T He I Mpact of S Oftware as a S Ervice on Is a Uthority

For some business applications, using Software as a Service (SaaS) is becoming increasingly popular. However, it is largely unknown how SaaS adoption affects the arrangements between business and IT departments. In this study, we take a contingency approach to investigate how firms allocate authority for SaaS applications. Based on semi-structured interviews with business and IT representatives of companies that have adopted the wide-spread SaaS solution Salesforce CRM, we extend existing contingency theory to propose a set of factors for governance arrangements on the application level. These factors are used in a comparative case study of 4 cases of SaaS adoption to explain why application authority is allocated either to the business or the IT side. The results suggest that in most cases there exist dominant and reinforcing contingencies determining a definite mode of SaaS governance.