Coordination mechanism of SaaS service supply chain: Based on compensation contracts
Abstract: The purpose of this
paper is to build new contracts theories of SaaS service supply chain. Software
as a Service (SaaS) has become a hot topic in this industry . Compared with
traditional manufacturing supply chain and general service supply chain, the
new IT service supply chain which based on SaaS has characteristics of both
service and IT. And SaaS is completely different from traditional software
package model. Therefore the classic contracts, which be widely used in
traditional manufacturing supply chain, can’t be directly applied in SaaS
service supply chain. The necessary way of IT services developing is to study
the SaaS service supply chain combining with characteristics of SaaS.
Therefore, It focuses on the coordination of SaaS service supply chain.
Design/methodology/approach: It tries to answer the following question:
how do the ISV motivate SaaS operators to improve the service level through
effective contracts mechanism under conditions of asymmetric information. In
order to answer these questions, this paper does some researches including:
Under the conditions of information asymmetry, supposing the service level (is
related to the degree of effort) of SaaS operator was private information, we
construct model of compensation contract, i.e., to motivate SaaS operator to
improve service level through transfer payments of compensation price.
Findings and Originality/value: The study finds out that when ISV get to
“positive feedback”, instead of the traditional market equilibrium, compensation
contract (linear) can coordinate satisfactorily the SaaS service supply chain.
In the point of “positive feedback”, the marginal revenue equals the marginal
cost, but it is not the equilibrium of ISV’profit-maximization.
Research limitations/implications: There are some limitations in this
research. In the linear compensation contracts, the compensation price is fixed
value. If in the contract, we can create a change value which is related to the
sales volume of service, the coordination efficiency of compensation will be
increased. And in the future, the nonlinear compensation contracts should be
researched.
Practical implications: In the practical implication, it will promote the
development of study and practice of SaaS and IT service industry. And it is
beneficial to ISV, platform operators and customers.
Originality/value: From the theoretical perspective, this paper put
forward some new contracts and motivating mechanism for effective coordination
of SaaS service supply chain and the conclusion will enrich content of service
supply chain theory system. In theory, it has more significance for further
researching on SaaS and service supply chain.
Keywords: SaaS (Software as a Service), Service Supply Chain,
Compensation Contracts, Coordination, the Service Level, Positive Feedback
Author: Yanli Guo, Jianbin
Chen, Hailing Guo, Xinman Lu
Journal Code: jptindustrigg130088
