Head in the Cloud: Organizational Expectations in Adopting Cloud Systems

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  • 5 years ago
  • Posted: November 14, 2014 at 1:01 pm

Organizations predict that cloud computing will have a huge impact in the future of conducting business. However, cloud is currently available and has started changing how organizations run and deliver their services. Despite being a relatively new technology, it has significantly impacted where and how businesses operate. Reduced costs, process optimization, operational flexibility and unlimited scalability are aspects that make cloud system implementation in an organization a suitable solution to its currents hurdles. As such, organizations have huge expectations from cloud system implementation. However, just as it is the case with most new technology implementations, organizations tend to overestimate the short-term impacts of this technology and at the same time underestimate its long-term impact to the organization.

Observing the report by the Software Alliance, BSA Cloud Computing Scorecard in 2013 notes primarily that cloud technology will play the pivotal role in improving overall life efficiency. The findings of the report come against a back drop of well-documented shift to cloud services by businesses, consumers, and government. Based on the report, whilst the paradigm shift has been properly documented, the same cannot be said of the policy environment to aid global cloud computing, with some nations making strides to improve their cloud readiness, whilst others, inclusive of the world’s largest technology markets continue to stall or all together back-tracked. Notably, the BSA Cloud Computing Scorecard is the first ever report to track year-over-year alterations in the international policy climate concerning cloud computing.

Research conducted by the London School of Economics and Accenture where a survey of more than 1,000IT executives and business as well as in-depth interviews with over 35 service providers and other stakeholders established that cloud computing will have significant short-term impacts in most of the organizations. Moreover, cloud technology is expected to revolutionize how business is conducted in the long term.

Cloud technology is defined as visualization-based style of computing where Information Technology resources are offered in a highly-scalable as a cloud service via the internet Literature categorizes cloud services with regard to their service and deployment model. Importantly, three-service models for cloud-based solutions are identified; each one targeting at varied levels of abstraction: infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS). Aside from the service model, two vital models of cloud computing deployment are distinguished, viz, private and public clouds. Private clouds have singular devotion of a company only and may be built, owned, and managed by an organization or a third party. Public clouds have their availability in the public and are built, owned, and managed by third parties.

Prior research on Information Technology utility-experience highlighted the crucial role of user satisfaction and defined as the users’ subjective rendition resulting from positive and negative observations of the cloud provider’s performance.

Cloud computing is a progressing construct and by that logic there is need to give a definition that is time-proof and time-integral. Indicating a definition is a vital endeavor as defining it would eventually determine how cloud systems will look like and how organizations will position themselves to derive the maximum benefit. This is because existing cloud adoption and maturity models provide the intellectual pedestal upon which further work on the same can be conducted. Modernity is essential, but the historicity of cloud computing cannot be neglected, and tracing the historiography (especially in books), a historical and ergo, a futuristic perspective is essential. Studies of cloud technology reveal a favorable image of historical, current, and ecumenical understanding of cloud computing that will be highly pertinent to organizational existential strategy.

The following is a sampling of the types of various data and information normally associated with technology analysis: Demography- population, gender, ethnic groups, population growth rates, active internet users, migration trends, tech-population ratio, et cetera. Secondly, policy environment- organizational policies on the use of technology, every organization determines its technology destiny by instituting policy projections that determines how best it leverages technology, especially the cloud system. Thirdly, the economic environment- technology cannot thrive without the support of economics. At the outset, technology is meant to reduce the cost of doing business and the strategic management of expectation of the organizational utility for cloud system is dependent of movement of economic phenomena (how far is the organization leveraged, factor-mobility, et cetera). Employment and wages- this is a pertinent question that an organization needs to answer in its strategic management of technology; finding the right personnel to operate the cloud system is paramount if it is to achieve its goals. Locating the right human resources is all and good, but keeping them becomes the tipping point, ergo, having a fair and realistic compensation plan is crucial. Fourthly, livelihood systems- could be off farm, urban, rural rural-urban. Understanding these dynamics of therein could help the organization how best and which cloud system to employ. Fifth, the existences of infrastructure- in terms of electricity, internet-enabling structures, data hubs, et cetera. The firm can have the best cloud technology, but if there is a breakdown in the flow of infrastructure, the ensuing result could prove catastrophic.

Research on cloud technology provides interesting views of using cloud technology that applies pertinently in assisting organizations to effectively manage Cloud system utility. They could be categorized as follows:

Financial aspects for Organizational use of Cloud Computing, Cloud negotiations- legal issues in Cloud Computing agreements, Privacy in Cloud Computing for the Organization and Client, Security in Cloud Computing, Management of Data in Cloud Computing, Community Cloud Governance- an organizational perspective. Subsequently, the definitional aspect availed the most ideal of definitions seen in the light of the NIST structure. NIST offers a comprehensive rendition, talking about different characteristics of cloud computing, different types of computing resources, deployment models and related service modes. NIST (National Institute of Standards and Technology) is model for providing convenient, on-demand network access to a shared cacophony of configurable computing resources, for instance, servers, storage, networks, services, and applications; that can be briskly provisioned and released with minimal management strenuous activity or cloud provider interaction. Cloud adoption is directly proportional to whether an organization wants to adopt public or private cloud. Most likely, organizations prefer the private cloud.

In any consideration of technology, the above-mentioned categories feature heavily, taking various angles upon further reflection. Just like any new delivery model, the initial step is to identify low-risk, value applications or pilots that are in order for the organization to build on its experience curve. This ultimately creates the space for cost-reduction and product efficiency. For instance, in the beginning, the organization might experience a 20 percent cost reduction, therefore a 20%+ amelioration of efficiency. With the correct strategy and efficient management of organizational expectation in cloud system utility, this figure can project upwards.

Organizations should have internal departments that keep abreast with cloud-policies and cloud-based services, paying close attention, also, to outside wisdom. The organization’s enterprise structure will provide the necessary strategic fuel in identifying the services, information types, and business processes that are likely to benefit significantly in adopting the cloud system. The organization can build a model based on the following variables that determine the outcome exploring cloud opportunities and risks: governance, security, management of change, financial impacts, timing and triggers, organizational capability, and business needs.

With regard to cloud adoption, the thinking is that it should take place under several domains, that is, business and strategy, infrastructure, information, architecture, portfolios, projects, services, administration, operations, management, governance, organization, and maturity and adoption spectrum. Another important issue is the Economics of cloud computing is most benevolent to the cloud system adoption. Gartner estimates that the maintenance of information technology accounts for 80% of total expenditure. Ergo, the opportunity cost of not adopting cloud accrues to the organization the benefit of maximum utilization of the 80% percent.

In fact, it is always a waltz between combining opportunity cost and the Pareto principle. While evaluating the Cloud-Based Strategic Management, organizations will have to address the technical barriers that they will definitely encounter. Dissipating these barriers sets the stage for skilled management of organizational expectation vis-à-vis the cloud system. Knowing when to apply the cloud system is necessary by noting the timing and triggers that might necessitate adoption. Ultimately, the organization’s capabilities in developing the technology internally will depend on it having abilities in mature enterprise architecture and business analyses. The Cloud system only serves to improve inefficiencies therein or enhance the already existing capabilities.

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Stefan Wolf
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