Post-adoption model on cloud computing and SME performance in Malaysia : resources-based view

Abstract

The trend of cloud computing has accelerated business model evolution for delivering information technology services. In the transition from traditional IT to cloud-based services, Small Medium Enterprises (SMEs) seems to have experienced substantial difficulties and hurdles in realising cloud benefits, which in turn lead to improving SME performance. In spite of the common belief that SMEs can potentially gain from cloud services, there are numerous evidence which indicate that SMEs have not utilised it at the desired level of adoption. Additionally, past literature also indicates that among those that have adopted, it is unclear as to how cloud services affect SME performance. Generally, it was noted that Malaysia SMEs are not utilising cloud computing for the advancement of their business strategy, and therefore they seem to not able to reap the cloud benefits as expected. Since there is a lack of past studies that examine the effect of cloud computing use on SME performance or the post-adoption stage, this study aims to fill this gap by developing a model for the post-adoption of cloud computing among SMEs in Malaysia. Considering this research purpose, the Resources-Based View (RBV) deems fit as an adoption theory to develop the proposed model since RBV considers organizations can gain competitive advantage and hence improve performance by leveraging on their unique resources. Based on the review of past literature, IT capability is viewed as the essential antecedent that influences how SMEs can gain cloud benefits, which in turn will affect the performance. Specifically, the model examines the effect of technical IT capability, relational IT capability and managerial IT capability on cloud computing benefits, which in turn affects SME performance. This study employed a quantitative approach to test the hypotheses of the developed model by surveying 387 Malaysian SMEs cloud adopters. By using purposive sampling, this number of responses were analysed using Partial Least Squares (PLS) based on Structural Equation Modelling (SEM). The empirical findings indicate that IT capability significantly affects cloud benefits and cloud computing benefits have resulted in a significant effect on SME performance among Malaysia SMEs in the sample. The other important finding is that the model developed has been validated. As this study represents the pioneering investigations on cloud computing post-adoption by SMEs in Malaysia using the RBV lens, the new evidence contributes to knowledge and enhances our understanding of cloud computing post-adoption. The study not only assists SME owners/managers to adopt cloud computing to improve competitiveness but also helps cloud service providers to understand SMEs’ requirements, and guides relevant policymakers to formulate policies to promote effective use of cloud services among SMEs in Malaysia.