Information & Management 53 (2016) 915–928

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Information & Management

journal homepage: www.elsevier.com/locate/im

Adoption of software as a service in Indonesia: Examining the influence

of organizational factors
Inge van de Weerda,* , Ivonne Sartika Mangulab , Sjaak Brinkkemperc
a
Department of Information, Logistics and Innovation, Vrije Universiteit Amsterdam, Amsterdam, The Netherlands
b
Department of Information and Computing Sciences, Utrecht University, Utrecht, The Netherlands
c
Department of Information and Computing Sciences, Utrecht University, Utrecht, The Netherlands

A R T I C L E I N F O A B S T R A C T

Article history:
Received 2 October 2015 In this study, we investigated the organizational factors that influenced Indonesian companies in their
Received in revised form 12 April 2016 decision to adopt software as a service (SaaS). Based on a multiple-case study of 18 Indonesian
Accepted 26 May 2016 companies, we identified three patterns: Top management support is an enabler for SaaS adoption; small
Available online 27 May 2016 to medium-sized enterprises (SMEs) are more likely to adopt SaaS than large companies; and
organizational readiness is not an enabler for SaaS adoption. The last two patterns contradict existing
Keywords: information technology (IT) innovation adoption research. We explain this by examining the nature of
Software as a service SaaS as an IT innovation and the characteristics of Indonesia as a developing country.
Adoption
ã 2016 Elsevier B.V. All rights reserved.
Organizational size
Top management support
Organizational readiness
Indonesia

1. Introduction reported by large analysts such as Forrester [25], in developing

The emergence of software as a service (SaaS) as a trend in the
information technology (IT) industry has attracted considerable
interest from both researchers and practitioners. SaaS enables
users to access an application over the Internet that resides and
runs on an SaaS provider’s servers and use it either for free or for a
fee based on usage [55,91,81,12]. This eliminates the need to install
and run an application on the user’s computer. Some examples of
well-known SaaS solutions for personal use are Yahoo Mail, Google
Docs, Facebook, and Twitter; for business users, examples include
enterprise resource planning (ERP) software such as NetSuite and
customer relationship management (CRM) software such as
Salesforce.com, Oracle Siebel on Demand, and Microsoft CRM.
SaaS is perceived as an innovative technology [50] that can provide
its adopters with several strategic and operational advantages.
Often-mentioned advantages include cost savings, increased
flexibility, and the reduced need for up-front investments or
skilled IT workers [7,92].
Several reports have predicted that these advantages may be
especially interesting for developing countries [13]. However,
although the global SaaS adoption rate is steadily growing, as
* Corresponding author.
E-mail addresses: i.vande.weerd@vu.nl (I. van de Weerd), i.s.mangula@uu.nl
(I.S. Mangula), s.brinkkemper@uu.nl (S. Brinkkemper).
countries such as Indonesia [19], Malaysia [75] and Thailand
[30,94], the adoption rates appear to be rather low. In our earlier
research, we found evidence for this low adoption rate [54], which
is also confirmed by market analysts such as the Asia Cloud
Computing Association [3], which reports that only 14% of
Indonesian small to medium-sized enterprises (SMEs) have
adopted cloud computing. Furthermore, the 2015 SMB Cloud
Insights research for Indonesia [61] estimates that only 24% of the
total Indonesian cloud market is accounted for by SaaS, or as they
call it “business apps.” Although reports on cloud and SaaS
adoption are difficult to compare due to the use of varying metrics,
we do see a large difference with global and Western cloud
adoption rates. For example, BCSG [5] reports an adoption rate of
64% of SMEs in Western Europe and IDG [33] reports a global cloud
adoption rate of 69%. Reasons that are used to explain the low rate
of SaaS adoption in Indonesia are, among others, the relatively low
reliability of Internet infrastructure and the low level of govern-
ment support [54].
To investigate the low rate of SaaS adoption in Indonesia, we
turn to innovation adoption theory, which has been widely used to
investigate technology innovation adoption in organizational
studies (e.g., [4,66,1]. An innovation can be defined as an idea,
practice, or object that is perceived as new by an individual or any
other unit of adoption [73]. IT innovations are regarded as enablers
for improving organizational competitiveness [91] and

http://dx.doi.org/10.1016/j.im.2016.05.008
0378-7206/ã 2016 Elsevier B.V. All rights reserved.
916 I. van de Weerd et al. / Information & Management 53 (2016) 915–928
productivity [62]. An often-used framework in information
systems (IS) is the technology–organization–environment (TOE)
framework developed by Tornatzky and Fleischer [86]. This
framework explains that the intention to adopt an IT innovation
is based on factors in the organizational context and its
environment as well as the characteristics of the innovation
technology itself [42,40].
The adoption of technology innovations may change the
adopting organization internally and/or externally [14]; hence,
the decision to adopt such innovations should be taken carefully.
As such, much research has been conducted to understand factors
related to organizational aspects that influence the decision
making behind technology adoption [14], such as top management
support, information intensity, innovativeness, organizational
readiness, prior IT experience, technology-sensing capability,
and organizational size [22,4,83,84]. These organizational factors
are considered important determinants of IT innovation adoption
(e.g., [94,51,35,65,14]. With respect to the influence of these
organizational factors, some recent studies on SaaS adoption in
Indonesia (e.g., [54,19] contradict existing theory. We believe this
may be due to the nature of SaaS, being a service model highly
suitable for organizations with few resources, as well as the
characteristics of Indonesia as a developing country. Therefore, we
contend that the extant theory regarding the influence of
organizational variables on adopting IT innovations should be
revisited in light of recent IT innovations such as SaaS.
Encouraged by the findings and the theories presented earlier,
we propose the following research question: “How do organiza-
tional factors influence SaaS adoption in Indonesian organiza-
tions?” In particular, we shed light on (1) the influence of
organizational factors on the adoption of SaaS and (2) the adoption
of SaaS in Indonesian companies.
2. SaaS adoption
IT innovation adoption has always been an attractive topic for IS
scholars, as IT innovations have a profound impact on organiza-
tions [46]. IT innovations influence almost every aspect of
organizational life [20] and generally intend to contribute to
performance and growth by increasing productivity, competitive-
ness, efficiency, and effectiveness [23,46].
SaaS is a form of cloud computing. This concept was coined
around 2006, when Amazon introduced a commercial web service
known as the Elastic Compute Cloud (EC2). This enabled small
companies and individuals with a limited budget for investing in IT
infrastructure to put their own applications on the provider’s site
[55]. Cloud computing is performed by customers on hardware or
software that they do not necessarily own or maintain [91], or, in
other words, the hardware and software resources are delivered as
a service through the Internet. There are essentially three service
models of cloud computing: SaaS, infrastructure as a service (IaaS),
and platform as a service (PaaS). With the SaaS service model, an
application is owned by the vendor and hosted on their site;
instead of installing and maintaining the application themselves,
customers simply access it over the Internet as a service provided
by the vendor [55,81]. Hence, SaaS provides customers with
advantages such as cost efficiency, as they only pay for a service
based on their usage [91], and increased flexibility and adaptability
to react to market changes [51].
2.1. Determinants of SaaS adoption
Rogers [73], p. 21) defined adoption as “a decision to make full
use of an innovation as the best course of action available.” Various
theories in the IS field have been used to find factors that
significantly or insignificantly influence SaaS adoption in
organizations. Examples include PEST (political, economic, social
and technological) analysis [45], the perceived e-readiness model
[52], the technology acceptance model [90], the theory of reasoned
action [7], and the TOE framework [93].
Several factors that can be found within an organization – but
also in the organization’s environment and in the technological
characteristics of SaaS – should be considered before taking the
decision to adopt SaaS [51]. The TOE framework developed by
Tornatzky and Fleischer [86] covers all of these aspects; it has been
extensively used by earlier scholars to investigate cloud services
adoption (for an overview, see Table 1). The TOE framework
identifies technological, organizational, and environmental
aspects that affect the intention to adopt IT innovation in
organizations [86]. The technology aspect describes both the
existing technologies in use and the emerging technologies that
are relevant for an organization. Examples of technological factors
include the innovation characteristics as suggested by Rogers [73],
namely relative advantage, compatibility, complexity, trialability,
and observability (e.g., [22,54], as well as perceived cost and
security (e.g., [75]. The organization aspect refers to the internal
elements of organizations that may influence the adoption of IT
innovations, such as top management support, organizational
readiness, organizational size, innovativeness, prior IT experience,
and information intensity (e.g., [63,84]. The environment aspect
relates to elements of the surroundings in which an organization
conducts its business, such as external pressure, competition
intensity, and government support (e.g., [8,30,75].
In Table 1, we present an overview of SaaS adoption studies that
use technological, organizational, and environmental factors to
explain SaaS adoption. We created this table based on a literature
review, where we searched Google Scholar using the search strings
“SaaS” “adoption” “TOE” and “cloud” “adoption” “TOE.” We
included studies that were of an empirical nature, and included
TOE variables that were studied in relation to cloud or SaaS
adoption. From each study, we extracted the tested TOE variables
and indicated whether their significance. Table 1 shows the results
of this review.
In addition to Table 1, we present an overview of the identified
variables according to the number of times that they have been
found to be significant (see Table 2). This overview only includes
variables that were found to be significant in at least one of the
studies.
Extant research shows that organizational factors are the most
widely studied variables for (IT) innovation adoption [14,36]. This
may be because organizational factors are often seen as the most
important determinants of IT innovation adoption in organizations
[14,39,36]. Subsequently, several scholars have focused their
research on the organizational factors that drive or hinder the
adoption of IT innovation in organizations [94,51]. Various factors
of the organizational context have been examined, such as firm
size, technology readiness, top management support, prior IT
experience, information intensity, and innovativeness [22,63,84].
As we can see in Table 2, three organizational factors stand out: top
management support, organizational size, and organizational
readiness. To clarify the organizational factors involved in this
study, the following paragraph provides a description of each of the
three factors. For each variable, we discuss the existing literature,
both from a general innovation adoption perspective and
specifically focused on SaaS and cloud studies, and we provide
the definition that we used in our research.
2.1.1. Top management support
Several studies have found that the support of top management
is one of the most important factors influencing the intention to
adopt IT innovations (e.g., [74,77,63,94]. When top management
support is high, executives are more likely to attend project
 I. van de Weerd et al. / Information & Management 53 (2016) 915–928 917

Table 1
Studies on cloud computing and SaaS adoption.

# Author Technological factors Organizational factors Environmental factors

(s)
1 [4] Relative advantage*, compatibility*, complexity*, Organizational size*, top management support*, Competitive pressure, industry*, market scope*,
trialability*, uncertainty* innovativeness*, prior IT experience* supplier computing support*
2 [8] Relative advantage*, compatibility, complexity Firm size, top management support*, IT expertise Competition intensity*, regulatory environment
of business users
3 [19] Relative advantage*, compatibility*, complexity, Technological readiness, top management Competitive pressure, partner pressure, external
cost, risk support support, marketing effort
4 [22] Relative advantage, compatibility, complexity Top management support, firm size, technology Competitive pressure*, trading partner pressure*
readiness*
5 [30] Perceived benefits*, business concerns IT capability* External pressure
6 [51] Relative advantage, compatibility, complexity Top management support*, organizational size*, Competitive pressure*, trading partner pressure*
technology readiness
7 [54] Relative advantage, compatibility*, complexity, Top management support, organizational Market pressure, market competition*, vendor
trialability, observability* readiness marketing effort, trust in vendor, government
support*
8 [63] Technology readiness* Top management support*, firm size* Competitive pressure, regulatory support
9 [75] Cost savings*, relative advantage*, accessibility*, Size*, size of IT resources, top manager’s Service-level agreement*, supplier’s
compatibility*, lack of data security, lack of data intention* competences*, government support*,
privacy competitors’ pressure*,
advice friends and family *, advice IT consultants*,
advice business network*
10 [83] Relative advantage*, compatibility, complexity, Technology-sensing capability*, technology- Industry pressure*
trialability responding capability
11 [84] Relative advantage, compatibility, complexity, Decision makers’ cloud knowledge*, information External support, competitive pressure
trialability, cost, security, and privacy intensity
12 [94] Data security*, compatibility*, complexity, costs Relative advantage, top manager’s support*, Government policy, perceived industry pressure
adequate resource*, benefits
13 [93] Trialability*, existence of required IT Top management support and involvement*, Adequate users and technical support from
infrastructure and resources*, compatibility*, resistance towards new technologies*, conformity provider*, choice of skilled cloud vendors*,
strength of inbuilt security systems, learning with work culture and style, impact of influence of market scope, nature of industry,
capability of employees, limited technical organizational structure and size, first adopters in relationship with providers, government, and
knowledge about similar technologies, our industry competitors
nonperformance of cloud services to support
operations
*
Factors found to be significant.

meetings and participate in important decisions concerning IT
innovation [74].
When adopting SaaS, several changes in business processes and
activities may be necessary as well as integration with the existing
systems; hence, top management support and commitment are
essential to convince an organization about the importance of the
innovation and influence internal users to participate in the
adoption processes [51]. This is also underlined by Oliveira et al.
[63,p. 502], who state that top management is important for cloud
computing adoption as it guides “the allocation of resources, the
integration of services, and the re-engineering of processes.”
Following Sabherwal et al. [74] and Scuploa [77], we define top
management support as a favorable attitude toward SaaS in
general.
2.1.2. Organizational readiness
Several scholars have used the concept of organizational
readiness to explore or predict the adoption of innovations (e.g.,
[32,51]. Organizational readiness is defined as the availability of
organizational resources to adopt new technologies [32,87,70].
This concept is often further specified under three headings,
including financial, human resources, and infrastructure aspects.

Table 2
Overview of significant factors.

Technological factors Organizational factors Environmental factors

Compatibility 6 Top management support 7 Competitive pressure2 5
Relative advantage 5 Organizational readiness1 5 Industry3 2
Trialability 2 Organizational size 5 Supplier computing support4 2
Complexity 1 Innovativeness 1 Trading partner pressure 2
Uncertainty 1 Technology-sensing capability 1 Competition intensity 1
Perceived benefits 1 Cloud knowledge 1 Market scope 1
Observability 1 Resistance to new technologies 1 Government support 2
Technology readiness 1 Service-level agreement 1
Cost savings 1 Suppliers competences 1
Accessibility 1 Advice of friends and families 1
Data security 1 Advice of business network 1
Advice of IT specialists and consultants 1
Choice of skilled cloud vendors 1
1
Including technological readiness, prior IT experience, IT capability and adequate resources, and existence of required IT infrastructure and resources.
2
Including market competition.
3
Including industry pressure.
4
Including adequate users and technical support from provider.
918 I. van de Weerd et al. / Information & Management 53 (2016) 915–928
Financial aspects refer to the allocated financial resources to invest
in new technologies [87]. Most researchers consider these financial
resources in a general sense, namely for any technology innovation
adoption, rather than as being specified for a particular technology
(e.g., [87,70,38]. One exception is the work of [32], who apply their
concept of financial readiness explicitly to financial reserves for
electronic data interchange (EDI), the technology they investigate
in their paper. Second, the human resources aspects refer to the
existence of employees with the knowledge and skills to adopt and
implement new IT innovations [96,89,51]. Finally, infrastructure
aspects refer to the installed IT that provides a platform on which
new IT innovations can be built [89].
The exact influence of organizational readiness on the adoption
of SaaS is unclear. Some authors have found that companies tend to
delay adoption until they have all of the required resources [94].
Along similar lines, several studies have identified that organiza-
tional readiness is an important driver of SaaS adoption (e.g.,
[22,94]. However, Low, Chen and Wu [51] found in their empirical
research on cloud computing adoption in Taiwan that organiza-
tional readiness was not a significant discriminator of cloud
adoption. Furthermore, some studies have identified high organi-
zational readiness as a barrier to SaaS adoption rather than an
enabler [54,19].
Following [87] and Low et al. [51], we define organizational
readiness as the availability of (a) sufficient financial resources for
adopting IT innovations; (b) human resources with the sufficient
skills, experience and knowledge for implementing and integrat-
ing SaaS applications; and c) sufficient installed and in-use
enterprise systems and network technologies on which SaaS
applications can be built.
2.1.3. Organizational size
Empirical studies have shown that organizational size positive-
ly affects an organization’s willingness to adopt IT innovations
[31,38,37]. This result has also been reported for the adoption of
SaaS and cloud (e.g., [51,63]. However, other results have also been
obtained. For example, Alshamaila et al. [4,p. 262]) noted in their
empirical research that in particular “start-ups and small busi-
nesses were found to be inclined to adopt cloud services,” and [58]
reported that cloud was highly suitable for SMEs.
To classify the size of each company participating in our study,
we used a quantitative measurement based on the number of
employees in an organization. This is in line with the World Bank
definition of organizational size. The general size categories used
are micro enterprises, with one to nine employees; small
enterprises, with 10–49 employees; medium enterprises, with
50–249 employees; and large enterprises, with 250 employees
[34]. To simplify this process, organizations are categorized into
two groups, small and medium sized (including micro enter-
prises), with up to 249 employees; and large, with 250
employees.
2.2. SaaS adoption in Indonesia
In 2006, the first Indonesian IT provider launched cloud
services [53]. Since then, the number of providers has increased.
However, SaaS adoption in developing countries remains in its
infancy, as seen, for example, in Indonesia (e.g., [54,19], Malaysia
[75], and Thailand [30,94]. This is also confirmed by several
professional reports, such as the abovementioned Asia Cloud
Computing Association [3], which found that only 14% of
Indonesian SMEs have adopted cloud computing, and the Asia
Cloud Readiness Index [2], which ranked Indonesia 12th out of 14
Asian countries, slightly above India and Vietnam. This last report
lists broadband quality, international connectivity, and data
center risk as three indicators on which Indonesia scores
especially low. The Global Cloud Computing Score Card [9] also
ranks the cloud readiness of Indonesia as “problematic”
compared to other countries. According to the report, this is
mainly caused by government regulations that create barriers for
cloud service providers.
3. Method
In this study, we followed a multiple-case study approach to
investigate how organizational factors influence the adoption of
SaaS in Indonesian organizations. The case study method enabled
us to investigate a contemporary phenomenon, namely the
adoption of SaaS, in its real-world context [95]. We approached
our study from an organizational perspective; that is, we focused
our research on three organizational variables: organizational size,
organizational readiness, and top management support. These
variables were defined a priori, based on the existing literature, to
shape the design of our research [18]. In our case studies, we
systematically compared and contrasted our findings with the
existing theory. We then used this analysis to further our
understanding of the adoption process and explain why Indonesian
companies adopt SaaS or not.
With our research method, we intended to determine why the
adoption rate of SaaS in Indonesia is relatively low and also
whether and how the three organizational variables influence the
adoption decision. Therefore, we used an explanatory case study
approach to explain how or why a certain condition (in this study,
the adoption or non-adoption of SaaS) came to be [95]. More
specifically, we followed a multiple-case design, which allowed
direct replication, thereby enabling more powerful analytical
conclusions, as well as the ability to use cases that offered
contrasting situations [95].
In the remainder of this section, we present how we selected
the case companies in our study. We then describe how we
collected, processed, and analyzed the data.
3.1. Case selection
All of the cases in our research were located in Indonesia. The
second author of this paper is Indonesian and therefore has
relatively easy access to Indonesian organizations and was
able to conduct interviews in the interviewees’ native language.
The country is also particularly interesting for this research when
we consider its high prevalence of SMEs (99.9% according to [2],
considering that several reports and publications have identified
that cloud and SaaS solutions may be especially attractive
for SMEs [56,58]. The results of our earlier research, in addition
to the most recent market analysis reports, contradict this, thus
sparking our interest. Finally, because Indonesia has the typical
characteristics of a developing country [48,78], and particularly
a developing country in the Asia Pacific region, the findings of
this study may be relevant for similar developing countries [41].
We used our own network to identify the case companies. We
selected our cases through a combination of theoretical and literal
replication [6,95]. Theoretical replication is used to generate
“contrasting results . . . for predictable reasons” [95]; for instance,
we were interested in how large organizations and SMEs or
organizations with sufficient readiness and those with insufficient
readiness differ in their adoption processes. Literal replication is
used to predict similar results within groups of cases with similar
characteristics, thus strengthening the robustness and reliability of
our study [95]. Previous studies have used theoretical and literal
replication to select their cases; for example, [80] used these
methods to select case sites for their research on software reuse as
a disruptive IT innovation, [57] used them to select firms for their
study of Internet adoption by SMEs, and[68] used them to select
 I. van de Weerd et al. / Information & Management 53 (2016) 915–928 919

SMEs in their exploration of contingent factors that affect IS
planning approaches.
We used the three variables organizational size, organizational
readiness, and top management support as well as the outcome
variable (adopt or not adopt) as conditions to determine the types
covered by our theoretical replication. The types based on the size
condition (SMEs and large organizations) could be defined
beforehand, whereas the other types (organizations with suffi-
cient vs. insufficient organizational readiness, organizations with
sufficient vs. insufficient top management support, and orga-
nizations that adopted SaaS vs. those that did not) were described
after the interviews and first analyses. [95] argues that we need at
least two individual cases within each subgroup in order to
complement the theoretical replications across the groups with
literal replication within each group. If, after the first analyses, it
appeared that this was not the case, we added extra cases to our
study.
We sent a letter of permission to a total of 40 companies, of
which 18 eventually agreed to participate in our study. Three
informants were interviewed twice, namely C1, C11, and C17. Of
these 18 companies, five had adopted SaaS and 13 had not and did
not intend to adopt within the next 3 years. All case companies
were located in Jakarta, with the exception of C11, C15, and C18,
which were located in Bandung.
Table 3 displays information about the companies that
participated in our study. The cases are divided over different
sectors. Six of them are health-care organizations, varying from
large hospitals distributed across Indonesia to small outpatient
clinics located in Jakarta. The three cases in the education sector
are all higher education facilities, located in Jakarta. Three of our
cases provide IT services to local customers in Jakarta and Bandung.
The two cases from the hospital sector are both hotels; one is a
large multinational with several hotels in Indonesia, and the other
is an independent hotel located in Bandung. The two organizations
in the banking sector are both Indonesian banks that also have
branches overseas. The organization in the media sector is a well-
known Indonesian media corporation that mainly operates online.
Finally, our last case is a small retailer in Bandung that sells fashion
products.
3.2. Data collection
We used semi-structured interviews [95] as our primary data
collection method. This research approach ensured that we
obtained all of the required information from our interviewees
[64]; it also gave us more room to ask for clarification, add
questions, or follow up on interviewees’ comments, allowing us to
gain additional insights into and understanding of the adoption or
rejection decision made by our case companies. We used an
interview guide in each of our interviews that we refined over the
course of the interview series. We complemented our interview
data with field notes and (online) documentation, such as
corporate websites and annual reports of the companies and their
IS.
Data collection was performed by the second author of this
paper, which took place in two periods. The first period covered
October and November 2014, while the second was in January
2016. In total, 21 interviews were conducted; this includes three
informants (C1, C11, and C17) who were interviewed twice, in
November 2014 and January 2016. Most interviews (n = 18) were
carried out in the informants’ offices and lasted between 30 and
90 min. The three remaining interviews (C9, C14, and the first
interview of C17) were conducted via e-mail. Our informants came
from different management functions and included IT supervisors,
IT managers, IT directors, and business owners, as can be seen in
Table 3.
Before starting the interview sessions, the interviewer intro-
duced herself and explained the aims of the study and how the
interview would be carried out. The interview topics included the
company’s background, the informant’s awareness of SaaS, and the
impact of the three organizational factors on SaaS adoption. In
order to clarify an informant’s basic awareness of SaaS, the
interviewer first asked whether the informant had ever heard
about SaaS and, if so, if they could explain what SaaS was. The
interviewer then explained our own definition of SaaS and
provided several examples of SaaS solutions that are implemented
in corporate or personal settings. Once the informant and the
interviewer had the same understanding of SaaS, the interviewer
continued with the other questions.

Table 3
Overview of case organizations.

Organization characteristi Informant characteristics

# Sector Existing SaaS applications Employees (in fte) IT staff Locations Total assets Position SaaS awareness Education
(in fte)
C1 Health care Hospital Information System 25 1 1 $100,000 < $3 million Owner Basic Non-IT
C2 Health care None 980 12 1 $3 million < $15 million IT manager Basic IT
C3 Health care None 700 5 1 $3 million < $15 million IT manager Very basic IT
C4 Health care None 96 1 1 $100,000 < $3 million IT manager Very basic IT
C5 Health care None 2700 15 10 > $15 million IT manager Basic IT
C6 Education None 81 3 2 $100,000 < $3 million IT manager Basic IT
C7 Education None 230 11 1 $100,000 < $3 million IT manager Basic IT
C8 Banking None 27,000* 276 1766 > $15 million IT director Basic IT
C9 Banking None 7460* 1780 422 > $15 million IT supervisor Basic IT
C10 Tourism None 11,000* 300 77 > $15 million IT manager Basic IT
C11 Tourism None 190 3 1 $3 million < $15 million IT manager Basic IT
C12 Media Corporate 550 12 4 $100,000 < $3 million IT manager High IT
Google Mail
C13 IT e-Office 17 3 1 < $100,000 IT supervisor Medium IT
C14 IT eMail Collaboration 30 3 1 < $100,000 IT supervisor Medium IT
C15 IT None 9 2 1 < $100,000 Owner Very basic IT
C16 Healthcare None 17 1 1 < $100,000 IT supervisor Very basic IT
C17 Education Office 365 62 4 1 $100,000 < $3 million IT supervisor High IT
C18 Retail None 3 0 1 < $100,000 Owner Very basic Non-IT

Organization marked with an * (size) are multinationals. Locations indicate the amount of geographically dispersed business units, which can be offices, medical facilities, or
hotels, depending on the type of organization.
920 I. van de Weerd et al. / Information & Management 53 (2016) 915–928
The interviewer assured informants that all information would
be treated confidentially. In line with the informants’ requests,
company names cannot be mentioned in our research paper; the
companies are therefore represented by the identifiers C1–C18.
The face-to-face interviews were audio-recorded with the
permission of the informants. As soon as the interviewer finished
an interview session, she summarized the interviews and asked for
feedback and approval from the informants.
3.3. Data processing and analysis
To aid our analysis, we used six codes to organize our data: SaaS
awareness level, top management support, organizational readi-
ness, organizational size, SaaS adoption and use, and developing
country. We used NVivo 10.0 to code our interviews and
documentation with these four themes. Table 4 shows our coding
scheme with a detailed description of each code and examples of
real text translated from Indonesian.
We analyzed our data in several iterations. We started with a
within-case analysis of each of the cases to structure, define,
reduce, and make sense of the information. We evaluated each case
separately in terms of the three organizational variables and
outcome variable by using transcripts, field notes, and (online)
documentation on the companies and their IS. Furthermore, we
analyzed the data for evidence related to SaaS awareness level,
SaaS adoption and use, and issues that are typical for developing
countries.
The results of the within-case analyses were processed in an
informal qualitative comparative analysis (QCA), a method
originating in management research that helps to “discover
combinations of conditions that sufficiently explain a certain
outcome” [79], p. V). This method allows for cross-case compar-
isons but also does justice to within-case complexity [71]. QCA
assumes that in order to enable the systematic comparison of
complex cases, these cases need to be transformed into config-
urations [71]. These configurations are a specific set of factors (in
this study, organizational variables) that produce a given outcome
of interest (in this study, the adoption of SaaS). In the IS field, QCA is
particularly interesting for finding configurations of factors that
explain IT innovation outcomes [20] and has, for example, been
used to explain how IT implementers’ responses influence user
resistance [72].
Finally, we carried out an across-case analysis. We used the QCA
results as a basis for identifying the different configurations that
led to either the adoption or non-adoption of SaaS. The goal of the
Table 4
Coding scheme.
Code Description
SaaS awareness Contains a collection of informant responses regarding their awareness “Yes, I did hear about cloud...I think SaaS is a web-based application.” (C10)
level and definition of SaaS.
Top Contains a collection of informant responses regarding how the top
management management makes decisions on the adoption or rejection of SaaS
support
Organizational Contains a collection of informant responses related to the influence of “In 2000, we started to use a Hospital Information System that had been
readiness the availability of the required organizational resources (financial, IT
expertise, and/or IT infrastructure) in triggering the adoption or rejection necessary resources to develop our own information system.” (C5)
of SaaS.
Organizational Contains a collection of informant responses related to the size of the “This new application is web-based, user friendly, and supported by experienced
size company or its IT unit and how this influences the adoption decision
SaaS adoption Contains a collection of informant responses related to the (non-)
and use adoption or use of SaaS applications.
Developing Contains a collection of informant responses related to issues that are “We are not considering adopting SaaS since we’re concerned about the Internet
country typical for developing countries (in relation to SaaS adoption).
across-case analysis was to find similar patterns across our cases,
enabling us to draw conclusions about the influence of our three
organizational variables [95].
3.4. Validity
Four types of validity are important for assessing the quality of
empirical research: construct validity, internal validity, external
validity, and reliability. Construct validity ensures that the correct
measures are used in a study [95]. The steps we took to ensure this
type of validity were (1) using multiple sources of evidence
(interviews, field notes, and documentation), (2) establishing a
chain of evidence during data collection, and (3) summarizing the
interview results of each case company for feedback and approval.
Internal validity concerns the evaluation of the causal relationships
found in a study [95]. We followed an explanation-building
procedure to strengthen our internal validity. External validity
relates to the generalizability of the research. We used a multiple-
case design in which we used replication logic to strengthen the
robustness and the generalizability of our research [44,95]. Finally,
we ensured the reliability of our research by using a case study
protocol and maintaining a case study database. This guaranteed
that the data collection and analysis could be repeated [95].
4. Results
We present our results in three parts. First, we elaborate on the
findings of our within-case analysis. We then present our QCA in
order to show how the different cases scored on the three
organizational variables in relation to the outcome variable, SaaS
adoption. Finally, we present our across-case analysis, in which we
elaborate on the patterns we found and illustrate these with
interview quotes to reveal more about the interviewees’ percep-
tions regarding these variables.
4.1. Within-case analysis
Our within-case analysis required a careful analysis of each
separate case based on the three organizational variables and the
outcome variable (adoption or non-adoption of SaaS). We also
analyzed other case details, such as awareness of SaaS and any
other characteristics that surfaced.
The analysis of the three organizational variables consisted of
two parts: first, we searched for ways to assign a value to each of
the variables. For organizational size, this was easy: This variable is
Example
“For the procurement lower than 2 million rupiahs, the decision is on the
director; while if it is more than 2 million rupiahs, the decision is on the board of
commissioners, I am just giving them some suggestions on IT implementation.”
(C4)
developed by ourselves. We do not host it at another place . . . we have all
IT personnel of the provider. Therefore, this will reduce our spending on IT
infrastructure and IT personnel...Currently we have only one part-time IT
employee.” (C1)
“We use Office 365 for free . . . in the form of a cloud based mail application.”
(C17)
reliability offered by the providers.” (C15).
 I. van de Weerd et al. / Information & Management 53 (2016) 915–928 921

a measurable, objective value that we acquired via either the
interviewee or additional documentation (e.g., company websites
and annual reports). Top management support and organizational
readiness, however, were more difficult to assess.
For organizational readiness, we looked at the three sub-
concepts financial resources, human resources, and installed and
in-use enterprise systems and network technologies. By examining
the information acquired from our interviews and additional
documentation, we evaluated whether these conditions were
sufficiently present or not. As an example of a case with insufficient
organizational readiness, we present our evaluation of C1. The
informant indicated that “[the company had] budget restrictions
for purchasing data storage and hiring an IT professional,” and
“currently we have only one part-time IT employee.” From this, we
concluded that there were insufficient financial resources; no
human resources with sufficient skills, experience, and knowl-
edge; and insufficient infrastructure to implement and integrate
SaaS applications. By contrast, we provide an example of an
organization with sufficient organizational readiness, C5. The
informant in this case indicated that his company had “all
necessary resources to develop our own information system,”
and that they “use a Hospital Information System that had been
developed by ourselves.” Complementing this with the informa-
tion on human resources and technology investment in the
organization’s annual report, we concluded that C5 had sufficient
financial resources; human resources with sufficient skills,
experience, and knowledge; and sufficient infrastructure to
implement and integrate SaaS applications.
Top management support was assessed based on how each
informant perceived this variable in his or her organization. For
example, the informant in C17 explained that the rector of his
educational facility “suggested us to adopt Office 365,” based on
which we concluded that top management support was sufficient
in this case. Finally, the evaluation of the outcome variable
(adoption or non-adoption of SaaS) was also based on the
information provided by informants.
4.2. Qualitative comparative analysis
In this section, we discuss how the cases can be classified
according to the variables organizational size, organizational
readiness, top management support, and the outcome variable,
SaaS adoption. We used an informal QCA to present the results
(following the approach of Rihoux and Ragin [71]).
First, we dichotomized each variable with either a 1 or a 0, with
1 indicating that a given condition or outcome was present and 0
indicating its absence. Following good practice in QCA [71], the
choice of 1 or 0 was based on the existing theory. According to
several studies (e.g., [38,37] large organizations are more likely to
adopt an innovation. Therefore, we coded large organizations with
1 and SMEs with 0. The same holds for the other two variables:
sufficient top management support and organizational readiness
were coded with 1, whereas insufficient top management support
and organizational readiness were coded with 0. We used the
results of our within-case analysis to assign the values to the
variables, as can be seen in Table 5.
Table 5 shows the data set table that summarizes our findings.
Based on this table, we developed a truth table that shows all
possible configurations of the three different conditions (three
organizational variables) that were considered to affect an
organization’s decision to adopt SaaS. As can be seen in Table 6,
eight configurations were possible. Six of these configurations

Table 6
Truth table.

Configuration Organizational size Organizational readiness Top management support SaaS adopted SaaS not adopted
A: 000 0 0 0 6
B: 001 0 0 1 4
C: 010 0 1 0 1
D: 011 0 1 1
E: 100 1 0 0 3
F: 101 1 0 1 1
G: 110 1 1 0 3
H: 111 1 1 1

Table 5
Data set table of cases.

Case Organizational Organizational Top management SaaS

size readiness support adoption
C1 0 0 1 1
C2 1 0 0 0
C3 1 0 0 0
C4 0 0 0 0
C5 1 1 0 0
C6 0 0 0 0
C7 0 1 0 0
C8 1 1 0 0
C9 1 0 0 0
C10 1 1 0 0
C11 0 0 0 0
C12 1 0 1 1
C13 0 0 1 1
C14 0 0 1 1
C15 0 0 0 0
C16 0 0 0 0
C17 0 0 1 1
C18 0 0 0 0
922 I. van de Weerd et al. / Information & Management 53 (2016) 915–928
were found in our data set, namely configurations A, B, C, E, F, and
G. It is worth noting that the configurations leading to the adoption
of SaaS are configuration B, containing SMEs with insufficient
organizational readiness but sufficient top management support,
and configuration F, containing one large organization with
insufficient organizational readiness but sufficient top manage-
ment support. Configurations A, C, E, and G did not lead to SaaS
adoption. Two configurations were not found in our data set,
namely configuration D (SMEs with sufficient organizational
readiness and top management support that have adopted SaaS)
and configuration H (large organizations with sufficient organiza-
tional readiness and top management support that have adopted
SaaS).
In addition to the truth table, we present a set-theoretical
representation of our data set in Fig. 1. In this figure, the cases that
adopted SaaS are marked in gray. Cases that were not large and had
no sufficient organizational readiness and top management
support are placed outside the three circles. A few points are
worth noting in this representation. First, sufficient top manage-
ment support seems to be the strongest predictor for the adoption
of SaaS in our study. Second, cases with sufficient organizational
readiness for IT innovation are not among the adopters of SaaS.
Finally, most large organizations, with the exception of C12, did not
adopt SaaS.
4.3. Across-case analysis
In this section, we elaborate on the results of our interviews and
try to find general patterns that help us understand and explain the
influence of the organizational variables on the adoption of SaaS.
To set the stage, we present a general discussion of the SaaS
awareness level of our interviewees. Second, we elaborate on the
findings concerning the variables top management support,
organizational size, and organizational readiness. Finally, we
discuss findings related to Indonesia as a developing country.
4.3.1. SaaS awareness level
To analyze the SaaS awareness level of our informants, we
classified them into four groups: (1) very basic level—the
informant has heard about either cloud computing or SaaS but
is not able to give a correct description of the terms; (2) basic
level—the informant has heard about both cloud computing and
SaaS but is not able to give a correct description of either of these
terms; (3) medium level—the informant has heard about cloud
computing and SaaS and is able to give an accurate description of
one of these terms; and (4) high level—the informant is able to
give a correct description of both cloud computing and SaaS. We
Fig. 1. Set-theoretical representation of the cases.
discovered that five of the 18 informants had only a very basic
level of SaaS awareness, whereas nine others were at the basic
level, as we can see in Table 3. Only two informants could be
classified at the medium level and two could demonstrate a high
level of awareness of SaaS. In other words, most of our
interviewees had heard of cloud computing or SaaS but were
not able to describe the concepts accurately. Most informants
described SaaS as a web application, which is not entirely in line
with the definition of SaaS used in our study. SaaS applications
may indeed be accessed via the Internet but, more importantly,
data storage is on the provider’s server instead of on the user’s
server or hard disk. Below is a selection of the interviewees’
responses:
“Cloud computing...Yes, I’ve heard about it...SaaS is a web
application.” (C11).
“Yes, I did hear about cloud...I think SaaS is a web application.”
(C10).
4.3.2. Top management support
In our study, top management refers to a person or group of
people that makes the decision to adopt or not adopt SaaS and to
allocate the necessary organizational resources to support the
adoption process. In our cases, the decision to adopt or reject SaaS
was made, for example, by the business owner, the IT director, or
the IT manager, as reflected in the following quotes:
“I am the owner and have sufficient knowledge about IT; the
decision was taken by myself and the IT director” (C1)
“As the head of the IT department, I make the decision.” (C12)
Top management may also refer to a person who has a key role
in influencing all decisions taken by a decision maker. In one of our
case companies, even though the IT manager had no power to
make any decisions regarding the adoption of new IT innovations,
he did have some power to influence the decision makers in his
company to adopt certain IT innovations:
“We have just developed our new Hospital Information System;
therefore, I do not think that we will adopt SaaS within the next few
years. The decision lies at the board of commissioners, I am just
giving them some suggestions on IT implementation.” (C4)
Five of our cases showed sufficient top management support for
SaaS, and each of these cases had actually adopted SaaS. All of these
cases showed that the top management was convinced of the
benefits of SaaS, as, for example, can be seen in the following
quote:
“When email would go down, top management would be very
disappointed...They feel the importance of email, so they are very
supportive of using Google Corporate email...I did not have to
bother to convince top management to use Google for our
corporate email, because they already felt that there would be a
severe impact in case email would go down.” (C12)
C17 is of particular interest. The informant in this educational
organization was interviewed twice, with 1 year in between
interviews. In the first interview, the informant indicated that SaaS
was not being discussed by top managers and that his organization
would probably not be using SaaS in the near future. However,
1 year later, the situation had changed and the organization had
started using a free version of Microsoft 365 for its e-mail services.
When our interviewee, an IT supervisor, was asked whether he was
the one who had suggested this SaaS solution to the organization,
he denied it and explained that the idea actually came from the top
management:
“No...In fact, [the rector] suggested us to adopt Office 365.” (C17)
In several cases, we found that top management was strongly
influenced by external parties, such as government policies and
 I. van de Weerd et al. / Information & Management 53 (2016) 915–928
the professional community. In our study, two companies ran
their businesses in the banking sector, where there is the
obligation to conduct business in accordance with the regulations
of the central bank of Indonesia. The nature of SaaS, especially
concerning data storage outside the customers’ chosen organiza-
tion, raises all kinds of compliance problems. This means that
adoption decisions have to be taken at the highest level of
management or even by governmental bodies, as is illustrated in
the following quotes:
“As a banking corporation, each new IT innovation that is to be
adopted must comply with the regulations made by the
government, such as by the central bank of Indonesia, which
has the authority in managing all activities and banking
regulations in Indonesia.” (C8)
“The decision rests with the board of directors, commissioners, and
the IT committee of our holding company...I am somewhat
pessimistic, because due to our banking institutions, many factors
must be taken into consideration...It will depend on the permission
from the Central Bank . . . and attitude of the decision-makers
(whether they are conservative or daring towards testing new
technologies).” (C9)
In other cases, informants explained that their top management
sometimes took suggestions from their professional community
into consideration before deciding to adopt a new innovation,
including SaaS:
“The decisions are taken by the hospital management with
considering the IT department recommendations. However, they
also sometimes consider the suggestions from their colleagues from
other hospitals.” (C3)
Based on our findings, we concluded that top management
support had a major influence on the adoption of SaaS. Although in
several cases IT employees had some influence on the decision, we
identified that SaaS applications were only actually adopted in
cases where top management was enthusiastic about SaaS.
Therefore, we concluded that top management support had a
positive influence on the adoption of SaaS.
4.3.3. Organizational size
We determined organizational size by measuring the number of
employees in each case company. We classified our case companies
into two groups: SMEs and large companies. As shown in Table 2,
seven large companies and 11 SMEs participated in our study. One
out of seven large companies and four out of 11 SMEs adopted SaaS.
To explain these findings, in this section, we elaborate on the
rationale behind adopting or not adopting SaaS and attempt to link
this to characteristics related to company size.
For the non-adopting large companies, instead of adopting
SaaS, some chose to develop their own IS or purchase them from an
application vendor, with slight modifications if necessary. One
reason for this was the uniqueness of their business processes, as
can be seen in the following quote:
“Since 2009, we have moved to a new web-based Hospital
Information System. We purchased it from an application vendor
and made about 20% of modifications to the flow of the system and
the features. The uniqueness of our information system is related to
our business processes, which are different from other hospital
business processes.” (C2)
Another company mentioned the obligation to use IS that were
already developed and standardized by the parent company as one
of the reasons for not adopting SaaS:
“For our company, it seems quite difficult to adopt SaaS since we
have to follow a standard system set by the principal of our hotel
group. We should have a discussion first with the stakeholders if we
want to adopt any new IT innovations.” (C10)
923
We can conclude from these quotes that the size of the
company, and the resources that come with this, enables
companies to make the choice to use customized IS and to keep
them in house for more control. Another factor that affects the
decision to not adopt is compliance with the rest of the
organization: Choices are made by headquarters and not by
subsidiary companies.
If we look at the single large company that did adopt SaaS, the
intention to adopt was related to the efficiency of its resource
utilization. Using cloud appeared to be more efficient and enabled
the company to focus more on its core business activities:
“For our long-term planning, after we did some calculations and
made a comparison between maintaining our own email server
and renting an email application from Google, we concluded it
would be more efficient on budget spending if we chose the second
option. We have 12 IT employees and three of them were allocated
for maintaining our own email server, which was not efficient.
After we started using Gmail, we could focus on our core business
activities.” (C12)
Of the 11 SMEs, we found that four adopted SaaS, but the other
seven did not. The adopting SMEs decided to adopt SaaS for
different reasons, but most mentioned their expectations of cost
reductions and the new functionality that the SaaS applications
could provide, as illustrated by the following quotes:
“ . . . this new application is already web-based, user friendly, and
supported with experienced IT personnel of the provider. Therefore,
this will reduce our spending on IT infrastructure and IT personnel.
Currently we have only one part-time IT employee” (C1)
“The adopted SaaS application we currently use has enabled us to
collaborate with the teams internally in our company as well as to
share knowledge regarding the existing problems and how to solve
them.” (C14)
The non-compliance of SaaS applications with the flow of the
organizations’ business processes was mentioned by two non-
adopting SMEs:
“We were thinking to buy a new application; however, since the
application was not compliant with our business process, we
decided to develop our own application.” (C4).
“ . . . we will consider to adopt SaaS if its features and functions are
similar to or are even better than our current business processes, so
we don’t have to do lots of customizations that will affect the costs.”
(C7)
Based on the findings presented here, we can conclude that
organizational size is generally not positively related to SaaS
adoption. It appears from our data that SMEs are more likely to
adopt SaaS than large companies.
4.3.4. Organizational readiness
The readiness of a company to adopt new IT innovations can be
considered in terms of three types of organizational resources,
including the availability of financial resources for adopting IT
innovations, human resources with the necessary IT skills and
knowledge, and installed and in-use enterprise systems and
network technologies. In the existing literature, the general idea is
that the absence of one or more of these resources is likely to
hinder a company’s intention to adopt an innovation. However, our
QCA showed that none of the organizations with sufficient
organizational readiness adopted SaaS.
Examining the responses of our interviewees, we found some
evidence to support the claim that the absence of organizational
resources prevents an organization from adopting an innovation.
The IT manager of a medical organization explained, for example,
“Considering the IT infrastructure that we have now, I think we’re
not ready yet to connect with the cloud . . . we have IT personnel
924 I. van de Weerd et al. / Information & Management 53 (2016) 915–928
with their own expertise . . . but we don’t have a budget to
frequently replace our applications.” (C2)
However, in contrast to this response, we also found that the
lack of budget allocation for IT infrastructure and expertise led to
SaaS adoption:
“At first, we preferred to place the application server at our
location. However, due to budget restrictions on purchasing data
storage and hiring IT professionals to maintain our servers, we later
decided to put the system in the cloud.” (C1)
Furthermore, we noted that for some of our cases, sufficient
funding, good IT infrastructure, and sufficient IT expertise did not
automatically trigger the intention to adopt SaaS, as confirmed by
the following quote:
“In 2000, we started to use a Hospital Information System that has
been developed by ourselves. We do not host it at another
place . . . we have all necessary resources to develop and host our
own information systems.” (C5)
C8 and C9 were the two organizations with the sufficient
organizational readiness in terms of budget, human resources, and
infrastructure. C8, for example, allocated more than US$50 million
in 2014 for IT investments, maintained an educated IT workforce
(through professional certification trajectories, among others), and
had well-developed IT infrastructure (for example, with a dual data
center facility). C9 had allocated US$26 million to IT infrastructure,
had won a prestigious IT excellence award, had employees with a
sufficient knowledge, and had well-developed and recently
updated IT infrastructure. However, neither organization men-
tioned the terms “cloud computing” or “SaaS” in their plans for
future IT developments; their budgets, skills, and existing
infrastructure enabled them to develop and host their own
applications and retain a maximum level of control:
“We currently use 100% on-premise applications. All servers are
placed at our organization...Thus, it is always under our control. For
an application with specific requirements, we prefer to develop it
by ourselves.” (C8)
Based on these arguments, the presence of sufficient financial
resources, skilled IT employees, and good IT infrastructure, that is,
sufficient organizational readiness, does not seem to have a
positive influence on the decision to adopt SaaS. Moreover, the
informants’ responses were an indication of the opposite:
Organizational readiness seems to be inversely associated with
SaaS adoption.
4.3.5. Adopting SaaS in a developing country
In addition to findings related to the a priori defined variables,
during our analysis, we found extra determinants of SaaS adoption
that related to Indonesia as a developing country.
Several of our informants noted that the Internet connections of
some vendors were still not reliable, as illustrated in the following
quotes:
“I think we are not ready yet...On the one hand, [SaaS] is a good
application, but we also have to consider the Internet providers. If
they have a good infrastructure, it’s ok for us. But we’re still
concerned about the bandwidth they offer.” (C3)
“We are not considering adopting SaaS since we’re concerned
about the Internet reliability offered by the providers.” (C15)
Furthermore, some of our informants pointed out that they did
not want to use SaaS due to their lack of trust in the local SaaS
vendors in terms of data security, as argued by one of the cases:
“I simply rejected SaaS adoption since I still have doubts
concerning its security. [The local providers] have not convinced
me that SaaS is secure.” (C11)
Another issue that arose during the interviews is related to the
low awareness level of SaaS. As described earlier, most of our
interviewees had heard of either cloud computing or SaaS, but they
did not really understand what the terms actually mean. One
informant mentioned that an SaaS vendor had invited him to
follow an SaaS seminar. However, in the view of this interviewee,
these types of seminars are more about promoting products, than
educating on SaaS:
“Yes, I received the seminar invitation, but I didn’t have time to go
there.And they are just promoting their product anyway. They
don’t explain what SaaS actually is.” (C4)
5. Discussion
In this section, we first discuss the influence of the organiza-
tional factors on the adoption of SaaS in Indonesia, and then
elaborate on the limitations of this study.
5.1. Patterns of SaaS adoption in Indonesia
In our across-case analysis, we revealed three patterns
concerning the adoption of SaaS in Indonesia: (1) top management
support is an enabler for SaaS adoption; (2) SMEs are more likely to
adopt SaaS than large companies; and (3) organizational readiness
for IT innovation reduces the likelihood of SaaS adoption. We
discuss each pattern and elaborate on the context in which the
results were found, namely, Indonesia as a developing country.
5.1.1. Pattern 1: top management support is an enabler for SaaS
adoption
With regard to top management support, we found that the role
of decision makers is crucial in deciding whether or not to adopt
SaaS: All of our cases with sufficient management support adopted
SaaS. We also found that how SaaS was perceived by decision
makers potentially influenced the support given, which in turn was
mostly affected by SaaS awareness levels. In other words, there is a
connection between top management support and SaaS aware-
ness. As we can see in Table 3, most of the non-adopting companies
had a basic or very basic knowledge of SaaS. This is in line with
Thong and Yap [85], who found that the top management
characteristics innovativeness, attitude toward the adoption of
IT, and IT knowledge have a positive influence on the adoption of IT
innovations in companies, and the work of Rogers [73], who argues
that the “attitude towards an innovation takes place before a
decision to adopt is made.”
In several cases, we saw that decision makers were influenced
by external pressures, such as from a professional community or
the government. We do not underestimate the influence of these
actors and recognize this as a form of institutional isomorphism
[21], in which organizations adopt similar structures and ideas due
to pressure from institutionalized ideas. DiMaggio and Powell [17]
identified three isomorphic pressures: coercive, mimetic, and
normative. Coercive pressures come from the state or other power
relationships, and banking regulations are a clear example of this.
In addition, we saw that several cases were pressured by mimetic
forces, implying that when these organizations were uncertain
about which course of action to take, they looked to their peers (in
this case other hospitals) and imitated their behavior. In earlier
studies, these types of mimetic forces have been found to influence
top management in the assimilation of IT innovations. An example
is the study by Liang et al. [49], who found that mimetic pressures
influence top management beliefs and participation in the ERP
assimilation process.
Based on the existing literature, it is no surprise that top
management support has a positive influence on the adoption of
 I. van de Weerd et al. / Information & Management 53 (2016) 915–928
SaaS. Many studies show that top management support is a strong
enabler for the adoption of IT innovations (e.g., [74,77,94]. This has
also been found in studies on the adoption of SaaS [51,63].
However, we were surprised to find that so few of our informants
had tried to use or promote SaaS applications in their companies. In
the recent literature, the consumerization of IT has been of
increasing interest. Consumerization, which refers to the use of
consumer technologies such as mobile devices and cloud services
in the workplace [26,60], can be seen as an example of user-driven
innovation. Tan and Kim (2014) found, for example, that prior
experience with SaaS collaboration tools such as Google Docs has
significantly influenced the introduction of these tools in orga-
nizations. In our cases, we did not find much evidence of this. One
explanation might be that the Indonesian culture is characterized
by a high power distance [29] in which organizations have strong
hierarchies and Indonesian employees expect to be clearly directed
by their executives. In these types of cultures, the opinions of top
management may have a stronger effect on the adoption process
than in cultures with a lower power distance, as found by Lee et al.
[47] in their research on the diffusion of knowledge management
systems in Chinese enterprises and by Kurnia et al. [41] in their
research on e-commerce adoption within the Indonesian grocery
industry. Furthermore, the collectivist nature of the Indonesian
culture [29] might increase the influence of isomorphic pressures,
indicating that top management is strongly influenced by the
government and their peers in their decisions on IT innovation
adoption, as also observed by Kurnia et al. [41].
5.1.2. Pattern 2: SMEs are more likely to adopt SaaS than large
companies
In terms of organizational size, we found that only one of the
seven large companies adopted SaaS, whereas four of the 11 SMEs
adopted it. This is surprising, as several studies on innovation
adoption have shown that organizational size positively affects an
organization’s willingness to adopt IT innovations [38,37,1].
However, this finding is also in line with some studies that argue
SaaS as being particularly fitting for SMEs and organizations with
tight resources (e.g., [4].
Our informants expressed several reasons for adopting or
rejecting SaaS that can be traced back to the size of their
organization. First, some informants expressed the need to control
data by placing their own server inside the organization. The fact
that large organizations have more resources in terms of finances,
infrastructure, and IT workers implies that these companies can
make choices that might not be the most cost-efficient. As [82]
argue, for large companies, the willingness to adopt an innovation
is related to, among others, how they handle the risks and
uncertainties associated with this new innovation [82]. This
motivation may be reinforced by the characteristics of Indonesia as
a developing country. As discussed in the last part of our analysis,
there is a lack of trust in the availability and stability of Internet
connections. This is a concern specific to developing countries and
has also been reported in other studies (e.g., [59,43].
Another reason mentioned was that our informants had to use
standardized applications in compliance with the parent company.
Large companies usually have more data and more complex
business processes, which means that the adoption of SaaS may
involve major changes in organizational IT governance [27].
As mentioned earlier, according to Hofstede’s (1994) cultural
dimensions, Indonesia has a culture with a high power distance,
where hierarchy is important. In large organizations in particular,
this may lead to a delay in the adoption of IT innovations, as lower
management levels may be less inclined to make such adoption
decisions without consulting the top management.
For the SMEs that adopted SaaS, decisions were motivated by
the need to lower the investment costs in IT infrastructure and
925
human resources, as well as the possibility of collaborating online
with internal users and customers. The small amount of data
owned by such companies and the simple structure of their
business processes were also some of the considerations that made
it easy to adopt SaaS. Conversely, the non-compliance of SaaS with
existing business processes had also led some other SMEs to reject
SaaS, similarly to some of the large organizations.
Based on our findings, we conclude that large organizations are
not more inclined to adopt SaaS than SMEs. Moreover, we found
strong indications that this relation is actually inverse. This is in
contrast to several studies that claim that the larger the size of an
organization, the more likely it is to adopt SaaS, reflecting its ability
to take risks and allocate the required organizational resources
(i.e., [63,75,51]. We believe that this contradiction is mainly caused
by the nature of SaaS as an innovation, in line with the arguments
of [4].
5.1.3. Pattern 3: organizational readiness for IT innovation reduces the
likelihood of SaaS adoption
Four of the 18 cases showed sufficient organizational readiness
for adopting IT innovations, indicating that these organizations
had sufficient financial resources, skilled IT employees, and a
decent IT infrastructure. Based on the existing literature (e.g.,
[22,94], we might expect these cases to be among the adopters of
SaaS. However, the opposite is true: None of these companies
actually adopted SaaS.
Based on the interview results, some companies delayed SaaS
adoption due to concerns about the security and reliability of their
own IT infrastructure, which actually supports the argument that
higher organizational readiness leads to the adoption of SaaS.
However, we also found evidence that limited IT infrastructure and
unskilled IT personnel lead to the exact opposite: They were used
as motivations to adopt SaaS. This is mainly due to the fact that
SaaS adoption requires low investments in IT infrastructure, such
as computer servers, and IT personnel for maintaining IT
operations. This contradicts prior studies such as [22,30,94], but
it is in line with the work of [54,19], who found in earlier studies on
SaaS adoption in Indonesia that organizational readiness was a
barrier to adoption rather than an enabler. Based on our findings,
we conclude that this contradiction is caused mainly by the nature
of the innovation (e.g., low up-front investments).
Although there is an overlap between large organizations and
organizations with sufficient organizational readiness, we believe
it is important to distinguish these variables. Indeed, this overlap is
not unexpected because large organizations tend to have more
resources [10]. However, organizational readiness is not compara-
ble one on one with organizational size, which can also be seen in
our large cases with insufficient organizational readiness and vice
versa. Therefore, we followed the extant literature on IT innovation
adoption, which treats these variables separately (e.g., [57].
5.2. Limitations
Although our study resulted in interesting findings, it has some
limitations to be discussed. First, we focused our study on the three
most commonly used organizational factors in the IT innovation
literature. This was intentional, as we focused our research on the
organizational aspects of adoption, but it also implies that we did
not thoroughly explore other factors, such as technological or
environmental factors. A broader scope might result in a more
comprehensive analysis of SaaS adoption in Indonesia.
Second, our study was based on 18 Indonesian cases, divided
over seven industry sectors. Although we used literal replication to
strengthen the robustness and reliability of our study, the findings
should be interpreted carefully. Several sectors were not included
in our study, which might have influenced our results.
926 I. van de Weerd et al. / Information & Management 53 (2016) 915–928
Furthermore, although Indonesia has the typical characteristics of
a developing country, it is not directly comparable with all other
developing countries, as these might have different cultural
dimensions. One solution to overcome the small amount of cases
is to use survey-based research methods so more organizations can
be included. Nonetheless, these methods have several limitations
compared to qualitative research methods; for example, if
interesting issues emerge, it is usually not possible to ask
follow-up questions. We believe that our multiple-case study
offers further insight into the adoption process.
Finally, we found in our research that top management support
is extremely important in adopting SaaS. However, we do not know
much about the personal characteristics of these managers. An
interesting direction for future research would be to consider the
personal characteristics of the top management and assess how
this affects attitudes toward SaaS adoption.
6. Conclusion and implications
In this paper, we attempted to answer the research question
“How do organizational factors influence SaaS adoption in
Indonesian organizations?” In particular, we investigated SaaS
awareness in Indonesian companies and how three organizational
factors, namely top management support, organizational size, and
organizational readiness, influence the decision to adopt SaaS.
This paper makes several contributions that have important
theoretical implications. First, our study revealed that top
management support is the strongest enabler for SaaS adoption.
This is in line with the literature [74,77,51,63]. However, we also
have indications that this influence is reinforced by the Indonesian
culture, with its high power distance and strong hierarchies [29].
Future research could investigate in more detail how the relation
between top management support and IT innovation adoption is
influenced by the Indonesian culture, or, in a broader context, by
the characteristics of developing countries. Second, we investigat-
ed the relation between organizational size and SaaS adoption. The
previously introduced IT innovation adoption literature assumes
that organizational size has a positive influence on IT innovation
adoption [38,37,1]. Contrary to this assumption, our research
showed that SMEs were more likely to adopt SaaS than large
companies, which is in line with the work of [4], although it
contradicts the majority of studies on SaaS adoption (e.g., [51,63].
This also holds for our third finding, namely that organizational
readiness reduces the likelihood of SaaS adoption. Again, the
existing studies on IT innovation adoption (e.g., [32,51] and most
studies on SaaS adoption (e.g., [22,94] assume that organizational
readiness has a positive influence. We believe that this contradic-
tion is caused in part by the nature of the innovation: SaaS is a
service model that is highly suitable for organizations with few
resources. Therefore, the extant theory regarding these variables
should be revisited in light of recent IT innovations such as SaaS.
Future research on organizational size and organizational readi-
ness in relation to IT innovation adoption should also explore the
influence of different types of innovations. Finally, we found that
several characteristics related to Indonesia as a developing country
influenced the results, in particular, Indonesia’s collectivist culture
with high power distance and the low reliability of its telecom-
munication infrastructure. This may explain why Indonesia is
lagging behind in adopting SaaS. Although there are several studies
on SaaS adoption in developing countries, more research into these
and other specific (cultural) characteristics is needed.
Beyond the theoretical implications, this study also has
practical implications. First, our study findings highlight the
importance of educating the Indonesian industry and making
businesses aware of the possibilities of SaaS. The Indonesian
government could play a large role in this, but also the SaaS
providers in Indonesia and in similar developing countries may use
this study to formulate better strategies for increasing SaaS
adoption. Secondly, the strong positive influence of top manage-
ment support on SaaS adoption suggests that appointment of
managers with knowledge and favorable attitudes towards SaaS
may be essential for adopting these IT innovations. Finally,
multiple cases in our research with insufficient organizational
readiness for IT innovation adoption have successfully adopted
SaaS. Therefore, organizations can be advised not to necessarily
reject adopting SaaS if they believe their organizational readiness
to be low.
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Inge van de Weerd is an assistant professor of the Knowledge, Information, and
Innovation research group at Vrije Universiteit Amsterdam. She holds a PhD in
information and computing sciences from Utrecht University, and she was a visiting
928 I. van de Weerd et al. / Information & Management 53 (2016) 915–928

scholar at the Tokyo Institute of Technology. Her research interests focus on the
intersection of IT and organizations. Her work has been published in proceedings of
conferences such as RE and CAiSE and appeared in international journals such as
Information & Software Technology and Computers in Human Behavior.
Ivonne Sartika Mangula is a PhD student at the Department of Information and
Computing Sciences of Utrecht University, the Netherlands. She has an interest in IT
innovation adoption and diffusion in organizations, particularly in the adoption of
software as a service. Her work has been published in several conferences such as
PACIS and iiWAS.
Sjaak Brinkkemper is full professor of organization and information at the
Department of Information and Computing Sciences of Utrecht University, the
Netherlands. He leads a group of about 20 researchers specialized in product
software development and entrepreneurship. The main research themes of the
group are methodology of product software development, implementation and
adoption, and business-economic aspects of the product software industry. Sjaak
Brinkkemper has published about 10 books and more than 150 papers.