A Study on the Adoption of Software as a Service (SaaS) in Online Business SMEs in Sri Lanka

Abstract

The purpose of this study is to investigate the factors that influence the adoption of Software as Service (SaaS) at Small Medium Enterprises (SMEs) that have adopted online business in Sri Lanka. Prior studies have shown that SMEs significantly benefit due to the adoption of SaaS. The research sough to explain the adoption of SaaS using Awareness, Trust, Cost, Top Management Support, Complexity and Relative advantage. Conceptualization of this researcher’s variables and their interrelationship have been supported by theory of Diffusion of Innovation (DOI) of Rogers’ (1962) and Technological Organizational and Environmental (TOE) Framework of Tornatzky and Fleisher (1990). The study was conducted among 250 randomly selected SMEs adopting online business using questionnaires addressed to managerial and ICT professionals who were capable of making ICT decision at SMEs under study. However only 224 questionnaires were returned with complete data required for the purpose of analysis. The study employed principal component analysis to reduce the data and employed Ordinary Least Square (OLS) to test the relationship between the variables. It is found that Cost (CT), Complexity (CX) and Relative Advantages (RA) are having significant impact on SaaS adoption in SMEs in Sri Lanka. This study extends the existing body of knowledge by providing empirical support for explaining SaaS adoption by SMEs in Sri Lanka. The finding will help various parties engaging in promoting the adoption of SaaS among SMEs with the view of SMEs’ development in Sri Lanka. On this basis, the researchers are able to recommend firstly, that SaaS is playing a significant role for the development of SMEs in this area of study and finally, that software vendors, policy makers, technological consultants and application developers intend to adopt SaaS should consider the validated model tested in this research study.

Factors Influencing Cloud Computing Adoption Among SMEs: The Jordanian Context

“…TOE theory, on the other hand, is suitable in terms of understanding the factors of technology adoption in a particular organization from both an internal and external perspective (Goyal and Sharma, 2019). However, to explain technology adoption, many scholars have used an approach that integrates more than one theory to explain technology adoption (Isma'ili et al, 2016a; Asiaei and Rahim, 2017; Ayoobkhan and Asirvatham, 2019) in order to better understand the factors that influence organizations when it comes to making a decision with regard to the adoption of technology. Among these theories, TEO and DOI have been employed widely in the information technology adoption domain and have provided empirical support as they focus on the organizational point of view (Asiaei and Rahim, 2017; Hassan et al, 2017; Abed, 2020; Skafi et al, 2020).…”

“…Environmental context refers to the external factors that influence technology adoption by SMEs, including Awareness, the firm’s competitors, access to resources supplied by others, and interactions with the government of the cloud. Among these factors, Awareness, firm’s competitors are found to be significant factors influencing cloud adoption (Abolfazli et al, 2015; Ayoobkhan and Asirvatham, 2019; Skafi et al, 2020).…”

“…Cloud computing awareness has been recognized as an important constraint with regard to cloud computing adoption (Ayoobkhan and Asirvatham, 2019). Previous studies have shown that awareness about cloud computing is a dominant factor in terms of affecting SMEs’ decision to adopt cloud computing (Abolfazli et al, 2015).…”

Cloud Computing Adoption in Higher Education Institutions of Kingdom of Saudi Arabia

“… Compatibility & Complexity: This is defined as "Cloud compatibility is the degree to which an innovation is perceived as being consistent with the existing values, needs and past experiences of potential adopters" [15]. Whereas, cloud complexity defined "as the degree to which an innovation is perceived as being difficult to use" [16].…”

“… Technology Readiness: This is known as using similar type of IT skills, IT infrastructures and IT policy in business organizations [16]. Another researcher pointed out that technological readiness reflects different technological aspects and top management support reflects organizational dimension and lastly regulatory support explained the environment factors [17].…”