2020 IEEE Conference on Open Systems (ICOS).

The Adoption of Cloud Computing CRM in SME’s,

Southland, New Zealand

Oras Baker Prabhjot kaur

School of Computing, School of Computing
Southern Institute of Technology, Southern Institute of Technology,
Invercargill, New Zealand Invercargill, New Zealand
oras.baker@sit.ac.nz prabhjot.kaur@sit.ac.nz

Abstract—Customer Relationship Management (CRM) and significant budget demands. However, another
solutions are helping businesses to grow by maintaining researcher state that many research studies investigate the
healthy relationships with the existing customers and building implementation of cloud CRM technologies but there is a
strong relationships with new customers. However, SaaS-CRM lack of research in adopting cloud-based CRM [7]. Thus, the
solutions are more desirable options for SME’s as these
solutions are less expensive and unsophisticated to implement
current research aims to fill this gap by the descriptive study
as compared to on-premise CRM. The main aim of this performed in the region of Southland, New Zealand to
research is to identify to what extent the SMEs in Southland identify the factors that affect the adoption of SaaS CRM
are aware of SaaS-CRM and what are the factors that affect among SMEs.
their decision for adoption. A survey was used to collect data
from 35 SME’s operating in the region of Southland, New II. THEORETICAL GROUNDING
Zealand. The results showed that only 10% of the SME’s use
Payne and Frow [8] define CRM as a critical strategy,
cloud CRM solutions and different factors such as relative
advantage, perceived ease of use, perceived usefulness, which improves customers’ and other key stakeholders’
technology readiness, top management support, trust in satisfaction and improve their relationships by using multiple
vendor, and regulatory support affect their cloud CRM tools. SaaS is the best option for automating CRM solutions
adoption decisions. where CRM applications are installed on servers and users
access those applications through the internet and web
Keywords—Cloud Computing, Software as a Service, Cloud browser [9].
CRM.
SaaS- CRM is a more desirable option for SME’s as it is
I. INTRODUCTION inexpensive and unsophisticated to implement as compared
Cloud Computing solutions are a boon for SME’s, which to on-premise CRM. However, SaaS CRM can be defined as
offer reliable and economic solutions for their growth. an improvement in CRM, which provides all features of
According to one survey by IBM, “more than 3000 global CRM along with other additional features.
CIO’s stated that 60% of organisations are ready to embrace SMEs are believed to gain more benefits from SaaS CRM as
cloud computing over the next coming years for growing they require less IT resources and less initial costs for setups.
their business and gaining competitive advantage.” [1]. However, SMEs play an important role in boosting up the
Moreover, New Zealand organisations are analysing the economic growth.
impacts of not moving to cloud and these impacts are forcing
them to move from traditional IT solutions to innovative and Hon Stuart Nash, Minister for Small Businesses in New
scalable cloud solutions such as Software as a Service (SaaS) Zealand, states in a report presented by Ministry of Business,
[2]. Dillon and Vossen [3] state that the New Zealand firms Innovation, and Employment [10] that small businesses are
believe in using SaaS cloud computing technology and New the backbone of the New Zealand economy, which makes up
Zealand firms believe that the usage of SaaS improves their 28% of New Zealand’s GDP and employs 29% of
competitiveness. Their research results showed that almost employees. In addition, a report published by Otago Daily
38% of SMEs in New Zealand are using SaaS whereas 48% Times [11], states that in Otago and Southland, most of the
of SMEs are considering adopting it. businesses are small and medium-scaled, which make up the
southern economy stronger. SaaS CRM technologies can
“Cloud computing prides on boosting small and medium help Southland businesses to be more competitive, however,
enterprises (SMEs)’s growth at all levels.” [4]. However, a it is important to understand to what extent are they aware of
research done by MYOB, which is the largest business and what factors affect their adoption decisions.
management solution provider in New Zealand and
Australia, states that only 16% of SMEs in Southland and III. ADOPTION MODEL AND HYPOTHESES
Otago use cloud technologies, which are the lowest results The current research purposes an adoption model that
for cloud usage [5]. encompasses two models that are used to study innovation
Currently, there is a great need for customer relationship adoption and they are TOE and TAM frameworks. The
management (CRM) solutions for all businesses because of Technology-Organisation-Environment (TOE) framework
the increase in customer base [6]. Cloud CRM solutions are was developed by [12], which is an organisation-level theory
better than on-premise CRM solutions due to less manpower framework, which states that the adoption process of

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technology innovation is affected by technological, The organisational context Technology Readiness is very
organisational and environmental dimensions of an important for organisations as if the employees working at
organisation’s context [12]. On the other hand, Technology organisations will be technically competent and welcome the
Acceptance Model (TAM) was presented as the doctorate change, the adoption process of new technologies will
proposal by [13], which focuses on the user’s intention and become easy.
abilities to accept new technology systems [14].
H5: Top Management understands the importance of cloud
The following Fig. 1. defines the purposed adoption CRM.
model and different factors incorporated from TOE and
The organisational context top management support is the
TAM framework.
vision, support, and commitment provided to accept and
implement the new technological advancements by the
higher authorities of the organisation (Martins et al., 2016).
In other words, top management takes decisions to invest in
new technologies.
C. Environment Context
The environmental context refers to all the surrounding
factors, in which organisations conduct their businesses. This
includes competitors, regulations, industry nature,
geographical locations, and government policies [15].
H6: Other competitors are using or soon to be using cloud
CRM.
Teo et al. [16] define market pressure as mimetic
pressure where an organisation imitates actions of other
similar organisations even there lies no relationships between
Fig.1. Purposed Adoption Model them [17].

Moreover, the following section defines hypotheses that H7: The CRM provider should have a good reputation in the
have been developed for the purposed adoption model: market.

A. Technology Context The reputation of cloud provider shows the quality of

services and support provided by them, which generates a
The technological context refers to all the technologies, trust level for them.
including internal and external technologies, which are used
by the organisation and, which are not used by the H8: Incentives are available to encourage the adoption of
organisation despite their availability in the market [15]. cloud CRM.
H1: The implementation of Cloud CRM helps to avoid the In the cloud, the data is stored in different locations,
extra cost of hardware and IT staff. which can be out of the country, but government support can
make it a bit easier for businesses to show trust to businesses
The technological context Relative Advantage refers to that data will be stored safely. Moreover, the government can
the degree when organisations gain more benefits from the fund the initial investment to support the adoption of cloud
implementation. Such as while investing in SaaS, the SaaS CRM.
providers offer software development and maintenance.
IV. LITERATURE REVIEW
H2: Cloud CRM improves work performance and boosts
work productivity. Different internal and external factors have been
identified by different researchers which hinder the adoption
The technological context Perceived Usefulness refers to of cloud technologies such as cloud CRM.
the belief of a user that the use of a certain system will
improve his or her performance. Amron et al. [18] define that the main factors that affect
cloud computing adoption are technology readiness, human
H3: Cloud CRM is easy to use and does not require much readiness, organisation support, security, and privacy.
mental effort. Another study was done by [19] in the Hawk’s Bay region of
The technological context Perceived Ease of Use refers to New Zealand to understand the adoption of cloud solutions
the comfort where the user can easily use the new system. showed that the main barrier found to hinder the adoption of
cloud is an overall risk as the New Zealand businesses
B. Organisation Context believed that the introduction of new technologies will bring
The organisation context refers to the characteristics and lots of changes along with it, which includes general and
resources of the organisation, which affects the decisions of intangible risks. The other barriers found are data privacy,
the adoption of innovations [15]. vendor lock-in, and integration issues.
H4: The employees have the necessary skills to use cloud Senarathna et al. [20] used an online survey to collect
CRM. data from Australian SMEs to state that the awareness of
cloud computing affects the adoption process. Hence, these

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research results are consistent with the research done by [21] variance is greater than 0.5 and composite reliability values
among New Zealand businesses, which stated that the lack of are greater than 0.7 which are acceptable for ensuring the
knowledge about the usage of cloud technologies is an validity of research data [25].
affecting criterion for New Zealand firms while adopting
B. Description of Respondents’ Attributes
cloud. In addition, [22] used a quantitative approach among
service sector SMEs of Malaysia states that firms with Fig. 2. shows that most of the respondents (60%) were
stronger IT infrastructure, involving more hardware and directors or the managers and Fig. 3. shows that most of the
software, are prone to adopting cloud technologies. For the respondents held a graduate degree.
successful implementation of cloud CRM, SMEs must be
aware of cloud computing and its services along with its
risks when they decide to move their applications to the
cloud. The prior knowledge helps in risk assessment and
appropriate steps to be taken [23].
Nĕmeček [9] used an online survey to collect data from
208 SMEs in the Czech to find the main barriers to cloud
CRM implementation and states top management support,
investment cost, lack of IT personnel and technical
infrastructure, and unclear return of investment, and lack of
awareness about the CRM as main affecting factors. The
author also adds that the different factors which affect pre-
purchase decisions of cloud CRM are clarity of CRM system Fig. 2. The current position of respondents
(78%), quality of evaluated data (73%), compatibility with
other IT system with the organisation (71%), and clarity of
evaluating the business cases (67%). However, no studies
reviewed and considered the ethical issues, which are equally
important and there are very few studies that considered the
economic effects which are very important for SMEs to
understand the positive and beneficial outcomes of the used
technologies [9]. Overall, different factors residing at
organisational, environmental, and technical levels affect the
adoption decisions of cloud computing and SaaS CRM.
V. RESEARCH METHODOLOGY
The research methodology is a plan, which defines what
methods and techniques will be used to collect primary data.
For the current research, the positivism philosophy has been Fig. 3. Last formal qualification of respondents
selected for answering research questions due to the more
quantitative nature of research data and it uses the deductive
approach as the research starts with reviewing different C. Description of Industry’s Attributes
frameworks such as TOE and TAM, and then survey The following Fig. 4. shows that most of the industries
questionnaires have been designed to collect primary data were either manufacturing (23%) or Information Technology
from the SMEs operating in the region of Southland. The and Communication (20%) whereas Fig. 5. shows that most
research uses mixed methods due to the qualitative and of the industries were small- scaled (63%).
quantitative nature of the questionnaire and data have been
collected from 35 SMEs by convenience non-probability
sampling.
VI. PRESENTATION OF FINDINGS
The following section defines the main findings of the
research:
A. Reliability and Validity Tests
To produce more reliable results, it is important to ensure
the reliability and validity of the research data. To ensure the
reliability of the current research data, Cronbach’s alpha test
has been performed which showed that the values for all
hypothesized constructs are greater than 0.70 which ensures
the reliability of research data and results [24]. Moreover, to
confirm the validity of research, average variance and
composite reliability values have been obtained with the help Fig. 4. Distribution of respondents by industry type
of SPSS statistical software which showed that the average

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In addition, Fig. 9. demonstrates that from a sample of

20% SMEs, only 10% SMEs are using cloud CRM solutions
which are very low usage results.
When 80% of the SMEs, who do not use cloud CRM,
was asked about the reasons why they do not use cloud
CRM. The main reason stated by them is that they are unsure
how cloud CRM will address their needs (46%) followed by
a lack of knowledge to use cloud CRM (23%), and cost
(27%). Moreover, the other reasons are lack of IT skilled
Fig. 5. Distribution of respondents by employee size staff, resistance by employees, lack of IT resources, data
The following Fig. 6. shows that most of the industries in back-up, and internet access as shown in Fig. 10.
Southland are operating for more than 10 years, which shows
their stability in the market. However, Fig. 7. shows that
almost 52% of SMEs are using cloud computing whereas
Fig. 8. states that only 20% of SMEs in Southland are using
CRM solutions.

Fig. 9. Usage of CRM (SaaS/On-Premise)

Fig. 6. Distribution of enterprises according to their operating years.

D. Usage of Cloud Computing and Cloud CRM

Fig. 7. Cloud Computing Usage

Fig. 10. Reasons for not Adopting Cloud CRM

E. Hypotheses Testing Results

Factor analysis and structural equation modelling have
been performed to test the hypotheses, and identify different
technical, organisational and environmental factors that
affect adoption decisions of cloud CRM among Southland
SMEs. The following Fig. 11. shows that competitive
advantage, perceived ease of use, and perceived usefulness
have a positive effect on the adoption of cloud CRM from
the technical perspective whereas technology readiness and
top management support affect the adoption decisions of
cloud CRM significantly from the organisational perspective.
Fig. 8. Distribution of Enterprises according to CRM usage Furthermore, the regulatory support from government and
trust in vendor can influence the adoption decisions but

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competitive pressure does not significantly affect adoption employees will not accept the changes whereas only
decisions of cloud CRM among Southland SMEs. 15% concerned about the privacy of data.
 The main technical factors which affect cloud CRM
adoption decisions among Southland SMEs are
relative advantage, perceived ease of use and
perceived usefulness.
 The main organisational factors affecting the
adoption decisions of cloud CRM among Southland
SMEs are top management support and technology
readiness.
 The external factors affecting adoption decisions
among Southland SMEs are regulatory support and
trust in the vendor.
However, the research has been performed in Southland,
New Zealand, which may pose a regional limitation and the
research work will have limited generalizability in terms of
its findings. Due to time constraints, no pilot studies had
been performed and the SME’s had been selected from
different business sectors with different IT requirements,
which might affect the results as different SME’s have
different opinions regarding the adoption of SaaS-based
CRM.
Future research can be carried out to compare the
adoption processes of different companies with regards to
their background and industry sector to better understand the
different factors, which play different roles in the adoption
process. However, the current research only focused on
identifying different affecting factors, the future studies can
focus on developing cost-effective and easy industry-specific
cloud CRM solutions.
Fig. 11. Summary of hypotheses testing.
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