Cloud Service Transformation Intention In Small And Medium Enterprises

Cloud computing technology is a new information technology industry revolution after Personal Computer and Internet. The new technology is not only associated with information technology industry, but also closely related to technology consumers, since cloud technology based service is integrated with all aspects of business activities. Specifically, cloud service changes the way organizations obtain their information technology capability. Especially for small and medium enterprises (SMEs), cloud service is a more flexible and efficient information technology solution, which proposes its fast access, pay for use mechanism, and lower upfront investment. Tremendous business prospects of cloud service market and leading position of SMEs are attracting great attention of cloud service stakeholders. However, there has been little literature systematically explaining this phenomenon. In the era of digital network and when the rate of information technology innovation is accelerated, whether traditional theoretical research on information technology innovation research is still able to guide the practice of cloud service? What kinds of rationalities that SMEs would depend on to make decisions in the cloud transformation process? What are the key influential determinants of SMEs’ decision-making of cloud service transformation under different rationality? What are the critical internal and external determinants of SMEs’decision-making of cloud service transformation? How these internal and external factors have impacts on SMEs’cloud service transformation behavior, and through what kind of mechanism? The exploration of these research questions is the development of related theory and meets the urgent needs of practice.Based on theoretical approaches, related theoretical models are built and the phenomena of SMEs’cloud service transformation are examined by data sample collected through survey. Firstly, based on technical-economic rationality, trust-based rationality, transaction cost theory, agent theory, and trust related research, an integrated SMEs’cloud service transformation decision model is constructed. Based on integrated rationality framework, this research investigates the role of perceived benefit of cloud service and cloud service trust in SMEs’cloud service transformation process, and further explores and tests the critical determinants of perceived benefit of cloud service and cloud service trust. Additionally, drawing on strategic choice theory, management fashion theory, trust literature, and organizational information technology innovation literature, trust-mediated entrepreneurial orientation and institutional pressure model is built to investigate SMEs’cloud service transformation. A survey involving107Chinese SMEs in Yangtze River Delta and Pearl River Delta was conducted to examine the research model and hypotheses. Smart PLS (Version2.0) was used to conduct data analysis. The main conclusions are as follows:(1) Technical-economic rationality and trust-based rationality both have significant influence on SMEs’cloud service transformation intention. Research results indicate that:perceived benefits of cloud service based on technical-economic rationality has a significant positive effect on SMEs’cloud service transformation intention, that is the more benefit SMEs can perceive from adopting cloud service, the more they will be willing to transform to cloud service; cloud service trust based on trust-based rationality has a significant positive effect on SMEs’cloud service transformation intention, that is SMEs with higher trust towards cloud service are more likely to transform to this new information technology usage mode; cloud service trust has a greater impact on SMEs’ cloud service transformation intention than perceived benefit of cloud service. It is notable that the dominant factor leading to organizational information technology innovation transformation decision-making is trust in the context of cloud service. The salient effect of trust indicates that trust-based rationality is a critical point of view in investigating SMEs’information technology innovation behavior.(2) Uncertainty and information asymmetry are positively associated with perceived benefit of cloud service; information security, vendor scarcity, and institutional pressure are found to have significant positive, negative, and positive influence on trust respectively.(3) Entrepreneurial orientation and institutional pressure both have significant but different effect on cloud service trust building. The analysis results indicate: institutional pressures exert a significant greater impact on institution-based trust on cloud service than on the information technology artifact trust on cloud service; institutional pressures not only present a greater impact on institution-based trust on cloud service than that entrepreneurial orientation has, but also present a greater impact on information technology artifact trust on cloud service than entrepreneurial orientation has.(4) Another finding is related to the distinguished roles that the two types of trust play in SMEs’transformation towards cloud service, and the mediating effect of trust has a sequential process in itself. The analysis results indicate that:while SMEs’ institution-based trust on cloud service is found to have insignificant effect on their cloud service transformation intention, information technology artifact trust on cloud service is found to have a significant positive effect on the SMEs’transformation intention to cloud service. Further, institution-based trust on cloud service has a significant positive effect on information technology artifact trust on cloud service, and has an indirect impact on cloud service transformation with a full mediation of information technology artifact trust. The full mediating effect of information technology artifact trust on the relationship between institution-based trust on cloud service and cloud service transformation intention indicates cloud service trust building in SMEs is a sequential process. SMEs are more likely to first scan their surrounding environments and communication networks and pay more attention to the overall situation of adopting information technology innovations, then evaluate the innovative information technology artifact itself.(5) Our results indicate the mediation roles of institution-based trust and information technology artifact trust that link SMEs’entrepreneurial orientation and institutional pressures to their cloud service transformation intention, suggesting that the complex trust building is one underlying interpretive mechanism of how an organization’s strategic choice and management fashion can results in information technology innovation acceptance and diffusion. The institution-based trust partially mediates the effects of SMEs’entrepreneurship and perceived institutional pressures from external sources on their transformation intention to cloud service. The information technology artifact trust partially mediates the effects of SMEs’ entrepreneurship on their cloud service transformation and fully mediates the effect of SMEs’perceived institutional pressures on their transformation.(6) This study empirically validates the appropriateness of second-order conceptualization of both types of trust in the cloud service context. The analysis results indicate:for institution-based trust, both structure assurance and situation normality are found significantly form the concept of institution-based trust. Situation normality exhibits a greater contribution to institution-based trust than structure assurance. When we check the contributions of three attributes to information technology artifact trust, we found that helpfulness and reliability contribute significantly to information technology artifact trust of cloud service, but functionality does not. This conceptualization validation is especially important for the emerging concept of information technology artifact trust.Originality of the study is that:First, this study investigates SMEs’cloud service transformation intention based on an integrated framework of technical-economic rationality and trust-based rationality, and deeply explores the antecedents of perceived cloud service benefit based on technical-economic rationality and the antecedents of cloud service trust based on trust-based rationality. The integrated rationality framework enriches organizational information technology innovation behavior research and deepens our understanding of cloud transformation process. Second, based on strategic choice theory and management fashion theory, this research empirically investigates the effect of organization internal entrepreneurial orientation and external institutional pressures on SMEs’cloud service intention. This is a new framework for organizational information technology innovation behavior research, enriching information technology innovation research and information technology fashion research. Third, this study proposes and examines the sequential mediating role of two types of trust, and also empirically approves the appropriateness of second-order conceptualization of both types of trust in cloud service context. Trust mediating effect and its sequential process enriches trust related research. The exploration of relationships between different types of trust supplies a new research direction for trust research. Additionally, the appropriateness of second-order conceptualization of trust is especially of critical value for the new conception information technology artifact trust, supplying empirical basis for future research.This research has the following practical implication:First, for cloud service vendors, this study has potential to provide some insights for them to offer appropriate services in effective ways. Second, organizational users of cloud service can also grab insights to deal with this new information technology innovation wave. Third, for cloud service market regulators, our study supplies some insights of governing the cloud service market and promoting the prosperity of cloud service market.