1. Introduction
Companies today are concerned with their competitive position relative to other competing companies, especially when designing their internal operations [
1]. It is no longer possible for companies to be satisfied with local markets. As a result of globalization in the economy and business, it has become necessary for companies to keep pace with this development to succeed in their field of work and to ensure the sustainability of their activities. Therefore, companies that do not respond to market requirements will quickly exit the competition, and one of the most critical current requirements for them is to restructure operations to achieve a distinct competitive position [
2]. Because companies want to develop their competitive capabilities, they have applied various techniques such as quality management, the balanced scorecard, re-engineering procedures and other operational tactics which aim to enhance their performance and maintain their competitive position and sustainable work [
3].
Many companies today are trying to find new methods to manage change better, which has led to the emergence of the business process engineering BPR concept and its widespread adoption among companies. This concept includes many significant changes such as entirely new processes and changes in performance indicators KPIs [
4]. All of this is considered essential for the success of companies in a competitive business environment, mainly since companies contribute to building strategic and competitive relationships, which improves the quality of activities and operations [
5].
Today, many companies in various countries rely on systems based on information technology and computer software to a large extent. In the Kingdom of Saudi Arabia, a unique vision has been developed for the country. Vision 2030 motivates companies to adopt automation and information technologies more widely to improve their performance and achieve sustainability in their business. According to [
6], companies can build and maintain a competitive advantage by examining the relationship-shifting patterns of competitive rivalry and the emerging structure of the volatile but growing information technology industry. This concept was driven by factors such as the existence of competitive sets of companies from three perspectives: research analysts, competitive suppliers, and service customers. The first perspective builds on and applies previous work in strategic groups, mobility barriers, and firm competencies. The second perspective is practical and depends on practising managers’ perceptions of the competitive environment. The final perspective is based on field research in customer organizations and is rooted in the idea that supplier differentiation will only emerge as a competitive advantage when it aligns with customer needs.
Researchers have categorized processes by different levels of technology into automated, mechanical, and manual processes [
4]. In manual and mechanical processes, there is usually a form of human control in the operations; however, they have the disadvantage of high unit costs and low output. Their requirement for human involvement leads to these processes needing to be faster. They also have variability in quality, which is why many companies embrace automation to overcome the problems of mechanized and manual processes. Many organizations have noted that automating their processes mainly aims to enhance operational performance.
We can define business process automation as the use of technology to automate business processes, increasing simplicity, digital transformation, service quality, and cost containment. Some of the critical components include integrating applications, restructuring labor resources, and utilizing software applications organization-wide. Please see the following graph (
Figure 1):
According to [
7], operational performance is the firm’s performance that is usually measured based on the prescribed indicators or standards of efficiency, effectiveness, and environmental responsibility. Operation performance is mainly determined by five main performance objectives: flexibility, cost, dependability, speed, and quality. These have been arrived at from the perspectives of different stakeholders, including shareholders, customers, society employees, and society. Automation is one of the approaches recommended for many manufacturing companies to improve operational performance. Hence, this study will seek to help understand the effect of business process automation on the operational performance of manufacturing firms in Saudi Arabia.
In the last decade, the manufacturing sector has become a critical area for Saudi Arabia, which has been investing in economic diversification in line with the vision of 2030. The manufacturing sector is expected to help create more employment and revenue for the nation [
8]. However, as a developing sector and developing nation, the sector has been facing rising market uncertainty and price fluctuation. This has led to calls for the implementation of intelligent measures for manufacturing processes. Faced with unpredictability in the market and the need to improve productivity and profits, management has been investing in automating their processes as a strategic move.
The initiation of Industry 4.0 in Saudi Arabia (KSA) is marked by a multifaceted approach aimed at bolstering the country’s industrial sector and driving economic growth in alignment with Vision 2030 objectives. The key aspects include substantial investments in infrastructure development tailored to industrial cities, coupled with the provision of industrial development funds and incentives. Additionally, Saudi Arabia has forged a strategic partnership with the World Economic Forum (WEF) to pioneer Industry 4.0 applications and mechanisms. Notably, the commitment is evidenced by plans to significantly increase the number of facilities benefiting from Industry 4.0 stimuli. Moreover, the nation is focused on enhancing technical infrastructure readiness by 50% through digitally enabled projects spanning mining, industry, logistics and energy, supported by a substantial USD 453 billion fund allocation. This comprehensive strategy underscores Saudi Arabia’s dedication to embracing cutting-edge technologies and fostering a dynamic industrial landscape conducive to sustainable economic advancement [
9,
10,
11].
As mentioned, Saudi Arabia continuously invests in the manufacturing sector in line with Vision 2030. However, having depended on the oil economy for many years, many companies are still in their growth stage and, hence, in the automation process, although many have yet to achieve full automation [
10]. As aforementioned, automation is one of the approaches used to enhance operation performance objectives. The study by [
5] concludes that technological improvements are also known to give businesses a competitive edge by improving quality, cutting costs, boosting efficiency, and giving them more ways to process information. Therefore, a study of the operating performance of manufacturing companies in the KSA regarding their quality, speed, and cost performance goals would show whether or not business process automation has helped them. However, despite the growing significance of the manufacturing companies in the KSA, there are limited empirical studies on the effectiveness of the automation processes and how they affect a company’s operational performance. The manufacturing sector presents an excellent opportunity for the KSA to meet its vision 2030 of economic diversification [
12]. Given this, the sector is an essential choice for this study of automation outcomes. A study of the companies’ operational performance will also help to determine whether automation has growth benefits for manufacturing companies. Also, even as many manufacturing companies adopt automation, many face challenges in becoming highly competitive in offering quality products and meeting demand; hence, this study will seek to establish the effect of business process automation on the operational performance of manufacturing companies.
3. Methodology
3.1. Research Approach
A quantitative approach was chosen for this study. Digital data are collected and analyzed statistically to obtain results, and then the results are generalized. This approach, as described in the book by [
31], “Introduction to Quantitative Research Methods”, is considered the best for achieving our research objectives as it allows for the collection of digital data related to automation and its impact on the performance of companies in the Kingdom of Saudi Arabia, and thus allows for statistical analysis through which we can identify relationships and patterns within the data.
3.2. Research Design
This study used a descriptive approach. It is assumed that this approach, as ref. [
32] indicates, describes and summarizes phenomena and characteristics without influencing or manipulating them. Ref. [
33] suggests that descriptive research be used to study phenomena and ensure the accurate representation of society. Therefore, a descriptive approach was used in this study to determine the extent of automation used by manufacturing companies in the Kingdom of Saudi Arabia.
3.3. Target Population
The target population of this study is employees in operations departments, production departments, or information technology departments in industrial companies in the Kingdom of Saudi Arabia as these employees are the most knowledgeable about automation activities and their role in operational activity in companies. The research focused on a sample of 301 employees, an appropriate and sufficient number to determine the prevailing general opinions in the automation field and make a high-confidence generalization.
3.4. Sampling Technique and Sample Size
As we explained above, the sample in this study included participants who work in production, operations, or information technology departments in Saudi industrial companies. As mentioned in the study by [
34], such targeted samples can provide an adequate point of view. Regarding the research topic, the larger the sample size, the more representative it is of society. Setting the sample size for this research at 301 was considered sufficient and is a similar sample size to those used in other similar studies.
3.5. Data Collection Process
Data were collected online by distributing the questionnaire to participants via email or social media. Participants were provided with clear instructions on how to fill out the questionnaire. In addition, the reminders sent and the follow-up with the participants ensured a high response rate. A five-point Likert scale was adopted. The questionnaire consisted of a section collecting the demographic data of the participants, a section on automation in industrial companies, and a final section including statements about the performance of these industrial companies. The survey design ensured consistency in the data collection by providing standardized questions and consistent answer options.
Reliability is the stability and consistency of the research instrument, while validity refers to the accuracy and suitability of the research instrument in measuring the required variables [
35]. The questionnaire’s reliability and validity were confirmed by testing and validation on a relatively small sample of 10 persons to identify any ambiguities or problems related to the wording, formatting, or answer options. A test-retest reliability analysis was conducted to ensure that the questionnaire was performed. The questionnaire was also submitted to an academic supervisor for review and correction based on his comments and feedback to achieve consistent results.
3.6. Data Analysis
After completing the data collection process, the data were first cleaned to ensure accuracy and to delete incorrect answers or incomplete questionnaires. The data were then coded. Descriptive and inferential analyses were conducted. Descriptive statistics were used to summarize the quantitative data collected and presented in the form of frequencies, cumulative frequencies, percentages, and graphs, while descriptive analysis provided a quick overview of the data, facilitating the identification of patterns and trends. After completing the descriptive analysis, regression and correlation analyses were conducted to examine the relationship between automation and the companies’ performance, where the correlation analysis shows the strength and direction of the relationship between the various variables. In contrast, the regression analysis helps examine the impact of automation on companies, and both analyses allow us to obtain meaningful results from the data collected.
3.7. Ethical Considerations
According to the recommendations of [
36], it is necessary to give high priority to ethical considerations in preparing research. Ethical practices were followed during the questionnaire stage in particular and in all steps of preparing this research in general. The participants were informed about the questionnaire and the research, and their consent was obtained prior to their participation. No private or confidential information was requested, and the particpants were assured that their privacy would be preserved, thus ensuring respect for the freedom of the participants and the protection of their information and privacy.
Furthermore, the contributions of the authors and other researchers to the study were acknowledged, ensuring that this ethical aspect of this study was taken into account. In addition to the above, it was confirmed that the involvement of the participants was voluntary, and they were assured that the data would be collected for academic purposes only.
The following graph (
Figure 2) illustrates the methodology steps:
5. Discussion and Conclusions
5.1. Discussion
Establihing the extent to which automation is used in the operations of Saudi Arabian manufacturing companies.
The first goal of this study is to determine the extent of the use of automation in the operations and activities of Saudi industrial companies. The descriptive data provided showed that most respondents agreed that automation is an integral part of the operation (mean = 4.1196), and that they use it in managing their manufacturing operations (mean = 3.7741). There was also agreement among the respondents on the necessity of using automation in the planning process for warehouses, using it to replace human labor, and the necessity of permanent investment in automation. These findings indicate the widespread adoption of automation in Saudi industrial companies and are consistent with a study by [
14], which explained that automation has become very important for different economies and modern companies. This is consistent with the Kingdom of Saudi Arabia’s adoption of technology to achieve Vision 2030, and of course, automation raises the level of services and sustainable performance in general. This is what ref. [
6] indicated: the use of information technology has become necessary for all companies that seek to remain competitive in a highly competitive market. In order to deal effectively with intense competition in markets and to obtain a competitive advantage, industrial companies must invest more in automation in order to improve production, increase operational efficiency, and at the same time, they must improve quality and raise productivity. Overall, it can be concluded that the industrial sector in the Kingdom has become more automated.
Determining the effect of business process automation on the operational performance of manufacturing companies in Saudi Arabia.
The second goal of this study was to determine the impact of automation on the operational performance of industrial companies. The correlation analysis showed a moderate relationship, r = 0.689, while the regression analysis showed a coefficient value (B) of 0.674, which means that automation positively affects operational performance. Moreover, returning to the descriptive statistics, the participants in the questionnaire agreed that automation had improved their performance, and this is consistent with the study by [
14], which states that automation through the application of information technology technologies makes the business sector more productive. It also supports reducing costs and improving production quality. At the same time, it increases customer satisfaction, improves business profitability in the long term, and certainly improves operational performance. Also, Ref. [
26] noted that many manufacturing industries in developing countries use modern technologies, which help transform the production in these manufacturing industries into an industrial pattern, but it is competitive and dynamic, and therefore, automation contributes to improving production capacity and sustainability.
Establishing the impact of business process automation on corporate performance.
The descriptive analysis shows that the respondents of this study agreed that “business process automation has improved efficiency in their firms (mean = 4.1528), “business process automation has increased profitability” (mean = 3.9070), “business process automation has increased employees’ productivity” (mean = 3.7209), “business process automation has increased customers satisfaction” (mean = 3.8904), “business process automation has increased the innovation” (mean = 3.9834) and “improved market share” (mean = 3.7375). Correlation analysis has confirmed a positive relationship between automation and performance, and this is consistent with the results of some studies, such as [
14,
25,
37]. All of these studies reported that the positive role of automation in various operational and administrative aspects leads to improved performance.
Determining the benefits of automation in Saudi Arabia’s industrial companies and whether they exceed costs.
The fourth objective of this study was to determine the benefits of automation for Saudi industrial companies. Descriptive statistics indicated largely positive perceptions among the questionnaire respondents regarding the benefits of automation. The most significant focus was improving efficiency, with an average of 4.1528, followed by increasing innovation, with an average of 3.9834, and then increasing profitability, with an average of 4.1528. The figure of 3.9070 is the increase in customer satisfaction, with an average of 3.8904. These results indicate generally positive perceptions of the benefits of automation in the manufacturing sector, which is consistent with other studies. Ref. [
8] has also shown that improving performance through improved output and lowering costs from automation has been critical to the KSA manufacturing sector. In general, as the statistical analysis showed, the benefits of automation are more significant than its costs [
25].
5.2. Managerial Implications
The results of this study are important to many stakeholders. Managers and executives in Saudi manufacturing companies can use them to develop their companies’ businesses as their knowledge of the positive impact of automation will be an incentive for them to introduce more automation. It can also be recommended that automation be introduced into all industrial companies in Saudi Arabia, regardless of the size of the companies so that automation becomes an integral part of the activity of any manufacturing company. At the same time, a portion of the companies’ capital and retained earnings should be allocated in order to achieve a good level of automation. Decision-makers should also pay attention to the importance of integrating automation decisions into the company’s long-term strategies, and this is another very important aspect for companies and their decision-makers. Emphasis should also be placed on the importance of innovation in companies as the development of automation is usually accompanied by an expansion of innovation. On the other hand, automation trends in Saudi Arabia can be supported by the government through the enactment of legislation and laws that encourage automation and the provision of facilities for that purpose. At the same time, consideration must be given by the government to employment and unemployment rates as automation is typically associated with the reduction in the number of workers in industrial companies. Suppliers who deal with industrial companies can also benefit. Saudi manufacturing companies benefit from this research with the increased availability of high-tech products and means of production. Automation will also contribute to achieving a higher level of sustainability, which is consistent with the Kingdom of Saudi Arabia’s Vision 2030. At the same time, this study highlights the need for the Saudi government to deal effectively with employment problems associated with the increasing use of automation by directing education and training towards advanced technical fields.
5.3. Theoretical Implications
This paper provided empirical evidence on the positive effects of automation on performance in companies, and thus enriches areas of knowledge and provides a basis for other future research that addresses the impact of automation in the Saudi market in particular and in the GCC market in general. Also, highlighting the importance of automation in business is an important aspect that enriches research on sustainability. This study also covers the integration of technological progress with business strategies, and at the same time addresses the state of innovation and work efficiency in the context of developing economies. All of this provides a high theoretical value to this paper.
5.4. Limitations
The methodology and the results of this research were of high value. Still, future studies can discuss many other aspects of this research by using mixed methods to obtain quantitative and qualitative data. It is possible to enhance the conceptual or mathematical models, and future research should also be based on stratified samples. To ensure that all business sectors are included in the study and that quantitative data can be supplemented with other qualitative data through other data collection methods such as interviews or focus groups, we also recommend the inclusion of additional control variables such as company size, industry, or location to account for potential confounding factors. Also, the impact of automation on unemployment rates is an important topic that can be covered in the future in any research, whether at the level of Saudi Arabia or at the level of other countries.