Timely Technology is an enterprise which provides specific electronic components for space programs function in a small town in the US market. Regarding information systems, the business has several models which can be utilized in deciding at the organizational level, such as the Technology, Organization, and Environment (TOE) and the Diffusion of Innovation (DOI). Subsequently, Timely Technology (TT) considers technology adoption as the most significant strategy for decisions (Drum, Becker & Fish, 2013). The two models are interrelated to some extent, where the TOE can be asserted to be an extension of the DOI: however, the technological choice is primarily associated with the environmental aspects which complement constraints and opportunities (Drum, Becker & Fish, 2013). As such, the level of technology in the firm, for example., the technical support and communication processes are factors to be addressed. Therefore, this paper seeks to explore environmental factors of the business's financial situation about the adoption of cloud computing applications within the firm.
Overview of the firm
Cloud computing can be determined to a variety of applications which outsources internet-based solutions thus allowing a firm’s staff to access information from anywhere at any time (Drum, Becker & Fish, 2013). Essentially, it is a new method of delivering online resources, but not a new technology itself; which relies on internet connections already existing in many enterprises (Kasemsap, 2015). Organizations can use the method for both software and hardware basis to provide the needed resources, as contrasted with purchasing them (Cite). Three are numerous use of cloud computing in an organization, although the majority revolve around the SaaS (Software as a Service). These services are provided by third parties providing information over the internet; who assume the responsibility for operating the updates and content, hardware upgrades and system backups.
In the TT firm, numerous benefits are arising from the adoption of cloud-based software. However, the method cannot manage its serves in analytics and update reporting. Surprisingly, TT’s management accepted the software despite the insufficient information which was practically a trade-off influenced by the firm’s economic condition (Drum, Becker & Fish, 2013). The administration believed that with cloud-based applications, the business would experience feasibility through the use of the new set of information without having to make long-term investment commitments, with slight or no forthright costs.
Additionally, the SaaS employed was maintained and updated by the vendor, concerning issues like local laws and regulations, the rule about changing account and employee releases in accounting and IT (Dixit & Sharma, 2015). However, the firm did not focus on efforts to gather information, implying the use of SaaS at TT would only allow a minimal spread of IT competence as employee emphasized on their abilities instead of ensuring the software is up and running (Drum, Becker & Fish, 2013). Therefore, this paper will deliberate on the implementation of cloud-based software at TT, and its effects during the economic recession.
Problem statement and analysis
The cloud-based software enables effective company management and communication, a useful aspect of top management, which can be considered as an organizational factor while the cloud-based software can be referred to as environmental factor – since it is implemented by competitors too. In TT, the firm's economic status about cloud technology was not considered in the adoption of the decision, for example, accessibility of information, reduced inventory and reduced transaction cost (Kasemsap, 2015).
Essentially, TT anticipated encountering increased profitability together with improved operational efficiency through both direct and indirect benefits as a result of the cloud-based application. However, studies have indicated that businesses facing financial stress tend to change their technologies with the aim of improving their returns. However, the case does not succeed for enterprises which are already facing a financial crisis (Dixit & Sharma, 2015). Also, not all top management official supports the approach that technology improves profitability. Consequently, economic downturns as a barrier which blocks new technology (Singh, Jeong & Park, 2016). Hence, senior management and decision makers should always partake precedence with regards to such features, facts, and figures.
From another perspective, tension emanating from the distress and scarce resources leads to trade-offs among the different electorates. However, the outcome is that the cloud software will serve the whole business (Kasemsap, 2015). For example, the cloud technology will organize its information in a manner which considers the kind of information gathered and the people to whom it is shared within production, marketing, and logistics among others. From the past, two decades, TT managed to earn its current net incomes in one quarter. Conversely, during the harsh economic times between 2006 to 2012, TT revenues significantly declined from around 700 million to way below 250 million in its annual returns (Drum, Becker & Fish, 2013). During the period, the company experienced significant financial setbacks like production costs along with costs incurred in closing several significant plants. The cost incurred during recovery following floods in its Asian plants was also huge.
The decline in profitability was also because of lack of demand for the business products, which was established to be caused by the drop in demand for laptop and desktop computers (Chang, Kuo & Ramachandran, 2016). Nonetheless, the decline of TT's product was caused by the business inability to offer quality products, consistent support along with other shortcomings. For the enterprise to survive in the industry with the declining economic conditions, the decision to reduce losses was quite challenging. For example, in the year 2008, TT laid off 25% of its workforce along with cut pays for the remaining staff by 5% (Drum, Becker & Fish, 2013). Also, the Chief Financial Officer (CFO), who was heading both the IT and other departments were exploring for a solution to the accomplished reduction in costs. In response to deficiencies in the company's information system, the CFO together with other top management officials evaluated the available options.
At first, they did not consider cloud-based alternatives. Instead, they still focussed on comprehensive ERP systems. At the time, cloud-technology was a stand-alone platform. The outcomes of the adopted course of action further led the company astray, and closing down operation was not an option. Therefore, the CFO decided to explore cloud-computing, she believed it would be a suitable replacement. Although adopting cloud-based solutions would be beneficial, risks are also involved. Loss of control over the company's data and other security concerns were among the risks involved as TT is reliant on stable order-delivery system and delays may result in losses. System outages was a significant concern for TT (Drum, Becker & Fish, 2013). Moreover, the type of SaaS to be implemented did not comply with the management and IT staff. Thus the firm had to outsource. Unfortunately, outsourcing was a costly undertaking, and that was major traction about the adoption of cloud technology.
Conclusion and Recommendation
In summary, TT had already implemented some form of cloud-technology in its shipping and inventories. The vendors provided the business with relevant information concerning products availability. The cloud technology played a significant role in maximizing TT’s production efficiency as well as the services offered to consumers. The enterprise CFO was also aware of the economic downturn at the company, where maintaining the ERP system was already expensive, they still had to implement the cloud applications into their systems – regardless of the economic status. Cloud-application software undoubtedly results in improved efficiency and appropriate sharing of information within the company. The analysis is an essential undertaking to the company, though it is time-consuming and costly to implement, more so during periods of economic downturns.
Nonetheless, the decision to adopt a cloud-based solution was recommended, as it aimed towards alleviating costs and increasing profitability. However, for TT, the decision was quite difficult considering the economic condition and the terms on which the application was provided. Management support is also a significant aspect, for instance, the officials did not support the decision, as they maintained that the firm was not in a position to afford cloud-based solutions. Following the decision to adopt cloud-based solutions, the business has managed to consistently downsize its information expectations, which if understood appropriately is would alleviate the situation of Timely Technologies. In essence, cloud-based applications, the business would experience feasibility through the use of the new set of information without having to make long-term investment commitments, with slight or no forthright costs.
References
Chang, V., Kuo, Y. H., & Ramachandran, M. (2016). Cloud computing adoption framework: A security framework for business clouds. Future Generation Computer Systems, 57, 24-41.
Dixit, S., & Sharma, A. (2015). Effect of Cloud Computing on Enterprises: A Review. International Journal of Computer Applications, 109(5).
Drum, D., Becker, D. A., & Fish, M. (2013). Technology Adoption in Troubled Times: A Cloud Computing Case Study. Journal of Cases on Information Technology (JCIT), 15(2), 57-71.
Kasemsap, K. (2015). The role of cloud computing adoption in global business. In Delivery and adoption of cloud computing services in contemporary organizations (pp. 26-55). IGI Global.
Singh, S., Jeong, Y. S., & Park, J. H. (2016). A survey on cloud computing security: Issues, threats, and solutions. Journal of Network and Computer Applications, 75, 200-222. 4
