THE ROLE OF INTERACTION STRUCTURES FOR CLIENT SATISFACTION IN APPLICATION SERVICE PROVISION RELATIONSHIPS

Transcription

1 THE ROLE OF INTERACTION STRUCTURES FOR CLIENT SATISFACTION IN APPLICATION SERVICE PROVISION RELATIONSHIPS Schroiff, Anna, Department of Information Systems and Services, University of Bamberg, Feldkirchenstr. 21, Bamberg, Germany, Beimborn, Daniel, Department of Information Systems and Services, University of Bamberg, Feldkirchenstr. 21, Bamberg, Germany, Brix, Andreas, Department of Information Systems and Services, University of Bamberg, Feldkirchenstr. 21, Bamberg, Germany, Abstract This paper presents an embedded exploratory case study of an application service provider s (ASP) client relationships. We focus on the relationship between the vendor and the clients in the ongoing business, which we analyzed based on interviews with client representatives, a pre-interview questionnaire assessing goal achievement, service quality, and relationship quality, and an identification of the real-life social network structure between vendor and client staff (not to be confused with online social networks). We identified two categories of clients fundamentally differing in their expectations for ASP support, which influences the formation of the social network structure between both firms. We found that ASPs should be aware of client differences and differentiate their support services accordingly in order to satisfy their clients in the long run. As main contribution, we extend the Expectation Confirmation Theory by adding a social network-theoretic argument explaining why disconfirmation does not necessarily reduce satisfaction in B2B relationships. Keywords: Outsourcing, ASP, service quality, exploratory case studies, Social Network Analysis (SNA), Expectation Confirmation Theory

2 1 Introduction The social perspective on information systems has been raised as research topic not only for firm internal matters (e.g., Chan and Reich, 2007), but also in the context of IS outsourcing (Fink, 2010). Outsourcing research often focuses on economic and strategic issues (Dibbern et al., 2004), but relational issues have also been tackled by various researchers (e.g., Grover et al., 1996; Mao et al., 2008). However, the role of socio-structural relationships which not only look at the quality of the relationship but rather focus on the structures of the social network between individuals from vendor and client in this context has rarely been targeted (Schroiff et al., 2010). Previous research has identified relationship management as outsourcing success driver, but it remains under-researched in terms of actual management action items regarding how to achieve and maintain high relationship quality (Holmström Olsson et al., 2008; Lacity et al., 2009; Lacity and Willcocks, 2009). This is also true for the particular outsourcing form of application service provision. While Susarla et al. (2009) focus on types of contracts and transaction cost of application service providers (ASP) service agreements, they also point out to the (under-researched) relevance of relational norms. We follow this avenue by examining the quality of ASP relationships and the associated social network structures in terms of interaction between client and vendor employees in the ongoing service provision. These socio-structural patterns are the basis for any client-vendor relationship and are shaped both by the formal setting of the outsourcing arrangement and the informal relationships between individuals as they evolve during the ongoing relationship. In this light we explore how ASP providers should shape their support services concerning a particular client organization with regards to interaction structures and pose the research question: How should ASPs distinguish their interaction structures with clients regarding the support services for different types of clients? We use Social Network Analysis (SNA) to explore a series of comparable cases embedded within a single case study. These embedded cases represent ASP relationships between the same ASP and different clients. We derive from our results that ASPs should distinguish between different client segments for their support and communication in ongoing ASP arrangements. We also deduce how a more effective social network structure can support higher satisfaction on the client side. As main contribution, we extend the Expectation Confirmation Theory by the argument of social network structure, which can help explain cases in which disconfirmation does not reduce overall satisfaction. Next, we provide some background of outsourcing relationships in general and ASPs in particular. In section 3 we introduce the case study approach along with the selection of client cases. Section 4 presents the case study results in detail. These are then reflected against the Expectation Confirmation Theory in section 5. We conclude with a summary and outlook on further research. 2 Background 2.1 Outsourcing Relationships An outsourcing relationship is an ongoing, long term linkage between an outsourcing vendor and customer arising from a contractual agreement to provide one or more comprehensive IT activities, processes, or services with the understanding that the benefits attained by each firm are at least in part dependent on the other (Goles and Chin, 2005, p. 49). The relationship between client and vendor has a clear impact on the success of an outsourcing deal and therefore needs to be explicitly managed by both sides (Kern and Willcocks, 2002). Various researchers have stressed this need from different perspectives (e.g., Dibbern et al., 2004; Goo et al., 2009; Sabherwal, 1999). Grover et al. (1996), Goles and Chin (2005), and Lee and Kim (1999) showed that relationship factors such as trust and cooperation have a strong effect on outsourcing success.

3 The interaction between client and vendor staff shapes an outsourcing relationship. Only few works have shown that different interaction structures have varying advantages and disadvantages, depending on the context. For instance, a centralized interaction structure (Leonardi and Bailey, 2008) vs. a distributed interaction setup between vendor and client (Levina and Vaast, 2008) exhibit different potentials and shortcomings from vendor and client perspective. Based on a literature review, Schroiff et al. (2010) suggest that the social network structure at the client-vendor interface is worth further investigation. In our case studies, we thus examine the relation between social network structures in terms of interaction between vendor and client staff and service quality. 2.2 Application Service Providers An ASP is an IT services vendor that provides access to remotely hosted IT applications via networks (Susarla et al., 2009, p. 221). The offerings include a wide range of products for both SMEs and larger companies, such as applications for accounting or marketing, but also industry-specific solutions (Schwarz et al., 2009). The ASP business model has been seen as a chance to penetrate the software market of small and medium sized enterprises (SME) since the late 1990ies (Currie and Seltsikas, 2001). ASP offerings have continuously increased, including but not limited to product offerings from large IT service providers such as IBM (Lacity et al., 2009). However, the adoption rate of ASP services especially by SMEs has not fulfilled the expectations, yet (Altaf and Schuff, 2010). In contrast to traditional outsourcing, an ASP owns and manages the software often in a highly scalable multi-tenant form. The perceived service quality of support provided by ASPs to their clients is of vital importance in this relationship, as the ASP is fully responsible for the operations and support of the software (Susarla et al., 2003). Support services produce ongoing and frequent interaction between the ASP and clients. For this context, the service quality dimensions of assurance, responsiveness and reliability (Kettinger and Lee, 1994) are most relevant because they reflect the availability and content of the support (i.e., problem solving capabilities) provided by the vendor. 3 Approach: Case studies We used an exploratory case study approach for our analysis, as our focus is on complex interaction structures which can hardly be measured and understood in depth by using a cross-sectional quantitative approach. Interviews provide rich data not only on how communication takes place, but also why certain interaction structures do appear and which effects they have. 3.1 Case study process For each case we followed a two-step approach in data collection: 1) a pre-interview questionnaire was sent to the manager on client side. The questionnaire comprised questions regarding the outsourcing goal and the overall satisfaction with the ASP s performance and reliability. Further, it included items on relationship quality dimensions using instruments from Goles and Chin (2005) and Lee and Kim (1999). The questionnaire served to prepare the second step of data collection and to obtain information on a comparable basis for all cases. 2) In each client firm, we interviewed one to three employees, depending on company size and contacts with the vendor. Our guideline for the semi-structured interviews aimed at structures of the social network between people from both firms. To elicit richer data, we defined five scenarios of interaction with the vendor, used as starting points to capture communication patterns from the interviewees: daily business, incidents, change requests, advice in special situations (e.g., moving to another building or site), and general questions. The interviews were tape-recorded and transcribed. One interview needed to be recorded in writing because the interview partner did not agree with tape-recording. Also, we reconstructed the interaction structures for each case.

4 3.2 Case selection Our series of embedded case studies comprised several client relationships of one ASP, which was our entry point for the case study. This ASP offers services and products to SMEs in the German finance industry, including IT infrastructure services, industry specific software products and ASP offerings. In our case study, we focus on the relationship regarding the ASP-based provision of the main application, which the clients use in their business. This application is involved in most of the clients business processes and doing business without it (or a substitute) would be impossible. The vendor mainly determined the selection of clients for the case studies: initially, client selection was a convenience sample of firms with upcoming server migration during the time of data collection (fall 2010). In order to add more variety to the selected cases, further clients were asked to participate. Overall, we have conducted interviews with 4 small clients and 2 medium sized clients (Table 1). Segment A Segment B Client Client1 Client2 Client3 Client4 Client5 Client6 # of sites employees Executives Dedicated IT staff no no no no yes (2 FTEs) No, but the husband of an executive fulfills this function ASP since Goals of outsourcing to ASP Interview partners Table 1. Quality improvements; (secondary goals: cost transparency; focusing on core competencies) Quality improvements; focusing on core competencies; (secondary goal: cost transparency) Overview of client cases Quality improvements; focusing on core competencies Quality improvements, cost transparency; (seconddary goals: focusing on core competencies, cost reduction) Cost reduction; quality improvements; focusing on core competencies Quality improvements; (secondary goals: cost reduction, focusing on core competencies) ClientASPResponsible1; ClientEmployee1 ClientExecutive2 ClientExecutive3-1; Client- Executive3-2; ClientASPResponsible3 ClientExecutive4 ClientExecutive5-1; Client- ITExpert5-1 ClientExecutive6-1; ClientASP- Responsible6 In the case analysis, we use the following labels for the individuals on client side: ClientExecutives are the leading managers and in case of small companies often also the firm owners. The ClientASPResponsibles are employees of the company, who are responsible for the ASP relationship but are not dedicated IT staff, in contrast to the ClientITExperts, who take care of IT matters only and as part of this also for the ASP relationship. ClientEmployees are any other employees of the client company who are users of the software provided by the ASP. On vendor side, the VendorManager is the ASP s department head for IT management, while the VendorTeamleads and VendorSpecialists are employees either from the service management team or from the design and technology department, which consists of a team for designing new product features and a team for installing and setting up the servers. The typical setup for the ASP s relationship to the client is the hotline (VendorHotline), i.e., a call center taking all client support requests. The VendorHotline should be the single and only entry point of contact for the client and should either directly answer requests or route them to an applicable VendorSpecialist.

5 4 Case Study Results In our case studies we found various differentiating factors which led to separating the analyzed client firms into two general customer segments: A) typically small clients without IT expertise (clients 1-4), and B) medium sized clients with dedicated people taking care of IT matters (client 5-6). Clients in segment A have at most 20 employees, usually working in one single location, and are owner-operated companies, mostly with the founder being the only executive. They usually have no dedicated IT staff, instead the director or another employee take care of the IT and the ASP relationship asides their main duties. The clients in segment B are significantly different. They have at least 50 employees, distributed over 4-5 locations. Their structure follows a partnership-owned business with several partners. In each case, one of the partners takes organizational responsibility for IT matters besides his/her other duties. In Client5 there are also two employees dedicated for and knowledgeable of IT matters on an operational level, while ClientExecutive6-1 s husband, who is an IT expert, supports her whenever problems or questions arise (although he is not employed). We assessed satisfaction with ASP in general in the pre-interview questionnaires. In segment A, the client satisfaction showed to be high quite consistently across all cases. The larger clients in segment B showed a more differentiated picture. While they are generally satisfied by the support, they attribute this mainly to direct contacts they have to the vendor rather than to the VendorHotline staff. 4.1 Expectations and perception of support service quality Next, we categorize the expectations that the clients posed on the ASP regarding the service quality of the support. The expectations were mainly about (1) the availability of support, (2) the competence of vendor s employees, and (3) individual support Availability of support is perceived differently by the two customer segments The service hotline for client support is the same for both client segments and all calls are handled equally. The clients in segment A expect that the hotline is available immediately in case of problems: For me it s important, the [ASP] is available on short notice. (ClientExecutive3-2) However, all clients in segment A express high satisfaction with the availability and services of the VendorHotline. If anything doesn t work, it just needs a call. Within shortest time the problem is fixed. I am absolutely happy. It s perfect. [ ]. Even with my wife, I m not that happy. But with [Vendor s ASP service] I m absolutely happy. (ClientExecutive4) Only minor complaints on the duration for processing were raised. As ClientExecutive3-2 summarizes: Availability is fine. Callback is fine. Handling of requests is fine. At times as with all things you sometimes think it could happen a bit quicker. But generally, in the vast majority of cases it works. (ClientASP-Responsible3) By contrast, the clients in segment B raised issues regarding availability: ClientITExpert5-1 had a very different perception of the VendorHotline s availability than the respondents from segment A: The [VendorHotline s] number is somehow disastrous [...] in that it should be always available. But, when you have a problem or when updates are taking place, then you often struggle to get through. Then you wait and wait and at some point they [the machine] tell you, you can also reach us through this and that channel. And then, suddenly, the system cancels the call. [ ] The availability when you have a problem used to be a lot better in former times from my point of view. (ClientITExpert5-1)

6 With former times, the ClientITExpert5-1 refers to a prior setup when the VendorHotline was not yet in place, but a dedicated team served the client. His statement implies that his expectations regarding availability are at least partly affected by his prior experiences with the vendor support. Client6 doesn t have such a major problem with the hotline, but they have at least the impression that the VendorHotline is reaching the limits of its resources: After the last update, the VendorHotline was under a lot of stress. [ ] We realized that because we got late call backs. Still today, we sometimes get s saying We are very sorry, but unfortunately we cannot process your request before tomorrow. In these cases you realize that they reach their limits. (ClientExecutive6) ClientExecutive5-1 also supported this perception of availability issues, explaining that especially in urgent cases the VendorHotline is not helpful and he justifies his high level of expectations as follows: Often, the work of more people than in a small client firm is stopped by a missing answer [from the ASP support]. To put it simply, the complexity [of our organization] is higher [ ]. Bigger clients contribute more to the ASP s economic success and thereof I might ask for our contribution being more reflected by wasting less time in hotline calls. (ClientExecutive5-1) In summary, the same service level and availability of support are sufficient and satisfying for segment A, while segment B raises serious complaints. This is influenced by a higher expectation on availability due to the experience with the previous dedicated team setup and the higher urgency from the client perspective because more employees are dependent on the ASP services Competence of vendor staff influences interaction structure Besides the availability of the VendorHotline, the competence of the vendor employees answering the client calls is a further important factor of service quality from the clients perspective. This includes not only their competence on the technical level, but also their capability to communicate with the clients in an understandable, not too technical language. As elaborated above, the clients in segment A are generally satisfied with the hotline, which is not only limited to the basic availability but also includes the effective handling of calls. Generally, the clients expectations in this segment are focused on the need that the service must be up and running while it is not important to them how it works. You have to consider that basically the IT as a whole just needs to work for us. If you look at a computer science guy, he works of course in a complex area, but for us, it is just important that it works. [IT] is a completely different world that the average person [=non-it guy] doesn t care about at all. [ ] This is all Greek to an average person. (ClientASPResponsible1) In this statement, the ClientASPResponsible1 also highlights the differing knowledge or mutual understanding between the clients and the VendorHotline. ClientExecutive4, who explained how a typical hotline call works, also supported this: A kind lady asks How can I help you?. Then I try to explain. Then it works out really fine: Sometime later I receive a call back. I explain what happened and [they say] yes, we ll manage it [ ] Then they fix something. I have no idea; I don t have a clue of IT. (ClientExecutive4) While he does not know what the support does to solve his problem, he is satisfied with the solution of the problem and the handling by the VendorHotline. Similarly, in none of the client interviews in segment A a lack of mutual understanding was seen as a problem for the solution of the problems, nor did any complaints concerning the technical competence of VendorHotline staff come up. Client5 in segment B shows to have more differentiated expectations towards the vendor support. On the one hand, ClientExecutive5-1 criticizes the lacking capability of VendorHotline staff to talk to non IT-savvy ClientEmployees. While the firms in segment A mentioned this without perceiving a problem, Client5 with a bigger number of employees found this to be an issue when it leads to a waste of time for solving the problems without proper VendorHotline support.

7 There is a general behavior at the hotline which in some cases is not conducive because it is too technical. [ ] That happens far too often. [ ] In the best case, they [the ClientEmployees] contact [ClientITExpert] or me. But often, they [the ClientEmployees] try to solve it somehow by themselves, which might take a lot of time. Just to not expose themselves to comments like well, a little IT knowledge is needed for this job [ ]. That definitely takes more time than if a call [to the VendorHotline] would have solved it directly. (ClientExecutive5-1) On the other hand, Client5 demands better trained support staff with more in-depth knowledge on the interplay of different products and for non-standard requests: If you want to help in an effective way, then it is indispensable that you understand the rough interrelations and effects of the [ASP s] software [used by the client] as comprehensively as possible. [...] That is often not the case and that makes things difficult. (ClientExecutive5-1) Here, ClientExecutive5-1 motivates his expectations by the fact that his medium-sized company uses the ASP s software to a larger extent than smaller companies and that this should be better supported. Also, ClientITExpert5-1 argues that he needs contact persons who are better informed then himself, which is currently not the case at the VendorHotline: When I discuss something with him [at the VendorHotline] - and I already do have some knowledge in this topic - and can clearly say where the problem is, then I cannot trust whether the employee [at the VendorHotline] can actually judge these things. [...] In my opinion, that is the factor of uncertainty for the caller. It s a different way of working when you call someone you know personally and know [this person] has helped a couple of times. (ClientITExpert5-1) Thus, ClientITExpert5-1 prefers contacts he knows personally, which leads to a bypassing of the VendorHotline. This happens in various situations, as both interview partners explained: When we got the new update, for example, the overnight batch processing did not work, because they missed to configure something correctly. Then I call particular people in the ASP division. Because I know [ ] the [usual] procedures solving it take too long. So I contact, e.g, the VendorSpecialist because I know he knows that topic. (ClientITExpert5-1) I sometimes do that [calling the direct contacts] when I know or assume that if I call the VendorHotline and describe my problem, that won t help. [...] Or I have a problem with the installation and someone [from the VendorHotline] told me something I know is absolute nonsense. (ClientExecutive5-1) Both interviewees call their direct contacts on the vendor side because they expect more knowledgeable support from them than from the VendorHotline, given their own IT background and subsequent ability to pre-evaluate the problem. Overall, we summarize that the larger clients have higher expectations regarding the competence of the VendorHotline staff. These are mainly explained through the existence of IT expertise on client side, and partly through the number of calls from non-it people. Since the vendor does not fulfill these expectations, the clients seek alternative ways of communication and thus bypasses the vendor hotline. In contrast, clients in segment A get their expectations completely fulfilled by the hotline Demand for individual support influences interaction structure The request for individual support came up in segment B only and is partly connected to their evaluation of VendorHotline s availability and competence (see above). They specifically demanded client contacts more knowledgeable about the client s organization, given that it is more complex than smaller clients: It would be nice to have a team that serves the bigger clients only and where the members are aware of the client s structure. That could be the key success factor. Currently, they [the ASP] pursue a different strategy. No one [from the support] knows us, [Client5].[ ] Take this example: we have [ASP s software product] as organizational software with a certain complexity that I believe you will rarely find in other [ASP s] clients. (ClientExecutive5-1)

8 Client6 also supported this, as ClientExecutive6-1 clearly saw an advantage of the prior setup in the background knowledge the dedicated team had about their structure and needs: They knew how our office is structured, they knew how we work. They had a clear idea of the things and immediately knew what was wrong. If you get someone on the phone [today] who doesn t know our company, you have to explain it all over again. (ClientExecutive6-1) Also, the number of employees and the size of the associated business drive the wish for more individual support by the vendor, as was already indicated above. These expectations and discontent with the support offered has also advanced the bypassing of the VendorHotline for certain requests, as the ClientExecutive5-1 elaborates: We have found alternative ways [of communication] because with the official communication structure and that s not even only attributed to the hotline it doesn t make sense. Because sometimes you get information that doesn t help because we have a different structure. The hotline just gives a standard answer. And I suppose that in other areas, at other bigger clients you find similar special requirements. And the clients would be glad if the vendor contact could keep that in mind for his answer. (ClientExecutive5-1) The changed communication patterns also extend to client requests, which are not directly related to ASP product issues, but rather are focused on more individual advice, as both interview partners exemplify. For instance, ClientExecutive5-1 used his direct relationship to the design team of the ASP vendor to push a request for iphone support in the service. He discusses similar questions with VendorSpecialist5-1 more or less regularly, also to gain better understanding of the topics: When I need information, especially regarding iphone and so on, then I call [VendorSpecialist5-1]. [ ] Because I look for someone I know handles these topics. Just to get some more information, when I think I don t know enough to really join a discussion on that topic and to be informed and prepared when someone tries to dissuade me from doing something like that. (ClientExecutive5-1) Also, both ClientITExpert5-1 and ClientExecutive6-1 explain how they use their direct vendor contacts for advice for hardware purchases which are not related to the vendor s products at all: I know what VendorSpecialist5-1 does and what he knows. And I ve taken it so far because I am also responsible for IT purchases in our firm as to ask him what he thinks what kind of laptop computers we should buy. (ClientITExpert5-1) I call them [ ] if something extraordinary comes up, for example if we need new computers. [ ] For questions like Which model should I take? What equipment do I need? I like to ask VendorSpecialist5-2. (ClientITExecutive6) Hence, Client5 and Client6 demand a more individual setup, with support staff informed about the particularities of bigger clients and advice beyond the VendorHotline s scope. This client expectation is driven by the client s size, resulting in a more complex organization and more specific requirements than those of smaller clients. The demand for individual support beside the regular support further encourages the bypassing of the VendorHotline in favor of the direct vendor contacts. 4.2 Interaction structures As indicated above, the expectations and the perceived quality of support result in different interaction structures for segment A and B. Figure 1 shows the interaction structure of Client2 to exemplify the typical client-vendor interaction in segment A: Generally, the ClientEmployees call the VendorHotline directly or they take the problem to the ClientExecutive first. In any case, the VendorHotline serves as single point of contact for the support by the ASP. Slight deviations between the clients in this segment concern the funneling of all calls to the VendorHotline through the ClientExecutives (e.g., Client4, Figure 2) or the existence of multiple ClientASPResponsibles (e.g., Client3, Figure 3).

9 Figure 1. Interaction structure Client2 Figure 2. Interaction structure Client4 Figure 3. Interaction structure Client3 Interestingly, the interviewees in segment A did neither see any need for nor possible advantages from direct relationships to experts bypassing the VendorHotline, not even when directly asked. They argued that the availability in this case would be an issue, as direct contacts might be busy when clients call. Also, it is unclear for them who the right contact person for which question is, as the clients usually have too little IT knowledge to determine the exact reason for a particular issue. Sometimes the problem is so fuzzy that you don t know who to call. So you have to call the VendorHotline anyway, so they can put you through correctly. (ClientEmployee1) In contrast, the interaction model between the clients in segment B and the vendor (exemplified by Client5 in Figure 4) is not geared towards the hotline as single point of contact. While the ClientEmployees contact the hotline only, the ClientITExpert5-1 uses his direct contacts to VendorSpecialists5-1 when the hotline could not solve questions satisfactorily, as elaborated above. Also, ClientExecutive5-1 and ClientExecutive6-1 call their direct contacts (VendorSpecialists and VendorTeamleads), ClientExecutive5-1 in urgent cases even the VendorManager. ClientExecutive6-1 explains that she calls her direct contacts for special questions or specific problems: It s these special questions [e.g., data management], which I discuss with VendorSpecialist5-3 because she is very knowledgeable. She knows about the problems. (ClientExecutive6-1) Within Client5, ClientEmployees usually contact ClientITExpert5-1 or ClientITExpert5-2, but also the VendorHotline. This part of the structure is similar to the model in segment A. Well, I should be the one and only they [ClientEmployees] call. Either I can solve the problem based on my abilities [or not]. I go to the employee s workstation, then I usually get the problem solved with my experience, without calling [the VendorHotline]. (ClientITExpert5-1) Figure 4. Interaction structure Client5

10 However, the ClientExecutive5-1 explains that he sometimes calls his direct contacts instead of the hotline because he does not want the VendorHotline to decide about the urgency of his problem. Rather, he calls someone he knows who can solve the problem: I need to make sure that a company with 130 people, when there is a really fundamental problem, [...] can proceed as fast as possible. And if something is of high importance, this question is subject to me and my company. That s the reason for this course of action [calling direct contacts instead of the VendorHotline]. (ClientExecutive5) Similarly, ClientExecutive6-1 also stressed that in her firm 50 people are affected and cannot work if the ASP service is down. In this context, ClientITExpert5-1 also emphasized that the client interface setup in earlier times has been superior than today s, given the fact that their contacts to the vendor at that time were more stable and had a certain background knowledge of the client, which is in line with the client expectation for more in-depth knowledge by the vendor support elaborated on above. This team we used to have, where particular [VendorTeamlead and VendorSpecialists] used to be responsible specifically for us when there were any problems, they usually immediately knew what was wrong because they knew our company and they knew some specific issues that caused similar problems previously. (ClientITExpert5-1) Hence, the interaction structures are altered due to the misfit of support quality provided by the VendorHotline and the client s expectations. 5 Discussion Our presentation of case study results contrasted the ASP s support service quality as currently perceived and expected by the client in terms of availability of support, competence of vendor s employees, and individual support. The interviews suggest size of the client, existence of dedicated IT staff, and prior experiences with the vendor being the main drivers behind these expectations:. Availability of support is satisfying for the clients in segment A, while the clients in segment B perceived problems. This was explained by the size of the company, as the need for more people to be able to work drives urgency for larger clients. Also, this expectation was increased by the prior experiences with the old interaction structure without the hotline. Competence of vendor s employees differed between the two segments and was mainly driven by the fact, that Client5 has dedicated IT staff, which can solve the easy problems. Once they call the vendor, they need people more knowledgeable about the systems than they are themselves. This used to be the case in the interaction setup they knew from prior experiences. Individual support was requested in segment B because the size of the company implies a different organizational setup. From the client perspective, the contacts at the vendor must be aware of this in their support. Also, clients in segment B regularly use their direct contacts for discussions besides the direct product support. This process is driven by the knowledge of the dedicated IT staff and ClientExecutive5-1 and ClientExecutive6-1, who want to discuss more advanced topics with the vendor. We summarize these findings by the following group of propositions 1a-c: P1a-c: Size of the client firm (a), client-side existence of IT experts (b), and prior experience with the vendor (c) drives the client s expectations regarding support from the vendor. The comparison of expected and perceived performance (here: perceived service quality of ASP support) is at the core of the Expectation Confirmation Theory (ECT), which explains the impact of clients expectations and their confirmation by perceived service quality on client s satisfaction (Oliver, 1977, 1980). Susarla et al. (2003) have used ECT in the ASP context, conceptualizing ASP satisfaction as satisfaction of users with the working relationship with the ASP as well as satisfaction with the ASP s service, which matches the expressions of satisfaction in our interviews. As we examined, the clients ASP satisfaction is driven by both their expectations and the perceived service quality of the support. We can therefore build on ECT, which serves as basis for the following propositions.

11 P2: Expectations have a negative impact on perceived support quality. P3a: Meeting higher expectations will be more difficult (i.e., higher probability of disconfirmation). P3b: The perceived support quality determines the level of disconfirmation compared to the client s expectations. P4: Perceived service quality has a positive impact on ASP satisfaction P5: The disconfirmation of client s expectations negatively affects ASP satisfaction. In our case analysis, we found that the evolution of interaction structures closely depends on the clients expectations regarding the perceived quality of the vendor hotline. As the clients in segment A are content with the quality and types of services offered by the vendor hotline, they stick to the vendor s proposed interaction model. By contrast, the clients in segment B have higher expectations on the ASP support, are less satisfied with the hotline, and therefore use direct contacts besides the hotline for pulling higher quality support and additional services. The changed interaction structure thus presents an alternative to reach ASP satisfaction if the expectations are not fulfilled. Thus, we extend ECT by introducing a socio-structural argument and propose: P6: Disconfirmation of client s expectations promotes the change of the interaction structure between client and vendor. Clients 5 and 6 evaluated service quality positively because of their extended interaction structure with direct contacts; they are satisfied with the support received from these contact persons although their expectations are initially disconfirmed. We can therefore complete the picture with proposition 7: P7: The interaction structure between vendor and client impacts ASP satisfaction. Figure 5 summarizes the derived model, building on and extending the basic ECT model (core ECT model is highlighted by dashed lines). Figure 5. Derived theoretical model (core ECT highlighted by dashed lines) 6 Conclusion In this paper, we presented an exploratory study of an embedded case on the role of social network structures for satisfaction in ASP outsourcing relationships. Our findings suggest that client size, the existence of dedicated IT staff and previous experience with the ASP shape the clients expectations regarding the vendor s support services. If service expectations are not met (i.e., disconfirmed), interaction structures do deviate from the intended collaboration model. This changed interaction structure can be a detour to reach ASP satisfaction if client s expectations and perceived service quality of support do not match. Thus, this argument represents an add-on to expectation-confirmation theory (ECT) since it provides a complementary mechanism (or: remedy) to overcome the negative impact of disconfirmation on satisfaction. Of course, the results have direct managerial implications, as well. They show that a differentiation of client support depending on client properties is advisable. Thus, in addition to product flexibility as recommended by Altaf and Schuff (2010), ASPs should differentiate the communication structures in their support services.

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