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The Determinants of Customer Perceptions in a Dynamic Business Environment: An Exploratory Analysis of the ASP Business Model

Outsourcing attracted much attention in 1989 when Kodak outsourced its data center operation to IBM (International Business Machines Corp.). Nowadays, this strategy has become more popular. At the beginning of this century, the ASP (Application Service Provider) model was considered one of the typical solutions of Internet-based IT (Information Technology) outsourcing. Although this model has been transformed and renamed (e.g. SaaS - Software as a Service), the principle concept of providing IT service through the Internet or wide area network is still there. This study attempts to explore the determinants of customer perception of Internet-based IT outsourcing by obtaining a comprehensive understanding of the ASP model. The research dimensions not only include factors affecting users' perception of service quality but also ASP business position (i.e. the firm origin of ASP and its provider type) and services utilized by the customers. Through the study of firm history, two important theoretical themes of this research - path-dependence and Ansoff's product/ market growth matrix - are taken account of in exploring the influence of the determinants. Web-based questionnaire survey research is conducted together with a documentation study to collect data. Targeting the customers of the top 50 ASPs selected by ASPnews.com during the period 2001-2004, the researcher contacted 597 potential respondents, and 196 responses were returned. The valid sample consisted of 175 responses, and 124 of them not only provided full information for satisfaction evaluation but also the information for tracking their ASP vendors' business position. The GLM (General Linear Model) and the Pearson correlation coefficient were the major statistical approaches used to evaluate the survey data for developing a structural model. The research findings indicated that the factors associated with service competitiveness, such as capability and performance, reliability and trustworthiness, affordability, integration and customization, have positive effects on customer perceived satisfaction; whereas lock-in has a negative effect. More specifically, the origin of the ASP firm has a direct effect on capacity and performance, and also directly influences the use of IT adoption services. Based on this finding, a descriptive analysis and qualitative research shows that two mechanisms for path-dependence - existing expertise and perceived expertise - can affect the satisfaction level of capacity and performance of ASP services. On the other hand, provider type has a direct effect on affordability and also directly influences the use of facility supporting services. On this basis, another two mechanisms for path-dependence - transaction cost and standardization - can indirectly impact customer's perception of this business model via affordability. In addition to those major findings, some other determinants (e.g. software applications, brand of applications, and intensity of service used) were also identified in this study. The study result can be used for theoretical understanding about the determinants of ASP customer's perception. It not only indicates a new perspective to enhance the current body of research on this topic, but can also be more broadly applied to any fast-growth firm, rapid-change business, or technology intensive industry. Acknowledgements I would like to sincerely thank the following people for their contribution to this research project. Dr. Scott Koslow, my chief supervisor, for his continued encouragement, patience and guidance to ensure the completion of this project. His speciality in statistics has provided appropriate and valuable guidance in the data analysis for my research. Dr. Steven Lim, my second supervisor, for his advice, coherence, and support over the years. I also appreciate his constructive comments on my drafts and the shaping of my research. Dr. Bob McQueen and Dr. Jim Corner, for their assistance and advice in the early stages of my study. My parents, Yu-Ho and Lee-Chiung Liang, and my brother Ken, my sisters Annie, Eva, and Nancy, my brothers-in-law, J.C. and Chen, and Alice, my sister-in-law, for their emotional support throughout the length of my study. I also thank Bessie, my best friend for her assistance in data collection and her loving support, as well as Ted, Kevin, Mark, Frank, and Shirley, my study mates for their encouragement and friendship. Special thanks goes to Dr. Kuang-Ya Wang, the principal of Yu Da High School of Commerce and Home Economics, Taiwan, and also to the staff over there for their concern and assistance in data collection. Most importantly, my heartfelt appreciation goes to Warren, my husband. I am deeply grateful to him for his understanding, patience, and practical help. Without his enduring support I could not have done this study. Finally, my thanks and gratitude goes to those people who patiently answered my survey questionnaire as their kind assistance made it possible to complete this research.
Type of thesis
Liang, Y.-M. (AMY). (2008). The Determinants of Customer Perceptions in a Dynamic Business Environment: An Exploratory Analysis of the ASP Business Model (Thesis, Doctor of Philosophy (PhD)). The University of Waikato, Hamilton, New Zealand. Retrieved from https://hdl.handle.net/10289/2555
The University of Waikato
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