
Low
Very Low
0% 20% 40% 60% 80% 100%
Figure 4.4: effects of E-commerce on Saudi society
According to Figure 4.4, about 70% of respondents believe that E-commerce

will strictly affect their society, and none of them rated this effect as low. In general,
the majority have perceived similar effects of E-commerce on their society.

4.3.3 Perception of E-commerce in Saudi Arabia

Clearly, E-commerce can be considered as an opportunity, a challenge or even
a threat to any society. It is strongly based on many aspects, for example, people‟s
competitiveness and their capability and compatibility with this new business tool. In
this research I have asked respondents to answer this question for their society. In
other words, is E-commerce an opportunity, a challenge or a threat?
According to Figure 4.5, about 33% of the respondents look at E-commerce as

an opportunity for their society, about 25% of respondents found it a threat, whereas
17% of respondents perceived it as a challenge to their society.
Threat 25% Opportunity

Ambiguous 8%
Challenge
I don't know 17%
Threat
Challenge 17%
Ambiguous
Opportunity 33% I don't know
Figure 4.5: the perception of E-commerce to the Saudi society
4.4 Part three: infrastructure requirements

In this part, the level of the necessary infrastructure and equipment which are
essentially required in the running of E-commerce will be evaluated in the
respondents' questionnaire. In fact, the respondents are asked to answer this question:
to what extent are you equipped to implement E-commerce for each item listed, i.e.
hardware and software, Internet access and Information technology skills? The
responses of respondents to these three important infrastructures are shown in Table
4.1:
Infrastructures Very Very

Much So-so Low Total
much low
Requirement
Hardware and 17% 42% 33% 8% 0% 100%
Software
Internet Access 8% 42% 8% 42% 0% 100%
Information 8% 58% 25% 8% 0% 100%

Technology skills
Table 4.1: Infrastructure requirements for E-commerce deployment

According to Table 4.1, the respondents' are generally well equipped with
hardware and software. Internet access seems to be a threat for 42 % of respondents to
be equipped for E-commerce. Respondents are remarkably well equipped with
information technology skills.
4.5 Part four : major obstacles

In this part, major obstacles and barriers for the adoption of E-commerce in
Saudi Arabia were questioned. In this question, I listed 12 major obstacles and asked
the respondents to evaluate these items according to their point of view. The question
was: to what degree will each of these items delay deployment of E-commerce in
Saudi Arabia?
Table 4.2 shows the respondents‟ answers to this question. Overall, lack of
appropriate legislation and regulation such as digital signature the lagging of
telecommunication technology, Internet access cost, security and privacy reservations,
and logistics, are the five top obstacles for Saudi society to embrace E-commerce.
Furthermore, this table gives more details on theses barriers. It also makes it easier to
evaluate the effects of these items.
Major obstacles Very much Much So-so Low Very low
Lack of appropriate legislation 33% 50% 13% 0% 0%
and regulation
Lagging of 50% 50% 0% 0% 0%
telecommunications
technology
Security and privacy 67% 33% 0% 0% 0%
reservations
Internet access cost 8% 67% 25% 0% 0%
Logistics 33% 42% 25% 0% 0%
Low intention to buy online 42% 8% 25% 8% 17%
and inflexible resistance to
change
Non-conformity of current 33% 33% 17% 8% 8%
products and services to
online offers
Traditional attitudes and views 8% 17% 25% 42% 8%
about the companies and the
movement of Globalization
Scarcity of IT staff 17% 50% 8% 17% 8%
English Language problem 33% 25% 17% 0% 25%
Lack of IT skills 8% 0% 8% 50% 33%
Complicated to evaluate 27% 27% 36% 9% 0%
products and services online
Table 4.2: Major Obstacles hindering Saudi Arabia to embrace E-commerce

On the other hand, by answering questions seven and eight, about 52% of
participates believe that Western vendors such as Tesco, Pc-World and Amazon are
more trustworthy, while 30% have no special preference for any particular vendors.
Just 25% preferred using an English language web site.
4.6 Perceived benefits

In the final part, the perceived benefits and advantages of adoption of E-
commerce in Saudi Arabia were the main questions to be asked from the respondents.
In this question, five significant benefits were given to the respondents. In fact, the
question was stated as: in the case of implementation of E-commerce, how many
benefits will you and your society obtain? Respondents' perceived benefits from E-
commerce deployment are shown in Figure 4.6.
Job enhancement and high efficiency

Very much
service available 24 hours a day / 7 days a week Much
More transparency and speed of claims management So-so
Increase of sale volume Very Low
Promotion enhancement with lower cost Low
0% 20% 40% 60% 80% 100%
Figure 4.6: Total perceived benefits of E-commerce implementation in Saudi Arabia
Service availability twenty fours hours a day / seven days a week and
promotion enhancement with lower costs are the most important benefits from E-
commerce implementation in Saudi Arabia from the respondents' point of view.
Nevertheless, all of the respondents' answers for the benefits of E-commerce
implementation in Saudi Arabia are given in Table 4.3, which makes the comparison
of attitudes toward these benefits between the questionnaire respondents' easier.
Perceived Benefits Very much Much So-so Low Very low
Promotion enhancement with 25% 67% 8% 0% 0%
lower cost
Increase of sales volume 8% 50% 42% 0% 0%
More transparency and speed of 17% 42% 33% 8% 0%
claims management
Service available 24 hours a day / 58% 42% 0% 0% 0%
7 days a week
Job enhancement and high 17% 42% 42% 0% 0%
efficiency
Table 4.3: perceived benefits of E-commerce implementation in Saudi Arabia

4.5.1 Readiness for E-commerce implementation
At the end of this questionnaire, the last question was intended to summarize
the respondents‟ overall attitudes toward the implementation of E-commerce in their
society. In other words, with respect to all questions cited in this questionnaire, to
what degree their society is ready to implement E-commerce. The question was stated
as: overall, to what extent is your society ready to embrace E-commerce? The
respondent‟s responses to this question are shown in Figure 4.7.
Very Much
Much
So-so
Low
Very Low
0% 20% 40% 60% 80% 100%
Figure 4.7: Readiness for E-commerce implementation
The graph shows that about 59% of the respondents believed that their society
is “very much” and “much” ready to embrace E-commerce with no participant‟s
feeling that their society is not ready to embrace E-commerce.

Fahad Alharby Chapter 5 Data Analysis
DATA ANALYSIS
5.1 Introduction
In the previous chapter, the data collected in this research was presented. Thus, in
order to complete the data analysis, this chapter is devoted to analysis and
interpretation of the quantitative data collected by the questioner in this study. In
order to solve the research problem and answer the research question, in this chapter
analyses are structured on the basis of the research question that guide us to explain
the study problem. Therefore, I have structured this chapter in six sections. This
chapter begins with a review of the research question and research problem. The
second section is devoted to the analysis of the second questionnaire part labelled
"attitudes and views to E-commerce in general”. The analysis and answers to the
third questioner question about infrastructure requirements will be presented in the
third section. Major obstacles and barriers ahead in implementation of E-commerce
in Saudi Arabia, which is the fourth part, will be additionally analyzed in the fourth
section. Finally, the last section concerns the analysis of the fifth part concerned with
the supposed benefits required from implementation of E-commerce in Saudi Arabia.
5.2 A review of the research question

The barriers and obstacles of implementation of E-commerce in Saudi Arabia are
the subjects of intense debate in the information technology society. The extent of E-
commerce adoption in Saudi Arabia remains unclear, which is the main focus of this
research. In addition, as discussed in the previous chapters, this research is planned to
address the main question which is “What are the barriers and challenges facing
adoption of E-commerce and E-government in Saudi Arabia”.
In consequence, to accomplish this point, I have made an effort to illuminate:

attitudes and views towards adoption of E-commerce, infrastructure requirements,
major obstacles, and benefits of implementation of E-commerce from the respondents'
point of view. Thus, depending on this background and the main purpose of this
research, the questionnaire has its basis in five parts.
With respect to the intention of this research and the research question, in the
following sections I aim to analyze and interpret the data presented in chapter four to
answer the research question. Analysing and interpreting the data and discussing the
literature review enable me to draw conclusions.

5.3 Attitude and views to E-commerce
To know the respondents' attitude towards E-commerce, I have to clarify

peoples' awareness concerning E-commerce. In order to attain this point, I include and
simplify these questions from the respondents' opinions:
To begin with, it is significant to identify to what extent they are acquainted

with the concept of E-commerce. In other words, are the participants familiar with E-
commerce? Clearly, they are able to obtain the linked information during a variety of
materials such as training programmes, courses, workshops and self-study.
By reviewing the information presented in section 4.3.1 in chapter 4 it can be

shown that about half of the participants have measured their expertise with the
concept of E-commerce as "much" and "very much,". In contrast, the "so-so" answer
has been made 25 percent overall. As well, less than 25 percent of the participants are
not acquainted with the concept of E-commerce and they have considered themselves
as "low" and "very low" in response to this question. Therefore, the majority of
respondents are acquainted with the concept of E-commerce.
The following item connected to this question is the effects of E-commerce on

Saudi society in general. In other words; to what extent will E-commerce affect our
society? An outline of the information provided in section 4.3.2 of chapter 4 is given
as approximately 60 percent of the participants have found that E-commerce will have
an effect on Saudi society. Around 17 percent of the respondents consider that E-
commerce will affect their society "very much" and roughly 42 percent of the
respondents expected that the effect of E-commerce on their society would be
"much." In contrast, just about 17 percent of the respondents declared that the effect
of E-commerce in Saudi society would low.
At the end of this part is the role of E-commerce in general. In reality, what
they believe regarding the position of E-commerce in the respondents' point of view.
Is it an opportunity, a challenge, a threat or are respondents ambiguous? Figure 4.5 in
chapter 4 affords the summing up of the participants‟ views. About 33 percent of the
participants think that E-commerce is an opportunity for their society, 25 percent of
them look at E-commerce as a threat for their society, and 17 percent find it a

challenge. Just about 8 percent of the respondents believe that E-commerce is an

ambiguous issue for their society.
Therefore, analyzing the related data for the second part, I can conclude that
Saudi society have optimistic attitudes and views towards the concept of E-commerce.
Moreover, they are well up to date and acquainted with E-commerce. Beside that,
they find that E-commerce will affect their society. While over one-third believed it is
an opportunity for their society if they embrace E-commerce implementation.
5.4 Infrastructure requirements

The following part is to assess the participant‟s ability regarding E-commerce
implementation which has been asked about in the third part of the questionnaire. In
fact, to answer the question: to what extend are you equipped to implement E-
commerce for each of the items listed below? I have categorized the essential
elements of infrastructure requirements in three groups as:
 hardware and software
 internet access
 Information technology skills
To attain the purpose of this part, I have tried to illuminate the items cited
above from the respondents' opinion and what they accurately think about them. By
looking at the information which was provided in section 4.4 in chapter 4, it indicates
that the participants are well equipped with hardware and software. Overall, just about
8 percent of the respondents feel that they are low and very low in hardware and
software infrastructures.
Internet Access is the second item in the infrastructure requirement

assessment. Table 3.1 in chapter 4 shows that roughly half of the participants have
assessed their Internet access as "low" and "very low," whereas the same percentages
evaluate themselves as " much" and even " very much."
The information technology skills are the third infrastructure required in E-

commerce implementation. Looking back to table 3.1 in chapter 4, approximately 66

percent of the respondents show that they are well skilled in information technology,
in general. Almost 33 percent of the respondents are concerned about the lack of
information technology skills.
5.5 Major obstacles
The fourth part in this study looks at the major obstacles and barriers which
may delay the Saudi society in embracing E-commerce. In particular to answer this
question: to what degree will each item delay deployment of E-commerce in your
society? I needed to recognize the barriers and so, requested the respondents to decide
to what degree these barriers will delay deployment of E-commerce in their society?
Based on the literature review and introductory study to investigate a full list of
possible obstacles and barriers to E-commerce implementation, a list of twelve major
obstacles were decided:
 Lagging of telecommunications technology
 Lack of appropriate legislation and regulation
 Security and privacy reservations
 Internet access cost
 Logistics
 Low intention to buy online and inflexible resistance to change
 Non-conformity of current products and services to online offers
 Traditional attitudes and views about the companies and the movement
of Globalization
 Scarcity of IT staff
 English Language problems
 Lack of IT skills
 Too complicated to evaluate products and services online
A review of the information provided in part 4.5 in chapter four indicates that
lagging of telecommunications technology to facilitate E-commerce is the most
important issue which will delay Saudi society to embrace E-commerce. Nearly all of
the respondents believe that lagging of telecommunications technology is hindering
E-commerce deployment in Saudi Arabia. The second highest mean value is "lack of

appropriate legislation and regulation". Approximately 33 percent of the respondents

graded it as "very much" and 50 percent as "much" for E-commerce deployment. In
total, 83 percent of the respondents agree that this barrier will hinder E-commerce
development.
In general, the main and basic elements in the implementation of E-commerce

in every society or business are online banking, telecommunication infrastructure and
appropriate regulation. Theoretically, without any telecommunication support to
provide and develop high quality Internet services, online banking to make accessible
electronic payments and, in the end, appropriate legislation and regulation to protect
copyright and digital signature, no business can initialize and deploy any electronic
business. Incompetence in each of them will certainly stop E-commerce applications.
Furthermore, security and privacy reservations, logistics, Internet access cost,

non-conformity of current products and services to online offers, low intention to buy
online and inflexible resistance to change are the next most important obstacles which
may obstruct E-commerce deployment.
Almost all of the respondents are concerned about security and privacy
reservations. In addition, over three-quarters of respondents are suffering from
problems with logistics services and thus, this is the fourth major obstacle in the
respondents' opinion. Non-conformity of current products and services to online
offers are the next major obstacles which are highly expressed by about 66 percent of
the respondents. In contrast, about half of the respondents have found that low
intention to buy online and inflexible resistance to change and adapt with the culture
needed for E-commerce implementation are other major impediments which can
disadvantage E-commerce deployment.
Even though most of the new generation in Saudi Arabia know the English
language they still prefer Arabic web sites. Almost two-thirds of the respondents
chose an Arabic web site interface and about 8 percent of the respondents do not have
any problem using dual language web sites. Western vendors such as Tesco, Wall
Mart, PC-World and Amazon are becoming more trusted than Arabic vendors by 58
percent of the respondents.

To sum up, the majority of the respondents consider that these twelve major
barriers will delay E-commerce implementation. They have the same opinion on most
of them although the intensity of agreement is somewhat different.
5.6 Perceived benefits
The fifth part of this research concerns perceived benefits wanted from
implementation of E-commerce. This question was asked: in the case of
implementation of E-commerce, how many benefits will you and your society obtain?
To obtain an answer to this question, I have selected the top five benefits of E-
commerce. These are listed below:
 Promotion enhancement with lower costs
 Increase in sale volume
 More transparency and speed of claims management
 Service available 24 hours a day / 7 days a week
 Job enhancement and higher efficiency
Therefore, I asked the respondents to evaluate these five major benefits of E-

commerce. In other words, to what extent they believe that their society will
accomplish these benefits if their society goes through to E-commerce.
Overall, almost all respondents think that in the case of E-commerce use, they
will enjoy the availability of services 24 hours a day / seven days a week. Thus it is
regarded as the most significant benefit sought from E-commerce, and is among the
top benefits. The next most significant benefit according to the respondents‟ point of
view is promotion enhancement with lower costs. Almost 92 percent of the
respondents state that it is a very essential benefit for them in the case of E-commerce
implementation. Conversely, as few as 8 percent of the respondents believe it is less
important to them and should be considered as the second most important benefit.
Almost 59 percent of the respondents declare that job enhancement and high
efficiency would be another benefit for their society if they embrace E-commerce by
choosing “very much” and “much”. On the other hand, just 42 percent of the
respondents are in doubt that E-commerce would cause optimistic results for job

enhancement and higher efficiency.
Nearly 59 percent of the respondents judge that implementation of E-

commerce will bring more transparency and speed of claims management which will
build a high-quality service and a good relationship between customers and business
owners. Increase in sale volumes is another benefit of E-commerce implementation.
Roughly 58 percent of the respondents agree with this benefit, and they believe that
E-commerce can raise sales volume.
In brief, the majority of respondents have the same strong opinion on these
five top benefits. Indeed, in the case E-commerce implementation, Saudi society will
acquire the advantage of all the benefits. As a result, these five top benefits can be
sorted below according to the respondents' highest agreement from the highest
perceived benefits to the lowest benefits:
 Service available 24 hours a day / 7 days a week
 Promotion enhancement with lower costs
 Job enhancement and higher efficiency
 More transparency and speed of claims management
 Increase in sale volume
5.7 Readiness for E-commerce implementation
In general, the readiness for E-commerce implementation contrasts and is

firmly based on several issues bounded by the society. With all respect to these issues,
I asked the respondents to answer the final question concerning their readiness for E-
commerce implementation. Hence, in this research, the final question in the
questionnaire is: overall, to what extent is your society ready to embrace E-
commerce? Overall, more than half of the respondents believe that their society is
ready to embrace E-commerce. By contrast, over one-third of the respondents do not
believe that their society is capable of embracing E-commerce, and thus, they believe
that their society is not prepared to implement E-commerce applications well.

Fahad Alharby Chapter 6 Conclusions and Recommendations
CONCLUSIONS AND RECOMMENDATIONS
In the previous chapter I analyzed the data collected by questionnaire in this study. In
this chapter, I will present the conclusions drawn from the analysis achieved in this
research. Findings will initially be presented in a general discussion, dealing with the
areas of the most barriers to implement E-commerce. However, in this final chapter,
general conclusions will be drawn. Finally, at the end of this chapter I will also give
some further recommendations for future research.
Studying the barriers of E-commerce and the use of E-government in Saudi

Arabia, it can be easily conclude that the main bottleneck of developing E-commerce
is none of the technical difficulties other than the regulations and logistics. While in
traditional commerce, the private sector should present control for the expansion and
improvement of E-commerce, as well as the establishment of dependable and
trustworthy business practices for performing business activities in the new era of
technology. Government should build a positive environment for open and reasonable
contribution in E-commerce. In addition, the Government should support technical
services and infrastructure improvements that will lead to the establishment and
implementation of E-commerce.
The regulations and legal system and international agreements between

countries, should be familiar to accommodate E-commerce. Laws must be established
and be compulsory to avoid cyber crime, for instance money laundering, violation of
intellectual property rights, respect of copyright regulations, certifying customer
protection, and education and training should be initiated to enhance digital literacy
among all citizens is crucial, in addition to research and development in the field of
information technology. The Saudi Government can take a significant responsibility
in ensuring that main stakeholders are completely involved in conducting E-
commerce.
In spite of the important role of government in the implementation of E-

commerce, much of the required investment requests must be approached from the
private sector. Experiences confirm that the private sector has been the most

innovative player and the most important driving force towards building E-commerce.
Overall, the modalities of technical application to business activities are more
powerfully determined by the market than by government. Nevertheless, an E-
commerce strategy that combines public intervention with private sector enterprise in
a commonly encouraging way is the simple practical one. The following
recommendations should cover the most important factors of E-commerce
implementation:
1. Government regulation
Regulation should intend to present legal security and technological and
commercial neutrality in addition to removing obstacles to using E-commerce and E-
government services. Some regulations which must be valid include:
 Certifying that online transactions are legally valid.
 Performing legislation to make sure that electronic signatures can be used with
legal effect.
 Enacting legislation relating to computer crime.
 For high-quality preparation of E-commerce, making guidelines and codes of
conduct is very important.
 Making compulsory, intellectual property rights, copyright policy and patented
ideas.
 Enacting regulations in the field of information protection and privacy.
2. Telecommunication and Internet access
A high priority for Saudi Arabia is to ensure that their citizens have access to
the Internet at a reasonable cost. That means that the Saudi Government, in
collaboration with other stakeholders must:
 Ensure that telecommunication services and Internet access is accessible in all

the country.
 Improve the quality and service of telecommunication companies.
 Control Internet and telecommunication services tariff prices.
 Create E-payment gateways and platforms in association with the financial
system.
 Ensure secure hosting facilities.

3. Education and training

Unless businesses and customers are educated about the opportunities and
benefits offered by E-commerce and E-government services, E-commerce will not be
launched. It is necessary to create a demand for E-commerce by:
 Education and training in efficient use of new technologies.
 Educating teachers and increasing Internet access and computers in schools.
 Ensuring professional information technology training programmes at
universities and technical colleges.
 Government should encourage demand for digital information exchange by
providing information and services online.
 Supporting the private sector, in particular small and medium enterprise, in
using E-commerce, such as: financial aids and loans to use E-commerce
applications, development of web sites, etc.
The E-commerce implementation and development process in Saudi Arabia

should have two main factors present in order to accomplish a satisfactory usage level:
free and fast Internet access and more security regarding the confidentiality of
transactions and web sites. No doubt, some factors either advance or delay Internet
access development. Logistics, education, culture or language should be analyzed in
order to realize the diversities in using the Internet around the world especially in the
developing countries of the Middle East.
While the technology to implement E-commerce is developing quickly, with

advances in wireless technologies and high-speed Internet, it is the social and legal
issues, which will possibly cause the most barriers. Working on a worldwide basis
via the Internet creates major legal ambiguities, which are a challenge for government
to regulate. Provided that these challenges are recognized then I believe the future will
be bright for E-commerce. From the social aspect, E-commerce can have many
advantages, such as working from home avoiding the bother of car parking, long
queues, and more choices available. Though with this, social interaction becomes less
and less. To sum up, E-commerce is here to stay and provided its place in business is
recognized and implemented correctly then it can prove a valuable asset to any
business.

6.1 Recommendations for Further Research
The limitation of this research and its findings should be noted with a view to
extending the present study. This section includes some recommendations for
prospect study related to research method and hypothesis in addition to empirical
concerns. I hope that these suggestions will persuade others to carry out researches in
order to precede knowledge of the barriers facing E-commerce implementation in
Saudi Arabia. As well as probably confirm, improve the dispute made in this study.
As stated in the pervious chapters, a few of the Saudi companies have actually
implemented E-commerce, thus far. Some companies have been established semi-
online by offering their consumer to fill in their information and even order their
services and products and then they have to pay to their bank account or possibly they
will pay in cash when they obtain the offers. Nevertheless, most of the Saudi‟ banks
are preparation to start their E-business which means that they might be facilitate
other sectors in money payment and transactions. Hence, it is strongly suggested to do
research in the case of online banking, to evaluate this forthcoming study with a real
one following E-commerce implementation.
The next suggestion is to extend of this dissertation. In this study I have focus
on E-commerce in general and I did not consider in particular issues such as B2B and
B2C and the challenges facing them, as well as their impact in Saudi culture and
market. Prospect studies could make several extensions of the existing study and also
study the roles and effects of E-commerce in Saudi Arabia. It is highly recommended
to conduct another study with qualitatively research rather than focusing on a
quantitative research to investigate extremely on each item mentioned in this study,
and explore the unknown sides of this research.

Fahad Alharby References
REFERENCES
Aarabi N., Bromideh A. (2006). The impact of e-commerce on the Iranian insurance
Adam N. R., Dogramaci, O., Gangopdhyay, A., & Yesha, Y. (1999). Electronic
Commerce, Technical, Business, and Legal Issues. New Jersey: Prentice Hall PTR.
Aichholzer G., Schmutzer R., (2000). „Organizational Challenges to the Development

of Electronic Government‟, DEXA 2000, IEEE Press, pp. 379-383.
Al-Furaih I. (2002). Internet regulations; the Saudi Arabian experience. Retrieved

July 8, 2006, from http://inet2002.org/CD-ROM/lu65rw2n.
Almogbil A. (2005). Security. Perceptions and Practices: challenges facing adoption

Alyabis F. (2000). Examining the impact of Internet electronic commerce on

commercial organizations in Saudi Arabia. Ph.D. Dissertation. University of Northern
IOWA, December 2000.
Caelli, W., Longley, D., & Shain, M. (1989). Information Security for Managers. New
York: Macmillan.
Capurro, R. (2000). Ethical challenges of the information society in the 21st century.
International Information and Library Review. Retrieved July 10, 2006, from
http://www.capurro.de/EEI21.htm
Cornall, Monica J; Jolif, Nicolas; Anirnashahun. Ade H; Athwal, Gurpreet S., (2000).
“E-Actuaries,” Presented To the Staple Inn Actuarial Society. Retrieved from
http://www.sias.org.uk/papers/e-actuaries.pdf
Dawes S.S., Bloniarz P.A., Kelly K.L., (1999). „Some Assembly Required: Building a
Digital Government for the 21st Century‟, Report of a Multidisciplinary Workshop
Held in October 1998. Retrieved June 11, 2006 from:
http://www.ctg.albany.edu/publications/reports/some_assembly/some_assembly.pdf.
E-govUAE (2006). E-government in UAE Retrieved Aug 16, 2006, from

http://www.government.ae/gov/en/index.jsp

Deloitte Research, (2000). „At the Dawn of e-Government: The Citizen as Customer‟
from:http://www.deloitte.com/dtt/cda/doc/content/at_the_dawn_of_egovernment%28
1%291.pdf. Retrieved June 21, 2006.
Ghashghai, E. & Lewis R. (2002). Issues Affecting Internet Use in Afghanistan and
Developing Countries in the Middle East. RAND. Retrieved July 11, 2006, from
http://www.rand.org/publications/IP/IP231/
Gisler M., Gunter M., Spahni D., (2001). „Minitrack E-government‟, Proc. of the 34th
Hawaii International Conference on System Sciences, IEEE Press.
Hall, P. (1999). Software Internationalization Architectures. Decision Support

Systems for Sustainable Development in Developing Countries. G. E. Kersten, Z.
Mikolajuk and A. Yeh, Eds., Boston, Kluwer: 291-304.
ISO 7498-2. (1989). Information Processing systems -Open Systems Interconnection-

Basic Reference Model - Part 2: Security Architecture, International Standards
Organization
Jordan Times. (2001). Arab banks facing the challenge of online banking. 10 June.
Retrieved July 14, 2006, from http://www.jordanembassyus.org/06112001003.htm
(December).
Keniston, K. (1999). "Language, Power, and Software." MIT Program in Science,

Technology, and Society, Retrieved July 12, 2006, from
http://stuff.mit.edu/people/kken/papers1/Language%20Power%20Software.htm.
Kotzab, H. & Madlberger, M. (2001). “European retailing in e-transition? An

empirical evaluation of web-based retailing – indications from Austria”, International
Journal of Physical Distribution and Logistics Management, Vol. 31, No. 6, pp.440-
462.
Krishnamurthy, S. (2003). E-Commerce Management: Text and Cases, Louiseville:

Transcontinental Printing, Inc., ISBN 0324152523.
Mariga, J. (2003). Managing E-commerce and mobile computing technologies.

Hershey, PA, USA Idea Group Inc., p. 3.
(December).
Moodley, Sagren, (2003)."the Status of B2B E-Commerce in The South African

Manufacturing Sector: Evolutionary Or Revolutionary?" The Southern African
Journal Of Information And Communication, Issue No 3.
MsMoney.com. (2002). What is Internet Banking? Retrieved July 8, 2006, from

http://www.msmoney.com/mm/banking/onlinebk/what_is.htm

OECD, (2000). "E-Commerce: Impacts and Policy Challenges," Organization for

Economic Co-operation and Development, OECD Economic.
Pastore, M. (I999d). Saudi Arabia Gets Wired. July 21, 1999. Retrieved June 20, 2006,
from http://www.clickz.com/showPage.html?page=151061
Reuters. (2000). Saudi banks embark on Internet race. Arabia.com Dubai. August 23.
2000. Retrieved June 23. 2006, from
http://www.arabialink.com/Archive/GWDigests/GWD2000/GWD_2000_08_28.htm
Roth, A. (2001). Middle East Web Could Draw U.S. Bankers. Credit Collections
World-May 30, 2001. Retrieved June 21, 2006, from
http://www.creditcollectionsworld.com/news/053001_4.htm
Saarenpaa, A. (1999). Law, Technology and Data Technology. Judicial Academy of

Northern Finland. Retrieved July 7, 2006, from
http://www.urova.fi/home/oiffi/julkaisut/lawtech.htm
SwissRe, (2004). "World Insurance in 2003: Insurance Industry on the Road to

Recovery," (New: Statistical Appendix, Updated February 2005), Sigma No. 3. Zurich.
Taylor, D. (1992). Global Software. Developing Applications for the International

Market. New York, Springer Verlag.
TELC. (2000). TELC. Telecommunication: Mutually Exclusive. Retrieved June 23,

2006, from http://www.insight-publications.com/saudi/saudi/saudi-sl2.html
The World Bank. (2000). Poverty in Age of Globalization. Retrieved July 16, 2006,
from
http://www1.worldbank.org/econmipolicy/globalization/docuuments/povertyglobaliza
tion.pdf
Tokuro. Matsuo, (2003). ''A Study on Electronic Commerce Support Systems Based
On Users' Preferences", Msc. Dissertation, the Japan Advanced Institute Of Science
and Technology
Turban. E. And King, D., (2003). "Introduction to E-commerce," Prentice

Hall USA. 61- Turban. E., King; D., Warkentin, M. And Chung, H. M., (2002),
"Electronic commerce: A Managerial Perspective" International Edition, Prentice
Hall, USA.
U.S.-Saudi Arabian Business Council. (2002). the Saudi Arabian Economy. Retrieved
July 8, 2006, from http://www.us-saudi-business.org/pub.htm.
Wakefield, R. L. (2001).A Determination of the Antecedents of Online Trust and

Evaluation of Current Web Assurance Seals. Ph.D. Dissertation. The University of
Mississippi. May 2001.

Wang, S. (2001). Individual/ Organization Characteristics and Intension to Adopt

E _Commerce: A Study Based on Innovation Adoption Theory. Ph.D. Dissertation,
the Chinese University of Hong Kong. July 2001.
Werner, Ulrich, (2003). ''Business Information and Communication Systems."

Outward Oriented Information Systems. Retrieved July 10. 2006. from http://
www.ulrichwerner.com/ba303/documents/71.html.
Wigand. R. T. (1997). "Electronic Commerce: Definition, Theory and Context"

The Information Society, 13 (1), 1-16.
Yang, Z. (2001). Measuring e-service quality and its linkage to customer loyalty.
Ph.D. Dissertation. New Mexico State University, December 2001.
Yarnani, M. (2000). Changed Identities: The Challenge of the New Generation in

Saudi Arabia. Brookings Institute Press. September 1, 2000.
rd
Yin, Robert, K., (2003). “Case Study Research: Design and Methods,” 3 edition,
Thousands Oaks California: Sage Publications.
Yusuf, S. (2001). Globalization and the Challenge for Developing Countries, World
Bank, DECRG, June 2001. Retrieved July 7, 2006, from
http://econ.worldbank.org/files/221/0_wps2618.pdf.
Zikmund, William, (2003). “Essentials of Marketing Research,” USA: Thompson

South-Western.

Fahad Alharby Appendix: Questioner
Appendix A
A Questioner in the major obstacles of adoption E-commerce in

Saudi Arabia
Dear Sir/Madam
I am a postgraduate student, conducting a questioner on the adoption of E-commerce

technology in Saudi Arabia.
I would very much appreciate if you could help me by completing this short
questionnaire. Please note that this research is purely for academic purposes. Your
responses are also confidential as no information that identifies you is asked in this
questionnaire.
This questionnaire takes less than 10 minutes to complete!
Kind Regards!

Part 1: Personal Profile
A) Gender
Male Female
B) Age
Under 18, 18 to 25, 26 to 35 36 to 50, Over 50
C) Education Level
Pre secondary Secondary University Postgraduate
Others, please specify it ………………………..
Part 2: Attitudes and views

1) Do you ever connect to the Internet?
Yes Sometimes No
If No go to question 2,
In average, how many hours you spend on the Internet every week?
0-5hr 6-10hr 11-20hr 21-30hr 31+hr
What are your connections types?

Dial-Up DSL/128 DSL/256 DSL/512 or higher
Satellite
2) To what extent are you familiar with the concept of E-commerce?
Very much Much So-so Low Very low
3) To what extent will E-commerce affect our society?
4) In your point of view, E-commerce is a/an:
Opportunity Challenge Threat Ambiguous I don‟t know

Part 3: Infrastructure Recruitment

5) To what extend you are equipped to implement E-commerce for each items
listed below?
Infrastructures Very much Much So-so Low Very low

Hardware and Software
Internet Access
Information Technology
skills
Part 4: Major Obstacles

6) To what degree each of these items will delay deployment of E-commerce in
your society?
Major obstacles Very much Much So-so Low Very low

Lack of appropriate
legislation and regulation
Lagging of
Telecommunications
Security and privacy
reservations
Internet access cost
Logistics
Low intention to buy online
and inflexible resistance to
change
Non-conformity of current
products and services to
online offers
Traditionally attitudes and
views over the companies
and the movement of
Globalization
Scarcity of IT staff
English Language problem
Lack of IT skills
Complicated to evaluate
products and services online

7) Which most vendors you trust?
Saudi vendors such as Panda, Extra and Jarier bookshop
Western vendors such as Tesco, Pc-World and Amazon
No special preference
8) Depending on the language used, what are the most preferred web sites?
Arabic web sites
English web sites
Dual language websites
Part 5: Perceived Benefits

9) In the case of implementation of E-commerce, how many benefits will you
and your society obtain?
Benefits Very much Much So-so Low Very low

Promotion enhancement
with lower cost
Increase of sale volume
More transparency and speed
of claims management
service available 24 hours a
day / 7 days a week
Job enhancement and high
efficiency
10) Totally, to what extent your society is ready to embrace E-commerce?

Barriers of E-Commerce and E-Government in Saudi Arabia

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

Barriers of E-Commerce and E-Government in Saudi Arabia

Caricato da

Copyright:

Formati disponibili

Fahad Alharby Abstract

Barriers of E-commerce and E-government in Saudi Arabia

Project Supervisors: Dr. Rami Qahwaji, Dr Mark Goodall

E-commerce can enhance the velocity of money in an economy. In a developing

Barriers of E-commerce and E-government in Saudi Arabia

Barriers of E-commerce and E-government in Saudi Arabia

Second, I dedicate this dissertation to my wife, my parents, and my children:

Barriers of E-commerce and E-government in Saudi Arabia

ADSL Asymmetric Digital Subscriber Line

AOL America Online

ARAMEX Arab Logistics Company

ATM Asynchronous Transfer Mode

AT&T American Telephone & Telegraph

DDN Digital Data Network

DHL A company provides international shipping of documents and

EDI Electronic Data Interchange

EFT Electronic Funds Transfer

GCC Gulf Cooperation Council

GDP Gross Domestic Product

ISOC Internet Society

IPPS Internet Petroleum Product Sale

ISP Internet Service Providers

Barriers of E-commerce and E-government in Saudi Arabia

KACST King Abdul-Aziz City for Science & Technology

LPG Liquefied Petroleum Gas

MCI Microwave Communications Inc.

NAP‟s Network Access Points

NCDC The National Centre for Digital Certification

NSF National Science Foundation

OECD Organization for Economic Co-operation and Development

PKI Public Key Infrastructure

PSTN Public Switched Telephone Network

SAMA Saudi Arabian Monetary

SADAD Saudi Electronic Payments Systems Project

SaudiEDI Saudi Electronic Data Interchange

SDH Synchronous Digital Hierarchy Network

STC Saudi Telecom Company

TADAWUL Saudi Stock Market

UAE United Arab Emirates

UPS United Parcel Service, Inc.

URL Uniform Resource Locator

WWW World Wide Web

Barriers of E-commerce and E-government in Saudi Arabia

Barriers of E-commerce and E-government in Saudi Arabia

Barriers of E-commerce and E-government in Saudi Arabia

Barriers of E-commerce and E-government in Saudi Arabia

Barriers of E-commerce and E-government in Saudi Arabia

INTRODUCTION AND BACKGROUND

1.2.1 Introduction to E-commerce

Barriers of E-commerce and E-government in Saudi Arabia -1-

1.2.2 Introduction to E-government

E-government is sometimes defined as citizen‟s services and re-engineering

Even though there are many definitions of E-government, the real

1.2.3 The Internet in Saudi Arabia

Barriers of E-commerce and E-government in Saudi Arabia -2-

Online services consumers depend on Internet technologies for immediate

Barriers of E-commerce and E-government in Saudi Arabia -3-

nevertheless, in their strategies and government due to loyalty to separate Islamic

1.3 Statement of the problem

Barriers of E-commerce and E-government in Saudi Arabia -4-

The procedures, technologies, and ways of E-commerce and E-government have

1.4 Research Objectives

1.5 Research Question