Impact of Strategic Knowledge Management Practices on ERP Systems in Saudi Arabia Business Organizations

Abstract

Many organizations are currently implementing enterprise resource planning (ERP) to address their operational challenges. Despite its appeal, ERP implementation is fraught with obstacles and complications, particularly in developing nations. Recent studies indicate that the implementation of EM-ERP has significantly enhanced production, services, revenues, and employee well-being. Both developed and developing nations have witnessed the emergence of novel management levels and innovative concepts. The "Saudi Vision 2030" initiative is a significant national undertaking with substantial economic implications for Saudi Arabia. Knowledge management (KM) is assuming new, crucial responsibilities in advancing the industrial business environment, especially in the face of globalization and intense corporate competition. Organizations are increasingly focusing on the development and application of knowledge as a strategic asset. In 2017, the industrial sector contributed approximately 45% of Saudi Arabia's gross domestic product (GDP), a figure expected to rise as KM-ERP programs are integrated into Saudi business organizations, particularly in the manufacturing sector. This Dissertation investigates the critical factors influencing the adoption of ERP systems for effective KM in the Saudi Arabian manufacturing sector. The study aims to determine how KM can be utilized as a strategic resource to optimize ERP systems, consequently enhancing organizational competitiveness. Additionally, it assesses the role of support teams, providing a novel perspective on how human resources and team interactions can substantially influence ERP and KM processes. The integration of ERP systems and KM is essential for improving the performance, efficiency, and competitiveness of industrial businesses in Saudi Arabia. ERP systems automate and integrate business operations, including human resources, accounting, inventory, production, and sales. KM connects the generation, dissemination, and implementation of knowledge within an organization to achieve its goals. Thus, it is crucial for manufacturing companies to develop and implement contemporary strategies. Given the global impact of AI on research and implementation, expanding Saudi Arabia's research program is vital. By monitoring and analyzing data from machinery and shop floor processes, manufacturers can detect patterns to predict or prevent malfunctions. ERP systems are critical digital infrastructures that link operations throughout manufacturing enterprises. With the rapid development of AI capabilities, ERP platforms are poised for transformation. The integration of intelligent features can provide unprecedented connectivity, visibility, efficiency, and insight, revolutionizing the manufacturing sector in Saudi Arabia and enhancing the nation's economic status. This investigation achieves several essential contributions. First, it identifies critical factors influencing the success or failure of an ERP-KM environment within Saudi Arabian manufacturing organizations. The study focuses on organizational learning readiness, change management, ERP adoption scenarios, and KM methods used by Saudi enterprises. Second, it integrates information management and decision-making by examining knowledge alignment, collaboration, and communication. The study uses quantitative methods, including logistic regression and partial least squares SEM, followed by CFA and structural model assessment using Python. Third, it evaluates the impact of ERP and KM systems on support teams within business organizations, quantifying this impact with statistical metrics such as goodness of fit, R-squared, Chi-square, RMSEA, CFI, and TLI. The study identifies adoption barriers and explores how social, political, economic, and cultural factors influence KM and ERP implementation. Lastly, the research implements the PLS-SEM model and demonstrates that strategic business information distribution significantly impacts AI awareness in KM. It highlights the necessity of instruction and training in novel technologies and examines the role of learning environments and AI awareness in organizational structures. By exploring interdepartmental collaboration and information exchange, it provides a comprehensive perspective on organizational dynamics impacting ERP and KM systems. Incorporating strategic KM practices into the ERP systems of Saudi Arabian manufacturing companies will optimize ERP capabilities and reveal both financial and non-financial benefits. This Dissertation contributes to organizational learning readiness, change management, and technological adoption, providing insights into the optimization of ERP and KM systems in Saudi Arabia.