A Methodology for Assessing the Benefits of Software as a Service

Abstract

Software as a Service (SaaS) has been utilized as a means to deliver an Enterprise Resource Planning (ERP) system since the last decade. This software delivery model enables Small Medium Sized Enterprises (SMEs) to outsource the system from vendors based on pay-per-use or pay-per-period without having to do prior investments. Yet, SaaS model is still immature in concept and the unforeseeable uncertainty is relatively high because of different application specificity and behavioral acceptance for adopting a SaaS-based application. In the field of ERP and SaaS, there is no literature, which discussed about what benefits can be achieved from adopting a SaaS ERP system. Moreover, differences in opinion about SaaS benefits have emerged from the perspectives of critical actors, e.g. an agreement toward cost-savings and time-savings among vendors and adopters. This research explores the benefits of delivering SaaS ERP system within SMEs by considering three perspectives, which are the perspective of vendors as SaaS providers, the perspective of SMEs as SaaS adopters, and the perspective of lifecycle process of SaaS. In order to accommodate differences which might arise when conceptualizing these perspectives, each perspective is directed to a set of common goals and benefits, namely the benefits of Service Oriented Computing (SOC). For this reason, we developed a methodology for assessing benefits of SaaS that consists of three main steps, which are understanding, conceptualizing, and estimating the benefits of SaaS. Research data was collected from interviews and questionnaires to appreciate benefits from the three perspectives. Following this, the structures of SaaS benefits were conceptualized for each perspective. Then, we estimated the benefits of SaaS qualitatively by indicating such benefits whitin a case study, and quantitatively by applying Partial Least Squares (PLS) Path modeling method within which the structures of SaaS benefits were developed through SmartPLS software. Our findings show that the proposed methodology can be used to realize the benefits of SaaS in more structured way through the models of SaaS benefits that accommodate the three perspectives. Although the models are weakly validated due to limited research data, rich descriptions of SaaS benefits pertaining to the delivery of SaaS ERP system within SMEs can be gained from the structures of SaaS benefits. Furthermore, a sound understanding to overcome differences in opinion about SaaS benefits can be expected through this comprehensive methodology since each perspective in realizing the benefits is directed to the achievement of the benefits of SOC. Yet, we suggest further research for the task of validating the models with more reliable research data. The comprehensive methodology can be improved by enhancing variables and factors that define the benefits and can be used as a best practice to improve readiness of adopting a SaaS-based application in general, and a SaaS ERP system in particular.