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IT8331 Siva Trichaisri ID: 5929443 1 of 12 SaaS Adoption in Software Development Company in Thailand Siva Trichaisri Abstract Software as a Service (SaaS) has been a focus of attention in recent years. A growing number of countries, as well as Thailand, have promoted the SaaS market accordingly. The study in this research is interested in the adoption of SaaS in the software development company in Thailand. The study will apply the framework of technology- organization-environment (TOE), which provides the factors that affect organizations to adopt new information technology in three perspectives, which are technology, organization, and environment. The directions for future research if this research result in a successful outcome is also discussed in this paper. 1 Background A cloud based application, in form of SaaS, is a model where an application is provided to customers using the internet technologies. Application downloading or installation is not necessary. The clients basically access the system via a web browser and paying a usage fee.

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SaaS Adoption in Software Development

Company in Thailand

Siva Trichaisri

Abstract

Software as a Service (SaaS) has been a focus of attention in recent years. A growing

number of countries, as well as Thailand, have promoted the SaaS market accordingly.

The study in this research is interested in the adoption of SaaS in the software

development company in Thailand. The study will apply the framework of technology-

organization-environment (TOE), which provides the factors that affect organizations to

adopt new information technology in three perspectives, which are technology,

organization, and environment. The directions for future research if this research result in

a successful outcome is also discussed in this paper.

1 Background

A cloud based application, in form of SaaS, is a model where an application is provided to

customers using the internet technologies. Application downloading or installation is not

necessary. The clients basically access the system via a web browser and paying a

usage fee.

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IT departments are interested to use cloud solutions because they lack of resources to

support the software. One of the advantages of SaaS is the ease of implementation.

Implementation takes time and resources of the client company. With SaaS solutions,

hardware, software, and security setup are all managed by the vendors. The

implementations are very light and very fast. Another advantage of SaaS is the ease of

upgrade. The clients do not have to struggling with to keep their software up to date as

this is also managed by the vendors (Kelly 2017). The fact that SaaS is provided through

the internet channel provides the ease of access to the users. For multinational

companies, it is much easier to roll out and support the systems globally. SaaS can also

provide high power of computing therefore it is not necessary to leverage the users’

devices or machines to perform heavy computing tasks (P.K. Senyo et al 2017).

The characteristics of SaaS are very beneficial to global software development (GSD).

GSD is the exercise of having software developers distributed to multiple geographical

locations. The purposes are to reduce labor costs, and increase development capacity

(Al-qadhi and Keung, 2014). Virtualizations, scalability, zero investment on infrastructure,

high performance, low cost, and multi-tenancy are the important cloud features that

support Agile development (Younas et al. 2016).

There are numerous software development tools in a cloud environment to support

development team. For instance, Jira are used to support sizable systems, manage

software problems and improve reliability. Assembla, and AgileFant are used as project

management tools that help in planning and decision making. Projects are built in the

effective way by adopting these tools (Younas et al. 2016).

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Table 1 – Agile and Cloud tools (Younas et al. 2016)

Haig-Smith and Tanner (2016) stated that cloud computing (CC) supports software

development in regard to simplicity. The development team can directly focus on the

tasks that create value, without having to maintain and support the development

environments.

In order to get a deeper understanding how the software development organizations in

Thailand make a decision whether to use SaaS to support their business, the following

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research question is addressed in this paper: What factors are significant for software

development organizations in Thailand to adopt cloud based solutions in form of SaaS?

2 Literature Review

In the studies of technology adoption at the organization level, Wu (2011) used

technology acceptance model (TAM; Davis 1986) to study the SaaS adoption. However,

Wu also has pointed out that TAM cannot be appropriate for application in all kinds of

situations because they fail to highlight the significance of marketing effort, security, and

trust.

Yeh et al. (2014) utilized the technology-organization-environment framework (TOE;

Tornatzky and Fleischer 1990) to study the factors influencing IT capabilities for new

technology adoption. Awa et al. (2017) and Premkumar (2003) used modified version of

TOE. The framework was modified by adding two additional domains, which are Task

and Individual domains, to study technology adoption in organizations.

TOE is well suited for the study at the enterprise-context adoption. Other technology

adoption theories, such as technology acceptance model (TAM), are mostly techno-

centric and therefore address the adoption at individual level. Whereas TOE focus more

on the organizational elements (Awa et al. 2017).

TOE framework has been widely used in the studies of IT/IS, especially for cloud

computing researches (P.K. Senyo et al 2017).

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Table 2 – Research frameworks used in cloud computing researches (P.K. Senyo et al 2017).

3 Theoretical Background

The framework of technology-organization-environment (TOE) was presented by

Tornatzky and Fleischer in 1990. TOE provides the features that affect organizations to

embrace new information technology in three perspectives, which are technology,

organization, and environment (DePietro, Wiarda, & Fleischer, 1990).

The three factors influence how an organization sees the need to adopt new technology.

The technology domain includes internal/external technologies that are related to

the organization, which may comprise of processes and equipment.

The organization domain refers to the characteristics and resources of the

organization. The organizational factors that have been widely studied are degree

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of support from high level management, the size of the organization,

communication channels, formalization, and centralization (Premkumar 2003).

The environment domain includes the structure and the industry size, the

company’s competitors, the regulatory environment and the macroeconomic

situation.

Figure 1 - Technology-Organization-Environment framework

Technological Innovation

Decision Making

Technology

OrganizationEnvironment

4 Theoretical Model and Hypotheses

4.1 Theoretical Model

The proposed theoretical model is based on TOE theory discussed in the theoretical

background. The model has been constructed to identify the 7 research hypotheses and

the expected causal relationships among the variables.

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Figure 2 - Conceptual Model

Perceived SimplicityPerceived

CompatibilityPerceived Benefits

Technology

SaaS Adoption

H2H1 H3

H6

H7

Partnership Quality

Mimetic Pressure

Environment

Management Support

IT Human Resource

Organization

H4

H5

4.2 Research Hypotheses

The hypotheses are associated with the casual effect relationship between variables as

illustrated in the theoretical model.

4.2.1 Technology Domain

H1: Perceived simplicity in manipulating SaaS application significantly supports adoption

Ease of use of the technologies has been widely studied in IT implementation, especial in

technology acceptance model (TAM). It has been found to be strongly influencing

adoption (Premkumar 2003). Awa et al. (2017) found that perceived simplicity in handling

innovative technology significantly encourages adoption. The simplified operation of a

system speeds up the adoption process.

H2: Perceived compatibility between SaaS application and organization environment

significantly supports adoption

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Compatibility of a new technology is how it is perceived to fit with the existing

technologies, work procedure, and corporate culture (Awa et al. 2017, Premkumar 2003).

Awa et al. (2017) confirmed that when new technologies offer compatibility and

integration the adoption is faster.

H3: Perceived benefits has a significant positive direct effect on SaaS adoption

Perceived benefits, which can also be referred to perceived usefulness in TAM, is how a

new technology is perceived as better than the existing one (Premkumar 2003). Awa et

al. (2017) found that new technologies have higher possibility to be implemented when

they are perceived to offer relative advantage over the existing ones.

4.2.2 Organization Domain

H4: Management support helps SaaS adoption to be faster

Top management support gives well-founded directions within the organization. Top

management can help to reduce any political interruption, and ensures sufficient

resources for implementation (Premkumar 2003). The study of Awa et al. (2017)

confirmed that with great attention from top management new technologies are more

likely to be implemented faster than without such support.

H5: IT human resources have a significant positive direct effect on SaaS adoption

Internal IT staff must understand not only the surround technologies in the organization,

but also the certain business processes. They must be able to solve the immediate

problems and guide the users how to use the new technology to resolve the problems

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related to their work (Ferratt et al. 2005). Yeh et al. (2014) found that IT human resources

influence the degree of IT capability, which is important to new technology adoption.

4.2.3 Environment Domain

H6: Partnership quality has positive impact on SaaS adoption.

IT does not just involve an internal resources, but also to the firm’s partners (Premkumar

2003). If the vendor does not have adequate skills, clients will experience low service

quality and target performance will be less than expected. Another important challenge

to the adoption of SaaS is the problem of security and trust. Data leakage, data backup,

and loss of privacy are concerned by many users (Wu 2011). The study of Yeh et al.

(2014) found that the quality of partnership between the organization and external

parties is positively associated with the new technology adoption. In this study, we focus

mainly on the perceived quality of the vendor.

H7: Mimetic pressures from competitors positively affects the probability of SaaS

adoption.

Every company in the industry intentionally and interestedly monitors other competitors

and mimics actions of others correspondingly in order to remain competitive (Awa et al.

2017). Many studies (Pang and Jang 2008, Oliveira and Martins 2011) confirmed that

organizations borrow ideas and other characteristics of successful competitors,

particularly those that relate to new technology adoption.

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5 Data Collection

The study will use an online survey and distribute it to the companies in software

development industry in Thailand, which are listed in th.jobsdb.com. Survey is a good

technique to get attitudes, and to gain understandings on casual effect relationships.

Web surveys are beneficial in terms of cost and speed. Interviewers are not necessary to

be present for web surveys. People with many responsibilities, who are probably not

interested in participating in telephone survey, are willing to fill in the survey in their

convenient time on their monitors (Szolnoki and Hoffmann, 2013). The target

respondents will be CIOs and IT Managers who have been previously involved in SaaS

adoption decision making processes.

6 Expected Contributions

The research framework used in this study is applied at the organizational level. There

are many studies that investigate the SaaS adoptions using economic theories such as

Transaction Cost Economics (TCE) theory, Agency theory, and Resource-based view

theory. The findings from the survey should give the researchers to understand more

about the critical factors, based on TOE theory, when a software development company

in Thailand decides to adopt cloud services, particularly in the form of SaaS. The findings

should also be useful for the enterprise users, as well as the SaaS providers, in order to

have a deeper understanding in regard to SaaS adoption.

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7 Directions for Future Research

There are many interesting aspects that have not yet been included in this study. The

researchers may also include the concepts of other theories into this framework such as

adding the frequency of use from TCE into technology domain. There are also some

constructs that have not been included in this framework such as organization size,

geographical locations. The future research should also be carried out for different layers

of cloud services such as Platform or Infrastructure as a service (PaaS and SaaS).

8 References

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In Proceedings of the International Workshop on Innovative Software Development Methodologies and Practices

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to investigate the factors influencing e-business information technology capabilities”, Information Development.

Nov2015, Vol. 31 Issue 5, p435-450. 16p. DOI: 10.1177/0266666913516027. , Database: Library, Information

Science & Technology Abstracts

Davis, F. D. (1986). A technology acceptance model for empirically testing new end-user information systems:

Theory and results. Doctoral dissertation, Sloan School of Management, Massachusetts Institute of Technology,

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DePietro, Rocco, Wiarda, Edith & Fleischer, Mitchell (1990). “The context for change: Organization, technology and

environment”, in Tornatzky, L. G. and Fleischer, M. (Eds.) The processes of technological innovation, Lexington

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