The impact of information technology on organisations : the case of the Saudi private sector

Abstract

For several decades, researchers in the field of information technology and management have studied the impact of using computers and other information technology facilities on business organisations. In the 1960's and 1970's, information technology was widely employed by many firms mainly for achieving routine clerical and administrative activities such as processing data related to bookkeeping and accounting activities. The 1980's and 1990's have witnessed advancements in the technological field (along with other advancements) which have enhanced the economies of information technology and greatly expanded its applications. Today, information technology has become not only a tool to process data and record transactions, but also a competitive weapon that can change an industry's structure. This observation was one of the motives for the present study. This study explores the impact of using information technology in developing countries by considering its application in the Saudi private sector. The study was examined from two major perspectives: 1) the impact; and 2) the implementation. The impact perspective focuses on the impact of using information technology on the organisations' strategy, structure, and people. The implementation perspective covers several issues including the information technology strategic planning, technical considerations, behavioural considerations, and the role of top management in the implementation process. The sample under study was comprised from the top managers of the top 500 companies in Saudi Arabia in 1996. A total of 205 companies from 7 different business sectors in Saudi Arabia participated in the study. This represented more than a 41 percent response rate. The necessary data were collected through two methods: 1) mailed questionnaire, and 2) personal interviews. Based on the statistical analysis of the data, the study suggests that the use of information technology in the Saudi private sector is expected to have positive impacts on the strategy of business organisations. The data also suggests that information technology usage could induce many organisations to adopt smaller and flatter structures. Also it was found that information technology utilisation can lead toward a more decentralised decision-making organisation. The results showed that a positive relationship exists between information technology usage and decentralisation in the private firms of Saudi Arabia. The study also finds that respondents believe that the use of information technology in business organisations in Saudi Arabia can help to reduce the total number of the organisations' employees. This is particularly the case regarding unskilled workers. The study did not provide evidence to support the view that the use of information technology in business organisations would lead to the elimination of middle management. The study also did not provide evidence to support the hypothesis that information technology utilisation is dependent upon the size of the company. The data analysis showed that several technical and behavioural problems could effect the success of information technology in business organisations and the involvement and support of the top management is essential for success in the implementation process. The study concludes with recommendations for the Saudi government and suggestions of several topics to be carried out for future research to enable us to understand and use information technology as an important resource for business organisations in Saudi Arabia.