Which IT Security Investments Will Pay Off for Suppliers? Using the Kano Model to Determine Customers' Willingness to Pay

Abstract

Although cost-benefit analyses are an important aspect of information technology (IT) security (ITS) management, previous research focuses largely on the customer perspective and neglects the supplier side. However, since ensuring a high level of ITS in modern IT products is typically associated with a large investment, customers' willingness to pay is essential for decision making in the context of IT product development. We draw on Kano's theory of attractive quality to analyze how customers generally evaluate implemented ITS safeguards. Based on expert interviews and a large-scale empirical study involving customer company decision makers, this paper demonstrates that different customer evaluations of ITS safeguards are associated with different levels of willingness to pay. Therefore, our results will enable IT suppliers not only to understand their customers' ITS needs but also to derive optimal ITS strategies, which may provide both economic and competitive advantages. Further theoretical and practical implications are also discussed.