opportunities for strategic alignment of it to business with the adoption of cloud computing: case...

PICMET '15 Conference

Opportunities for Strategic Alignment of IT to

Business with the Adoption of Cloud Computing:

CASE STUDIES IN LARGE ORGANIZATIONS

Eduardo Zied Milian

Mauro de Mesquita Spínola

Marcelo Schneck de Paula Pessôa

University of São Paulo, Production Engineering Dept., São Paulo, SP, Brazil

University of São Paulo - Polytechnic School

› Founded in 1893

– Incorporated to USP in 1934

› Courses

– Undergraduation:

› 14 courses

› Approximately 4,500 students

– Graduation:

› 20 Master courses, with about 1,200 students

› 18 Doctorate courses, with about 850 students

– Continued Education:

› 250 courses, with over 7,000 students

14/09/2015 PICMET 2015 A FACIN / M SPINOLA / L V GOMES 2

Introduction

› Cloud Computing (CC)

is a new paradigm for

delivery of computer

services.

› Increasing availability

of CC services.

14/09/2015 3 PICMET 2015 E Z MILIAN / M SPINOLA

Introduction

› This paper study the adoption of cloud computing as a

tool to promote strategic alignment of Information

Technology (IT) to business.


Introduction

› Q1. How do organizations identify the benefits of CC

adoption?

› Q2. Can the CC adoption contribute to the strategic

alignment of IT with the business?


Cloud Computing Overview

Figure - Cloud Computing Ove

rview – NIST Definition

Source: Adapted from SUBASHINI & KAVITHA, 2011


Cloud computing benefits

› Lower cost of customers’ capital (B1)

› Lower cost of providers’ capital (B2)

› Reduces deployment cycle (B3)

› Reduces cost of entry into new

business (B4)

› Reduces cost of business expansion

or entry into new markets (B5)

› Ease of maintenance (B6)

› Strategic flexibility (B7)

› Focus on organization's core business

(B8)

› Access to IT technology high-end

features (B9)

› Quality improvement (B10)

14/09/2015 PICMET 2015 E Z MILIAN / M SPINOLA 7

Strategic Alignment Model

FIGURE - STRATEGIC A

LIGNMENT MODEL

SOURCE: HENDERSON & VENKATRAMAN (1999, PP. 476)


Strategic alignment of IT to Business

› Two types of alignment between business and IT:

– Strategic Adjustment: the link between business and IT

strategy.

– Functional Integration: the link between business

infrastructure/processes and the IT

infrastructure/processes. 14/09/2015 9 PICMET 2015 E Z MILIAN / M SPINOLA

Strategic Alignment Perspectives

FIG

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GIC

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SP

EC

TIV

ES

SO

UR

CE: L

UF

TM

AN

, LEWIS

& O

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1993


Research Methodology

› The CC is a relatively new way of providing IT services

› Multiple case study: to understand the adoption of CC in large

organizations, with complex IT environment.

› Units chosen:

– Unit A - German multinational group (technology for food processing industry)

– Unit B - American multinational company (lightweight metals engineering and

manufacturing)

– Unit C - Huge Brazilian public University

– Unit D - Largest developer of ERP systems in Latin America


Unit A - Registry of references

Research Constructs Background / Fieldwork notes

Service Models NF-e Application – Software as a Service (SaaS).

Deployment Models

The organization does not have cloud infrastructure. The

SaaS provider is a public cloud services provider.

Strategic Alignment Functional Integration.

Strategic Alignment

Perspective

Strategy execution.

Benefits

Considerations and/or notes could be identified related to:

B1, B2, B3, B4, B5, B6, B8, B9 and B10.


Unit B - Registry of references


Service Models Hires Software as a Service (SaaS) e Infrastructure as a

Service (IaaS).

Deployment Models

The organization does not have cloud infrastructure. The

SaaS and IaaS providers are public cloud services

providers.

Strategic Alignment Functional Integration

Strategic Alignment

Perspective

Strategy execution

Benefits Considerations and/or notes could be identified related to:

B1, B2, B3, B4, B5, B6, B7, B8, B9 and B10.


Unit C - Registry of references


Service Models

Software as a Service (SaaS) (Administrative and academic control

systems) and Infrastructure as a Service (IaaS) (offers computing

resources to the units / departments).

Deployment Models

Private cloud (owned, managed, and operated by the university on

premises and by third parties off premises).

Strategic Alignment Strategic Adjustment.

Strategic Alignment

Perspective

Strategy execution.

Benefits Considerations and/or notes could be identified related to:

B1, B2, B3, B4, B5, B6, B8, B9 and B10.


Unit D - Registry of references


Service Models Supplies Infrastructure as a Service (IaaS) and Software as a

Service (SaaS).

Deployment Models

Private cloud (owned, managed, and operated by the

organization on premises and by third parties off premises).

Strategic Alignment Strategic Adjustment.

Strategic Alignment

Perspective

Competitive potential.

Benefits

Considerations and/or notes could be identified related to:

B1, B2, B3, B4, B5, B6, B7, B8, B9 and B10.


Benefits of CC adoption

Benefits Unit A Unit B Unit C Unit D

Customer capital cost (B1) ¹

Capital cost of the supplier (B2)

Reduced implementation cycle (B3)

Cost of entry into new businesses (B4)

Cost of expanding business or entering new markets (B5)

Ease of maintenance (B6)

Strategic flexibility (B7) ─

Focus on organization's business (B8) ²

Access to IT technology high-end features (B9)

Quality improvement (B10)


Cloud Computing benefits

Q1: How do organizations that have adopted or plan to

adopt the CC identify the benefits of this adoption?

› All the units of analysis take advantage of some of CC

benefits.

– The benefits B9 ("Access to IT technology features high-end") and

B10 ("Quality improvement") were observed in all units of analysis.

– The benefit B7 ("Strategic flexibility") can be observed only in the

unit B.


Strategic alignment of

IT to business

Q2: Can the adoption of the CC contribute to the strategic

alignment of IT with the business?

› Effect in the strategic alignment of IT to business in all cases.

– A and C: the CC adoption is due to specific needs of large organizations.

– B and D: the cloud adoption is an explicit orientation of the organization.

– In large organizations, the CC adoption clearly contributes to the

business-IT alignment.


Conclusions

› This work aimed to understand how

CC can be considered in the

alignment of IT to business.

› Recent literature > a set of benefits

> a tool for their evaluation >

evaluate the potencial benefits in

each company.

› In all the units, we could identify

benefits of cloud adoption.


Conclusions

› In all the units, we could identify potencial impacts of

decisions related to cloud adoption on the strategic

alignment of IT:

– in organizations whose IT are intended to support the business and…

– … in organizations in which IT has competitive potential to transform

the business.

› This framework can help managers to identify cloud adoption

opportunities.


Conclusions (cont.)

› As a case study, the results of this study cannot be

generalized. However, it has a solid foundation for future

work.

› Further studies can be made in medium or small

organization or in companies that have strongly

outsourced IT.


PICMET '15 Conference

Opportunities for Strategic Alignment of IT to

Business with the Adoption of Cloud Computing:

CASE STUDIES IN LARGE ORGANIZATIONS

Eduardo Zied Milian

Mauro de Mesquita Spínola

Marcelo Schneck de Paula Pessôa

University of São Paulo, Production Engineering Dept., São Paulo, SP, Brazil

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