Adoption of Cloud Computing at Small and Medium-Sized Enterprises - Essay Example

Cloud Computing at SME ‘X’ Name: University: Date: Table of Contents Cloud Computing at SME ‘X’ 1 Table of Contents 2 Executive Summary 3 1.0 Introduction 3 2.0 Cloud Computing Value Creation within SMEs 4 3.0 Impact of Cloud Computing Technologies 6 3.1 Economic Issues 6 3.2 Cultural Issues 7 3.3 Legal Issues 8 3.4 Demographics Issues 8 4.0 Conclusion 9 5.0 References 10 Cloud Computing at SME ‘X’ Executive Summary Cloud computing involves delivering computing services through the Internet and it is considered to be beneficial to the small and medium-sized enterprises (SMEs). Basically, implementation of IT platforms and solutions is considered too costly and complex for SMEs, but cloud computing eases this burden. Scores of business are using cloud computing solutions as their main business strategy that enables them to concentrate on their core business. Business organisations are turning to cloud computing services for data backup, storage and processing so as to improve productivity, for customer support and service, communications or accounting services. When the organisation allows the cloud provider to handle personal information, the legal issues such as privacy infringement may arise. These days, SMEs are competing at the global stage, wherein companies that are more established have harnessed various technological trends like big data, cloud computing as well as mobility. In this report, cloud computing value creation within SMEs is examined by focussing mainly on how it may be used to support SME ‘X’ maintain its competitive advantage at global level. Besides that, the report discusses the impact of cloud computing technologies on the cultural, economic, demographics, and legal issues from global and societal perspectives. 1.0 Introduction SMEs need IT resources and tools so as to grow and improve their profitability while moving into the markets. Partners in the industry have the commitment and resources that can make SMEs more competitive at the global stage by offering enterprise-grade solutions. Cloud solutions are without a doubt beneficial to the SMEs; for instance, cloud platforms enable SMEs to be able to compete at the global stage since it offers a level playing field needed to be successful in the business. A number of SMEs have not yet fully realised the benefits that are brought about by cloud solutions. Presently, SMEs are using cloud computing with the aim of growing their business without using new infrastructure or equipment that easily gets obsolete. Besides that, the physical IT needs more control as well as maintenance. 2.0 Cloud Computing Value Creation within SMEs These days SMEs are facing various challenges like adaptability, competitiveness, globalisation, growth and speed of change. Therefore, the need of innovative technology has become more and more necessary. Managing the abovementioned challenges relies heavily on the ability of the SME ‘X’ to adopt cloud computing, which can develop and exploit the potential within the organisation. Basically, cloud computing is an important tool for developing and nurturing SME ‘X’ since the organisation can be able to get new business ideas. Imperatively, the barriers of entering a certain market segment or market for SME ‘X’ has been reduced dramatically and the strategic advantage that was boasted by large established corporations have been tipped away by cloud computing towards SMEs. SME ‘X’ adoption of cloud computing will result in cost savings and the company will be able to concentrate on other business activities like greater innovation investment. In addition, cloud solutions will offer SME ‘X’ global market opportunities with no need for upfront investments. Cloud computing will result in security effectiveness for SME ‘X’; cloud computing utilises multi-tenancy environment for storing as well as intergrading client data. Therefore, the information’s remote accessibility and virtualisation are the key security concerns associated with adoption of cloud computing (Adam & Musah, 2015). Still, cloud computing is more secure as compared to traditional information technology solutions. Through cloud computing, SME ‘X’ can meet its organisation needs at the global level: Implementation of cloud technology can be anchored on the objectives of the client and organisational needs. For imperatively, the SMEs can rent the cloud computing services so as to store important information about their customers; therefore, this protects the financial resources of the company and enable it to concentrate on the key competencies. Furthermore, cloud computing promotes business advancement, and this can encourage SME ‘X’ to become more adaptable and coordinated to changes within the business environment. As a result, the SME organisational performance and capabilities are improved by cloud computing; thus, resulting in value creation. Adoption of cloud computing results in cost effectiveness bearing in mind that the traditional IT stage required considerable investment in skilled professionals, programming and equipment so as to update and maintain the servers and the product. Cloud computing technology enables SMEs reduce expenditures related to software and hardware and allows the company to have highly advanced applications at minimal cost. The process of automation will enable SME ‘X’ to reduce the cost of support and administration and will be able to handle the sustainability, archiving and security of the business for an extended period of time (Mohabbattalab, Heidt, & Mohabbattalab, 2014). Such cost benefits and value has made SMEs to shift from their conventional operation system to cloud computing. Most importantly, cloud computing bring about flexibility which is a crucial factor for organisations operating at the global level. Cloud computing implementation is fairly uncomplicated and fast, and enable SMEs realise their ecommerce goal in improving their ability to seize opportunities with little resources. Imperatively, cloud computing will enable SME ‘X’ to share resources at global stage. So as to improve competitiveness, SME ‘X’ will have to rationalise output in order to enhance process innovation, cut costs as well as integrate new technologies. SMEs looking for this competitive edge are incessantly pressuring the IT departments to offer new agile solutions that are more cost-effective, efficient and flexible, and allowing faster time to market. As mentioned by Sahandi, Alkhalil, and Opara-Martins (2013), an IT infrastructure that is flexible can help get rid of barriers to global competition and enable SMEs to be competitive, efficient and flexible. Therefore, cloud computing can play a major role in dealing with inefficiencies and contributing to the competitiveness and growth of SME ‘X’ at the global level. 3.0 Impact of Cloud Computing Technologies 3.1 Economic Issues Basically, there are a number of important economic features of cloud computing which can impact the operation of SME ‘X’ at the global market. Some of these features include; changes in the network effects strength and the emerging organisational model that emerges, that is to say, whether cloud computing will be able to maintain its present vertically integrated structure as well as 'conduit'. Without a doubt, transition to cloud computing can possibly weaken the network effect for operating systems within the cloud environment since the application software programs’ data are more in inclined to be portable across operating systems. Besides that, the costs related to cloud computing that could face SME ‘X’ include the costs of data security concerns; service disruptions possible regulatory compliance issues attributed to transferring, processing or storing of sensitive data beyond the defined borders; and challenges in moving software and proprietary data from one provider to another. Furthermore, economic benefits or costs of implementing cloud computing vary according to the size of the organisation as well as its current IT resources/overheads which includes computer hardware, internal processes maturity, legacy software, infrastructure, technical skill base as well as IT staffing. Such factors define the strategic benefits or costs that accumulate to the SME. 3.2 Cultural Issues Basically, culture is one of the most important elements, which can enable an SME adopt cloud computing. Resistance to innovative technologies, driven by lack of knowledge, fear, cultural and religious beliefs as well as traditional practices is strong in some countries. Therefore, it is imperative for SME ‘X’ to understand the cultural conditions that determine how cloud computing is adopted. Cultures which technological ability, creativity, and with high number of educated persons are deemed to be successful at adopting technologies such as cloud technology. SME ‘X’ will find challenges to operate in communities where social stigma, word-of-mouth as well as peer pressures from other members of the community exist because the location is normally related to various risk dimensions. Imperatively, cultural norms and values determine the perception of the consumers on whether they should engage in a particular activity such making online purchase. Therefore, cultural influence is an important element in understanding the diffusion of cloud computing since cultural factors are known to limit technology adoption. 3.3 Legal Issues There are a number of legal issues that are associated with adoption of cloud computing; therefore, SME ‘X’ must ensure that before handing over their data to the cloud service provider, their operations should be structured and also ensure their data can only be accessed by individuals with appropriate legal rights. Besides that, the SME ‘X’ should ensure that it controls its data to the level stipulated by law. So as to get effective cloud-based computing services, with security and safety benefits in addition to legal compliance, an informed business decision has to be made by SME ‘X’ with regard to the sensitivity and type of data it will move to the cloud, the type and configurations of cloud service needed so as to abide by the stipulated legal obligations. Furthermore, the SME should conduct a detailed assessment and audit of the technology and security protocols offered by the cloud service provider and then create a roadmap of future plans to avert any possible legal implications. The SME ‘X’ should ensure the customers information is protected and should not share the information with anyone. 3.4 Demographics Issues The problem that faces scores of SMEs in the global markets is not their size but their isolation, which hampers their ability to access certain markets as well as institutional, finance and information support. Basically, with increasing age, people’s skills improve and this attributed to the fact that people learn the essence of managing time effectively. Adoption of cloud computing is normally harnessed mainly by young entrepreneurs who understand the importance of technology in improving the business competitive advantage; therefore, when adopting cloud technology, SME ‘X’ must first understand different demographic factors such as age, race, income, education as well as occupation. 4.0 Conclusion In conclusion, the report has emphasised the importance of cloud computing, especially in reducing barriers to market entry. As mentioned in the report, adoption of cloud computing will enable SME ‘X’ to reduce costs associated with implementing new businesses that could be hard to manage with traditional. Furthermore, cloud computing results in bbusiness agility, which is a key factor for success at the global stage. Numerous SMEs have been able to improve their productivity as well as customer service after harnessing cloud computing. An SME can be able to gain access the customers’ information unceasingly after storing the customers’ date in the cloud; thus, enabling the company to further grow its business. 5.0 References Adam, I. O., & Musah, A. (2015). Small and Medium Enterprises (SMEs) in the Cloud in Developing Countries: A Synthesis of the Literature and Future Research Directions. Journal of Management and Sustainability, 5(1), 115-139. Mohabbattalab, E., Heidt, T. v., & Mohabbattalab, B. (2014). The perceived advantages of cloud computing for SMEs. GSTF Journal on Computing, 4(1), 61-65. Sahandi, R., Alkhalil, A., & Opara-Martins, J. (2013). Cloud Computing from SMEs Perspective: A Survey-based Investigation. Journal of Information Technology Management Volume, XXIV(1), 1-12. Read More