According to BearingPoint's cloud adoption survey, Finnish companies have been quick in moving their processes to cloud. 30 out of 32 IT decision-makers and specialist, who answered the survey, indicated that their organization had already taken cloud services into use. Processes related to collaboration, human resources, customer relationship management, reporting and planning, sales and marketing stood out as the most common areas, where cloud services are already in use. The factors affecting technology adoption are often viewed through three contexts: technology, organization and environment. How do they affect the adoption of cloud services in Finnish organizations?
When examining the overall factors affecting cloud adoption, the survey respondents were requested to choose items from a list of challenges related to cloud adoption, which they considered having a negative impact on cloud adoption. Data privacy, security, lack of control over service, dependence on provider, lack of standards and service location were highlighted in the results.
The results indicate that organizations are mainly concerned with the trustworthiness of the providers, in addition to interoperability and the effort related to switching services. However, it must be noted that due to the high cloud adoption rate among the respondents, these challenges are unlikely to be major barriers for cloud adoption.
In addition to known challenges, the survey concentrated on the three contexts that are seen to affect the adoption of new technologies – cloud services in this case. Those three contexts are the building blocks of TOE-framework: Technology, Organization and Environment.1 Various factors can be grouped under these three categories and their impact on the cloud service adoption can be examined more closely. Based on our literary review, seven factors were highlighted in this study:
According to the diffusion of innovation theory, there are certain solution qualities that affect the spreading of innovations and technologies in population. Out of these factors, three were chosen to the framework of our study. Relative advantage describes how the innovation can benefit the organization. Complexity refers to how hard it is to use the innovation and understand it. Compatibility takes into consideration how well the existing business processes, practices, experiences, and value systems are in line with the innovation.2
Based on the survey, 73% of the respondents saw that cloud services have a positive effect on e.g. operational productivity, reactivity, and costs. The views on complexity and the ease of use divided the respondents. Half of them saw that the use, adoption, and customization of cloud services are relatively easy, whereas the other half considered them to be either more neutral or difficult. Only 26 % of the respondents saw that the adoption of cloud services does not require changes to processes and other existing technologies.
Compared to the high adoption rate, the results indicate that relative advantage is clearly a motivator to adopt3. Research literature presents varying views on the ease of use and complexity towards cloud, which is in line with the survey results. This is likely to be related to the experiences the respondents have had with the services. It lowers the threshold to try new solutions, if the solution is considered easy to use and to have low complexity4. The results also reflect that the respondents understand that cloud services and the adoption of them are not always “plug-and-play” solutions. They require changes to the IT architecture, as well as processes, to achieve the desired level of compatibility5.
The state of the organization and its features affect especially decision-making and the progress of the adoption. Top management support is the combination of supportive actions that are related to the allocation of resources, encouragement, and engagement to accomplish a common goal4. Readiness and competence refer to the state of IT, capabilities, and resources6. In the survey, 47 % of the organizations found top management support and their understanding for adopting cloud services to be on sufficient level. Only 39 % of the respondents thought that the organization’s readiness and competence were sufficient.
The survey indicated that there are needs for strengthening management support and internal competencies in the organizations. However, for the organization’s taking part in the survey, they have not been barriers for cloud adoption. The capabilities of the organization can also be strengthened with external resources, but internal support and competences are likely to affect adoption intentions, its progress and the organization’s agility.4 & 5
Organizations are not detached entities, but they are impacted by the outside world. Competitive pressure describes the pressure an organization experiences from its competitors. Partner pressure refers to an organization relying on its trading partners, such as vendors, and being impacted by it.6&7
Not more than 30 % of survey respondents saw competitive pressure as a factor that would affect their organization’s intention to adopt cloud services. However, 66 % mentioned that their business partners had adopted cloud services and saw cloud services as a way to enhance collaboration with them.
Based on our survey results, the respondents did not seem to have a clear view about the cloud adoption status of their competitors and did not feel pressured for it. However, partner pressure was highlighted as a viable factor for driving cloud adoption forward in the organization to deepen cooperation and create more value. This indicates that the organizations may not seek competitive advantage from the systems themselves, but from the possibilities they enable, such as new ways to collaborate.
Various factors are seen to have influence on the adoption of cloud services. Based on the cloud adoption survey results, organizations do not always seek solutions that are simple and blend in without effort. This indicates that they are looking for new opportunities and changes to the existing setup. Finnish organizations seem to be motivated about the benefits and not fearful for the challenges.
In the next article we will be concentrating on the factors that are connected to the success of cloud adoption.
Director, Cloud Transformation Services, BearingPoint Finland
Business Consultant, Cloud Transformation Services, BearingPoint Finland