An Integrated Environmental Perspective on Software as a Service Adoption in Manufacturing and Retail Firms

In this study, we examine the influence of a firm's environmental factors on its intention to adopt software as a service (SaaS). We operationalized our assessment of a firm's environmental pressures as mimetic, coercive and normative pressures and examined the moderating role of perceived technology complexity. Mimetic forces are pressures to copy or emulate other organizations’ activities, systems or structures. Coercive pressures are formal or informal pressures exerted on organizations by other organizations upon which they are dependent. Normative forces describe the effect of professional standards and the influence of professional communities on an organization. We empirically tested our research model using data from 289 valid survey responses. The results provide support for the assertion that there are both significant direct and interaction effects that influence a firm's SaaS adoption intention. Most important was the significant interaction effects between mimetic pressure and perceived technology complexity. This suggests that the complex relationships proposed by institutional theory and diffusion of innovation help to describe how environmental pressures and perceived technology complexity combine to affect intention to adopt an emerging technology. The theoretical contributions of this study are (i) we integrated, tested and validated mature theories in today's supply chain era with a new but rapidly diffusing technology, (ii) and we answered the call to include practical technology artifacts in information systems studies. From a practical perspective, through this work managers may develop a better understanding regarding environmental factors and whether or not they should consider these issues for their firm when formulating an intention to adopt SaaS.