Aim: The study was conducted to investigate the barriers and impact of cloud computing adoption and use on business organizations in public sector. The information would help to determine if cloud services were wholly beneficial and would always help organizations make profits. The setting of the study was London borough from where local authority councils were selected for the study. Data was gathered from staffs in the IT department in each council.
Methodology: Simple random sampling was used to select ten organisations in the public sector. The same sampling technique was applied to select 20 employees from each of the 10 organizations. Data was then collected using survey questionnaires. 200 questionnaires were distributed but only 105 were analyzed, since others were rejected for either being irrelevant or incomplete. The quantitative data was analyzed using SPSS software.
Findings: The study results showed that cloud computing had gained popularity and all the surveyed staffs in the IT department were aware of its existence and application in business processes. The study also found that there were several advantages of cloud computing to business, which were also the factors that attracted users to the technology. The study also realized that there were several associated challenges that made application of cloud services more complex.
Conclusion: The study concluded that there are significant benefits as well as risks or uncertainties that should be compared before adoption of cloud computing to avoid losses that the technology might bring on the business.
CONTENTS
ABSTRACT. 2
LIST OF TABLES.. 5
ACKNOWLEDGEMENT. 6
SECTION 1: INTRODUCTION.. 7
1.1 Introduction. 7
1.2 Background. 8
1.3 Statement of the Problem.. 10
1.4 Aim.. 10
1.5 Motivation. 11
1.6 Research Objectives. 11
1.6.1 Specific Objectives. 11
1.7 Setting. 11
1.7.1 Timescale. 12
1.8 Research Questions. 12
SECTION 2: LITERATURE REVIEW... 12
2.1 Theoretical Framework: Technology Acceptance Model (TAM) 12
2.2 Literature Review.. 13
2.3 Relevance of the Literature Review.. 16
2.4 Shortcomings in Current Research. 16
SECTION 3: METHODOLOGY.. 17
3.1 Research Strategy. 17
3.2 Sampling. 18
3.3 Data Collection. 18
3.3.1 Survey Questionnaires. 18
3.4 Data Analysis. 18
3.5 Ethical Considerations. 18
3.6 Limitations of the Study. 18
3.7 Comparison between Research and Proposal 19
SECTION 4: DISCUSSION AND EVALUATION.. 19
4.1 General Findings. 20
4.1.1 Results based on Participants response to the stated Business Advantages of Clod Computing 20
4.1.2 Results based on Responses to the Stated Business Challenges to Adoption and Use of Cloud Computing. 22
4.2 Relationship between the Findings and Existing Reports of Previous Research. 25
SECTION 5: CONCLUSION AND RECOMMENDATION.. 26
5.1 Conclusion. 27
5.2 Research Limitations. 27
5.3 Recommendations. 27
5.3.1 Future Research. 28
REFERENCES.. 28
APPENDIX.. 31
LIST OF TABLES
Table 1 Types of Cloud Services adopted and used in Government Sector 18
Table 2 Cost Effectiveness of Cloud Computing. 18
Table 3 Users’ Concerns over Data Insecurity. 20
Table 4 Appearance of Uninvited Advertisements. 20
Table 5 Lock-in By Service Providers. 20
Table 6 Cloud Issues due to Concerns over Privacy. 21
Table 7 Cloud Computing Challenges related to Reliability Difficulties. 21
Table 8 Challenges Regarding Regulatory Compliance Concerns. 21
Table 9 Existence of Organisational Culture that Resists Adoption of New Technologies. 22
Acknowledgment
Any accomplishment requires hard work and support from other people, and this research project was not an exception. First of all, I am grateful to my teacher who guided me throughout the project. I wholeheartedly express that your advice made a significant contribution to the progress of my work. I also wish to present my special thanks to all the ten local authority councils in London borough that accepted my request to survey their organizations. My special gratitude also goes to all participants who spared part of their working hours to respond to the questionnaires. Your efforts contributed profoundly to the success of my business research project.
SECTION 1: INTRODUCTION
1.1 Introduction
Cloud computing is recognized as a recent internet evolution. The innovation uses a network to enable transfer information technology (IT) resources and systems from the supplier to the users (Sabi, Uzoma, Langmia, Njeh & Tsuma 2017, p. 1). There are two primary components of the cloud: information systems and IT infrastructure. The IT infrastructure has further contents that can only be used with the Internet. Even though the technology was identified much earlier by some large private companies, it became prevalent quite recently (Panda, Gupta, & Jana 2017, p. 4) and is expected to experience rapid growth. Columbus (2014), for example, reported the forecast by Forrester Research that public cloud market would grow from $58 billion, observed in 2013, to approximately $191 billion in 2020. Feature (2013, p. 1) also reported that the cloud market in the UK encountered significant growth between 2011 and 2012, which enabled it to achieve £1.6 billion (38% growth rate). The attraction is not just for businesses because the UK government is reported to have spent about 533.6 million British pounds by 2015 (Gordon 2016, p. 1). Research shows that organizations adopt cloud computing for benefits such as efficiency and cost-effectiveness of its resources, value generation, and increased productivity (Venters & Whistley 2012, p. 180) that enables the business to make more profits. However, a study conducted by El-Gazzar (2014) revealed that enterprises which adopt cloud computing face many challenges in decision making because the information systems (IS) still has several under-investigated areas.
About this Project
The current paper investigates the impact of deployment of cloud computing on government organizations in the UK with a focus on the benefits and risks. The study, specifically, examines experience of local authority councils in London borough. The boards are among the local authorities that often receive lower funding (Hastings et al. 2015, p. 47) making them seek means of lowering overall business costs to make meaningful profits. Cloud has become the option for many businesses that require low costs and reduced operational risks (Rajan & Shanmugapriyaa 2012, p. 38). The organizations have been favored by the G-Cloud project as they have been given a chance to cut on costs of operation. The study examines how much the organizations understand the application of cloud in business, and the associated benefits as well as risks. The findings help how reliable cloud computing is in helping businesses realize profits. This section includes information on background of the research as well as study setting, aims, and significance.
How and Why the Project was Chosen
In more than a decade now, cloud computing has emerged as an IT catchword but a clear definition of this technology is still missing (Kim 2009, p. 65) as its features are yet to be fully explained. Cloud technology is also an emerging innovation that promises to become part of future generation computer services (Bijwe and Ramteke 2015, p. 685; Botta et al 2016, p. 74). The major interest in this innovation is thus to determine its impact on business in order to encourage its adoption while identify areas that need to be improved for future effectiveness.
1.2 Background
According to Yang and Tate (2012, p. 35), cloud computing is in technology based on the Internet. An in-depth definition, however, considers how this innovation resulted from improvement of two traditional computer-based technologies. These were grid and virtualization. As a matter of fact, there are several factors that link features of cloud with the traditional grid as well as virtualization (Kumar & Goudar 2012, p. 356). EL-Gazzar (2014, p. 216) states that under grid computing, data can easily be accessed without concerns over location, administration of the involved account or the operating system in use. On the other hand, virtualization functions by hiding physical features of the computing resources from the individual applying it. Away from the similarities, cloud computing still has other characteristics and risks that differentiate it from the two technologies. The definitions given to cloud computing were first dictated by the understanding that it was an application which applied the Internet to transmit models for use in business operations.
The understanding became more prevalent because the technology used IT services that relied on Internet for functionalities such as storing infrastructure and networking (El-Gazzar 2014, p. 218). The worldwide accepted definition of this innovation was introduced by the National Institute of Standards and Technology. The definition refers to cloud as a model that allows access to reliable network through computing infrastructure, which after configuration is transferable with less investment in management (Mell & Grance 2011). This definition implies that there are two main actors in cloud computing. The first one is cloud service provider (CSP), which represents the providers of the required service models. The other actor is cloud service customer (CSC). El-Gazzar (2014, p. 20) explains that cloud service mainly comes in three forms: i) Software-as-a-Service (SaaS); ii) Platform-as-a-Service (PaaS); and iii) Infrastructure-as-a-Service (IaaS).
Cloud computing has been applied at government level to increase sharing of information, improve applications processing and as a replacement of traditional technologies. The growth in adoption has been fueled by the ability of cloud services to save on costs (Ali, Soar & Yong 2014, p. 280). Another reason for the platforms adopted at this level is because it can unify geographical data centers to create a shared infrastructure. In this way, cloud services enable retrieval of government services and data. Moreover, the initiative can ensure that organizations utilize fewer resources. The advantage has been applied to cut the rate of carbon emissions. Furthermore, cloud computing promotes strategic IT architecture for organizations because as it enables free access to cloud systems from any targeted location given provided that the user has access to an internet connection (Nolan 2012, p. 98).
In the UK, establishment of a private Government Cloud Computing Infrastructure (G-Cloud) would be useful in six ways: standardization and simplification of desktop; standardization of Networks and rationalization of data centre estate; provision of an open source; delivery of common measures and techniques for reuse ; introduction of green information technology (IT); as well as offering of information security and assurance (Jones et al 2017, 9). Furthermore, the G-Cloud initiatives would assist the UK government in improving shared services, increasing the reliability of projects, monitoring of supplies, and making IT-enabled business changes more professional. The UK also has enterprises that had adopted the technology earlier. London Borough of Hillingdon, for example, was the first local authority to announce its targeted use of SaaS platforms for business purposes. The initiative would use Google Apps. The Council expected the adoption of cloud computing to result in improved internal organizational engagement and increased productivity. The Council also anticipated that the technology would launch new ways of operation that would heighten cost savings of as much as £3 million in some years after adoption (Jones et al. 2017, p. 12). Another enterprise is the UK Warwickshire County Council, which aimed to adopt cloud computing to access latest internal email solution along with the installation of Google Mail. The initiative was part of the G-Cloud planned by the UK government. The overall goal of the G-Cloud was to reduce license costs while providing businesses mobile and flexible. In response to the growing demand, the UK government encouraged construction of infrastructure which doubles the solutions in the government sector. In fact, the Government’s ICT Strategy has enabled cloud infrastructure to be standardized and simplified so that local delivery meets the needs of the local people (Jones et al. 2017, p. 15).
1.3 Statement of the Problem
The deployment of cloud services encourages concentration of data. The centralization of data has improved information accuracy because the ability to compare data from different sources of individuals helps in determining consistency. The consolidation encourages sharing of ideas hence gives more opportunities for communication (Jones et al. 2017, p. 17). The most significant importance is that time is saved through the ease of data retrieval across departments and among business partners. The installation costs can also be reduced if the existing remote infrastructure is changed into a shared IS, and big data be processed and managed (Yang et al 2017, p. 15). Another advantage of cloud is that it allows chances for business to start with small investment and increase coverage with growth in business (Cheng & Boutaba 2010, p. 8). However, cloud computing is an emerging area, and many details are yet to be researched about it.
For many business operators, the field is complex and unpopular, meaning that several risks and uncertainties surround the adoption of this technology. While these are the most critical risk factors that the earlier adopters have complained about, the reliability of providers, lock-in by the service provider, technological security, user privacy and service’s reliability (Sultan 2011, p. 273; Kumar & Goudar 2012, p. 358) are also areas of concern to potential adopters. So far, Sultan (2011, p. 274) states that the primary care of users is the assurance that unauthorized persons cannot retrieve data. Other researchers (Ahmed & Hassan 2014, p. 25; Tari 2014, p. 54) have emphasis data security and privacy of users as the major concerns. Buyya (2013, p. 4) states that major research challenges include privacy, security of data, compliance of virtual machines belonging to providers. Additionally, organizations might lose a lot if their customers do not trust the system’s capabilities (Armbrust et al. 2010, p. 57). Given the already mentioned challenges, it is apparent that care must be taken during the implementation and application of cloud technologies.
1.4 Aim
The research purposed to determine if adoption of cloud yields unconditional profits in organizations that adopt it or if there exist factors that may reverse the situation and lead the businesses into losses. To achieve this goal, the research investigates the positive and the adverse business outcome that has been encountered by the local authority councils in London borough. The presence of significant benefits along with substantial challenges should mean that cloud computing can either bring profits or losses, depending on the level of analysis and planning performed by the decision-makers in an organization.
1.5 Motivation
Cloud computing is a recent technology but has received attention from many organizations (Carlin and Curran 2012, p. 59). The unique qualities made the innovation easy to recognize. Additionally, the technology’s attractiveness lies in benefits such as its cost efficiency and the simplicity that it brings to businesses to enable them to save more and yield more profits but according to Jones et al. (2017, p. 5) cloud is complicated and unpopular in some organizations. Even then, the organizations continue to develop an interest in it because of the expected advantages. Given the many benefits of cloud computing (Eric and Lozano 2010, p. 12) and the possible negative implications on internal operations of an organization (Goncalves and Ballon 2011, p. 13), a better understanding of this technology is essential. The study thus provides a better understanding of cloud services to current and potential users. It will inform the adopters that despite the many attractive benefits that come with cloud computing, there are serious business risks and uncertainties that must be considered when planning for cloud adoption. The right decisions will secure businesses from the dangers.
1.6 Research Objectives
The primary concern is to determine how cloud computing has been adopted by organizations in the local authority councils London borough. The assessment includes reasons for councils’ interest in the innovation and barriers to adoption of cloud technologies.
1.6.1 Specific Objectives
To determine awareness of employees regarding the application of cloud computing in business activities.
To investigate the process of adoption to understand ease and difficulties in the installation of cloud infrastructure.
To identify the benefits that organizations have gained due to the advantages of cloud computing.
To find out the challenges that organizations have witnessed when using the technological innovation.
1.7 Setting
The study examines cloud adoption and uses in UK’s public sector with a focus on the local authority councils in London borough from where ten councils were selected through simple random sampling techniques. 20 employees were then chosen from each of the ten councils using simple random sampling, to fill in the survey questionnaires.
1.7.1 Timescale
The research is scheduled to last for approximately six months. This duration is expected to be adequate for the collection of sufficient data, data analysis, and report writing.
1.8 Research Questions
Are organizations in the public sector aware of adoption and use of cloud services for business activities?
What attracts organizations to cloud computing?
What challenges do organizations face during installation of cloud computing?
SECTION 2: LITERATURE REVIEW
Cloud computing is a recent model that is important for hosting and delivery of services using the Internet. The innovation is recognized as an advanced version of the traditionally used, client-server application. While checking the trend in adoption of this new model, the current study focuses on both the positive and negative implications of its installation and use. This chapter reviews previous research studies on cloud computing to generate more ideas (including data collection methods, sampling techniques, approaches to data analysis, and findings) regarding the subject to recognize existing gaps in the research. This section also compares and contrasts ideas of different research studies.
2.1 Theoretical Framework: Technology Acceptance Model (TAM)
TAM was launched by Davis, Bagozzi, and Warshaw in the year 1989. TAM forecasts and evaluates the pre-acceptance stage of technology (Cheok, Wong, Ayub & Mahmud 2017, p. 21). The model is founded on the argument that individuals’ response to the system used depends on their motivation to use the innovation. Conversely, individual motivation depends on the features and capability of the proposed system. TAM applies users’ acceptance to find out the pattern of technology usage (Cheok et al. 2017, p. 23). The theory states that users are likely to be motivated by the perceived usefulness (PU) of the proposed technology and perceived ease of use (PEOU) of that innovation. The outcome determines personal attitude about the technology. The opinion then determines the rejection or acceptance of the change in question. In many past scenarios, technological recognition has often been defined by previous achievements of failures of the system. TAM will thus be useful in deciding behavioral intentions, understanding of cloud computing (benefits and challenges), and external variables (Cheok et al. 2017, p. 28). The primary external variables are individual attitude and intention to adopt the innovation. The figure below illustrates how these variable relate to each other.
Figure 1 Modified Technology Acceptance Model (TAM)
Figure 1 illustrates how perceived usefulness affects perceived ease of use, including how the variables are both influenced by external variables to shape an individuals attitude towards purpose and intention of target customers to use the system. Perceived usefulness as well affects an individual’s plan to adopt the technology. The entire process determines the acceptance or rejection of the technology in question.
2.2 Literature Review
Qian & Palvia (2014) acknowledged that cloud computing has emerged to be a favorite trend in IT within the past two years because of the significant change it has contributed to technology and business landscape. The authors also state that the benefits and risks of cloud computing have been widely discussed (p. 35). However, they point out that the innovation’s strategic impacts are not yet adequately addressed. When investigating the potential changes that would result from cloud computing, on organizations’ IT strategy, the researchers interviewed CIOs/IT directors belonging to the US companies that already use cloud computing. The study employed grounded theory approach and took the form of qualitative research. The results indicated that cloud computing wholly affects IT strategy. The changed aspects are IT design, management, plans to data, and alignment of the business. The results also reveal the possibility that more organizations will adopt the technology in future (p. 5).
Sawas & Watfa (2015) state that businesses are increasingly considering cloud computing because of its significant benefits, including saving on costs, and providing security to businesses against unexpected circumstances. The innovation assures firms of its ability to change IT from the traditional costly state to the technology that keeps the money while promoting business flexibility and agility. The study used survey method to measure the benefits of cloud computing. The selected sampling technique was a mix of convenience and judgment. The study sample was selected from different industries including oil & gas, banking, private, government and semi-government. The findings revealed significance between cloud service and IaaS as well as SaaS but not PaaS (p. 100).
Hassan (2017) investigated organizational factors that affected adoption of cloud technologies. The study used questionnaires to collect data from SMEs in Malaysian service sector. The findings revealed that information technology resources were significant factors. However, the research did not gather enough evidence to clarify the support of the innovation by top management. Moreover, it could not prove that employees had adequate knowledge of cloud computing (p. 979).
Avram (2014) explains that cloud computing technologies resulted from the introduction of technological advances that enabled processing and data storage through over Internet since they became more affordable, robust and accessible. The positive implications of the cloud have encouraged businesses to switch to the cloud platforms (p. 530). However, Avram reports that cloud adoption is more sophisticated than had been earlier thought. The complexity is primarily associated with data management, system unification and coordination of many providers. Avram, therefore, argues that there are significant expenses and barriers to adoption of cloud computing across the globe. Avram’s study examined factors that should be prioritized when an enterprise considers adopting cloud computing, from a company’s perspective. The study found that some companies were interested in cloud computing just because it was the latest model of IT. There were other companies that did not agree with the idea of availing their company’s data outside the company’s premises. The study thus suggests that purposeful analysis is performed before deciding to adopt the technology. Primary areas of focus as indicated by the survey include the capacity to achieve collaboration with existing infrastructure; and the associated software expenses, benefits, capabilities, and security. Companies can, therefore, evaluate these factors to select the solution that better fits their needs (p. 532).
Gangwar & Date (2016) employed Technology Acceptance Model (TAM) to empirically evaluate factors that influence cloud computing adoption plans. They considered security, reliability, and issues related to compliance. The researchers developed a test on the potential impact of cloud adoption intentions. The mediating factors in this regard were two: perceived ease of use; and observed usefulness. The study employed a questionnaire method to gather data from 280 organizations in India. Data analysis was conducted via exploratory factors along with confirmatory reports (p. 889). Furthermore, AMOS 20.0 structural equation was also applied during the examination of cloud technologies. Findings revealed a link between adoption intention and PU as well as with PEOU. Additionally, PU was found to influence PEOU. On the other hand, PU was seen to get influence from threat, uncertainties, and compliance (p. 901). The study concluded that the applied model (TAM) could assist adopters to realize a positive outcome.
Alshamaila, Papagiannidis & Li (2013) studied the cloud computing adoption process among SMEs. They argue that if allowed access to technologies for scalability, the SMEs could offer products which only large enterprises could provide (p. 254). The theoretical base of the study was a Technological, Organizational and Environmental framework. Semi-structured interviews were used for data collection within 15 SMEs in northern England. Results identified main factors that affect cloud adoption to be: related advantage, uncertainty, geographical constraints, compatibility with the remote infrastructure, size, support from organization’s management, ability to innovate, market share, supplier support and external support (p. 271). The study, however, found no significant link between competitive pressure and adoption of cloud computing.
Bildosola et al. (2015) explain that the shift towards cloud computing is among the significant challenges that enterprises currently encounter (p. 2). Cloud computing is also described as a new model that uses ‘on-demand payment’ for ideas communicated in the modern economy. The researchers had a particular interest in the small and medium enterprise. The authors also argue that the entry into cloud technology has not been adequately especially with regards to practical (real) frameworks. The study examined a real tool that has been implemented and tested to inform cloud computing adoption decision. The suggested device makes use of the gathered information and to provide valuable information to users on how they can apply SaaS solutions (p. 7). The study results revealed that users are highly interested in the technology, but they have low knowledge level concerning the innovation.
2.3 Relevance of the Literature Review
The studies report on the growth and expected future growth in some users of cloud computing as the technology promises to help with cost saving (Qian & Palvia 2014; Sawas & Watfa 2015). Bildosola et al. (2015) and Avram (2014) also report that cloud computing adoption is among significant challenges that enterprises face in the current economy. The problems are contributed by the fact that potential users have little knowledge of the technology (Bildosola et al. 2015). The studies also reveal that qualitative (Qian & Palvia 2014) and survey methods, as well as non-probability sampling/convenience (Sawas & Watfa 2015), can be applied to study this subject. Moreover, applicable theory and framework in such study are Technology Acceptance Model (Gangwar & Date, 2016; Bildosola et al. 2015) and Technological, Organisational and Environmental (Alshamaila et al. 2013), respectively. IT resources have also been cited as the most important factors to consider when adopting cloud computing (Qian & Palvia 2014, Hassan 2017). The two mediating factors in the cloud adoption process are reported by Gangwar & Date (2016) to include perceived ease of use together with usefulness. Adoption is as well determined by other factors such as associated advantages, compatibility with existing infrastructure, support from top management, and support from suppliers (Alshamaila et al. 2013).
2.4 Shortcomings in Current Research
The study by Qian & Palvia (2014) reported on the outcome of adoption cloud and how the technology would affect the entire IT strategy but did not link this to business profitability or losses. Other researchers also concentrated on specific aspects of cloud computing. Sawas & Watfa (2015), for instance, focused on the types of cloud services that were being adopted as opposed to its impact on businesses. On the other hand, Hassan (2017) failed to determine awareness of cloud services among employees while other researchers (Avram, 2014; Alshamalia et al., 2013; Bildosola et al., 2015) just concentrated on factors attracting users to the technology. Moreover, Gangwar & Date (2016) only focused on the ability of Technology Acceptance Model (TAM) to predict adoption of cloud.
SECTION 3: METHODOLOGY
This section presents the methods that were employed during the study to select study participants, collect data, analyze data and give the results of the study.
3.1 Research Strategy
The chosen design for current research is mixed methods, which comprises of qualitative research tools and quantitative methods. The qualitative approach was instrumental in retrieving data from secondary data, especially from internet sources, while quantitative approach was used for collecting primary data. The primary data collection will take the form of deductive reasoning. This strategy involves the construction of theory or hypothesis and testing it (Graham and Carmichael 2012). The approach is often based on the specified object. The method runs from general to specific, to enable the researcher to establish a reasoning framework founded on assumptions that are helpful for achieving research objectives.
3.2 Sampling
The study made use of simple random sampling to select ten local authority councils from London borough. 20 participants were then chosen randomly from the government organizations. This means that, altogether, 200 participants were to be surveyed. However, after issuing the 200 questionnaires, only 105 were used for analysis. 95 other inquiries had been rejected for either being incomplete or for containing irrelevant information.
3.3 Data Collection
The primary data were collected using survey questionnaires, which were issued to the employees in their place of work. The employees were mainly from the IT department in each organization that was selected from the government sector.
3.3.1 Questionnaires
Questionnaires are useful in that they allow collection of data from more than one participant, at the same time. The researcher is thus able to save time and resources. However, the method requires the researcher to perform extensive planning and acquire professional skills to collect data that is relevant to the study topic (Mahon-Haft & Dillman 2010, p. 44).
3.4 Data Analysis
The data analysis process employed SPSS software (Kothari 2004, p. 6). Some of the statistical tools that will be used include frequencies and descriptive statistics. Charts, graphs, and tables were then used to present the results. The results are in section 4 of this business research project report.
3.5 Ethical Considerations
The study adhered to the ethical standards to show respect for the rights of participants. The respondents were informed about the purpose of the survey and were allowed to choose whether or not to take part in the study (Kothari 2004 p.3). The researcher also respected the participants’ need for privacy and did not disclose any information that the respondents regard as confidential.
3.6 Limitations of the Study
The limitations are related to research design and data collection method. The first limitation, therefore, is that quantitative method uses numbers and the researche
