Small And Medium Enterprises Sourcing Software As A Service - A Dynamic Perspective On Is Capabilities

Software as a Service (SaaS) is a promising approach for Small and Medium Enterprises (SMEs) firms, in particular those that are focused on growing fast and leveraging new technology, due to the potential benefits arising from its inherent scalability, reduced total cost of ownership and the ease of access to global innovations. This paper proposes a dynamic perspective on IS capabilities to understand and explain SMEs sourcing and leveraging SaaS. The model is derived from contextualizing the IS capabilities of Feeny and Willcocks (1998) to SMEs and SaaS and combining it with the dynamic capabilities framework of Teece (2007) . We conclude that SMEs sourcing and leveraging SaaS require leadership, business systems thinking and informed buying for sensing and seizing SaaS opportunities and require leadership and vendor development for transforming in terms of aligning and realigning specific tangible and intangible assets.