simon kinneen dissertation
TRANSCRIPT
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Cloud Computing and SMEs in Ireland: Perceived benefits and factors for success
Simon Kinneen
M.Sc. in Business and Management
Trinity College Dublin
Supervisor: Dr. Brian Massey
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Declaration and access
I declare that this thesis has not been submitted as an exercise for a degree at this or any other
university and it is entirely my own work. I agree to deposit this thesis in the University’s
open access institutional repository or allow the library to do so on my behalf, subject to Irish
Copyright Legislation and Trinity College Library conditions of use and acknowledgement.
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Abstract
The modern knowledge and service-based economy offers many opportunities for SME to
increase competitive advantage through strategic outsourcing. The emergence of cloud
computing technology provides an intriguing new IT arrangement in organisations, offering
benefits such as increased elasticity of resources, financial flexibility and better functionality.
This study investigate the perceived benefits of cloud technology by Small and Medium sized
enterprise adopters in Ireland. The study is conducted using a resource-based view of strategy,
focusing on the organisation’s capabilities and sources of competitive advantage. This study
is an attempt to make a contribution to the emerging literature of cloud computing, the aim
of this study is to provide a profile of typical SME cloud users and analyse their perceptions
of cloud technology within their organisations.
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Acknowledgements
This dissertation could not have been finished without the help and support from
many professors, colleagues and my family. I wish to acknowledge those who have helped
me throughout the year and during this research dissertation. To my supervisor Dr. Brian
Massey, thank you for you calm support and guidance. Thank you to those who helped me
throughout the research dissertation in gaining access to participants. A special thank you to
those who have supported me throughout the year and being there for me when needed.
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Contents
1. Introduction. ........................................................................................................3
2. Literature Review. ...............................................................................................7
2.1 History of Strategic Management. ..........................................................7
2.2 Cloud Computing Technology.....................................................................10
2.2.1 Defining Cloud Computing. ................................................................... 10
2.2.2 Cloud Computing Economics. .................................................................11
2.2.3 Cloud Computing Concerns.................................................................... 13
2.2 Contemporary Strategic Management. .................................................13
2.2.1 Competitive advantage. .......................................................................... 15
2.3 Resource-based Perspective. .......................................................................16
2.3.1 Core Competences. ................................................................................. 16
2.3.2 Dynamic Capabilities. ............................................................................. 17
2.3.3 Reconfiguration and Transformation. ..................................................... 18
2.4 Strategic Outsourcing. .................................................................................19
2.5 Innovation. ..................................................................................................20
2.6 Cloud Computing Potential. ...................................................................... 21
3 Methodology. ....................................................................................................24
4 Findings. ...........................................................................................................28
4.1 RQ1 Determine a profile of Irish SME cloud users. ...................................28
4.2 RQ2 Determine the perceived financial benefit of Cloud Computing for
SMEs. .................................................................................................................33
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4.2.1 RQ2 Statistical analysis. ...................................................................... 35
4.3 RQ3 Determine the perceived productivity benefit of Cloud Computing for
SMEs. .................................................................................................................36
4.3.1 RQ3 Statistical Analysis. ........................................................................ 38
4.4 RQ4 Determine the perceived strategic benefit of Cloud Computing for
SMEs. .................................................................................................................38
4.4.1 RQ4 Statistical Analysis ......................................................................... 40
5. Discussion. ............................................................................................................41
6. Conclusion. ...........................................................................................................47
7. Bibliography. .........................................................................................................50
Appendices. .......................................................................................................55
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1. Introduction.
The US National Institute of Standards and Technology (NSIT) defines cloud
computing as:
“A model for enabling ubiquitous, convenient, on-demand network access to a shared
pool of configurable computing resources (e.g. networks, servers, storage, applications, and
services) that can be rapidly provisioned and released with minimal management effort or
service provider interaction” (Mell and Grance, 2011, p.2).”
Cloud Computing (CC) is a technology that enables access to scalable computing
resources such as web applications, networks, data storage and other services over the
network. The attractiveness of CC is in its ability to give SME nearly immediate financial
savings, greater agility and responsiveness to business dealings and the potential to increase
productivity when merging cloud infrastructure as part of their business strategy. The key
benefit is that the computing functions can be allocated and released on a usage basis with
minimal need for IT technological knowledge (Mell et al, 2009a). The concept of CC is based
upon the idea that computing resources as we know them will reside elsewhere than in-house
IT units, and that users can freely utilize the resources whenever they need. The CC services
can be defined as Software as a service (SaaS), Infrastructure as a service (Iaas) and Platform
as a service (Paas). This elasticity of resources, without the insurmountable costs for such
scale, is a major shift from traditional IT infrastructure and services (Armburst et al, 2010).
The Cloud model for businesses is delivered to the end users as oriented pay-per-use services
in which certain regulations and guarantees are stated by the providers through customized
Service Level Agreements (SLAs) (Neves et al, 2011). This servitisation of corporate IT
functions mirrors what is happening in business, Rolls Royce’s ‘Power by the hour’ business
model and Netflix’s entertainment streaming service are examples of the increasingly
popular pay-per-use strategy in business. There is debate whether the same models can be
effectively applied to CC and businesses of all sizes. Although there are realistic limitations
on the scope of this study, any insight gained into this area may be valuable for further work.
Although research into CC is in relative infancy, CC is gaining popularity as an emerging IT
structure in organisations, offering many possible benefits such as efficient payment plans
and the potential of increased level of flexibility to manage the increasingly high elasticity
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of demand (Nuseibeh, 2011). CC therefore can be regarded as potentially replace the
infrastructure of traditional networks, so that the overall cost regarding IT hardware and
software resources are reduced (Nanath et al, 2013). CC has been put forward by researchers
as a potential way for organisations to reduce IT expenditure through changing from a capital
expenses (CapEX) model to an operational expenses model (OpEx) (Armburst et al 2010).
Cloud Computing adoption has experienced a considerable rate of growth since its
emergence in 2006 (Carcary et al, 2014).
The technological aspects of cloud computing would indicate that the possibility of
reduced IT related costs, improved scalability and greater firm agility are achievable. (Neves
et al, 2011). These benefits which will be explored are particularly relevant to start-ups and
small and medium enterprises (SMEs), the attractiveness of Cloud Computing lies in its
ability to show SME entrepreneurs the possibility of increased productivity and improved
responsiveness to the business, by outsourcing the IT infrastructure to cloud computing
vendors. What is important to consider for businesses and researchers is that the strategic
application of CC can potentially facilitate an organisation to be more creative and innovative
due to the improved functions that the exciting technology allows. Depending on industry,
CC may kick start businesses to come up with better products and services in a more cost-
effective way (Misra et al, 2010 p516). Much of the research on CC has focused on a
technological and vendor perspective, although there are emerging research into the adoption
by businesses, the focus has largely been on multinational corporations. An approach
focusing on SMEs specifically in Ireland will be adopted for this study to build upon the
emerging research in the field. The European Commission defines SMEs as any enterprise
with less than 250 employees. SMEs are important to the overall economic strength of a
country as they represent 99% of all enterprises in Europe (European Commission, 2012). In
the Republic of Ireland, SMEs have a great deal of importance for employment as they
constitute approximately 60% of the entire working population (Central Statistics Office,
2008). Carcary et al (2014) stress the vital role in which SMEs have in the Irish economy
and that building up the level of understanding of the factors relating to CC is of great
importance. SMEs have to be viewed differently than larger organisations, as they have
inherently different constraints, both financially and in their resource capabilities. SMEs will
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not usually have a dedicated or large ICT department or budget, therefore they are not likely
to have access to the latest IT architecture and services (Neves et al, 2011). The tighter
constraints on resources means that CC may offer SMEs significant benefits such as reducing
the financial capital needed when introducing new technology, a point which will be explored
through this study. CC is potentially an attractive prospect for businesses to undertake
because of the variety of potential benefits that the technology can offer. The technological
offerings are regarded as having the capacity to ‘level the playing field’ between the major
corporations and SMEs (Ross et al, 2015 p89).
Teece (1997) states that the fundamental question in the field of strategic management
is how organisations achieve and sustain competitive advantage. This study will use strategic
management theory to assess the potential benefits that may come with outsourcing certain
parts of IT and communication functions. With the development of CC technologies, an
emerging strategy in business is appearing; increasingly SMEs are no longer investing
significant parts of their information systems (IS) in-house. They are now strategically
outsourcing traditional IT functions such as software services and network infrastructure to
dedicated CC providers. The relatively new way of combining emerging business strategies,
IT strategies and information technologies must be aligned (Li et al, 2011,p1). The
increasingly competitive markets demand that successful companies locate and utilize firm
specific capabilities, which then can be leveraged to gain advantage. The emergence of CC
technologies offers SMEs to utilize the evolving IT platforms more efficiently and focus on
how combinations of competences and resources can be developed, deployed and protected.
(Teece, 1997, p510).
Businesses in Ireland are emerging in a knowledge and service-based economy. (Hitt
et al, 2001). Emerging technologies offer numerous opportunities for well-run small and
medium enterprises to increase profits and agility, while also allowing for increased focus on
their core competencies and abilities through strategic outsourcing. (Quinn, 1999). Cloud
Computing facilitates organisations in finding ways of accessing on-demand and powerful
IT services using internet based technologies on a scalable payment plan (Carcary et al, 2014
p1). This opportunity can allow companies to improve their strategic and technological
agility. Outsourcing in the modern business environment is an important force in the global
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economy and it is significantly reshaping businesses (Boguslauskas et al, 2009). The
business environment has always been information centric; the combination of speed of
discovery, access, and the ability to process it correctly characterizes successful businesses
in the 21st century (Dimitrakos, 2010). Businesses will be judged on their ability to identify,
cultivate and exploit the core competencies which make success possible (Prahalad et al,
1990), it is therefore deemed necessary to investigate whether CC can be a contributing factor
to this success. The following chapter will explore the relevant literature in the field of both
strategic management and cloud technology; research questions will be developed from the
existing literature on which the basis of this study will be formed.
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2. Literature Review.
The following section will review and critique the relevant literature that has been
researched both prior and throughout the duration of the study. As this research dissertation
is grounded in strategic management theory, the literature review will begin with the early
strategy theories developed in the academic field. A historical perspective will be taken to
view the development of strategy theories, these strategic management theories and concepts
will provide context and a foundation for the work to be based upon. The chapter will be
broken up into sections containing relevant academic work which will be compared and
contrasted and chronological ordering will be used where appropriate. Some technical
aspects of Cloud Computing will be introduced to give further context to the research carried
out.
2.1 History of Strategic Management.
The strategic management discipline as we know it can find its origin traced back to
the 1950s. As business and corporations grew in size and complexity, the science of
management developed over the years and in the 1950s strategy became a topic of focus.
Earlier ideas relating to corporate strategy were more concerned with the financial side of
strategy and the allocation of financial resources. As managers adopted concepts of financial
strategy to other areas of business, strategic management became a useful tool for both
principles and agents to analyse and react to internal and external forces in the business world.
Although the financial management of a business will always be held at the upmost of
concern for owners and managers, strategic management of all other areas of a firm are now
considered vital for sustainable competitive advantage. This can be attributed to the early
budgeting and management techniques being adapted and extended so that the financial
management supported the strategic objectives of the firm. This concept of business
‘alignment’ is important and it will be explored further later in the chapter. Peter Drucker
(1954) explored strategic management ideas in his work “The Practice of Management”,
introducing concepts of internal and external strategies. The core concept introduced by
Drucker was that for organisations to be successful they must analyse their own firm and ask
‘What is our business?’ (Drucker, 2008). The question asked by Drucker can be argued as
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being an early example of a SWOT or PESTEL tool used for analysing internal and external
factors surrounding a firm, both of which will be viewed in more detail in this chapter.
Philip Selznick, a Berkeley professor and noted author on organisational theory
wrote about an organisation’s “distinctive competence”. Although referring to the U.S
Navy’s distinctive competence, the concept of an organisation’s capabilities and
competences is still core to modern strategic management and this research dissertation (Day
et al, 1994). Selznick’s military example also reinforces the idea that strategic management
is rooted in military traditions and can be traced back through military with origins that can
be attributed to Sun Tzu’s book The Art of War from 500 BC (Tzu, 1964). Selznick also
developed and conceptualised the idea of matching an organisation’s internal factors with
external variables (Day et al, 1994). The key idea of internal and external factors for strategy
was built upon by Kenneth Andrews (1963), where we can see the development of the actual
Strength, Weaknesses, Opportunities and Threats (SWOT) analysis of a firm. Although the
business environment can be said to be very different in 2015 in comparison to 1963, through
technological advances and the sophistication of business management processes, the SWOT
is still used as a core strategic management tool today.
Alfred Chandler (1962) realised how vital it is to coordinate and align management
processes to fit with an overall company strategy if a firm wants to achieve sustainable
competitive advantage. The interactions between varying processes in a firm have been dealt
with usually by managers, the interactions that Chandler discusses in his book “Strategy and
Structure”, (1962) have become even more complicated especially with the introduction of
modern technologies such as Cloud computing. The interactions have been called a variety
of names, later research relating specifically to CC will use the term “touching points” which
echo the early work of Chandler but are adapted to the CC context (Li et al, 2011). Chandler
also added key concepts of long-term strategic planning and the importance of having
perspectives which span a long period of time rather than just short term KPI’s and
milestones. For Chandler long-term strategy gave an organisation a foundation and direction.
By giving an organisation a long-term plan, it focused the business areas into a unifying goal.
The following quote is from Chandler’s 1962 book “Strategy and Structure”:
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“Strategy is the determination of the basic long-term goals of an enterprise, and the
adoption of courses of action and the allocation of resources necessary for carrying out these
goals.”(Chandler, 1962).
The quotation is relevant to this piece of research as it introduces key concepts which
underline the basis of this dissertation. “Adoption of courses of action” is referring to a firm’s
adoption of certain strategic plans and this is an early concept which is developed further
throughout the work of James March (1991) and David Teece (1997). Interestingly it can
also be linked to more recent research conducted by Carcary et al (2014) on CC and SMEs
state of readiness for the adoption of such technology, which will be discussed in greater
detail. The quotation also contains the words “allocation of resources”, this phrase is
recurring throughout strategic management literature and is increasingly relevant to this
research dissertation’s focus on SMEs, which have an increased necessity for the strategic
management of resources. The CC concepts discussed in this research dissertation are
explored using Chandler’s concept of resource allocation. The question of whether or not CC
has the potential to enable SMEs to access and manage resources such as applications,
networks and storage in ways that were previously more difficult to obtain prior to CC is
explored based upon ideas developed by Chandler. Although Chandler introduced important
concepts in strategic management, the ideas needed to be developed further to be fully
utilised. Igor Ansoff (1965) recognised that Chandler’s work, while important, needed to be
adapted using dedicated vocabulary. The grid concept introduced by Ansoff in “Corporate
Strategy” (1965), built upon previous research by adding a more positivistic approach to the
subject. The grid was a tool for managers to utilise in which they could create long-term
plans.
Porter (1980) developed a number of key concepts which presented firms as having
a series of strategic choices they must make in order to fully achieve organisational potential.
The concepts created an alternative view of strategy than the experience-curve perspective
of strategy. Firms could strategically position themselves to be low-cost or differentiated in
their strategy as well as having specific markets and consumers to locate their enterprise
(Porter, 1980). In 1985 Porter again added to the field of strategic management by
introducing the idea that strategic process design and implementation is paramount to
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achieving competitive advantage. The idea that increased performance for processes within
a company will be part of sustainable competitive advantage is interesting and the idea that
CC technology may facilitate improved process design was developed from Porter’s view on
strategic management.
This section’s aim was to provide some historical context to some of the theories
discussed throughout this research dissertation. Many of the concepts mentioned above were
used as a basis for conducting the research and legitimising its relevance. The next section
will discuss more contemporary strategic management concepts leading up to the strategic
management concepts that will be explored relating to CC use in SMEs in Ireland.
2.2 Cloud Computing Technology.
SMEs will not usually have dedicated ICT departments or large financial budgets to
spend on sophisticated IT architectures and functions (Neves et al, 2011). CC technology has
the potential to offer SMEs a solution to their IT business requirements and reduce costly
investment demands. This section will introduce some key technological aspects of CC
which make it an attractive opportunity for SMEs. CC may facilitate organisations the ability
to access on-demand IT services on a pay-per-use plane, therefore allowing firms to improve
their strategic and technological agility, and responsiveness in the global business
environment (Carcary et al, 2014).
2.2.1 Defining Cloud Computing.
Cloud computing refers to the applications delivered as services over the internet and
the hardware as well as systems software in CC provider’s data centres (Armburst et al, 2010).
The three main service groups which CC is made up of are; Software as a service (SaaS),
Infrastructure as a service (IaaS) and Platform as a service (PaaS). (SaaS) make up the largest
cloud market sector share in terms of usage, the software programs used include: email,
database access and back-up. (IaaS) represents powerful solutions for organisations such as
externally based CPU and network facilities; Google and Amazon are two of the largest
providers of these facilities. (PaaS) can be thought of as being in between SaaS and IaaS,
providing important middleware and tools for organisations to create their own applications
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and software (Landis et al, 2013, p20). The word “cloud” is referring to the data centre
hardware and software which the CC provider then ‘rents’ to the user and customers.
Three more ways in which CC can be classified are in the different delivery models
the three main delivery models are the public cloud, the private cloud, and the hybrid cloud
(Armburst et al, 2010). The public cloud provider operates a system which is shared and
accessible to any customer, the private cloud delivers a private system where access is limited
to a specific organisation. A hybrid cloud environment is a combination of both public and
private service delivery models, this would be suitable to organisations that need the capacity
of a public cloud with added exclusivity of usage (Garrison et al, 2012).
Figure 1: Cloud Computing's standard service models. (Garrison et al, 2012).
2.2.2 Cloud Computing Economics.
Research on the cost-benefit analysis of cloud computing has mainly been focused
on individual companies (Buya et al, 2008). An important aspect of CC is the financial
benefits that it may provide businesses, the increases agility and flexibility provided is
important, however the rate of SME adoption comes down to the level of affordability
provided (Dhar, 2012). An intriguing aspect of CC is the scalability of its service, the
technology eliminates wasted CPU and storage functions. Naturally demand will vary over
time and therefore the usage rate of a business IT function will change accordingly.
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Underutilising costly IT services is detrimental for organisations when resources are scarce,
SMEs will typically have smaller financial budgets and therefore need to be efficient with
their expenditure. CC enables an organisation to pay by the hour for usage levels, essentially
‘renting’ similar services that traditional IT departments would satisfy (Armburst et al, 2010).
Another interesting aspect of the economics of CC is that it can negate the costly
provision of that companies have to make to allow for spikes in usage. Start-up companies
may find this particularly useful as a spike in customers can easily be managed by the CC
vendor. The “cost associativity” of cloud computers makes large scale tasks more affordable,
“using 1000 EC2 machines for one hour costs the same as using one machine for 1000 hours”
(Armburst, 2010, p52). CC offers a pay as you go approach to IT solutions, the shift from
capital expenses to operating expenses (CapEx to OpEx) is important to note as start-ups and
micro size businesses have greater opportunity to access more powerful IT processes
(Nuseibeh, 2011). Although there is some risk of vendor lock-in (Dhar, 2012), the benefits
of CC outweigh this with the economic benefits of elasticity and the transference of risk
(Armburst, 2010, p53). The literature cites scope for future work to include rigorous testing
in varying business types. An approach which focuses on intangible factors that come with
adopting cloud computing has been neglected (Neves et al, 2011, Carcary et al, 2014).
Figure 2: Cloud computing economics. Source: (https://toyinogunmefun.wordpress.com)
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2.2.3 Cloud Computing Concerns.
As CC is a relatively new IT and business dynamic, there are many areas of
underdeveloped research (Son et al, 2011). Although CC seems to be the next major topic
for business and IT specialists to consider, the risk and reward for adopting Cloud computing
seems to be high (Nuseibeh, 2011). Security risks are a major concern, as an organisation
opens itself up to attack on a greater scale when moving to the cloud (Armburst, 2010),
(Nuseubeh, 2011), (Carcary, 2014). Isolation failure and the risk of insecure deletion of data
are also concerns that have surfaced from the literature,
2.2 Contemporary Strategic Management.
This section will follow on from section 2.1 to continue to develop strategic concepts
found in the literature which have impacted this research dissertation. The historical
perspective taken in the section 2.1 was to give a framework upon which much of the modern
strategic management literature is based upon. The contemporary strategic management
literature begins to touch upon the areas which will be directly explored in this research
dissertation.
James G. March (1991), examines the dynamics of exploring new possibilities and
the exploitation of old certainties in organisations. This paper is particularly relevant to this
research dissertation because of the dynamics that CC technology may bring to SMEs. The
relative infancy of CC knowledge and organisational strategy would infer a knowledge gap
where complications may occur. The ‘complications’ in resource allocation are discussed in
March’s paper, specifically those relating to the distribution of costs and benefits across time
and space (March, 1991). This idea can be drawn upon to compare with Michael Armburst’s
view on CC, whereby the new technology can facilitate organisations to be less concerned
with the allocation or waste of valuable resources (Armburst, 2010). March’s paper also
creates a question as to how CC should be viewed through his organisational lens; it can be
argued that CC is a form of new organisational knowledge in which may cause
‘complications’, but also it could be viewed as a platform or bridge in which can facilitate
the development of organisational learning. The exploration/exploitation trade-off presented
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by March does apply to modern technologies although it may now be too simplistic in its
approach to technologies that have been developed in recent years such as CC. March argues
that adaptive systems that engage in exploration to the exclusion of exploitation are likely to
find that they suffer adversely the cost of experimentation without achieving many of its
benefits (March, 1991, p71). The paper suggests that those who engage too far in exploration
will manifest themselves into too many underdeveloped new ideas and not enough distinctive
competence. As CC develops and matures this may be less true, as CC could be used as a
replacement to existing IT processes which already fulfil already exploited old certainties
but on a scale with an elasticity of resources which is unprecedented in the history of IT
(Armburst, 2010, p50).
March’s paper states that new technology comes with the increase demand of
organisational learning and this may in fact stifle a company in reaching the very top of an
industry (March, 1991, p84). This point would suggest that truly innovative or exploratory
technology could in fact have a major effect on the mean but less on the variance of
performance. This perspective on technology adoption may be outdated due to the
technological developments that have taken place as well as the increasing adoption of
technology into our every-day lives in society. The following quotation is taken from March’s
paper which highlights the value that technology may bring, value that could be viewed
through financial or strategic benefits.
“If a new technology is so clearly superior as to overcome the disadvantages of
unfamiliarity with it, it will offer a higher expected value than the old technology.”(March,
1991, p83).
March’s perspective is that organisations can develop effective ‘instruments’ of
coordination and communication, in which CC could be regarded as being. The impact on
organisational performance and the impact on dynamic capabilities is what is most intriguing.
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2.2.1 Competitive advantage.
The fundamental question when studying the area of strategic management is how
organisations achieve and sustain competitive advantage. March’s paper on exploration and
exploitation of organisational resources touches upon this question but not in enough depth.
David Teece (1997) released an exemplary piece of work surrounding dynamic capabilities
and strategic management. Teece develops a dynamic capabilities approach to analysing how
organisations capture and create wealth. This concept is particularly relevant to this research
dissertation as it aligns itself with the Shumpeterian world of innovation-grounded
competition. Teece recognises that the field of strategic management was dominated by two
main paradigms; the dominant paradigm in the area of strategic management in the 1980s
was the competitive forces approach developed by Porter (1980). This approach takes the
view that the key to competitive advantage for an organisation lies in its environment and
the industry or industries in which it competes. Although this is still somewhat true today,
the blurred lines of industry now makes the approach less suitable and it can be regarded as
too simplistic for today’s ‘born-global’ companies. Porter mentions that some industries are
more attractive than others because they have ‘structural impediments’ in place which act as
barriers to competition (Porter, 1980). Porter’s literature creates questions which need to be
explored, CC may have the ability to remove some of these structural impediments for SMEs
such as costly ICT start-up costs and the ability to access global markets (Ross et al, 2015).
The second main paradigm was the ‘Strategic Conflict’ approach attributed to
Shapiro (1989), it is similar to the competitive forces approach in that it concentrates on
product market imperfections, barriers and strategic interaction (Teece, 1997 p510).
Shapiro’s literature discusses the need for greater appreciation of the role of sunk costs, as
opposed to fixed costs for determining an organisations competitive results. This point on
sunk and fixed costs, which Teece also recognises, creates an interesting line of questions
surrounding CC and its ability to change IT investment demands and the wasting of costly
resources (Armburst, 2010). Both the paradigms have similar positions that competitive
advantage is achieved from having superior product market positions.
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2.3 Resource-based Perspective.
A ‘resource-based perspective’ emphasises unique organisational capabilities and
assets and the role of isolating mechanisms as the core determinants of firm performance
(Teece, 1984). Teece expands on this further in his paper ‘Dynamic capabilities and strategic
management’ (1997), an attempt to identify the attributes of firm-specific capabilities that
may be sources of competitive advantage. These capabilities are explored, analysing how
they can be combined into distinctive competences and resources which can be developed,
deployed and protected (Teece, 1997 p510).
“The resource-based approach sees firms with superior systems and structures being
profitable not because they engage in strategic investments that may deter entry and raise
prices above long-run costs, but because they have markedly lower costs, or offer markedly
higher quality or product performance.”
The quotation above highlights costs and product performance, two of the factors that
will be explored using CC in this research dissertation. Strategic focus is another factor that
will be explored, Teece’s literature provides a concept that every organisation contains
strengths and weaknesses and highlights the importance of identifying what they are so to
grow the organisations core competences. The research conducted by Carcary et al (2014)
and Armburst et al (2010) viewed with Teece’s concepts leads to question whether CC may
facilitate SMEs to focus less on costly upfront IT and more on their core competences.
2.3.1 Core Competencies.
A brief definition of ‘core competencies’ will be valuable as it is a key term used
throughout this research dissertation. Teece defines core competences as those in which
define an organisations’ core business. The value of core competencies may also be enhanced
by combining with appropriate relating assets (Teece, 1997, p516). An important point to
note is that the level of distinctiveness for a core competence is dependent on the level of
difficulty it is for competing organisations to imitate. CC may potentially offer organisations
strategic value by offering successfully adopting companies a competitive advantage in the
form of increased focus on core competencies (Nuseibeh, 2011). Literature on business
strategies suggest that a focus on core competencies and capabilities is the key for success in
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a crowded business environment. C.K. Prahalad and Gary Hamel (1990) identify the fact that
firms will be judged on their ability to identify, cultivate and exploit their core competencies.
Core competencies are the collective learning in a firm, especially how to coordinate diverse
production skills and integrate a variety of technologies. (Prahalad et al, 1990). This
definition of core competencies relates both to modern businesses and specifically small and
medium enterprises (SMEs), the streams of technology available to businesses now are
growing allowing for increased flexibility when deciding upon an IT strategy.
2.3.2 Dynamic Capabilities.
As this research dissertation will be using the term “dynamic capabilities”, a brief
definition is required to give greater understanding. Dynamic capabilities is defined as the
organisations ability to integrate, grow and delegate internal and external competences to
address rapidly changing environments (Teece, 1997 p516). Competitive advantage is the
goal in which dynamic capabilities are striving to achieve, new and innovative ways in which
a firm achieves this goal can be related to their dynamic capabilities.
As mentioned in previous sections, the importance of the internal and external
approach developed by Drucker (1954), is built upon by Teece but from a ‘dynamic
capabilities’ approach to exploiting core competences. Although the approach could be
regarded as going beyond the discipline of strategic management and entering operational
management or technology R&D, Teece does recognise this departure. One critique of
Teece’s approach is that ‘dynamic’ is increasingly a relative term, modern businesses are
located in increasingly competitive environments and their own ‘dynamic’ capabilities are
hard to measure but instead could be viewed on a continuum. Most capabilities and
competencies cannot simply be accessed through market penetration, but need to be grown.
The organisational learning that needs to occur takes time and resources. March’s (1991)
literature discussed earlier gave some insights into the trade-offs that need to take place.
CC technology offers an interesting dynamic as it contradicts some of the strategy
literature, Teece states that fixed assets which are purchased cannot be the source of a firm’s
competitive advantage (Teece, 1997 p518). As CC does not require the purchasing of fixed
tangible assets like traditional ICT does, the outsourcing approach and flexibility of scale
potentially may be a source of competitive advantage for SMEs. Although it may be too easy
18
for another company to imitate the benefits of CC, the technology itself has very intriguing
aspects which blur the lines of fixed assets and outsourcing, Technology is often viewed as
having devastating impacts on incumbent organisation’s ability to compete in a crowded
market, CC may be the technology which facilitates SMEs ability to compete against large
global enterprises. The CC technology’s architecture may also remove the typical radical
organisational re-engineering required to support new technology (Armburst, 2010).
2.3.3 Reconfiguration and Transformation.
As technology evolves the traditional thought process for satisfying consumer needs
is altered, an example of this can be seen in the way internet speeds has facilitated the
streaming of media, this has altered the way in which products are delivered to the customer
such as Netflix’s drastic change in business model. In increasingly competitive and evolving
environments there is a requirement for organisations to have some form of strategic
adaptability and flexibility. To be able to achieve this there needs to be an ongoing scanning
of emerging technologies and an organisation-wide willingness to accept new ideas
(Langlois, 1994). The capacity to reconfigure and transform can therefore be regarded as a
learned organisational capability (Teece et al, 1997).
“It is well recognised that how far and how fast a particular area of industrial activity
can proceed is in part due to the technological opportunities that lie before it.” (Teece, 1997,
p523).
The above quotation by Teece is highlighted to show the level of importance that
technology can have on an organisation. The interesting opportunities that CC may present
for SMEs creates an exciting knowledge gap to be explored further. Although Teece (1997)
and Quinn (1999) both recognise that the existence of technological opportunities can be
somewhat organisation specific, this may not be the case for CC, as the inherent scalability
offered by CC technologies could present a potential boon to SME entrepreneurship (Ross
et al, 2015). Although what is concerning is that the ease of use and adoption may also create
competitive advantage which is not sustainable. As the benefits of adopting CC may be easy
to imitate.
19
2.4 Strategic Outsourcing.
The previous sections have introduced key strategic management concepts, the challenge of
implementing the concepts in reality is complex. James Quinn’s (1999) paper on strategic
outsourcing focuses the strategic concepts discussed to the more focused view of outsourcing
which will give greater context to CC adoption by SMEs. Global information technology
outsourcing has been evolving significantly as many industries are increasingly using CC
technology (Dhar et al, 2012). Quinn presents outsourcing as being filled with potential, the
combination of strategic outsourcing and emerging technology offers increased value,
flexibility, and the ability to integrate cross-divisional systems (Quinn, 1999). If
implemented properly, strategic outsourcing can lower costs and fixed investments while
expanding flexibility and growing innovation capability. The way in which Quinn describes
strategic outsourcing echoes many of the key components that Armburst et al (2010), Neves
et al (2011) and Ross et al (2015) present for CC. The way in which Quinn presents strategic
outsourcing is intriguing, however it may be too optimistic or simplistic a view to attach to
CC. March’s (1991) “complications” must also be considered as the allocation of resources
is something that a firm must carefully consider (March, 1991 p71). Although outsourcing
may be considered a cost-saving approach for organisations, outsourcing for intellectual
value is even more valuable. As strategic management knowledge grows, organisations have
realised that outsourcing for a short-term cost saving benefit does not fully utilise the
opportunities available for strategic outsourcing. Outsourcing for future and long-term
intellectual growth is far more valuable (Quinn, 1999 p3), this reinforces the long-term
strategic concepts mentioned earlier first introduced by Alfred Chandler (1962).
The 1998 study conducted by PriceWaterhouseCoopers revealed that strategic
outsourcing had evolved beyond simply replacing a single process, but to a more complex
‘reconfiguring or rebundling’ entire areas to create better organisational value (Quinn, 1999
p3). Whether CC technology has the ability to carry out this type of outsourcing is not yet
fully known, however the potential for CC to support increased capacity and extend an
organisations capabilities without major costs makes it a viable option (Carcary et al 2014).
Drucker’s (1954) concept of asking strategic questions mentioned earlier can be related here,
20
instead of asking “what is our business?” (Drucker, 1954), organisations are now asking
“where can we focus our own resources to create unique value?” (Quinn, 1999 p3).
The knowledge strategy that Quinn (1999) discusses relates to modern businesses
which have adopted CC. The four principles in which they follow are; focusing more on a
few capabilities, on-going innovation in areas that help production levels, becoming more
agile to cope with external environment and leveraging their own key resources. These
principle make-up a strategic mind-set of “core competency with outsourcing” (Quinn, 1999
p4). The strategy concentrates a company’s scarce resources on their core competencies, the
flattening can help a firm develop better capabilities. This idea relates to the potential of CC
very well, Armburst (2010) helps explain the technological aspects of CC and many of the
characteristics described fits with Quinn’s “core competency with outsourcing” strategy. The
strategy also tries to increase a company’s agility and flexibility through removing rigid fixed
costs and physical investments. CC technology has the potential to reach this goal by its
scalability and flexible pay-per-use payment plans (Naneth et al, 2013). Although some argue
that some functions and processes should never be outsourced (Boguslauskas et al, 2009),
the make-up of SMEs is different than larger organisations. Boguslauskas et al, 2009 suggests
that firms must first undertake a series of evaluation steps to self-examine before they
outsource a process. SMEs will have less constraints on them and have a clearer view of
which processes they consider core to their business. Cloud computing can therefore
considered a favourable option due to the make-up of SMEs. (Carcary et al, 2014).
2.5 Innovation.
Organisations can use innovation strategically in order to gain competitive advantage
(Hitt et al, 1998), become flexible to external environments and customer demands and
achieve superior performance (Keupp et al, 2011). As mentioned earlier, Porter (1985) views
strategy as a key component of achieving competitive advantage, innovation represents an
important aspect of an organisation’s overall strategy. As technologies continue to develop,
the strategic management of innovation is becoming increasingly core to the field of strategic
management. The existence of ICT technology that allows for low cost financial statement
modelling has created the need for the exploration of different assumptions about revenues
and costs (Teece, 2010, p174). CC technology presents an interesting dynamic for companies
21
to explore, the assumptions about revenues and costs that Teece (2010) discusses are relevant
to CC and how adoption of such technology can create value for businesses. There appears
to be a knowledge gap surrounding CC and its benefits for businesses, the themes discussed
relate to the potential aspects that CC may provide entrepreneurial activities. Teece (2010)
states that technological change often creates scenarios where innovation needs to take place
(Teece, 2010, p187). When the underlying technology changes and the mainstream way of
thinking about value shifts, the business model must change too. Cloud computing is a
paradigm shift in computing which has the potential of shifting the way in which businesses
look at IT processes. (Misra et al, 2010).
2.6 Cloud Computing Potential.
The potential that CC has for business is an intriguing area to explore. As CC is a
relatively new IT and business combination there is still an attractive knowledge gap to focus
research upon (Son et al, 2011). Michael Armburst (2010) released a comprehensive paper
on CC technology and its potential application for businesses, it highlights a number of areas
where the technology offers new ways in which organisations can utilise for competitive
advantage. The technology offers infinite computing resources which can be accessed on
demand to allow for load surges, this removes the costly planning of allocating resources.
This aspect gives users the scalability that is becoming increasingly attractive in modern
business environments, strategic management researchers such as Porter (1985), March
(1991), Teece (1997) recognises the value that scalability brings to business strategy.
Armburst (2010) does not link the strategic management benefits of such scalability and CC,
however Garrison (2012) expands on this point further by mentioning the “increased
business agility” that CC offers (Garrison et al, 2012, p62). Ross (2015) takes a focused
approach on scalability and discusses the potential that CC offers for organisations at
relatively cheap prices. CC vendors will operate large data warehouses which pool CPU and
data storage resources at scale, the resulting economies of scale and density can allow
services to be provided at a cost effective manner (Ross et al, 2015, p91).
The elimination of large capital requirements typically associated with IT
development is a key aspect that organisations can take advantage of. In reducing the level
of resource commitment needed for CC adoption, organisations can adopt increased agility
22
as they can access more IT resources whenever necessary (Armburst et al, 2010). As
mentioned previously Chandler (1962) highlights the importance of an organisation’s
“allocation of resources”, CC can allow for SMEs to have increased agility by reducing the
necessary capital investment and therefore risk associated with Information communication
technology (ICT) technology. Garrison et al (2012) discusses the reduced IT-related costs
associated with CC and states that the technology offers “increased business agility”
(Garisson et al, 2012, p62). Criticisms of the literature by Armburst (2010) and Garrison
(2012) can be made as they do not factor in organisational size when discussing the benefits
of CC. Relating to this specific research dissertation the literature does provide evidence of
a knowledge-gap where additional research is necessary for a clearer understanding. Carcary
et al (2014) provides some context for organisational size and focuses on SMEs adoption of
CC in an exploratory study which provides interesting information of state of readiness and
the demographic of CC adopters in Ireland.
The potential for increased agility is discussed in a paper by Ross et al (2015), this
qualitative research paper presents CC from an entrepreneurial perspective. The cheap up-
front costs associated with CC allows organisations an improved ability to try and test
multiple new IT related services (Ross et al, 2015, p95). By removing the costly capital
expenditure required, CC allows businesses to have “easy failure” and therefore is beneficial
to entrepreneurial activity for SMEs. This is important because as mentioned previously,
SMEs comprise over 60% of the workforce in the Republic of Ireland (Carcary et al, 2014).
CC technology offers a cost effective alternative to traditional ICT processes, the
ability to access a pay-per-usage CPU and data storage facilities makes CC potentially very
attractive for businesses (Armburst et al, 2010). A key strategic benefit that CC may have for
SMEs, is that the IT overheads, normally coupled with the development and usage of in-
house IT departments are absorbed by the cloud provider. CC has the potential to enable
businesses to lower operational costs as well as capital expenditure (Garrison et al, 2012).
The literature identifies the lack of insight into the internal factors associated with CC and
SMEs. Further research is suggested, taking into account the internal variables that relate to
this area. This dissertation hopes to fill part of that knowledge gap and build upon the
established literature. In relation to further studies in the area, in Ireland SMEs represent 98%
23
of all companies employing less than 50 people, and constitute approximately 60% of the
overall workforce (CSO, 2008). (Carcary et al, 2014). The important role that SMEs play in
the economy requires a deeper understanding of issues associated with cloud computing.
Further research in this area could build a better understanding for SMEs use of cloud
computing and the benefits that come from CC adoption by SMEs. This proposal presents
evidence of the benefits of outsourcing IT requirements so that businesses can focus on core
competencies and capabilities. Core competency building is viewed as being an important
factor for success of a firm. (Quinn et al, 1980). The research relating to cloud computing as
a facilitator of this business strategy is relatively new and therefore has research gaps
mentioned in the literature review.
Based on the literature the following research questions have been generated:
RQ1. Determine a profile of Irish SME cloud users
RQ2. Determine the perceived financial benefit of Cloud Computing for SMEs
RQ3. Determine the perceived productivity benefit of Cloud Computing for
SMEs
RQ4. Determine the perceived strategic benefit of Cloud Computing for SMEs
24
3 Methodology.
The following section will explain the methodology used in this research dissertation,
a brief explanation of the underlying research philosophies will be given, followed by a clear
explanation of the methods used throughout the research. The ‘Research Onion’ model will
be used when discussing the underlying philosophies and approaches. The research ‘onion’
(Saunders et al, 2011) facilitates the dissertation to formulate a consistent approach to the
research. The ontology aspect used is an objective approach to the research. Using an
objective approach to the research will allow the interpretations of any consequences created
from the perceptions and consequent actions of the participants (Saunders et al, 2011). This
aspect assumes that there will be similarities in every organisation that will tested.
The research philosophy that is used for this research dissertation is a positivist
philosophy, this gives a base of which the research strategy will be created upon (Johnson et
al, 2006). An attempt to take a value neutral approach where possible was undertaken and
observations made without any participation. An important component of a positivist
approach is that the research is undertaken in a value-free way as much as possible (Saunders
et al, 2011). As usually advocated, the positivist approach will use a highly structured
methodology in order to facilitate replication where possible (Gill & Johnson, 2010). A focus
on quantifiable observations which will lend themselves to statistical analysis using SPSS
statistics software is used.
25
Figure 3: Research Onion, (Research Methods for Business Students; Saunders et al, 2011).
An inductive approach to the research will be adopted, the research questions in
chapter 2 have been generated from the literature and will be explored and theories developed
from the data collected. An inductive approach will allow the research to explore whether
there are any causal relationships between the concepts and variables surrounding CC.
Although limited in scope the research hopes to find some areas where generalisation can be
made surrounding CC and strategic management as the area is underdeveloped in this sense.
I will use a highly structured methodology to facilitate replication. (Gill & Johnson, 2010).
Following along with the underlying philosophy of the research dissertation, a
quantitative approach to data collection is used in this study. An online questionnaire survey
was created using Surveymonkey.com, questions were developed from themes found
throughout the relevant literature. This method was chosen as an online questionnaire is
widely recognised as a useful means of data collection (Doherty, 2012). As there are
constraints into the timeframe afforded for conducting the research the online questionnaire
provides a higher response speed (Adams et al, 2000) and a reduced level of respondent error
(Weible et al, 1998). As mentioned previously the removal of researcher bias where possible
is important to the overall dissertation research philosophy and the online questionnaire
method adds the benefit of removing interviewer bias (Jankowski et al, 2006). The
26
methodology chosen will allow for maximum response rate, the aim is to have a large a
sample as possible as to strengthen any significant causal relationships that may be found.
The survey strategy is usually associated with the quantitative research approach and
was viewed as appropriate for this research dissertation. Adopting a survey strategy allows
for the collection of quantitative data which can be analysed quantitatively using descriptive
and inferential statistical methods (Saunders et al, 2011). Developing the questionnaire
constructs was undertaken after reviewing the existing literature relating to CC and strategic
management. The literature provided three key themes to be explored further in this research
dissertation; productivity, cost effectiveness and strategic focus. The themes helped frame
the online questionnaire’s constructs to test the hypotheses generated from the literature. The
questionnaire contained mostly quantitative questions which gathered responses using 5-
point Likert scales. The quantitative method allowed for the coding of the responses and a
numerical score was associated with the answers, measuring attitudes respondents had on
core CC issues.
A purposive stratified sampling technique was used for this research dissertation,
specific attributes of organisations where chosen to facilitate a focused approach to the
themes developed from the literature (Saunders et al, 2011). It is recognised that a purposive
sampling method helps focus the research to address the main points of interest. As the
literature by Nuseibeh (2011), Neves et al (2011) and Carcary et al (2014) highlight the
research gap relating to SMEs and CC, the sampling boundaries were created and the criteria
for a useable questionnaire was:
Organisations must be located in Ireland
Organisations must not have more than 250 employees
Organisations must be using Cloud Computing technology
A hyperlink was created which linked participants to the online questionnaire, an
email containing the hyperlink was sent out to organisations that were contacted in the
months prior to the research collection phase. The internet enables access to research
participants in a number of ways, although it also carries some data quality and ethical issues
with it (Saunders et al, 2011). Gaining access to organisations provided a number of
27
difficulties, obtaining permission to access higher levels of management proved challenging,
however the more senior the level of management the higher level of knowledge regarding
an organisations strategy was assumed. Building credibility is regarded as important for
gaining cooperation from intended participants (Robson, 2011), sharing the purpose of the
research dissertation as well as affiliating the research with Trinity College Dublin’ School
of Business was carried out throughout the data collection phase. As most business
researchers suggest that you are more likely to gain access where using existing contacts
(Buchanan et al, 1988; Saunders et al, 2011), previous contacts and known associates were
used in the data collection stage. The circulation of the hyperlink through existing contacts
was employed to ensure the largest sample size of respondents possible.
As the research is relatively new in this area in Ireland (Carcary et al, 2014), a cross-
sectional research method was used to get a ‘snapshot’ of the current state of SMEs and CC
usage in Ireland. Although a longitudinal approach would be useful to gather more complete
data, the constraints in time and resources meant a cross-sectional research method was the
best option to undertake (Saunders et al, 2011).
28
4 Findings.
In this section the data gathered from the online questionnaire will be given and
statistical analysis will be carried out relating to the research questions mentioned in section
2. The online survey questionnaire yielded 35 responses. Out of the 35 responses 30 were
deemed usable, each usable respondent was currently using cloud computing technology,
was from an organisation located in Ireland and the organisation was classified as a SME, i.e
had less than 250 employees. The surveys also had to be completed in full to be deemed
usable for this research dissertation.
4.1 RQ1 Determine a profile of Irish SME cloud users.
Out of the 35 overall respondents 31(88.6%) were cloud computing users and 4 were
non-users (11.4%) (See Figure 1). As this research dissertation is a study on organisations
that do use CC, the 4 non-users were screened from the rest of the survey and re-directed to
the end of the questionnaire. The 31 CC user respondents provided 30 completed
questionnaires, the sample size for analysis is therefore 30 respondents.
Figure 4: Cloud Computing Users
In terms of industry sectors, the industry most represented by the respondents was
Telecommunications, Technology, Internet & Electronics (20.7%, n=6) followed by the
Retail and Consumer durables (13.8%, n=4), Food & Beverages (13.8%, n=4) categories,
Business Support & Logistics (10.3%, n=3) and Entertainment & Leisure (10.3%, n=3) were
also significantly represented. The industry make-up of the respondents does reflect a high
representation of businesses in the service sector which is in line with other research studies
29
on CC adoption (Neves et al, 2011, Carcary et al, 2014). The respondents were asked to give
the number of full-time employees that were part of their organisation; the average number
of employees was (n=31.41) (Figure 3).
Figure 5: Average number of full time employees
The respondents were asked to give their current job level (Figure 4), of the 29
responses 31% described themselves as Owner/Executive/C-Level (n=9), 37.9% described
themselves as Senior Management (n=11), 20.7% described themselves as Middle
Management (n=6), 6.9% as Intermediate (n=2) and 3.4% as Entry Level (n=1).
Figure 6: Respondent Job Level
The respondents were asked to describe their level of knowledge relating to cloud
computing (Figure 5). 10.3% of the respondents stated that their level of knowledge was
30
Very Good (n=3), 31% of the respondents checked Good (n=9), 37.9% Basic (n=11), 20.7%
Poor level of knowledge (n=6) and 0 no respondent said their level of knowledge about cloud
computing was Very Poor (n=0).
Figure 7: Respondent cloud computing knowledge level
The respondents were asked what kind of IT resource did they outsource to a cloud
provider (figure 7), this multiple-choice classification question was to give a clearer picture
of the make-up of respondents cloud use. Of all the completed answers, 100% (n=28) were
availing of software services (SaaS), this is the most commonly used form of cloud resource,
21.4% (n=6) of the respondents answered Operating Systems, Development Environments,
Software Packages (PaaS) and 21.4% (n=6) answered Infrastructural (Hardware, Storage,
Network) Resources (IaaS).
31
Figure 8: Respondent cloud resource
The respondents were asked to select what kind of cloud infrastructure(s) and
provider(s) that they were using (Figure 8); 27.6% (n=8) selected Infrastructure operated by
a third-party vendor (Public Cloud), 10.3% (n=3) selected Infrastructure or infrastructure
operated solely for your company (Private Cloud), 34.5% (n=10) selected Combination of
Public and Private Cloud Infrastructure (Hybrid Cloud), 3.4% (n=1) selected Cloud shared
amongst organizations with similar goals (Community Cloud) and 34.5% (n=10) selected
Don’t Know.
Figure 9: Respondent cloud computing infrastructure and provider
32
The respondents were asked to give their reasons for adopting cloud computing
technology, this multiple choice question was to give a more in depth look at why the SMEs
had adopted cloud in their organisations (Figure 9). The options were selected based off
relevant literature (Armburst et al, 2010, Neves et al, 2011, Ross et al, 2015), the options
were related to the potential cost, production and strategic benefits of CC technology. The
list of options was randomised for each respondent, as answers are influenced by the order
in which they are presented, this is called the order-effect. By randomising the list of options
it lessens the occurrence of the primacy and recency effect. The most answered reason for
adoption was Better functionality at 69% (n=20), followed by Advanced Technology 55.2%
(n=16), Increased Flexibility 48.3% (n=14), Cost savings 44.8% (n=13) and More Core
business focus 34.5% (n=10).
Figure 10: Respondents reasons for adoption
The final RQ1 question asked on the questionnaire was asking the respondents their
level of concern for common cloud computing factors associated with business (Figure 10).
The list of factors was developed from the literature (Teece et al 1997, Armburst et al, 2010,
Misra et al, 2010, Carcary et al, 2014) and the relating themes generated in chapter 2. A
Likert style rating measure was used to measure the level of respondents concern; where 1
33
was not concerned and 5 was very concerned, therefore the higher the rating average the
greater the level of concern. The factor which had the highest recorded level of concern was
Privacy (n=3.97) followed by Confidentiality of corporate data (n=3.38). It is interesting to
note that these two factors are related and can be both regarded as security issues. Integrity
of services and/or data (n=3.24) and Cloud provider switching difficulty (Vendor Lock-in)
(n=3.24) were the next two highest levels of concern, Integrity of services and/or data could
be regarded as another security concern which is interesting. Vendor lock-in which was
discussed in chapter 2 is a factor which was prevalent throughout the literature and is
reflected by this study as well. A surprising result was that the cost and payment factors
scored low for levels of concern; Uncontrolled variable cost (n=2.45) and Unclear scheme
in the pay per use approach (n=2.48) were the two lowest scores from the questionnaire and
are both related to the financial aspect of CC. Although the potential for financial savings
when using CC have been well established in chapter 2, it is nonetheless surprising that
organisations would be less concerned about costs than data security.
Figure 11: Respondents level of concern on cloud factors.
4.2 RQ2 Determine the perceived financial benefit of Cloud Computing for SMEs.
The next section of the online questionnaire was related to the RQ2 which was
developed from the literature, as potential financial benefit is a major theme throughout the
literature, gathering data from actual SME cloud users was carried out. Question 10 on the
survey asked respondents whether having adopted CC, they feel it is more financially
beneficial than traditional IT processes (Figure 11). 58.6% (n=17) of the respondents
Not
concerned
Slightly Not
concerned
Neither
concerned or
not
Slightly
Concerned
Very
Concerned
Rating
Average
Response
Count
0 2 2 20 5 3.97 29
3 3 15 8 0 2.97 29
2 5 7 14 1 3.24 29
0 4 11 13 1 3.38 29
0 7 11 11 0 3.14 29
2 5 16 5 1 2.93 29
5 7 12 3 2 2.66 29
3 13 9 4 0 2.48 29
3 13 10 3 0 2.45 29
3 7 9 10 0 2.90 29
1 6 8 13 1 3.24 29
5 5 10 8 1 2.83 29
0
Cloud provider switching difficulty (Vendor Lock-in)
Integrity of services and/or data
Unclear scheme in the pay per use approach
Answer Options
Other (please specify)
Loss of control of services and/or data
Cost and difficulty of migration to the cloud (legacy
Availability of services and/or data
Inconsistency between trans national laws and
Please rate your level of concern, (where 1 is not concerned and 5 is very concerned) on the following cloud computing factors.
Poor Broadband speed
Confidentiality of corporate data
Uncontrolled variable cost
Privacy
Lack of liability of providers in case of security
34
recorded Yes, that they felt CC is more financially beneficial than traditional IT processes.
10.3% (n=3) of the respondents recorded NO and 31% (n=9) recorded Don’t Know. The
results indicate that a significant percentage of the respondents felt that CC had financial
benefit.
Figure 12: Respondents categorical opinion on CC financial benefit.
Question 11 on the online questionnaire asked respondents to estimate the percentage
difference in financial savings that CC provided compared to traditional IT processes (Figure
12). The average response was 22.47%, this represents a substantial difference in perceived
financial benefit that the respondents had.
Figure 13: Estimated percentage difference in financial savings by cloud computing.
35
Question 12 used a 5 point Likert style rating measure to record respondent’s opinions
on statements relating to CC and financial savings (Figure 13). The respondent’s answers
were coded as 1 being strongly agree and 5 being strongly disagree, therefore the lower the
score the greater the respondent’s level of agreement with the statement. The statement that
recorded the highest level of agreement was “Cloud computing allowed my organisation to
focus finances on more important issues”, this statement was developed from the literature
in chapter 2 and is related to the clouds ability to provide flexibility for organisations,
especially in their financial planning. This appears to be the case as a significant number of
respondents agreed with this statement.
Figure 14: Respondents level of agreement relating to financial CC statements
4.2.1 RQ2 Statistical analysis.
The results in section 4.2 show the RQ2 data from the questionnaire, the financial
data was analysed using the profile of respondents developed from RQ1 to provide a deeper
understanding of the findings. The Shapiro-Wilk test (Appendix tables 1, 2,7) was performed
to test whether the data was normally distributed, as this would influence what correlation
tests could be performed. The first test performed was a crosstabulation between the job level
and % financial benefit variables (Appendix table 3). A Chi-Square is a statistical test of
association between two variables, the chi-square value of 11.753 indicated a low level of
association between job level and % financial benefit scores. Combined with a sig level
of .163 we cannot say there is statistical association between the two variables and therefore
36
cannot reject the null hypothesis that Job level and perceived % of financial benefit are
independent. A Chi-Square test was performed using the knowledge level variable and the
financial benefit variable (Appendix table 4), this gave a value of 12.270 again indicating a
low level of association between CC knowledge level and perceived financial benefit. The
test gave a significance level of .056 which is not low enough to reject the null hypothesis
that CC knowledge level and perceived financial benefit are independent.
As the data was not normally distributed Pearson’s Correlation test was not applicable,
instead a Spearman's rank correlation coefficient test was carried out between the level of
knowledge variable and the perceived % savings variable (Appendix table 6). The correlation
analysis showed a negative correlation (-.516) between the level of knowledge variable and
the perceived % savings variable. This shows that when the knowledge level of the
respondents went up the perceived level of financial savings reduced. A one-way ANOVA
test was carried out to see if there was any statistically significance in difference reported on
the % finance saved and the job-level groups (Appendix table 5). The test produced an F
value of (1.403), with a significance of (.287), there was no strong statistical evidence to
suggest the job-level groups were significantly different in perceiving the level of financial
savings of CC.
4.3 RQ3 Determine the perceived productivity benefit of Cloud Computing for SMEs.
The next section of the online questionnaire was related to the RQ3 which was
developed from the literature, as the potential productivity benefit of CC is a major theme
throughout the literature, gathering data from actual SME cloud users was carried out. Q15
on the online questionnaire asked respondents whether they feel CC has influenced
productivity in their organisation and to what extent (Figure 14). 44.8% (n=13) of the
respondents said that they felt CC had a weak positive influence on their productivity, 31%
(n=9) reported No perceived influence, 17.2% (n=5) reported a strong positive influence and
6.9% (n=2) reported a weak negative influence of CC on their productivity. No respondent
reported a strong negative influence of CC on their productivity. The results indicate that the
majority of respondents felt that CC had a positive effect on their productivity.
37
Figure 15: Cloud computing influencing organisational productivity.
Q16 on the online questionnaire asked respondents to estimate by what percentage
increase does CC have on their organisations productivity. The average number given was
8.97% which indicates that respondents felt CC had a small level of influence over their own
organisational productivity (Appendix table 9). Although this may be subjective to what job
level or organisational knowledge they have within their organisation, this will be analysed
further in the next section.
Q17 on the online questionnaire used a Likert style rating measure to record
respondent’s opinions on statements relating to CC and productivity (Figure 15).
Respondents were asked on a 5-point Likert scale (where 1 represented strongly agree and 5
strongly disagree) to what level they agree or disagree with three statements. Results
indicated that the respondents agreed most with the statement “Cloud Computing has
facilitated greater productivity within my organisation” with an average rating score of (2.28).
Figure 16: Respondents attitudes relating to CC and productivity
38
4.3.1 RQ3 Statistical Analysis.
The results in section 4.3 show the RQ3 data from the questionnaire, the productivity
data was analysed using the profile of respondents developed from RQ1 to provide a deeper
understanding of the findings. The Shapiro-Wilk test (Appendix table 1, 2,7) was performed
to test whether the data was normally distributed, as this would influence what correlation
tests could be performed. A Chi-square test was carried out to measure the level of
independence between the variables job level and perceived level of productivity (Appendix
table 8), the test produced a chi-square value of (19.815) with a significance level of (.071)
this shows some level of dependence but the significance level is not strong enough to reject
a null hypothesis that job level and perceived level of productivity are independent.
A one-way ANOVA test was performed to test the level of difference between job-
levels in terms of CC perceived level of influence on productivity (Appendix table 10). The
test gave an F value of (5.333) with a significance level of (.003), this significance level is
below the acceptance level of (.005) and therefore we can accept that there is a significant
overall difference between job levels in terms of perceived level of CC influence over
organisational productivity.
A one-way ANOVA test was performed to rest the level of difference between
knowledge levels of CC in terms of perceived level of influence on productivity (Appendix
table 11). The test gave an F value of (4.958) with a significance level of (.007), this
significance level is at the borderline level to which allows the assumption to be made that
there is a significant overall difference between knowledge level and perceived level of CC
influence over organisational productivity.
4.4 RQ4 Determine the perceived strategic benefit of Cloud Computing for SMEs.
The next section of the online questionnaire was related to the RQ4 which was
developed from the literature, as the potential strategic benefit of CC is a major theme
throughout the literature, gathering data from actual SME cloud users was carried out. Q20
on the online questionnaire used a Likert style rating measure to record respondent’s opinions
on statements relating to CC and strategic benefit. Respondents were asked on a 5-point
Likert scale (where 1 represented strongly agree and 5 strongly disagree) to what level they
39
agree or disagree with three statements. The statement “Cloud computing has allowed my
organisation to focus on core business activities” received the highest level of agreement
(Appendix table 13), with 40% (n=12) of respondents saying they strongly agree and 43.3%
(n=13) checking slightly agree. The statement “Cloud computing has allowed for more
innovation from within the organisation” (Appendix table 14) provided a more neutral
response as 43.3% of respondents recorded neither agree nor disagree. The statement “Cloud
computing has been a source of competitive advantage for the organisation” (Appendix table
15) also provided a neutral response with 60% (n=18) of respondents recording neither agree
nor disagree. “Cloud computing has facilitated the development of dynamic capabilities”
(Appendix table 16) provided 36.7% (n=11) with slightly agree and 40% (n=12) recording a
neutral response. “Cloud computing benefits can be easily copied or replicated by other
organisations” (Appendix table 17), showed some agreement as 46.7% (n=14) of respondents
recorded slightly agree. “Cloud computing provides agility needed to succeed in increasingly
competitive markets” (Appendix table 18), 53.3% (n=16) of respondents recorded slightly
agree. “Cloud computing allows my organisation to focus on our own resources to create
unique value” (Appendix table 19), 43.3% (n=13) of respondents recorded slightly agree.
40
4.4.1 RQ4 Statistical Analysis
Non-parametric correlation tests were carried out for the strategic benefit variables
and the RQ1 profile variables of the respondents. Spearman’s Rho was the test carried out
using the SPSS Statistics 22 software. Surprisingly no significant correlations were found
between job rank and perceived strategic benefit. The correlation tests were run for
knowledge level and some significant correlations were found between knowledge level and
select perceived strategic benefit variables (Appendix table 20). There was a weak positive
correlation (.513) found between knowledge level and “Cloud computing has facilitated the
development of dynamic capabilities” variable, with a significance level of (.004). There was
a weak positive correlation (.519) found between knowledge level and “Cloud computing
allows my organisation to focus on our own resources to create unique value”, with a
significance value of (.003). A weak positive correlation (.587) was found between the
knowledge level variable and the “Cloud computing has allowed my organisation to focus
on core business activities” variable, with a significance level of (.001). The last significant
correlation found was that between knowledge level and the “Cloud computing benefits can
be easily copied or replicated by other organisations” variable (.553), with a significance
level of (.002).
41
5. Discussion.
This chapter will look at the research results found in chapter 4 and analyse them in
the context of other relevant research and literature in the field. The results will be discussed
and compared to relevant literature in which the results are in support or contrary to the
literature.
The results from the RQ1 provided some insight into a section of SME CC users in
Ireland, as the majority of research surrounding CC is from a vendor perspective (Carcary et
al, 2014) it was deemed necessary to explore the area looking at actual users. Although
almost all of the respondents recorded themselves as being cloud users, this data is not
significant as cloud users were the target sample and therefore the majority of respondents
were expected to be cloud users. The literature does indicate that CC is gaining popularity as
a new IT arrangement in organisations (Nuseibeh, 2011, Dhar, 2012, Carcary et al, 2014),
the limited timeframe in which this research dissertation was carried out and the sample size
compared to other similar studies (Carcary et al, 2014), does indicate that the literature is
true and there is a growing CC user base in Ireland. The industry sector breakdown showed
the largest group of respondents were located in the telecommunications/technology &
internet sector (20.7%). The strategic management literature by Teece (2010) mentions the
growth of internet and e-commerce in many outsourcing business activities, this is reflected
in the results as the majority of respondents were located in service industries or those that
were relating to technology. Dhar (2012) also reports the increase in outsourcing of IT related
services to a third party vendor by business organisations. Carcary et al (2014) also carried
out a similar study and the results echo what the literature has said about CC adoption in
Ireland. The smallest sector represented in the study by Carcary et al (2014) was from the
manufacturing sector, manufacturing was not represented at all in this research dissertation.
Analysing respondent’s level of knowledge regarding CC was interesting, the
majority of respondents regarded themselves has having a ‘basic’ level of knowledge with
CC. The research in this area has provided some recommendations for further studies into
organisations knowledge levels surrounding CC (Armburst, 2010). The results would
indicate that there is not sufficient levels of information for SMEs in Ireland about CC, the
technology has vast potential for growth (Armburst, 2010, Misra, 2010, Carcary, 2014) so it
42
would therefore be reasonable to think of the opportunities being lost by the relatively low
levels of knowledge surrounding CC. Carcary et al (2014) recommends a concerted national
effort by government and state bodies to support SMEs who are thinking of adopting CC. By
raising the awareness, a knowledge base could be built upon so that businesses can utilise
the emerging technology to its fullest potential. In a recent study Ross et al (2015) highlights
CC’s ability to be a facilitator of SME entrepreneurship, through providing greater access to
global markets, lowering opportunity costs and supporting innovation in new businesses. The
profile generated from the RQ1 results does indicate that there is a lack of higher levels of
knowledge surrounding CC which needs to be developed.
The profile of respondents also showed that the majority of users were using SaaS
cloud resources. Armburst (2010) and Misra (2010) show that SaaS is the most common
resource used for CC, the results are in line with these findings. As IaaS and PaaS resources
are more specialised and sophisticated (Armburst, 2010) it is to be expected that they would
have a lower representation in the profile of respondents. The hybrid Cloud infrastructure
was the most represented however a surprisingly high amount of respondents reported they
did not know what infrastructure they were using. This adds to the earlier point that there is
a relatively low level of knowledge surrounding CC with SMEs. March’s (1991) paper
surrounding organisational learning relates to some of the findings in this research
dissertation, the lack of adoption for the more specialised CC resources could be due to the
higher demand on organisational resources it would cause. The exploration of the more
complicated CC resources may take away from the existing exploitation of established
resources within an organisation. The main reason for adoption was the better functionality
of CC, Quinn (1999) wrote about the ability of strategic outsourcing to free up resources and
facilitate the creation of unique value through core competences. The better functionality
provided by CC could be the process in which Quinn (1999) is discussing. The results
regarding levels of concern were surprising in some ways as cost and payment scheme were
among the least of concern for the respondents. It does indicate the flexibility of payment
and investment demands that (Armburst, 2010 and Neves, 2011) cite when adopting CC.
43
The results surrounding RQ2 provided some level of insight into SMEs perceptions
to whether CC was financially beneficial compared to traditional IT systems. As SMEs will
usually have lower financial capabilities that larger multinational organisations will have
(Teece, 1997), financial benefit is an important topic surrounding CC (Armburst, 2010; Misra,
2010; Dhar, 2012; Nanath, 2013). The results showed that the majority (58.6%) of SME
respondents felt that CC was more beneficial than traditional IT systems. The results back
up the literature surrounding the subject as key potential benefits of CC include reduced
capital expenditure, lower maintenance costs and flexible payment schemes (Armburst et al,
2010; Misra et al, 2010). The economies of scale that CC vendors can reach make it an
attractive option for SMEs to explore (Dhar, 2012), although the literature does mention that
costs are not the only financial benefit that CC can offer. Naneth et al (2013) develops a
model for cost benefit which suggests that CC is an attractive option for SMEs, Misra (2010)
also proposed that the green IT factor would eventually be beneficial financially as
governments offer tax breaks to those organisations that lower carbon footprint (Carcary et
al, 2014). The statement that was most in agreement for respondents was “Cloud computing
allowed my organisation to focus finances on more important issues”, this is important as it
supports the literature surrounding CC and financial benefit. The removal of costly IT
investments means that SMEs can allocate financial resources to other areas of their business
strategy. Teece (1997) and Quinn (1999) highlight the importance for an organisation to
establish what their core competence is, as this will be the hardest to imitate by their
competition.
Focusing finance on more important issues seems to be important for the respondents.
Dhar (2012) mentions that organisations are continually looking to outsource IT related
services and the results show CC is perceived to be beneficial and therefore an attractive
alternative in which to outsource IT related processes. The correlation analysis results
showed a negative correlation (-.516) between the level of knowledge variable and the
perceived % savings variable. This was surprising, in that the literature suggests a strong link
between CC and financial benefit (Armburst, 2010), and therefore the higher the knowledge
level would be expected to have an increased expectation of the financial benefit of CC. It is
important to note however that the correlation analysis conducted in the social sciences is
44
somewhat limited in its application. The results could be explained by the existence of
naivety from the respondents with lower levels of CC knowledge and that they projected a
financial benefit beyond what is currently capable by the technology. Garrison et al, (2012)
does mention that there are social aspects of an organisation which influence the level of
success when adopting CC, the social influences explained by Garrison (2012) could be
represented in the results as the knowledge level of CC impacts a respondent’s perceptions
of CC.
A major theme throughout the literature was the increased functionality and agility
that the CC technology can provide SMEs (Armburst et al, 2010; Neves et al, 2011; Carcary
et al, 2014; Ross et al, 2015). The elasticity of resources that CC can provide is a major shift
from the traditional IT processes which businesses have been using. The survey results
provided some insight into SMEs perceptions on what impact CC has for productivity. The
analysis performed in chapter 4 shows that job-level had a significant impact on the way
respondents viewed CC and productivity. Neves et al, (2011) discusses how CC can facilitate
improved resource utilisation by enabling businesses to increase or decrease resource
capacity. This level of strategic knowledge would usually require upper management or
executive level to fully appreciate, therefore it would be logical to think that job-level would
carry different perspectives on productivity and overall CC strategic alignment.
The knowledge level variable also had a significant difference relating to
respondent’s perceptions about CC influence over productivity. Li et al, (2011) introduces
the concept of collaboration points where business and technology meet and influence each
other, although from a more technical perspective than this research dissertation, the
literature by Li et al, (2011) indicates similar results in that higher organisational status and
knowledge is a factor when viewing cloud technology and business strategy. The strategic
management literature by Drucker (1954) suggests that overall organisational strategy must
be initiated from the higher job-levels and then integrated throughout the organisation, this
is reflected by the variety of perceived levels of production from the different job levels.
Garrison et al, (2012) also suggests that overall trust levels and communication are very
important to the level of success in CC adoption, citing cooperation and relational capability
between management.
45
A fundamental question in the strategic management literature is how organisations
can achieve and sustain competitive advantage (Teece et al, 1997). Cloud technology has the
potential to offer strategic value by allowing adopting organisations a competitive advantage
though financial and production related benefits, this may facilitate an organisation to
concentrate on core competencies (Nuseibeh, 2011). Although there are a number of
considerations and hurdles to overcome before this can happen (Garrison et al, 2012). A
resourced based perspective of an organisation does provide the basis of which cloud
technology should be able to help achieve competitive advantage through combinations of
competences and resources. The results from chapter 4 do indicate that the SMEs are in
agreement with the literature, and CC does offer strategic benefit. The literature mentions
that successful strategic adoption is reliant on an organisations state of readiness for the
technology (Neves et al, 2011; Carcary et al, 2014). This would indicate a certain level of
job-rank would be important in viewing strategic benefit as the organisational strategic
direction would usually be a responsibility of owner/executive level positions. The results
did not provide any significant correlations between job rank and perceived strategic benefit.
However, this was surprising in that both readiness and cooperation among management was
cited as significant variables to CC strategic planning (Armburst, 2010; Garrison et al, 2012).
A more focused research approach to these variables would be recommended as there were
obvious limitations in this research dissertation regarding sample size and organisational
positioning.
The results did indicate there was a weak positive correlation between knowledge
level and some of the strategic benefit statements. This supports the literature in that
knowledge levels and the exploration and exploitation of resources is linked in the strategic
management literature (March et al, 1991). Although March’s strategic exploration of new
resources is before cloud technologies existed, March’s models of organisational learning
and development of knowledge can be seen in CC related studies such as Nuseubeh’s (2011)
and Neves et al, (2011).
The implications for this research and practical recommendations must be taken
lightly as the limited sample of respondents makes the results unlikely to be generalisable.
However, there are some points to consider for users of CC; there appears to be a knowledge
46
gap about the infrastructure and services that cloud technology offers. Becoming aware of
all the capabilities of CC could facilitate a greater utilisation of the technology’s capabilities.
The variance of perceived productivity and job-level also indicates a separation in the view
of CC by layers within an organisation. Clear strategic planning and effective communication
regarding the adoption and use of new technologies such as CC is suggested as to achieve a
unified picture of how the organisation is operating.
47
6. Conclusion.
This study was carried out to explore the usage of cloud technologies within SMEs
in Ireland and has identified a positive overall perception of cloud facilities from its users.
The general theoretical literature on this subject and specifically in the context of SME users
in Ireland is underdeveloped. This study sought out to add to this area by analysing the
perceived financial, productivity and strategic benefits within the context of the profile of
respondents. As SMEs represent approximately 60% of the overall workforce in Ireland
(Central Statistics Office, 2008), the study was undertaken because of the importance that
SMEs have to the overall economic welfare of a country. As cloud technology has the ability
to build increased firm capabilities at an affordable price (Carcary et al, 2014) building upon
the knowledge base may help raise awareness of CC and its benefits that it offers to
businesses.
The attractiveness of CC is in its potential ability to give SME nearly immediate
financial savings, greater agility and responsiveness to business dealings and the potential to
increase productivity when merging cloud infrastructure as part of their business strategy.
CC therefore can be regarded as potentially replacing the infrastructure of traditional
networks so that the overall cost regarding IT hardware and software resources are reduced
(Nanath et al, 2013). CC has been put forward by researchers as a potential way for
organisations to reduce IT expenditure through changing from a capital expenses (CapEX)
model to an operational expenses model (OpEx) (Armburst et al 2009). This study indicates
that current users of cloud technology do feel that it is more financially beneficial than
traditional IT infrastructure, although job-level and knowledge level did not impact
perceptions of this in any significant way.
The technological aspects of cloud computing would indicate that the possibility of
improved scalability and greater organisational productivity are achievable (Neves et al,
2011). The attractiveness of Cloud Computing lies in its ability to show SME entrepreneurs
the possibility of increased productivity and improved responsiveness to the business, by
outsourcing the IT infrastructure to cloud computing vendors. This study did indicate that
current CC users did feel that the technology did provide some level of increased productivity,
48
the results also showed that there was significant overall difference between job level and
perceived levels of productivity.
Businesses can be judged on their ability to identify, cultivate and exploit the core
competencies which make success possible (Prahalad et al, 1990). The business environment
has always been information centric; the combination of speed of discovery, access, and the
ability to process it correctly characterizes successful businesses in the 21st century
(Dimitrakos, 2010). Cloud technology may be the best option for SMEs when trying to
cultivate their core competencies, this study does indicate that current users have a positive
overall perception of CC and its ability to be beneficial to their business strategy.
This research dissertation was undertaken to add to the existing literature surrounding
cloud technology and business strategy among SMEs in Ireland. Although there were some
interesting findings, the results cannot be applied to a broader context given its limited
sample size. A greater population sample would allow for stronger arguments to be made
about any implications the results have for SMEs in practice. The limitations of this study
are that it only takes a cross-sectional view of the cloud users, a longitudinal approach would
provide a better understanding of how cloud technology effects the respondents over time.
Although this is a study on people perceptions, an empirical study into the economic benefits
and productivity effects that cloud usage has on organisations would also help provide a
clearer picture of the benefits of CC. However defining productivity and some of the strategic
benefits was challenging in this study and therefore measuring real productivity changes
would be difficult to manage. The quantitative methodology used in this study gave figures
which allowed for some level of analysis, deeper analysis could be made however using a
qualitative methodology where access to the organisations would need to be greater.
Although there are limitations to what conclusions can be made from social science studies
(Saunders et al, 2011), combining the knowledge developed from this study with existing
literature can provide some insight for future research. The opinions from the sample in this
study must also be carefully considered as there will be an inherent bias from cloud users
about the technology as opposed to non-users. Further research into this area could conduct
a study using a mixed sample of SME cloud users and non-users which may give different
results for the perception of cloud benefits.
49
Cloud technology has been presented in the literature as potentially very important
to the future of businesses and especially SMEs. The results from this study do indicate that
there is a positive perception of the technology from the users, but also a significant
knowledge gap regarding the services and facilities that CC can provide. Future initiatives
are recommended by government and state bodies to raise the awareness and knowledge
level surrounding the topic, which may boost adoption rates and entrepreneurial activity in
Ireland. A focused approach to raising awareness could take place alongside entrepreneurial
events and technology tradeshows. The rise of multi-national organisations have
monopolised parts of certain industries, this research dissertation takes the viewpoint that
cloud technology may have the ability to bridge the capabilities gap between SMEs and
larger corporations. The technological offerings are regarded as having the capacity to ‘level
the playing field’ and support increased computing resources available on-demand,
something previously only afforded to the largest of companies. This exploratory cloud study
has provided some insight into the perceived benefits of cloud computing by cloud users,
further investigation is suggested as it is important to support the development of SMEs and
the knowledge base surrounding this area is underdeveloped.
50
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Appendices.
Table 1: No. of employees - level of normal distribution
Table 2: % difference in financial savings- distribution table
56
Table 3: Chi-Square test- Job level & % Financial benefit
Chi-Square Tests
Value df
Asymp. Sig. (2-
sided)
Pearson Chi-Square 11.753a 8 .163
Likelihood Ratio 13.829 8 .086
Linear-by-Linear Association .004 1 .948
N of Valid Cases 30
Table 4: Chi-Square test- Knowledge level & Perceived financial benefit
Table 5:One way ANOVA test- Job level and % finance savings
57
Table 6: Spearman's Rho- Knowledge level & % Perceived financial savings
Table 7: Perceived level of productivity- distribution table.
Table 8: Chi-Square test- Job level and CC productivity
Table 9: Estimated % influence of CC on organisational productivity
58
Table 10: One-way ANOVA test- Job level & productivity
Table 11:One-way ANOVA test- Knowledge level & Productivity
Table 12: Spearman's Rho- Level of Knowledge & % Perceived productivity
Table 13: Descriptive statistics- Focus on core business activities
59
Table 14: Descriptive statistics- Innovation
Table 15: Descriptive statistics- Competitive advantage
Table 16: Descriptive statistics- Dynamic capabilities.
Table 17: Descriptive statistics- CC replication.
60
Table 18: Descriptive statistics- Agility
Table 19: Descriptive Statistics- Unique value
61
Table 20: Significant Non Parametric correlations: Knowledge & Strategic benefit
62
Figure 17: Online questionnaire p1
63
Figure 18: Online Questionnaire p2
64
Figure 19: Online questionnaire p3
65
Figure 20: Online questionnaire p4
66
Figure 21: Online Questionnaire p5
67
Figure 22: Online Questionnaire p6
68
Figure 23: Online questionnaire p7
69
Figure 24: Online questionnaire p8
70
Figure 25: Online questionnaire p9
71
Figure 26: Online questionnaire p10