Understanding the formation of software-as-a-service (SaaS) satisfaction from the perspective of service quality

Highlights

• This study examines the formation of SaaS satisfaction.

• This study uses the dedication-constraint framework as a theoretical lens.

• This study focuses the relationships between satisfaction, trust, and service quality.

• Relational norms are used as a moderating variable.

Abstract

SaaS has attracted interest among researchers and practitioners. Despite the importance of client satisfaction in SaaS success, the formation of it remains unclear. To address this, this study uses dedication–constraint mechanisms as a theoretical lens to explain how satisfaction is affected by trust, including competence-based trust and openness-based trust, and how trust is influenced by service quality. We also investigate the moderating effect of relational norms on the influence of trust on satisfaction. The proposed model is supported by data collected from 124 senior IT managers using survey instrument, showing that service quality, in terms of rapport and flexibility, positively affects trust, which in turn influences satisfaction. Besides, the moderating effect of relational norms on the relationships between trust and satisfaction is significant. We provide the theoretical and practical implications of our findings.

Introduction

The development of on-demand software delivery service models such as software-as-a-service (SaaS), aiming to provide firms with Internet-based access to resources or applications related to a firm's complete virtual value chain [3], [28], has raised an important question: How to improve a client firm's satisfaction. The reason for attracting a client firm is to avoid high installation cost and uncertainty pervading tradition IT initiatives, but reduced capital investments of the client usually cause its low dedication to the relationship with its service provider (SP) [17], [25]. Satisfaction plays a key role in avoiding a client's switch to a new vendor and increasing its positive word of mouth and long-term continuation of relationships with the SP [16]. However, studies on SaaS [4] show that clients' unsatisfying rate is high and the formation of satisfaction is inconclusive, slowing the advances of SaaS. This present study focuses on the determinants of satisfaction in SaaS, because they help SPs understand how to improve their service quality and clients choose the SP which is beneficial to them to avoid costs involved in switching SPs including termination costs and redeployment costs [11].

While the promising opportunities for the successful use of SaaS and its software revenues, are forecasted to grow by 19.4% overall between 2008 and 2013, not everyone is optimistic about the future of SaaS [4]. Some studies are skeptical about SaaS's viability in markets of enterprise application software such as ERP and have identified that the top three reasons for dissatisfying client firms are unfulfilled technical requirements, information security and privacy concerns, and lack of flexibility for performing the outsourced task such as changing contractual or functional aspects [3], [4]. Others have pointed out that inspiring trust and loyalty in an online and on-demand service model may not be easy [6], [24].

Due to these inconsistent views, researchers on SaaS have struggled to develop research models by identifying the key drivers of client satisfaction. They have suggested that a socio-technical perspective should be used by combining individual, technological, organizational, and service-related factors [3], [4]. Accordingly, some studies have examined various antecedents of satisfaction, including individual characteristics (e.g. perceptions on SPs' performance and competence, trust), contextual factors (e.g. gender, experience, and shared values) and service quality (e.g. interaction and outcome quality, perceived benefits) [10], [16], [28]. However, less attention has been paid to the unique features of SaaS and a systematic and empirical investigation on the formation of SaaS satisfaction remains scant. Without the minimal level of satisfaction, users are unlikely to continue using SaaS and the investment in SaaS is unable to recover, emphasizing the importance of understanding satisfaction. To deliver satisfied services, SaaS vendors have to earn their customers' trust and to provide high quality service from which the trust can be created [4], [11]. Responding to their calls and attempting to fill the gap in understanding about how SaaS customers' satisfaction is formed, this study raises the following research questions.

• RQ1: How does trust in SaaS vendors' competence and goodwill affect customers' satisfaction? How do relational norms moderate the above relationships?

• RQ2: How does vendors' service quality affect trust?

This study builds on theories in several domains to deepen our understanding about how satisfaction is formed, including social capital, social exchange theory, and service marketing [13], [16], [30]. The underlying premise of our work is that client satisfaction is most likely to be affected by whether an SP is perceived to possess characteristics that support the SaaS-based software delivery arrangements. In particular, this study draws from the dedication–constraint framework [2] by integrating two distinct mechanisms of trust—competence-based (CBT) and openness-based (OBT) trust. We emphasize the role of trust as an intervening variable linking the causal relationship between SP service quality and client satisfaction. Besides, we also examine how trust interacts with relational norms to influence satisfaction. This study contributes to the research of on-demand and online service by accounting for the influence of dedication–constraint mechanisms on shaping post-adoption phenomena.