The Impact of Artificial Intelligence on Business Performance in Saudi Arabia: The Role of Technological Readiness and Data Quality
Received: 18 May 2024 | Revised: 12 June 2024, 5 July 2024, and 21 July 2024 | Online: 9 October 2024
Corresponding author: Mohammed Alarefi
Abstract
This study aims to examine the impacts of Machine Learning (ML) and Artificial Intelligence (AI) capabilities on Business Performance (BP) of technology enterprises in the Kingdom of Saudi Arabia (KSA). Building on established theories such as the Resource-Based View (RBV) and the Technology Organization Environment (TOE) framework, the study proposes that AI and ML capabilities impact business performance. Their effects are anticipated to be mediated by Technological Readiness (TR) and moderated by Data Quality (DQ). A total of 190 executives and IT professionals in KSA participated in this study. Smart PLS 4 was used to analyze the data. The findings showed that AI and ML capabilities positively affected business performance. Technological readiness acted as a mediator in the relationship between AI and ML capabilities, and BP. Data quality significantly increased the impact of AI capabilities on BP. The business performance of enterprises in KSA will increase with the presence of efficient AI and ML capabilities as well as the development of a high level of technological readiness and data quality.
Keywords:
artificial intelligence capability, machine learning, technological readiness, data quality, business performanceDownloads
References
H. Taherdoost and M. Madanchian, "Artificial Intelligence and Knowledge Management: Impacts, Benefits, and Implementation," Computers, vol. 12, no. 4, Apr. 2023, Art. no. 72.
I. J. Ismail, "Speaking to the hearts of the customers! The mediating effect of customer loyalty on customer orientation, technology orientation and business performance," Technological Sustainability, vol. 2, no. 1, pp. 44–66, Jan. 2022.
R. J. Correia, J. G. Dias, M. S. Teixeira, and S. Campos, "Building competitive advantages and business success: the role of learning orientation, reward systems and entrepreneurial orientation," European Business Review, vol. 35, no. 1, pp. 92–119, Jan. 2022.
A. K. Rizky, "The Role of Technology Readiness to Mediate the Impact of Digital Financial Literacy on Digital Financial Inclusion," in 10th Gadjah Mada International Conference on Economics and Business (GAMAICEB), Yogyakarta, Indonesia, Sep. 2022.
M. Ghasedi, M. Sarfjoo, and I. Bargegol, "Prediction and Analysis of the Severity and Number of Suburban Accidents Using Logit Model, Factor Analysis and Machine Learning: A case study in a developing country," SN Applied Sciences, vol. 3, no. 1, Jan. 2021, Art. no. 13.
S.-L. Wamba-Taguimdje, S. Fosso Wamba, J. R. Kala Kamdjoug, and C. E. Tchatchouang Wanko, "Influence of artificial intelligence (AI) on firm performance: the business value of AI-based transformation projects," Business Process Management Journal, vol. 26, no. 7, pp. 1893–1924, Jan. 2020.
F. Kitsios and M. Kamariotou, "Artificial Intelligence and Business Strategy towards Digital Transformation: A Research Agenda," Sustainability, vol. 13, no. 4, Jan. 2021, Art. no. 2025.
X. Wang, X. Lin, and B. Shao, "How does artificial intelligence create business agility? Evidence from chatbots," International Journal of Information Management, vol. 66, Oct. 2022, Art. no. 102535.
W. A. Khan, S. H. Chung, M. U. Awan, and X. Wen, "Machine learning facilitated business intelligence (Part I): Neural networks learning algorithms and applications," Industrial Management & Data Systems, vol. 120, no. 1, pp. 164–195, Jan. 2019.
L. Ma and B. Sun, "Machine learning and AI in marketing – Connecting computing power to human insights," International Journal of Research in Marketing, vol. 37, no. 3, pp. 481–504, Sep. 2020.
H. Liu, F. Huang, H. Li, W. Liu, and T. Wang, "A Big Data Framework for Electric Power Data Quality Assessment," in 14th Web Information Systems and Applications Conference, Liuzhou, China, Nov. 2017, pp. 289–292.
L. Ehrlinger, V. Haunschmid, D. Palazzini, and C. Lettner, "A DaQL to Monitor Data Quality in Machine Learning Applications," in International Conference on Database and Expert Systems Applications, Linz, Austria, Aug. 2019, pp. 227–237.
S. I. Khan, "Saudi Vision 2030: New Avenue of Tourism in Saudi Arabia," Studies in Indian Place Names, vol. 40, no. 75, pp. 2394–3114, 2020.
L. G. Tornatzky and M. Fleischer, The processes of technological innovation. Lanham, MD, USA: Lexington Books, 1990.
A. Alhamami, N. Hashim, R. Hamid, and S. Hamid, "The adoption of social media by small and medium enterprise: a systematic literature review," Indonesian Journal of Electrical Engineering and Computer Science, vol. 24, no. 2, pp. 1220–1227, Nov. 2021.
H. H. Nuroglu, "Business Network Governance Structure and IT Capabilities," Procedia - Social and Behavioral Sciences, vol. 229, pp. 50–59, Aug. 2016.
R. S. Kaplan and D. P. Norton, "Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part II," Accounting Horizons, vol. 15, no. 2, pp. 147–160, Jun. 2001.
A.-A. A. Sharabati and S. J. Fuqaha, "The Impact of Strategic Management on the Jordanian Pharmaceutical Manufacturing Organizations’ Business Performance," International Review of Management and Business Research, vol. 3, no. 2, pp. 668–687, 2014.
Y. Z. Shin, Y. G. Lee, and M. S. Park, "The use of non-financial performance measures in CEO compensation contracts and stock price crash risk," Asia-Pacific Journal of Accounting & Economics, vol. 30, no. 2, pp. 531–552, Mar. 2023.
A. R. Samanpour, A. Ruegenberg, and R. Ahlers, "The Future of Machine Learning and Predictive Analytics," in Digital Marketplaces Unleashed, C. Linnhoff-Popien, R. Schneider, and M. Zaddach, Eds. New York, NY, USA: Springer, 2018, pp. 297–309.
M. A.Jabbar, S. Samreen, and R. Aluvalu, "The Future of Health care: Machine Learning," International Journal of Engineering & Technology, vol. 7, no. 4.6, pp. 23–25, Sep. 2018.
M. F. Mubarak, F. A. Shaikh, M. Mubarik, K. A. Samo, and S. Mastoi, "The Impact of Digital Transformation on Business Performance: A Study of Pakistani SMEs," Engineering, Technology & Applied Science Research, vol. 9, no. 6, pp. 5056–5061, Dec. 2019.
M. Ghobakhloo, S. Asadi, M. Iranmanesh, B. Foroughi, M. F. Mubarak, and E. Yadegaridehkordi, "Intelligent automation implementation and corporate sustainability performance: The enabling role of corporate social responsibility strategy," Technology in Society, vol. 74, Aug. 2023, Art. no. 102301.
M. F. Mubarak and M. Petraite, "Industry 4.0 technologies, digital trust and technological orientation: What matters in open innovation?," Technological Forecasting and Social Change, vol. 161, Dec. 2020, Art. no. 120332.
A. Alrashedi and M. Abbod, "The Effect of Using Artificial Intelligence on Performance of Appraisal System: A Case Study for University of Jeddah Staff in Saudi Arabia," in SAI Intelligent Systems Conference, Amsterdam, Netherlands, Sep. 2021, pp. 145–154.
S. R. Gopi and M. Karthikeyan, "Effectiveness of Crop Recommendation and Yield Prediction using Hybrid Moth Flame Optimization with Machine Learning," Engineering, Technology & Applied Science Research, vol. 13, no. 4, pp. 11360–11365, Aug. 2023.
P. Ilius, M. Almuhaini, M. Javaid, and M. Abido, "A Machine Learning–Based Approach for Fault Detection in Power Systems," Engineering, Technology & Applied Science Research, vol. 13, no. 4, pp. 11216–11221, Aug. 2023.
N. A. Alsharif, S. Mishra, and M. Alshehri, "IDS in IoT using Machine Learning and Blockchain," Engineering, Technology & Applied Science Research, vol. 13, no. 4, pp. 11197–11203, Aug. 2023.
Y. Chen and Y. Zhou, "Machine learning based decision making for time varying systems: Parameter estimation and performance optimization," Knowledge-Based Systems, vol. 190, Feb. 2020, Art. no. 105479.
N. Watson, S. Hendricks, T. Stewart, and I. Durbach, "Integrating machine learning and decision support in tactical decision-making in rugby union," Journal of the Operational Research Society, vol. 72, no. 10, pp. 2274–2285, Oct. 2021.
S. P. Phillips, S. Spithoff, and A. Simpson, "Artificial intelligence and predictive algorithms in medicine," Canadian Family Physician, vol. 68, no. 8, pp. 570–572, Aug. 2022.
R. Kaswa, A. Nair, S. Murphy, and K. B. von Pressentin, "Artificial intelligence: A strategic opportunity for enhancing primary care in South Africa," South African Family Practice, vol. 64, no. 1, Sep. 2022, Art. no. 5596.
R. Williams, H. W. Park, and C. Breazeal, "A is for Artificial Intelligence: The Impact of Artificial Intelligence Activities on Young Children’s Perceptions of Robots," in CHI Conference on Human Factors in Computing Systems, Glasgow, UK, Dec. 2019, pp. 1–11.
K. Kim and B. Kim, "Decision-Making Model for Reinforcing Digital Transformation Strategies Based on Artificial Intelligence Technology," Information, vol. 13, no. 5, May 2022, Art. no. 253.
S. R. Cox, "The successful implementation of supply chain management technology initiatives: technological readiness as a key indicator," Ph.D. dissertation, Georgia Southern University, Statesboro, Georgia, 2015.
O. Okuonghae, M. O. Igbinovia, and J. O. Adebayo, "Technological Readiness and Computer Self-efficacy as Predictors of E-learning Adoption by LIS Students in Nigeria," Libri, vol. 72, no. 1, pp. 13–25, Mar. 2022.
J. Kim and E. Kim, "Relationship between Self-Esteem and Technological Readiness: Mediation Effect of Readiness for Change and Moderated Mediation Effect of Gender in South Korean Teachers," International Journal of Environmental Research and Public Health, vol. 19, no. 14, Jan. 2022, Art. no. 8463.
V. S. V. Pulla, C. Varol, and M. Al, "Open Source Data Quality Tools: Revisited," in Information Technology: New Generations, New York, NY, USA, 2016, pp. 893–902.
A. Jain et al., "Overview and Importance of Data Quality for Machine Learning Tasks," in 26th ACM SIGKDD International Conference on Knowledge Discovery & Data Mining, Jul. 2020, pp. 3561–3562.
J. Pap, C. Mako, M. Illessy, N. Kis, and A. Mosavi, "Modeling Organizational Performance with Machine Learning," Journal of Open Innovation: Technology, Market, and Complexity, vol. 8, no. 4, Dec. 2022, Art. no. 177.
T. Sturm et al., "Coordinating Human and Machine Learning for Effective Organization Learning," Management Information Systems Quarterly, vol. 45, no. 3, pp. 1581–1602, Sep. 2021.
D. Wang and Y. Zhang, "Implications for sustainability in supply chain management and the circular economy using machine learning model," Information Systems and e-Business Management, vol. 21, no. 1, pp. 1–1, Aug. 2023.
Y. Chen and Z. Lin, "Business Intelligence Capabilities and Firm Performance: A Study in China," International Journal of Information Management, vol. 57, Apr. 2021, Art. no. 102232.
M. Nuseir and G. Refae, "The role of artificial intelligence, marketing strategies, and organizational capabilities in organizational performance: The moderating role of organizational behavior," Uncertain Supply Chain Management, vol. 10, no. 4, pp. 1457–1466, 2022.
K. Bley, S. F. B. Fredriksen, M. E. Skjærvik, and I. O. Pappas, "The Role of Organizational Culture on Artificial Intelligence Capabilities and Organizational Performance," in Conference on e-Business, e-Services and e-Society, Newcastle upon Tyne, United Kingdom, Sep. 2022, pp. 13–24.
M. Tsourela and M. Roumeliotis, "The moderating role of technology readiness, gender, and sex in consumer acceptance and actual use of Technology-based services," The Journal of High Technology Management Research, vol. 26, no. 2, pp. 124–136, Jan. 2015.
J. C. Lin and H. Chang, "The role of technology readiness in self‐service technology acceptance," Managing Service Quality: An International Journal, vol. 21, no. 4, pp. 424–444, Jan. 2011.
M. J. Kim, C.-K. Lee, and M. W. Preis, "The impact of innovation and gratification on authentic experience, subjective well-being, and behavioral intention in tourism virtual reality: The moderating role of technology readiness," Telematics and Informatics, vol. 49, Jun. 2020, Art. no. 101349.
M. Abdallah, "Big Data Quality Challenges," in International Conference on Big Data and Computational Intelligence, Pointe aux Piments, Mauritius, Feb. 2019, pp. 1–3.
J. G. Elmore and C. I. Lee, "Data Quality, Data Sharing, and Moving Artificial Intelligence Forward," JAMA Network Open, vol. 4, no. 8, Aug. 2021, Art. no. e2119345.
V. M. Alves et al., "Curated Data In — Trustworthy In Silico Models Out: The Impact of Data Quality on the Reliability of Artificial Intelligence Models as Alternatives to Animal Testing," Alternatives to Laboratory Animals, vol. 49, no. 3, pp. 73–82, May 2021.
L. Bertossi and F. Geerts, "Data Quality and Explainable AI," Journal of Data and Information Quality, vol. 12, no. 2, Feb. 2020, Art. no. 11.
M. Al-Okaily, R. Alghazzawi, A. F. Alkhwaldi, and A. Al-Okaily, "The effect of digital accounting systems on the decision-making quality in the banking industry sector: a mediated-moderated model," Global Knowledge, Memory and Communication, vol. 72, no. 8/9, pp. 882–901, Jan. 2022.
J. F. Hair, M. Sarstedt, C. M. Ringle, and S. P. Gudergan, Advanced Issues in Partial Least Squares Structural Equation Modeling. Thousand Oaks, CA, USA: SAGE, 2023.
O. Enaizan, B. Eneizan, M. Almaaitah, A. T. Al-Radaideh, and A. M. Saleh, "Effects of privacy and security on the acceptance and usage of EMR: The mediating role of trust on the basis of multiple perspectives," Informatics in Medicine Unlocked, vol. 21, Jan. 2020, Art. no. 100450.
R. Pillai and B. Sivathanu, "Adoption of artificial intelligence (AI) for talent acquisition in IT/ITeS organizations," Benchmarking: An International Journal, vol. 27, no. 9, pp. 2599–2629, Jan. 2020.
M. Stone et al., "Artificial intelligence (AI) in strategic marketing decision-making: a research agenda," The Bottom Line, vol. 33, no. 2, pp. 183–200, Jan. 2020.
Y. Al-Anqoudi, A. Al-Hamdani, M. Al-Badawi, and R. Hedjam, "Using Machine Learning in Business Process Re-Engineering," Big Data and Cognitive Computing, vol. 5, no. 4, Dec. 2021, Art. no. 61.
D. A. A. G. Singh, E. J. Leavline, S. Muthukrishnan, and R. Yuvaraj, "Machine Learning based Business Forecasting," International Journal of Information Engineering and Electronic Business, vol. 10, no. 6, pp. 40–51, Nov. 2018.
S.-M. Tseng, "The impact of knowledge management capabilities and supplier relationship management on corporate performance," International Journal of Production Economics, vol. 154, pp. 39–47, Aug. 2014.
S.-M. Tseng and P.-S. Lee, "The effect of knowledge management capability and dynamic capability on organizational performance," Journal of Enterprise Information Management, vol. 27, no. 2, pp. 158–179, Feb. 2014.
Downloads
How to Cite
License
Copyright (c) 2024 Mohammed Alarefi
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain the copyright and grant the journal the right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) after its publication in ETASR with an acknowledgement of its initial publication in this journal.
