SaaS Adoption Factors among SMEs in Indonesian Manufacturing Industry

Benefits of cloud computing to Small Medium-sized Enterprises (SMEs) seem obvious: financial savings (e.g. infrastructure savings, maintenance savings, etc.) and resource management advantage (e.g. skilled IT labor and equipment, resource flexibility, etc.). Software as a Service (SaaS) is one of cloud service model that has been acknowledged as the most plausible cloud service for SMEs. With regard to SMEs, Indonesia has enormous market size consisting of around 650.000 units. Despite its market size, according to Indonesian Cloud Forum (ICF), SMEs adoption to cloud computing including SaaS is only 3%. Yet, little is known about why the adoption of such technology is very low for SMEs in Indonesia. A requirement to SaaS adoption is the ICT adoption, notably the availability of basic IT infrastructure such as Internet and computer, which can also be seen as the basic requirement for SaaS adoption. However it is also unclear how many SMEs have adopted this basic IT infrastructure. Various factors may facilitate or inhibit SaaS adoption, yet very little is known about these factors. In this regard, this study seeks to investigate the factors that influence SMEs in Indonesia to adopt SaaS by focusing on manufacturing industry. Ordinal logistic regression and rough set analysis were applied to test the hypotheses in investigating the ICT and SaaS adoption factors. The study found a low level of ICT adoption among the SMEs. Moreover, the findings of the study suggest that firm size, education of middle to top management, and industry sector positively influence the ICT adoption among SMEs. In addition, the findings concerning SaaS adoption indicate that relative advantage, complexity, and compatibility as the strongest factors that tend to influence SaaS adoption level. These findings provide a better understanding on how SaaS is adopted by SMEs in Indonesia. It is still long way to go for SaaS to be adopted widely by SMEs; much effort is needed to boost such adoption. The low level of ICT adoption among SMEs should be addressed prior to or in parallel with SaaS adoption. Other factors from this study that expected to influence the ICT adoption are necessary to be investigated in this issue. Further, this study contributes to the knowledge on the adoption factors of information technology among SMEs in general. In terms of practical relevance, it gives recommendations to the national government as well as SaaS providers in formulating strategies for a better penetration of SaaS in the SMEs market.

Subject

adoption factor
ICT
SaaS
cloud computing
Indonesia
small medium enterprise

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Student theses

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master thesis

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