Skip to main content
SpringerLink
Log in

Understanding the Role of Organizational Integration in Developing and Operating Software-as-a-Service

  • Chapter
  • First Online:
Information Systems Outsourcing

Part of the book series: Progress in IS ((PROIS))

Abstract

While previous research has mostly studied Software-as-a-Service from a client perspective or focused on downstream activities of vendors, an in-depth understanding of the coordination and communication between software development and software operations is still missing. In order to fill this gap, we develop a theoretical framework that integrates extant literature on the constituent characteristics of services and on organizational integration. Guided by this framework and based on a multiple-case study of six software vendors, we identify five types of challenges and opportunities of organizational integration between Software-as-a-Service development and operations. The challenges include ensuring awareness and continuity between operations and development, as well as considering customers’ business activities in scheduling updates. The opportunities relate to the ability to leverage a direct feedback channel and innovate with higher velocity. In addition, service mindset, technical harmonization, and company size emerged as three contingency factors that enable or inhibit organizational integration. The study contributes to existing literature by providing a better understanding of the activities that require coordination and communication when developing and operating Software-as-a-Service. Moreover, this study adds to previous research by linking the integration of organizational subunits to constituent characteristics of services. Decision makers learn about challenges and opportunities when offering Software-as-a-Service that go beyond providing a technical infrastructure.

This paper was originally published as: Stuckenberg, Sebastian, Kude, Thomas and Heinzl, Armin “Understanding the Role of Organizational Integration in Developing and Operating Software-as-a-Service”, Journal of Business Economics, 2014. Reprint with permission of Springer Science + Business Media.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 129.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 169.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

References

  • Adler, P. S. (1995). Interdepartmental interdependence and coordination: The case of the design/manufacturing interface. Organization Science, 6(2), 147–167.

    Article  Google Scholar 

  • Alam, I. (2002). An exploratory investigation of user involvement in new service development. Journal of the Academy of Marketing Science, 30(3), 250–261.

    Article  Google Scholar 

  • Atuahene-Gima, K., & Evangelista, F. (2000). Cross-functional influence in new product development: An exploratory study of marketing and R&D perspectives. Management Science, 46(10), 1269–1284.

    Article  Google Scholar 

  • Aulbach, S., Grust, T., Jacobs, D., Kemper, A., & Rittinger, J. (2008). Multi-tenant databases for software as a service: Schema-mapping techniques. In Proceedings of the 2008 ACM SIGMOD International Conference on Management of Data, Vancouver, Canada (pp. 1195–1206). New York: ACM.

    Google Scholar 

  • Banerjee, S., Srikanth, H., & Cukic, B. (2010) Log-based reliability analysis of software as a service (SaaS). In 2010 IEEE 21st International Symposium on Software Reliability Engineering (ISSRE) San Jose, CA (pp. 239–248). November 1–4, 2010.

    Google Scholar 

  • Barki, H., & Pinsonneault, A. (2005). A model of organizational integration, implementation effort, and performance. Organization Science, 16(2), 165–179.

    Article  Google Scholar 

  • Benlian, A., & Hess, T. (2009). Welche Treiber lassen SaaS auch in Grossunternehmen zum Erfolg werden? Eine Empirische Analyse der SaaS-Adoption auf Basis der Transaktionskostentheorie. In R. H. Hansen, D. Karagiannis & H. G. Fill (Eds.), Wirtschaftsinformatik, Austria, Vienna (pp. 567–576). February 25–27, 2010.

    Google Scholar 

  • Böttcher, M., & Meyer, K. (2004). IT-basierte Dienstleistungen. In K. P. Fähnrich & C. van Hussen (Eds.), Entwicklung IT-Basierter Dienstleistungen in der Praxis - Kurzstudie Zum Co-Design Von Software Und Services in Deutschen Unternehmen (pp. 10–20). Stuttgart: Fraunhofer IRB-Verlag.

    Google Scholar 

  • Botzenhardt, A., Meth, H., & Maedche, A. (2011). Cross-functional integration of product management and product design in application software development: Exploration of success factors. In International Conference on Information Systems, Shanghai, China.

    Google Scholar 

  • Brentani, U. (1989). Success and failure in new industrial services. Journal of Product Innovation Management, 6(4), 239–258.

    Article  Google Scholar 

  • Buxmann, P., Diefenbach, H., & Hess, T. (2013). The software industry—economic principles, strategies, perspectives. Berlin: Springer.

    Google Scholar 

  • Choudhary, V. (2007a). Comparison of software quality under perpetual licensing and software-as-a-service. Journal of Management Information Systems, 24(2), 141–165.

    Article  Google Scholar 

  • Choudhary, V. (2007b). Software-as-a-Service: Implications for investment in software development. In R. H. Sprague (Ed.), 40th Hawaii International Conference on System Sciences, Waikoloa, Hawaii. January 3–6, 2007b. IEEE.

    Google Scholar 

  • Cordon-Pozo, E., Garcia-Morales, J., & Aragon-Correa, J. (2006). Inter-departmental collaboration and new product development success: a study on the collaboration between marketing and R&D in Spanish high-technology firms. International Journal of Technology Management, 35(1), 52–73.

    Article  Google Scholar 

  • Dolfsma, W. (2004). The process pf new service development—issues of formalization and appropriability. International Journal of Innovation Management, 8(3), 319–337.

    Article  Google Scholar 

  • Espadas, J., Concha, D., & Arturo, M. (2008). Application development over Software-as-a-Service platforms. In H. Mannaert, T. Ohta, C. Dini & R. Pellerin (Eds.), The Third International Conference on Software Engineering Advances, Sliema, Malta (pp. 97–104). October 26–31, 2008.

    Google Scholar 

  • Ettlie, J. E., & Reza, E. M. (1992). Organizational integration and process innovation. Academy of Management Journal, 35(4), 795–827.

    Article  Google Scholar 

  • Fan, M., Kumar, S., & Whinston, A. B. (2009). Short-term and long-term competition between providers of shrink-wrap software and software as a service. European Journal of Operational Research, 196(2), 661–671.

    Article  Google Scholar 

  • Fitzsimmons, J., & Fitzsimmons, M. (2011). Service management: operations, strategy, information technology (Vol. 7). New York: McGraw Hill.

    Google Scholar 

  • Froehle, C. M., Roth, A. V., Chase, R. B., & Voss, C. A. (2000). Antecedents of new service development effectiveness. Journal of Service Research, 3(1), 3–17.

    Article  Google Scholar 

  • García, N., Sanzo, M. J., & Trespalacios, J. A. (2008). New product internal performance and market performance: Evidence from Spanish firms regarding the role of trust, interfunctional integration, and innovation type. Technovation, 28(11), 713–725.

    Article  Google Scholar 

  • Gupta, A. K., Raj, S. P., & Wilemon, D. (1986). A model for studying research-and-development—marketing interface in the product innovation process. Journal of Marketing, 50(2), 7–17.

    Article  Google Scholar 

  • Heart, T., Tsur, N. S., & Pliskin, N. (2010). Software-as-a-Service vendors: Are they ready to successfully deliver? In I. Oshri & J. Kotlarsky (Eds.), Global sourcing of information technology and business processes (Vol. 55, pp. 151–184). Lecture notes in business information processing Berlin, Heidelberg: Springer.

    Chapter  Google Scholar 

  • Herder, E. (2009). Forward, back and home again—analyzing user behavior on the web. Saarbrücken: VDM Dr. Müller.

    Google Scholar 

  • Hilbert, D. M., & Redmiles, D. F. (1998). An approach to large-scale collection of application usage data over the Internet. In International Conference on Software Engineering (pp. 136–145). Kyoto, Japan: IEEE Computer Society.

    Google Scholar 

  • Hilkert, D., Wolf, C. M., Benlian, A., & Hess, T. (2010). The “as-a-Service”-paradigm and its implications for the software industry—insights from a comparative case study in CRM software ecosystems. In First International Conference on Software Business (ICSOB 2010), Jyväskylä, Finland. June 21–23, 2010.

    Google Scholar 

  • Ivari, J., Hirschheim, R., & Klein, H. K. (2001). Towards more professional information systems development: ISD as knowledge work. In European Conference on Information Systems, Bled, Slovenia.

    Google Scholar 

  • Kakihara, M. (2006). Developing Software-as-a-Service in the rapidly changing environment. International Review of Business, 8, 1–17.

    Google Scholar 

  • Kenett, R. S., Harel, A., & Ruggeri, F. (2008). Controlling the usability of web services. International Journal of Software Engineering and Knowledge Engineering, 19(5), 627–651.

    Google Scholar 

  • Kerlinger, F. N., & Lee, H. B. (2000). Foundations of behavioral research. Fort Worth, TX: Harcourt College Publishers.

    Google Scholar 

  • La, H., & Kim, S. (2009). A systematic process for developing high quality saas cloud services. In M. Jaatun, G. Zhao & C. Rong (Eds.), Cloud computing (pp. 278–289). Lecture notes in computer science Berlin, Heidelberg: Springer.

    Chapter  Google Scholar 

  • Lawrence, P., & Lorsch, J. (1969). Organization and environment. Boston, MA: Harvard Business School Press.

    Google Scholar 

  • Luoma, E., & Rönkkö, M. (2012). Software-as-a-Service business models. Communications of Cloud Software, 1(1).

    Google Scholar 

  • Ma, D. (2007). The business model of “software-as-a-service”. Paper presented at the IEEE international conference on services computing (SCC 2007), Salt Lake City, USA, July 9–13.

    Google Scholar 

  • Mäkilä, T., Järvi, A., Rönkkö, M., & Nissilä, J. (2010). How to define software-as-a-service—an empirical study of finnish SaaS providers. In P. Tyrväinen, S. Jansen & M. A. Cusumano (Eds.), Software business (pp. 115–124). Lecture notes in business information processing Berlin, Heidelberg: Springer.

    Chapter  Google Scholar 

  • Malone, T. W., Crowston, K. (1990). What is coordination theory and how can it help design cooperative work systems? In Proceedings of the 1990 ACM Conference on Computer-Supported Cooperative Work (pp. 357–370). Los Angeles, CA: ACM.

    Google Scholar 

  • Mata, F. J., Fuerst, W. L., & Barney, J. B. (1995). Information technology and sustained competitive advantage: a resource-based analysis. MIS Quarterly, 19(4), 487–505.

    Article  Google Scholar 

  • Mathiassen, L., & Vainio, A. M. (2007). Dynamic capabilities in small software firms: a sense-and-respond approach. IEEE Transactions on Engineering Management, 54(3), 522–538.

    Article  Google Scholar 

  • Merz, S., Eschinger, C., Eid, T., Pang, C., & Wurster, L. (2011). Forecast: Software as a Service, Worldwide, 2010–2015, 1H11 Update. Market Analysis and Statistics. Gartner Research.

    Google Scholar 

  • Messerschmitt, D. G., & Szyperski, C. (2003). Software ecosystem. Cambridge: The MIT Press.

    Google Scholar 

  • Miles, M. B., & Hubermann, A. M. (1994). Qualitative data analysis: an expanded sourcebook (Vol. 2). Thousand Oaks, CA: Sage Publications.

    Google Scholar 

  • Milliken, F. J., & Martins, L. L. (1996). Searching for common threads: Understanding the multiple effects of diversity in organizational groups. The Academy of Management Review, 21(2), 402–433.

    Google Scholar 

  • Millson, M. R., & Wilemon, D. (2002). The impact of organizational integration and product development proficiency on market success. Industrial Marketing Management, 31(1), 1–23.

    Article  Google Scholar 

  • Nambisan, S., & Wilemon, D. (2000). Software development and new product development: potentials for cross-domain knowledge sharing. IEEE Transactions on Engineering Management, 47(2), 211–220.

    Article  Google Scholar 

  • NIST NIoSaT. (2011). The NIST definition of cloud computing. Gaithersburg: National Institute of Standards and Technology.

    Google Scholar 

  • Ojala, A., & Tyrväinen, P. (2011). Value networks in cloud computing. Journal of Business Strategy, 32(6), 40–49.

    Article  Google Scholar 

  • Olsen, R. (2006). Transitioning to software as a service: Realigning software engineering practices with the new business model. In IEEE International Conference on Service Operations and Logistics, and Informatics, Shanghai, China (pp. 266–271). June 21–23, 2006, IEEE.

    Google Scholar 

  • Pinto, M. B., & Pinto, J. K. (1990). Project team communication and cross-functional cooperation in new program development. Journal of Product Innovation Management, 7(3), 200–212.

    Article  Google Scholar 

  • Ramaswamy, R. (1994). Design and management of service processes: Keeping customers for life. Reading, MA, USA: AddisonWesley.

    Google Scholar 

  • Ruhe, G., & Saliu, M. O. (2005). The art and science of software release planning. IEEE Software, 22(6), 47–53.

    Article  Google Scholar 

  • Sääksjärvi, M., Lassila, A. & Nordström, H. (2005). Evaluating the software as a service business model: From CPU time-sharing to online innovation sharing. In P. Isaisas, P. Kommers & M. Mc-Pherson (Eds.), IADIS International Conference e-Society 2005, Qawra, Malta (pp. 177–186). June 27–30, 2005.

    Google Scholar 

  • Saeed. M., Jaffar-Ur-Rehmann, M. (2005). Enhancement of software engineering by shifting from software product to software service. In W. Khan & F. Ahmed (Eds.), First International Conference on Information and Communication Technologies (ICICT), Karachi, Pakistan (pp. 302–308). August 27–28, 2005.

    Google Scholar 

  • Sampson, S. (2001). Understanding service businesses: applying principles of the unified service theory (Vol. 2). New York: Wiley.

    Google Scholar 

  • Sampson, S., & Froehle, C. M. (2006). Foundations and implications of a proposed unified service theory. Production and Operations Management, 15(2), 329–343.

    Article  Google Scholar 

  • Sarker, S., Sarker, S., & Sahaym, A. (2012). Exploring value cocreation in relationships between an ERP vendor and its partners: A revelatory case study. MIS Quarterly, 36(1), 317–338.

    Google Scholar 

  • Schilling, M. A., & Hill, C. W. L. (1998). Managing the new product development process: Strategic imperatives. The Academy of Management Executive (1993–2005), 12(3), 67–81.

    Google Scholar 

  • Schuetz, S., Kude, T., & Popp, K. M. (2013). The Impact of Software-as-a-Service on software ecosystems. In International Conference on Software Business (ICSOB), Potsdam.

    Google Scholar 

  • Song, X. M., Montoya-Weiss, M. M., & Schmidt, J. B. (1997). Antecedents and consequences of cross-functional cooperation: A comparison of R&D, manufacturing, and marketing perspectives. Journal of Product Innovation Management, 14(1), 35–47.

    Article  Google Scholar 

  • Song, X. M., Neeley, S. M., & Zhao, Y. Z. (1996). Managing R&D—marketing integration in the new product development process. Industrial Marketing Management, 25(6), 545–553.

    Article  Google Scholar 

  • Song, X. M., Xie, J., & Dyer, B. (2000). Antecedents and consequences of marketing managers’ conflict-handling behaviors. The Journal of Marketing, 64(1), 50–66.

    Article  Google Scholar 

  • Stevens, E., & Dimitriadis, S. (2004). New service development through the lens of organisational learning: evidence from longitudinal case studies. Journal of Business Research, 57(10), 1074–1084.

    Article  Google Scholar 

  • Stone, E. (1978). Research methods in organizational behavior. Santa Monica, CA: Goodyear Publishing Company Inc.

    Google Scholar 

  • Stuckenberg, S., Fielt, E., & Loser, T. (2011). The impact of Software-as-a-Service on business models of leading software vendors: Experiences from three explorative case studies. In Pacific Asia Conference on Information Systems, Brisbane, Australia.

    Google Scholar 

  • Stuckenberg, S., & Heinzl, A. (2010). The impact of the Software-as-a-Service concept on the underlying software and service development processes. In Pacific Asia Conference on Information Systems, Taipei, Taiwan (pp. 1297–1308).

    Google Scholar 

  • Thompson, J. (1967). Organizations in action. New York: Mc Graw-Hill.

    Google Scholar 

  • Tiwana, A. (2004). An empirical study of the effect of knowledge integration on software development performance. Information and Software Technology, 46(13), 899–906.

    Article  Google Scholar 

  • Troy, L., Hirunyawipada, T., & Paswan, A. (2008). Cross-functional integration and new product success: an empirical investigation of the findings. Journal of Marketing, 72(6), 132–146.

    Article  Google Scholar 

  • Tyrväinen, P., & Selin, J. (2011). How to sell SaaS: A model for main factors of marketing and selling software-as-a-service. In B. Regnell, I. Weerd & O. Troye (Eds.), Software business (ICSOB 2011), Brussels, Belgium, June 8–10, 2011, 2011 (pp. 2–16)., Lecture notes in business information processing Berlin Heidelberg: Springer.

    Google Scholar 

  • Walz, D. B., Elam, J. J., & Curtis, B. (1993). Inside a software design team: Knowledge acquisition, sharing, and integration. Communication of the ACM, 36(10), 63–77.

    Article  Google Scholar 

  • Weinhardt, C., Anandasivam, A., Blau, B., Borissov, N., Meinl, T., Michalk, W., et al. (2009). Cloud computing—a classification, business models, and research directions. Business & Information Systems Engineering, 1(5), 391–399.

    Article  Google Scholar 

  • West, M., McNee, B., Geisehecker, L., Guptill, B., McNeill, R., & Burns, C. (2010). Key SaaS, PaaS and IaaS trends through 2015: Business transformation via the cloud. USA: Saugatuck Technology Inc.

    Google Scholar 

  • Wu, W.-W., Lan, L. W., & Lee, Y.-T. (2011). Exploring decisive factors affecting an organization’s SaaS adoption: A case study. International Journal of Information Management, 31(6), 556–563.

    Article  Google Scholar 

  • Xin, M., & Levina, N. (2008). Software-as-a Service model: Elaborating client-side adoption factors. In R. Boland, M. Limayem & B. Pentland (Eds.), 29th International Conference on Information Systems, Paris, France. December 14–17, 2008.

    Google Scholar 

  • Yin, R. K. (2009). Case study research - design and methods. Thousand Oaks: Sage Publications.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of General Management and Information Systems, University of Mannheim, L15, 1-6, 68161, Mannheim, Germany

    Sebastian Stuckenberg, Thomas Kude & Armin Heinzl

Authors
  1. Sebastian Stuckenberg
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Thomas Kude
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Armin Heinzl
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Thomas Kude .

Editor information

Editors and Affiliations

  1. Business Administration, Louisiana State University, Baton Rouge, Louisiana, USA

    Rudy Hirschheim

  2. LS ABWL und Wirtschaftsinformatik I, Universität Mannheim, Mannheim, Germany

    Armin Heinzl

  3. Institute for Information Systems Dept of Information Engineering, University of Bern, Bern, Switzerland

    Jens Dibbern

Appendix 1: High Level Interview Guidelines

Appendix 1: High Level Interview Guidelines

  1. A.

    Information regarding company and interview partner

    1. 1.

      Interviewee’s position within organization, role regarding Software-as-a-Service development and operation, interviewee’s experience

  2. B.

    Inward-oriented integration

    1. 1.

      Describe the development and operation processes of your Software-as-a-Service solution.

    2. 2.

      Are development and operations separated or integrated processes within your organization? What interfaces exist between the two areas?

    3. 3.

      Does Software-as-a-Service require special technologies? Do these technologies have an impact on the development and operation processes?

  3. C.

    Outward-oriented integration

    1. 1.

      Does Software-as-a-Service change the way customers are integrated /involved in the development and processes in general?

    2. 2.

      Does your organization create an advantage out of the direct customer relationship?

    3. 3.

      Does the changed customer relationship have implications on a process level?

Rights and permissions

Reprints and permissions

Copyright information

© 2014 Springer-Verlag Berlin Heidelberg

About this chapter

Cite this chapter

Stuckenberg, S., Kude, T., Heinzl, A. (2014). Understanding the Role of Organizational Integration in Developing and Operating Software-as-a-Service. In: Hirschheim, R., Heinzl, A., Dibbern, J. (eds) Information Systems Outsourcing. Progress in IS. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-43820-6_13

Download citation

Publish with us

Policies and ethics

Search

Navigation