January 10th, 2018
How the Adoption of Cloud Computing Betters the way IT can Deliver Value to Business
The competitive nature of the modern business environment has buttressed the need to direct attention to value-creating activities of the business. In addressing such needs, technology has provided tools that better the value creation process. Technology has for instance enhanced the business value-creation process by making a wide array of processes to be more efficient. Such efficiency is important in generating higher customer satisfaction levels that in turn help enhance customer loyalty to the products the entity offers. Automation in business areas such as payroll procedures and manufacturing processes; has for instance reduced business costs and delays associated with manual work leading to increased profitability for the entity.
In terms of information technology (IT), new technologies have improved business activities such as communication and data storage. In respect to communication, the advent of network technology has improved the communication processes within the organization, and also enhanced interactions with stakeholders outside the organization via the Internet. For data storage aspects, emerging computer systems have increased the firms’ data storage capacity and made the retrieval process more efficient as compared to cases where data and information was stored in folders and cabinets. Such aspects have benefited entities with reduced costs in areas such as storage space thus enabling firms to proceed towards achieving optimal cost reductions in their operations while not lowering the service level offered to the customers.
To benefit from technological advances, organizations must however ensure its prudent use with relevant controls. Despite the advantages of adoption of IT solutions being enormous, various challenges could arise that were not present with previous information handling procedures. One of the challenges associated with the use of new technologies in business is the safety and privacy breach risks they tag along. With information being stored in a more readily available form as compared to its storage in hard copies, unauthorized access could arise either out of system malfunctions, or failure to observe prudent controls for access authorization. Safety risks are further increased by destructive programs that can be transmitted through the network at times leading to the loss of data. For the adoption of IT by an entity to result into a firm’s value creation, the challenges it presents should thus be appropriately addressed.
A recent IT advancement that promises better outcomes for business entities is cloud computing. The concept broadly encompasses two features – the applications that are presented as a service over the internet, referred to as Software as a Service (SaaS); and the hardware and systems software that form the data centers from which the applications are provided (Armbrust, et al., 2010). Other terms such as infrastructure as a service (IaaS) and platform as a service (PaaS) have been used in reference to products offered under the cloud computing concept but their definition is widely varied and at times the differences not clearly delineated (Armbrust, et al., 2010). With the variant products being offered under cloud computing, no single definition has effectively captured all the features the concept embodies with most of the suggested definitions lacking in one or more of the features of cloud computing (Vaquero, Rodero-merino, Caceres, & Lindner, 2009). While some of the definitions have, for instance, focused on the infrastructure thus coming up with scalability as the core aspect of cloud computing; other definitions have focused on business models as the differentiating factor of cloud computing with a “pay-per-use utility model” being the core of the definition (Vaquero, et al., 2009, p. 51). Yet other definitions of the technology have focused on virtualization identifying clouds to be a “virtualized hardware and software plus the previous monitoring and provisioning technologies” (Vaquero, et al., 2009, p. 51). Such differences in definitions have however not curtailed the potential impact that the technology could have on a wide range of business activities.
Though cloud computing has attracted diverse definitions, studies agree that it presents great potential for bettering business outcomes (e.g. Armbrust, et al., 2010; Buyya, Yeo, Venugopal, Broberg & Brandic, 2009; Weinhardt, Anandasivam, Blau, Borissov, Meini, Michalk, & Stöber, 2009). For instance the use of applications over the internet on a need basis rather than installing them in the entity’s systems – one of the cloud computing features – promises a potential solution for organizations that spend enormous funds in installation and maintenance of systems within the organization (Kambil, 2009). Similarly aspects such as data storage solutions that allow faster retrieval times under the cloud computing infrastructure have also been suggested to offer business firms an opportunity to improve the efficiency of their services (Kambil, 2009). With these suggested beneficial effects of cloud computing this paper purposes to evaluate how the adoption of cloud computing betters the way IT can deliver value to business. To achieve this objective the paper will present a literature review that first identifies the link between information technology and business value creation, then evaluate how various aspects of cloud computing helps in bettering such role of information technology. Go to part 2 here.