Factors Affecting Cloud Computing Adoption

Cloud computing is changing our lives in many ways and can bring benefits to both organizations and countries. There are some technological, organizational and environmental factors that could hinder the adoption of these technologies in developing countries.

Accordingly, the decision-making framework to adopt cloud computing was developed based on the technology-organization-environment (TOE) framework mentioned earlier.

All the identified factors from prior research regarding cloud computing adoption were considered as options for the factors and attributed in the research model.

These factors were placed accordingly by nature into factors and attributed in the framework.

Factors for adopting Cloud Computing

Factors for adopting Cloud Computing

Technological Factors

There are primarily two technological concerns when adopting a cloud computing system. They are the relative advantage and compatibility issues, each with its own technical variables. When adopting or migrating to a new technology, especially the one as dynamic as the cloud, companies must weigh its pros and cons carefully.

Relative advantage

Firms must consider whether the innovation that is being adopted is better than the idea it supersedes. Cloud computing has more advantages than other technologies because it is more flexible, mobile, and it has an infinite range of scalability.

Cost and manageability

When comparing IT costs, it is better to adopt a cloud computing system. Investment costs are one of the most important decision-making factors. Consider an initial outlay a company would need for acquiring the IT hardware infrastructure like servers, cables, routers, firewalls, uninterruptible power supplies (UBS), heating, ventilation, and cooling (HVAC), units, as well as the physical space to store these equipments. Moreover, consider the costs associated with setting up, troubleshooting, and maintaining all these components.

Finally, consider the costs of licensing software for each user in the organization. The resulting reduction in direct IT spending would be extremely beneficial to start-ups or small businesses.

Efficiency and flexibility

With cloud computing, not only is the physical infrastructure provided by the cloud service provider on a subscription basis, but also all the needed software applications are readily available.

This eliminates the headache associated with procuring, installing, and maintaining IT equipments and software. As a result, your business can use its overall human and financial resources more efficiently.

Managers can then focus their efforts somewhere else knowing that the cloud services are more than flexible to meet its growth, and because of its continuity, the cloud platform is more reliable.

Compatibility

Because the Internet has become the predominant form of information sharing and communication globally, cloud computing platforms, which are in alignment with the Internet platform, will allow companies to conveniently import and export applications and customize their services in a seamless way.

Ease of use and data integration

Cloud-based services should be compatible with all existing file formats, user interfaces, and other structured data in an attempt to increase interoperability among the users of technology.

Additionally, the time taken to perform tasks, transfer data, and integrate computer data into existing work would be much less. As a result, computer systems would be less complex to understand with higher functionality across various platforms.

Organizational Factors

From an organizational standpoint, strategic objectives must be established in order to outline expected outcomes and guide employees’ efforts in achieving these objectives.

As a result, a firm’s top management must support all efforts to ready the organization to meet these objectives and overall goals.

Again, when adopting or migrating to the cloud, managers must weigh its pros and cons carefully.

Organizational readiness

If a firm claims that it is ready to adopt or migrate to a new platform of technology, it must have both the financial resources and the technical infrastructure to support such an adoption. Many of the toughest challenges related to cloud are not with the technology, but with how to operate it in this dynamic world to realize its full benefits.

Financial readiness

Financial resources are key drivers of technology adoption. They are also one of its main constraints, especially in developing countries. From a monetary perspective, it is essential that managers consider the financial readiness and likelihood of migrating to the cloud.

Scarce financial resources restrain IT capabilities that could improve an organization’s effectiveness, so cloud computing attempts to address these economic limitations with useful, user-friendly, and less costly solutions for the organization.

Technological infrastructure

The IT infrastructure refers to the composite of physical components like computer and networking hardware and facilities as well as various software and network components required for the existence, operation and management of an IT environment.

Successful firms should have some effective technology infrastructures with expert professionals managing them. When companies plan to operate in a cloud computing environment, their cloud IT infrastructure will allow them to become more agile, efficient, and innovative to meet the growing demands of their users.

They will be more responsive to meet the needs of their customers while providing increasingly better quality of services.

Top management support

Top management support is considered one of the main factors in project management. Therefore, effective administrative involvement can considerably improve the success of the project. Sometimes, when resources are limited, strategies such as shifting resources from low-value adding activities to high-priority activities can help.

It ensures long term vision, commitment of resources, and optimal management or resources in the establishment and realization of the company’s goals.

Studies show that when companies fail to get sufficient top management support for IT projects, these projects have little chance of succeeding in this situation or they fail altogether.

Long-term vision and establishment of goals

A vision is a long-term goal that expresses what an organization wants to become, be known as, or be known for.

In this information age, organizations are accumulating vast amount of digital data. As the business landscape evolves into a more technological one, countless firms in various industries are incorporating cloud computing strategies into their long-term IT plans because managers believe that cloud systems can easily scale to meet their companies’ expectations without the need for new capital expenditures on hardware and software purchases, IT equipment security and maintenance, as well as other associated costs.

Commitment of resources

For a firm to effectively and efficiently achieve its goals, it must be ready and willing to commit its resources. Information needs are increasing and in order for firms to stay competitive in the global market, they need to adopt some information systems to accommodate the growing demands of information.

Management must commit financial resources to acquire a suitable IT infrastructure such as a cloud-based system to handle all its information needs.

Moreover, they need to train and educate human resources about the use of cloud computing so that they can operate freely in this new technological environment.

Environmental Factors

Cloud computing can bring many benefits to organizations and countries around the world. However, pressure from global competitors, government regulations, and comprehensive product support in new technology systems are important factors to be considered during an organization’s data digitization.

These factors may vary depending on the economic , social, and political environments of the countries in which companies operate, but as the internet continues to make transfer of information more accessible across international borders, these factors can become relatively uniform.

Competitive pressure

As competition usually compels provides of products to increase quality standards, it is strategically necessary to adopt new technologies to compete in the market.

Adopting information systems is useful for a firm to change its industry structure in efforts to increase its relative competitive position.

Changes of the industry structure

Cloud computing is maturing in the IT industry as many companies are adopting it into their existing infrastructure as well as in their business processes.

As more powerful computer hardware and software become available, this industry will continue to grow exponentially. The only hindrance to the cloud’s continued growth is the availability of skilled IT professionals.

Increase in the relative competitive position

Competitive advantages is the leverage that a firm has over its competitors. It refers to the ability gained through strategies and resources to perform at a higher level than others in the same industry or market.

When business adopt a cloud computing system, their data resources increase significantly, and thereby facilitating better information provision that adds value to its products.

As businesses create more value for their clients by differentiating their product offerings from others in the competitive landscape either through lower costs or better quality, their relative competitive position increases, and the target markets recognize these unique products or services, resulting in brand loyalty.

Generation of new business opportunities

There are countless reasons why cloud computing will benefit organizations, but perhaps the primary benefit rests in its ability to allow small and medium businesses to compete with their larger rivals, and even surpass them in some instances.

Additionally , the cloud environment enhances an organization’s working efficiency, offering seamless collaboration and communication among employees while extending its reach to discover new business channels.

Because the cloud enable businesses to utilize computing resources over the internet without having to invest in the underlying software and hardware infrastructure, the cloud serves as an ideal foundation on which managers can build a digital enterprise.

Government regulations

One of they key tasks of an organization is to keep data private and secure. Security and legal issues regarding data jurisdictions, security risks and data confidentiality must be considered when attempting to upload data in to the cloud.

In fact, with recent breaches of privacy laws such as the Facebook scandal in the United States and the Google scandal in China, these concerns are more significant than before.

Many times, businesses focus so much on the technological aspect of incorporating a cloud platform into their business management strategy that government regulatory compliance gets overshadowed.

Government incentives

In many developing countries, governments have strived to keep up with the current pace of IT innovation. In 2010, the United States Federal Government created the first cloud strategy called Cloud First, which provided government agencies broad authority to adopt cloud-based solutions for IT modernization.

In line with this, the federal government has stated it would allocate around $20 billion of its information technology resources to hybrid, public or private computer clouds throughout the upcoming four years.

Law and policies

Regulatory compliance is when a company obeys the laws, guidelines, and specifications that pertain to its business. In a global economy , it is necessary to be aware of the laws that are enforced not just pertaining to your industry but also in the countries where your customers live.

Technology support

The shortage of tech professionals has been a major constraint in the business community for many years since the advent of IT. Since almost every organization is dependent on some form of technology , hiring and retaining top tech professionals may be arguably the main obstruction to its growth.

As companies continue to migrate their internal systems to the cloud, it drastically lowers the demand for IT professionals within an organization because adequate user and technical support services will be delivered by cloud providers.