Cloud Computing Adoption: Strategies For Sub-Saharan Africa Smes For Enhancing Competitiveness

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Cloud computing adoption: Strategies for Sub-Saharan Africa SMEs for


enhancing competitiveness

Article  in  African Journal of Science Technology Innovation and Development · March 2018


DOI: 10.1080/20421338.2018.1439288

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African Journal of Science, Technology, Innovation and
Development

ISSN: 2042-1338 (Print) 2042-1346 (Online) Journal homepage: http://www.tandfonline.com/loi/rajs20

Cloud computing adoption: Strategies for


Sub-Saharan Africa SMEs for enhancing
competitiveness

Martin Adane

To cite this article: Martin Adane (2018) Cloud computing adoption: Strategies for Sub-Saharan
Africa SMEs for enhancing competitiveness, African Journal of Science, Technology, Innovation
and Development, 10:2, 197-207, DOI: 10.1080/20421338.2018.1439288

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African Journal of Science, Technology, Innovation and Development, 2018
Vol. 10, No. 2, 197–207, https://doi.org/10.1080/20421338.2018.1439288
© 2018 African Journal of Science, Technology, Innovation and Development

Online First Articles


Cloud computing adoption: Strategies for Sub-Saharan Africa SMEs for enhancing
competitiveness

Martin Adane*

Faculty of Education, Finance & Management, Walter Sisulu University, Queenstown, South Africa
*Email: madane@wsu.ac.za

Small and medium-sized enterprises (SMEs) need to design and implement strategies for adopting new technologies as a
competitive tool for maintaining their competitive advantage and cloud computing is at its peak. Since its emergence, there
has been a surge in the adoption of cloud computing with research into its adoption primarily concentrated on bigger firms.
However, a major characteristic of cloud computing is the anticipated possibilities it holds for SMEs. This paper primarily
explores cloud computing adoption strategies for SMEs operating in Sub-Saharan Africa. Using a mixed method approach,
a sample of 261 respondents and 11 SMEs was respectively used for the quantitative and qualitative stages of the research.
The results reveal that, even though SMEs have their unique expectations for adopting cloud computing, they were of the
consensus that elements of an adoption strategy should include adoption goals, a roadmap and considerations. The paper
makes specific recommendations to SMEs to develop adoption strategies that meet their specific needs if they expect cloud
computing to play a stronger role to support more strategic initiatives to grow their businesses and improve customer
experience.

Keywords: competitive advantage, competitive tool, measurable benefits, small businesses, strategic initiatives

Introduction they can adopt the technology. This will help them
In a challenging business environment, as experienced in obtain measurable benefits after adoption. This includes
developing economies, virtually all organizations, regard- knowing their business goals and the technological infra-
less of sector or size, strive to survive. There is the need structure to help achieve those goals, identifying business
for small and medium-sized enterprises (SMEs) to design applications to move to the cloud, and establishing a
and implement new strategies, and information technology roadmap to allow for the adoption of cloud computing
(IT) is at its peak (Guzman, Torres, and Serna 2015). with measurable benefits.
According to Aguilera, Gonzalez, and Cuevas-Vargas Initial studies into the cloud readiness of countries in
(2015) information and communication technologies Sub-Saharan Africa by Laverty (2011) showed that there
(ICTs) have become a catalyst for business processes, is the potential growth of at least one form of the cloud sol-
becoming a support tool for managing businesses, lever- ution in the future. The United Nations Conference on
aging developing strategies for achieving competitiveness Trade and Development (UNCTAD) report (2013) indi-
and innovation in business operations, and bringing sustain- cated that Ghana falls into the category of countries in
ability to SMEs over time. However, the ICT landscape is Sub-Saharan Africa which meets the minimum require-
constantly evolving to create a more competitive advantage ments for basic cloud services. Ghana can be considered
for businesses and this can be achieved through cost an early adopter of cloud services in Sub-Saharan Africa.
optimization, scalability, flexibility, innovation and agility. The paper is organized as follows. Following this
These benefits are normally realized through the use of introduction, the underlying problem warranting the
cloud computing (Buyya, Broberg, and Goscinski 2011). study is described. The formulated primary and secondary
Cloud computing is an ICT solution that provides objectives of the study are then presented. Next, a brief
remote access to resources that would otherwise be inac- review of related literature in the area of cloud computing
cessible to small businesses. The rationale is that cloud and business competitiveness is provided. This is followed
computing, as a technology solution for delivering IT by the methodology section which discusses the research
resources, brings about flexibility, scalability, efficiency paradigm, research approach, selection of research area
and cost-effectiveness to firms (Walsham, Robey, and and participants, data collection methods, and data analy-
Sahay 2007). It thus represents a potentially equalizing sis methods employed for the study. The findings and dis-
strategy for SMEs in Sub-Saharan African countries. cussion section presents the demographics of the study,
However, SMEs in developing countries have not been cloud adoption stage of participants, and participants’
successful in benefiting from such technologies (Gho- knowledge of cloud computing. It also discusses the out-
bakhloo and Tang 2015), as they lack the required techni- comes of the interview on the perceived benefits of adop-
cal, legal and cognitive infrastructure to embark on a tion, adoption approach, adoption goal, adoption roadmap
successful computing adoption process (Kshetri 2013). and adoption expectations. Finally, the conclusion and rec-
Also, several barriers have been identified within SMEs, ommendations are presented in the last section.
preventing them from adopting IT as an organizational
strategy (Parker and Castleman 2007). SMEs therefore Research problem
need to have a clear cloud computing adoption strategy Small and medium-sized enterprises (SMEs) which use
to create a better understanding of businesses and how modern technologies have the opportunity to enter

African Journal of Science, Technology, Innovation and Development is co-published by NISC Pty (Ltd) and Informa Limited (trading as Taylor & Francis Group)
198 Adane

regional and international markets and remain competitive Characteristics of cloud computing
despite the challenges of globalization, liberation and Cloud computing is uniquely characterized, making it
technical progress. However, according to the Ghana Min- different from the traditional form of computing. From
istry of Trade and Industry (MOTI) report (2011), SMEs in the NIST (2011) definition, five broad characteristics of
Ghana use outdated technology and have a limited capital cloud computing were identified: Broad network access,
and human resource base. This has resulted in their on-demand self-service, resource pooling, measured
inability to adopt and use technology for innovation that service and rapid elasticity. Broad network access is
leads to improved productivity and an increased ability where computing resources in the cloud are made avail-
to compete (MOTI 2011). This assertion is reinforced by able on multiple devices through the Internet. On-
Yeboah-Boateng and Essandoh (2014) who attribute the demand self-service is the ability to obtain computing
low rate of adoption of new ICTs by SMEs to poor ICT resources in the cloud at any given time and being able
skills, high costs and the risk associated with investing to self-provision depending on one’s needs at a point in
in ICT. However, a new paradigm in computing, namely time. Resource pooling allows the service provider to
cloud computing, presents an alternative for addressing combine computing resources with multiple users. The
the challenges SMEs face in adopting technological inno- measured service characteristic means the amount of
vations. There is, therefore, the need to explore the tech- pooled computing resources used are monitored and
nology and some of the strategies for its adoption if it is reported back to the user, thereby establishing the rate of
to be adopted by SMEs in Ghana as a business strategy consumption and its associated cost. Finally, rapid elas-
to help them stay more competitive. ticity of cloud computing means users have the ability to
automatically regulate the amount of computing resources
Research objective available to them depending on their requirements and for
To address the research problem stated above, the follow- only the period of a specific task or period.
ing primary objective was considered:
Cloud computing deployment models
To propose strategies for the adoption of cloud computing Cloud computing can be classified as either public,
by SMEs in Sub-Saharan Africa to enhance their
competiveness. private, community or hybrid in terms of its deployment.
In public cloud, computing resources are made available
The primary objective was achieved through the following to the general public over the Internet (Armbrust et al.
secondary objective: 2010). Examples of public cloud are Google Apps, Sales-
To investigate the different approaches SMEs in Sub- forces, Amazon Web Services, etc. In private cloud, the
Saharan African can use when adopting cloud computing
as a competitive tool. infrastructure is designed, built and managed by the organ-
ization intending to use that service (Zhang, Cheng, and
Literature review Boutaba 2010). Community cloud is formed by govern-
Cloud computing defined mental organizations, educational institutions, the health-
The concept behind cloud computing is that information care industry and similar industries that operate under
technology (IT) services such as hardware, software and shared goals and rely very much on shared data
other technology applications are rented out to businesses (Conway and Curry 2012). Hybrid cloud is the combi-
and payment is made for the amount of time the service is nation of two or more of the previous deployment
used or stored. Though in its early days, cloud computing models (private, community or public) which are
has become a top technology priority for businesses to bundled together but with each operating independently
achieve competitiveness (Carcary, Doherty, and Conway of the other (Mell and Grance 2011).
2014).
According to Marston et al. (2011), there is not one Cloud computing service models
universally accepted definition of cloud computing. Cloud computing service models describe the various
Different authors, organizations and technologists have types of services that can be obtained from the cloud
tried to define cloud computing from the business and and this is dependent on the level of abstraction and the
technical perspectives. However, some common ideas resources they provide. According to Buyya, Broberg,
that run through most definitions are data storage, Inter- and Goscinski (2011), three main categories of cloud com-
net-based, service, on-demand procurement and comput- puting services can be identified: Platform as a Service
ing resources. The National Institute of Standards and (PaaS), Infrastructure as a Service (IaaS) and Software
Technology (NIST) put forward a formal definition of as a Service (SaaS). Platform as a Service delivery
cloud computing that provides an in-depth understanding model of cloud computing focuses on the development
on this subject from the technical perspective. According and testing of applications without having to worry
to NIST (2011), ‘Cloud computing is a model for enabling about the underlying infrastructure, i.e. developers don’t
convenient, on-demand network access to a shared pool of have to worry about provisioning the servers, storage
configurable computing resources (e.g. networks, servers, and backup associated with developing and launching of
storage, applications, and services) that can be rapidly pro- an application (Butler 2013). Examples of PaaS include
visioned and released with minimal management effort or Google App Engine and VMware’s Springsource. In
service-provider interaction’. NIST also put forward five IaaS, the service provider supplies the required hardware
essential characteristics, three service models and four resources (CPU capacity, memory volume, servers, data
deployment models. storage, management control and communications
African Journal of Science, Technology, Innovation and Development 199

programs) needed to run a customer’s applications. The products will stagnate, and when conditions are not
user signs up for the necessary hardware resources and favourable they may eventually be forced to exit the
pays for the consumed resource over a certain period of industry.
time (Mitchell 2008). Examples of IaaS include Amazon
Elastic Compute Cloud (EC2), Simple Storage Service The information technology strategy
(S3) and Simple DB. Finally, in SaaS, the application is This is the strategy that guides the accumulation and
rented out to the user and services accessed through the deployment of technological resources and capabilities
Internet (Shimba 2010). Examples of SaaS are Dropbox, (Dasgupta, Sahay, and Gupta 2009). Adopting this strat-
Twitter, Microsoft Office 365, Web emails, Customer egy helps create a competing and modern business
Relationship Management (CRM) application, and environment and thereby improves competitiveness in
Google Apps. Most of these personal applications are, the global market. The adoption of new technologies
however, free online services (Muriithi and Kotzé 2012). like the Internet can help businesses increase their pro-
ductivity. With the introduction of web technologies,
Competitive advantage defined SMEs have been provided more avenues to internationa-
SMEs need to gain competitive advantage to survive in the lize (World Trade Report 2016). Others have also
current competitive global market. Baltzan and Philips adopted e-commerce and internet-based technologies as
(2010, 16) define competitive advantage as ‘a product or a way of reducing the costs associated with physical dis-
service that an organization’s customers value more tance between sellers and consumers by providing both
highly than similar offerings from its competitors’, that trust and information at a very low cost (Lendle et al.
is, having in possession something (i.e. products, services 2016). The online services help firms to create product
and capabilities) that is better and more useful than that of warehouses, leading to the establishment of direct links
your competitors. As a result, every firm strives to gain between firms and their customers. SMEs therefore have
competitive advantage to stay ahead of their competitors. to change their organizational structures by aligning tech-
Strategies therefore need to be put in place to achieve nology to their business strategy in order to harness the full
the needed competitive advantage (Stair and Reynolds potential of these new technologies.
2012).
The network and cluster strategy
Principle strategies for competitiveness There is growing attention on clustering and networking as
According to Barney (2002) strategy is an organization’s useful strategies for SME development. Often ‘networks’
idea about how to compete successfully. Thus, strategy are confused with ‘clusters’. A cluster is defined as a geo-
gives logic and direction to actions and decisions of organ- graphical, shared-focused, and sectoral concentration and
izations. There is the need for businesses to adopt strat- combination of firms (Niu 2010). That is, geographical
egies to attain competitive advantage (Stair and concentration, related and complementary activities, com-
Reynolds 2012). petition and cooperation are common characteristics of
clusters. Networks are groups of firms that cooperate on
The innovative strategy a joint development project complementing each other
Innovation is a key tool that businesses can use to help and specializing in order to overcome common problems,
customers satisfy and realize their desires. According to achieve collective efficiency and penetrate markets
the OECD (Organization for Economic Co-operation beyond their individual reach (UNIDO 2003). Networks
and Development) (2005), an innovation is the implemen- can thus develop within or outside of clusters. Networking
tation of a new or significantly improved product (good or among SMEs enables them to make use of advantages and
service), or process, a new marketing method, or a new flexibility with economies of scale and scope in larger
organizational method in business practices, workplace markets. Clusters and networks enhance SMEs’ competi-
organizations or external relations. These include introdu- tive advantage. Carpinetti and Oiko (2008) proposed that
cing new products and services to meet market demand, what makes clusters potentially beneficial to competitive-
developing new ways of doing things to improve pro- ness of SMEs are the opportunities for collective effi-
ductivity, applying new marketing techniques to broaden ciency, derived from external economies and joint
sales opportunities, and integrating new forms of manage- actions. According to Karaev, Koh, and Szamosi (2007)
ment systems and procedures to enhance operational effi- clusters influence competition, first, by increasing the pro-
ciency (Porter and Stern 2001). Madrid-Guijarro, Garcia, ductivity of SMEs based in the cluster; second, by promot-
and van Auken (2009) identified innovation as a key deter- ing the innovation; and, third, by stimulating the formation
minant of competitiveness among firms. Firms that do not of new businesses which expand and strengthen the
adopt innovation as a business strategy face the risk of cluster. Its positive impact is on learning and innovation
being less competitive as a result of their obsolete products and, consequently, in the upgrading of capabilities
and processes. Firms therefore need to engage new knowl- leading to the development of sustainable competitive
edge as this helps to produce innovative activity. The advantages and to the stimulation of regional economic
growth of surviving new entrant firms is dependent on development (Fensterseifer 2007).
the difference between the level of output and the size of
the firm. However, the survival of firms decreases as this The flexibility strategy
gap increases. Firms producing viable products efficiently Flexibility strategy is considered to be an important source
will grow (OECD 2000). Those who do not produce viable of SME competitive advantage in turbulent environments
200 Adane

(Guo 2013). The flexibility strategy is ‘the degree to which analyzing data (Marshall and Rossman 2010). In the quan-
a firm is willing to change its strategy in response to titative survey, a questionnaire was used to collect demo-
opportunities, threats, and changes in the external environ- graphic information on SMEs’ cloud computing adoption
ment’ (Zahra et al. 2008, 1043). Flexibility allows stage and their experiences with cloud-based applications.
businesses to respond effectively to changing situations. This was to allow for a general understanding of the actual
In dynamically changing environments, SMEs’ ability to state of SMEs in terms of their use of cloud computing.
quickly respond to changing situations is critical for com- The qualitative survey used interviews to acquire in-
petitive advantage (Johnson et al. 2003). The flexibility depth knowledge about the different approaches SMEs
strategy helps SMEs sense environmental changes adopt when implementing cloud computing as a competi-
(Grewal and Tansuhaj 2001), overcome organizational tive tool. Knowledge of these approaches will help ensure
inertia (Zhou and Wu 2010), reallocate resources a successful adoption process.
(Sanchez 1995), stimulate creativity and innovation (Li,
Su, and Liu 2010), and explore new business opportunities Pilot study
(Bock et al. 2012). After designing the questionnaire and interview guide,
they were tested in a pilot study. The pilot study was criti-
The foreign direct investment strategy cal in refining the questionnaire to allow for the most
Countries often try to attract foreign direct investment appropriate and relevant responses to be collected using
(FDI) to local or regional economies, as this has the poten- the questionnaire. Some suggestions were made by
tial to create jobs and provide access to new technologies respondents regarding the length, ambiguity, form, con-
(Piers and Wenyu 2015). In addition, foreign direct invest- tents and phrasing of some questions. Modifications and
ment enables local SMEs to act as suppliers to foreign refinements were therefore made to the questionnaire in
businesses (Javorcik 2004) and local businesses and line with these suggestions and the feedback obtained
future start-ups can gain access to world leading technol- from the pilot study.
ogy (Acs et al. 2007b). Foreign direct investment as a
strategy for the promotion of small business competitive- Selecting study area and research participants
ness can be influenced by three fundamental factors The study focused on SMEs operating in Sub-Saharan
(OECD 2000). Firstly, small firms need to prove superior Africa that have the desire to use ICTs to improve their
in their capabilities in foreign markets well over that of competitiveness. The use of cloud computing services
firms found in those countries. Secondly, the benefits the by businesses is said to have positive effects on develop-
SMEs gain as a result of their exploitation of the owner- ing economies and in particular for SMEs in Sub-
ship advantages must be more than those they stand to Saharan Africa (Yeboah-Boateng and Essandoh 2014).
gain if they choose to sell or licence them to foreign Ghana was chosen for this study because of its status as
firms instead. Finally, the inclusion of resources from the a developing economy and its situation in Sub-Saharan
home country makes production advantageous abroad. Africa. In addition, the UNCTAD report (2013) identifies
The benefits of expanding markets, exposure to different Ghana as one of the countries in Sub-Saharan Africa
customer demands and networking with foreign firms which meets the minimum requirements for basic cloud
offer SMEs the strategy to help them remain innovative services. Moreover, the Ghana information and communi-
in a global economy. When these strategies are adopted cation technology for accelerated development (ICT4D)
by businesses, they stand a chance of achieving the strategic plan was introduced by the government and
needed competitive advantage. aimed at facilitating and providing an enabling environ-
ment to ensure the development of the ICT industry to
Methodology facilitate technology usage (Boah-Mensah 2008). This is
Research paradigm an indication of the country’s commitment to the use of
The study followed the phenomenological philosophical ICT as a key developmental enabler.
paradigm to gain a deeper understanding of the complexity The study population consisted of SME owners and IT
of phenomena under investigation in their natural settings. managers. The choice of SME owners was as a result of
Phenomenology is the study of experiences from the per- the fact that they are better placed to know the overall
spective of an individual and the ways in which things benefits of using a technology-based solution within
present themselves in a given situation (Schutz 2011). SMEs. Technology professionals were considered as
they are in a better position to assess the system, infor-
Research approach mation and service quality construct (Ozkan 2006; Reich-
A mixed methods approach was adopted for the study. The gelt 2006). The sample population is also a key construct
quantitative part of the study was to help make meaning or of what the study seeks to investigate, i.e. SMEs’ ICT
interpret issues about phenomena under study in their adoption decision-makers. SMEs, regardless of their
natural settings. Creswell (2007), however, encourages location, use some form of technology. In this regard,
the use of qualitative research methodologies for research 261 SMEs from different sectors of the economy were
involving organizations and small communities. Qualitat- conveniently selected to respond to the questionnaire
ive research involves the collection of a variety of and another 11 to participate in the interviews. This
materials that describe routine and problematic instances sampling technique was used because it allows for the
and meanings in individuals’ lives. It employs the use of access of basic data and trends regarding the study.
descriptive and interpretive methods of gathering and Additionally, it gives an indication of a particular
African Journal of Science, Technology, Innovation and Development 201

phenomenon occurring within the sample and relation- from different perspectives (Oates 2008). Additionally,
ships among different phenomena. the use of more than one instrument enables the outcomes
The Innovation Diffusion Theory (IDT) was devel- to be substantiated or questioned through comparison with
oped by Rogers (1983, 2003) to explain the user adoption other available methods. This study used a web-based
and decision-making process of adopting an innovation. questionnaire and face-to-face interviews to collect data
IDT explains the process of decision-making, the factors from participants. Collis and Hussey (2009) argue that
that determine the rate of adoption, types of adopters, web-based questionnaires have the ability to cover a
the prediction of the probability and the rate of an inno- wider geographical area and give a higher degree of
vation being used. Thus, in order to avoid the pro-adoption freedom compared to paper-based questionnaires. In
bias (Rogers 2003), there was a random sample of both addition, according to Jacobsen (2002), interviews are
adopters and non-adopters of cloud computing for the the best way to confront a face-to-face situation.
interview. Using Roger’s classification and based on
responses, the 11 cases were categorized into three main
groups according to the extent to which an SME is rela- Data analysis methods
tively earlier to adopt cloud computing than others. The The analysis of the quantitative data involved two major
first group were cloud service users and labelled as steps: data preparation and descriptive statistics. The
‘adopter’. Four SMEs who participated in the study had process of data preparation began with editing, followed
already adopted cloud computing services. The second by coding and finally using computer software, Microsoft
group was labelled as ‘prospector’ and these are firms Excel 2013, to transform it into a database structure.
that have not yet adopted cloud computing services, but Descriptive statistics were then employed to explain the
intend to adopt at least one of these cloud services in the basic features of the data collected to help show a summar-
next three years. Five firms who participated were pro- ized form of the data. Thus, in the quantitative stage,
spector firms. Finally, the last group included firms who descriptive statistics were used to describe the background
have ‘not adopted’ cloud computing services and do not information of SMEs and also to establish if there was any
have any immediate intention of using them. Two firms relationship between SMEs and the individuals working
in this group participated in the study. Participants were for these SMEs in terms of the adoption and use of
selected from similar organizational positions considering cloud computing. The qualitative study was done to inves-
their technical and managerial expertise to evaluate the tigate the different approaches SMEs in Sub-Saharan
firm’s existing IT system as well as cloud computing ser- African can adopt when implementing cloud computing
vices. A summary of the profiles of the SMEs for the inter- as a competitive tool. The qualitative data was analyzed
view are presented in Table 1. using thematic analysis. This technique enabled the
A sample size of 11 was used for this phase of the researcher to report the experiences of the participants in
study because at the time of analyzing the data from the relation to approaches used in the adoption of cloud com-
11th SME there were no newer themes emerging; in puting in their business activities. Braun and Clarke
other words, the saturation point had been reached. The (2006) argue that thematic analysis is a useful approach
SMEs were assigned codes between [sb1 to sb11] to to analyze qualitative data, as it presents rich, detailed
help uniquely identify the respondents. and complex accounts of data. Thus, data was presented
and analyzed using the thematic frames that emanated
Data collection methods from the collected data in line with the literature review
This study employed more than one instrument for the col- and the objectives following the qualitative principle of
lection of data. Using more than one instrument in a reduction of raw data (De Vos 2006). Thick descriptions
research study allows the researcher to view the situation and verbatim quotations were also used in the study.

Table 1: Summary of the profiles of the SMEs for qualitative study.

Educational
SME Adoption level Category
Reference Industry stage Interviewee’s position of interviewee of SME Main product/service
sb1 Computer related Adopter Business Development Bachelor’s Small Websites/Web applications
Manager
sb2 Computer related Adopter Technical Manager Bachelor’s Medium Mobile applications
sb3 Computer related Adopter IT Manager Bachelor’s Medium Web applications
sb4 Business service Adopter IT Manager Bachelor’s Medium Conformity assessment
sb5 Computer related Prospector Technical Manager Postgraduate Medium Selling/Installation of
computer devices
sb6 Business services Prospector IT Manager Postgraduate Medium Insurance brokerage
sb7 Business services Prospector IT Manager Bachelor’s Small Conformity assessment
sb8 Business service Prospector IT Manager Bachelor’s Medium Inspection/Verification/
Certification
sb9 Aviation Prospector IT Manager Postgraduate Medium Air transport services
sb10 Manufacturing Non-adopter IT Manager Bachelor’s Medium Pharmaceuticals
sb11 Manufacturing Non-adopter General Manager Bachelor’s Medium Palm drink/soup
202 Adane

Table 2: Summary of pre-defined cloud-based application usage.

Number of respondents familiar with and using the Percentage (%) of Percentage (%) of
Cloud-based applications application responses respondents
Google Apps 149 10.11 57.09
Facebook 217 14.72 83.14
Gmail 160 10.85 61.30
Skype 129 8.75 49.43
Yahoo mail 114 7.73 43.68
LinkedIn 228 15.47 87.36
Twitter 59 4.00 22.61
PayPal 13 0.88 4.98
Hotmail 106 7.19 40.61
Flickr 15 1.02 5.75
Microsoft Office 365 57 3.87 21.84
Dropbox 162 11.00 62.07
Microsoft Security 65 4.41 24.90
Essentials

Table 3: Adoption decision stage of respondents.

Cloud adoption stage Number of respondents Percentage (%)


Adopted cloud computing 39 14.94
Intend to adopt cloud computing in six months 89 34.10
No immediate intention to adopt cloud computing 133 50.57
Totals 261 100.00

Findings and discussion The most popular cloud-based applications known to


A total of 261 SMEs participated in the quantitative phase respondents were LinkedIn, Facebook and Dropbox.
of the study to gather demographic information about They recorded 228 (87.36%), 217 (83.14%) and 162
SMEs and their current state in relation to cloud (62.07%) respectively.
computing.
Adoption decision stage of respondents
Respondents were asked to indicate their current adoption
Cloud computing knowledge stage. It is depicted in Table 3 that respondents were at
A central theme of this study was how SMEs can adopt various levels of cloud computing adoption decision-
cloud computing to improve their competitiveness. For making.
this reason, the respondents’ knowledge of cloud comput- While 39 (14.94%) of respondents are currently using
ing was sought. cloud computing services as individuals, 89 (34.10%) of
Respondents were asked to indicate which of the pre- them intend using this facility in the next six months.
defined cloud-based applications they are currently using. Half of the respondents surveyed (133 or 50.96%),
The options provided for response in this list were however, had no immediate plans for adopting and using
obtained through a literature review. It must be noted cloud services as individuals.
that the total number of respondents for all applications
adds up to more than 261 as each of the respondents
could tick multiple applications. These responses are pre- SMEs’ willingness to adopt cloud computing
sented in Table 2. Respondents were asked to indicate SMEs’ willingness to
adopt and use cloud computing as part of their IT.
As depicted in Figure 1, almost all SMEs surveyed 247
(94.6%) indicated that they are willing to adopt and use
cloud computing as part of their IT. Only 14 SMEs
which make up 5.4% were not willing to adopt cloud com-
puting services in their operations. This is encouraging, as
SMEs must have the desire to adopt cloud computing if
they are to have a successful adoption process.

Adoption decision stage of the firms respondents work


for and for individual respondents
SMEs who were willing to adopt cloud computing ser-
vices (247) were therefore asked to indicate their plans
for adoption.
From Table 4, it is evident that some SMEs (31 which
Figure 1: SME willingness to adopt and use cloud computing. is 12.55%) had already adopted and are using cloud-based
African Journal of Science, Technology, Innovation and Development 203

Table 4: Descriptive statistics from adoption decision survey.

Adoption stage of firms that Adoption stage of


Cloud adoption decision stage item individual respondents work for individual respondents
Already adopted cloud-based services 31 39
Short term (to adopt within the next six months) 94 89
Medium term (to adopt within seven to twelve months) 68
Long term (more than twelve months/No immediate intention of adoption) 54 133
Number (N ) 4 3
Mean 61.75 87.00
Standard Deviation 26.36 47.03

services. The remaining SMEs, though they have not the thematic frames that emerged from the data collected
adopted cloud services, have plans to adopt and use from participants. The following adoption strategies
them. While other SMEs (94 which is 38.06%) had were identified as themes from the collected data
short-term plans to adopt cloud computing within the through face-to-face interviews:
next six months, some (68 which is 27.53%) SMEs sur-
. Adoption approach
veyed hoped to adopt them between seven to twelve
. Adoption goal
months (medium term). However, 54 SMEs (21.86%) . Adoption roadmap and
had a long-term plan for adoption. They hope to adopt
. Expectations.
and use cloud services after twelve months. The descrip-
tive data of all the adoption decision survey items for These themes are further explained below.
both individual respondents and the firms they work for
are presented in Table 4. Adoption approach
Comparing the two set of data in Table 4, it can be seen Cloud computing solutions can be approached either pri-
that the adoption decision stage of the firms that individ- vately, publicly or as a hybrid (Buyya, Broberg, and Gos-
uals work for has a mean of 61.75 and a +/- standard devi- cinski 2011). It is therefore important to know what
ation of 26.36. Individual respondents have a mean 87 and approach to cloud computing SMEs are taking to realize
a +/-standard deviation of 47.03. Since there is no overlap their goals. Participants [sb4, sb7, sb9 and sb10] were
between the two sets of figures, it means the two groups of interested in a private cloud approach and attributed this
data are different. to the sensitive nature of their work and security concerns
A correlational analysis was therefore performed to in other environments. They felt private cloud offers a
establish if there was a relationship between the stages more robust platform. [sb7] stated: ‘I think private cloud
of adoption of individual respondents and the adoption will do. Because of the sensitivity of our job, throwing
stage of the firms they work for. The outcome of the cor- this on say a public platform, the risk involved will be
relation is presented in Table 5. quite higher compared to private’. [sb10] agreed:
For those who responded to this survey, the higher ‘Private cloud. Because we are not so sure how safe our
stage of adoption of individual respondents’ scores was information will be in a public and hybrid. Our data is
correlated with the scores of the higher adoption stage of expensive, so we wouldn’t mind spending to get a
firms they work for, r = 0.39, which can be considered private cloud just to protect our data’. Participants [sb3,
to be a moderate effect. Thus, the greater the number of sb8 and sb11] opted to approach the cloud through the
individuals who intend to adopt cloud-based services, public cloud model. Participants felt the shared and
the more their firms they work for also intend to adopt utility nature of a public cloud helps to reduce cost,
cloud-based services. since SMEs by their small size operate with limited
From Figure 1 it can be seen that the majority of SMEs capital. ‘We have looked at private and hybrid cloud but
surveyed (94.6%) was willing to adopt cloud computing as our business size does not recommend those options. So
a business strategy. Consequently, a qualitative study was public cloud for now is where we are’ [sb3]. This is con-
done to get in-depth knowledge about how they intended sistent with Goode and Stevens (2001), who found that the
to do this. An interview was conducted where participants adoption of technology is influenced by the size of the
were asked about their firm’s cloud computing adoption business. Participants [sb1, sb2, sb5 and sb6] indicated
strategy. they are pushing for hybrid cloud because of the
Thematic content analysis was then used to analyze the complex nature of what they put in the cloud. According
qualitative data. The use of thematic analysis allows for to [sb2]: ‘Sometimes we have portions of our work that
the identification, analysis, and reporting of themes in may require us to be in the private and portions that
qualitative data. The findings are discussed according to reside in the public’. Hybrid cloud offers businesses the

Table 5: Correlation of stage of adoption of individual respondents with the adoption stage of firms they work for.

Stage of adoption of individual respondents Adoption stage of firms they work for
Stage of adoption of individual respondents 1
Adoption stage of firms they work for 0.394831 1
204 Adane

opportunity to maximize efficiencies by using a public technologies deliver. Adopters trusted the cloud to
cloud for non-sensitive operations and private cloud perform some needed functions as part of their operations
where otherwise required (Intega 2014). and this led to them adopting it in the first place. This is
evident from what [sb1] stated: ‘The nature of our work
Adoption goal requires that everything is done online’. A similar obser-
SMEs are under pressure to innovate and adapt to new chal- vation was also made by [sb2]: ‘We are already in the
lenges in their operations in the growing challenging cloud. For now, I will say our needs are being met by
business environment experienced by organizations the cloud’. Businesses ideally want to operate the entire
throughout the world. As a result, SMEs interviewed business with minimum infrastructure footprint on-
[sb1-sb11] hope cloud computing will serve their various premise. Cloud integration strategy is therefore a key
business interests. For adopter SMEs [sb1-sb4] they aspect to be considered for SME applications which are
wanted to integrate their business information with a plat- hosted and planned in the cloud. This view was shared
form that will ensure they are highly available and cloud by [sb3]: ‘We have thought of how to integrate our
computing was the best alternative for them. ‘The nature business applications with the cloud platform’. Another
of our work requires that everything is done online and corroborated this by saying: ‘We hope to adopt before
also that they have access to information anytime and the end of the year. As I mentioned, storage and collabor-
from everywhere’ [sb1]. Prospector SMEs [sb5-sb9] hope ation. How to collaborate with our business application’
to adopt cloud computing to enable them to store more [sb6]. According to the data gathered from the interviews
data. ‘We hope to get most of our data up there and also [sb1-sb11], being able to integrate their hosted business
to be able to store more data up, where we can access applications with what the cloud platform has to offer
them wherever we are’ [sb6]. [sb9] added: ‘ … which will was found to be an important parameter for businesses.
prevent us from having physical facilities where we have They believe that this will free them from building and
to store data and it will be a good disaster recovery plan’. maintaining IT infrastructure so they can focus on value-
Cloud computing is new to non-adopters and, as such, creating differentiation to run over that infrastructure. As
they have no immediate adoption plans. However, upon [sb4] stated ‘With our applications running in the cloud,
finding out what the technology stands for, they were I am able to focus on other things than managing the phys-
quick to state what their adoption goals would be if they ical aspect of the IT work’. For SMEs, using cloud com-
decided to adopt. Cloud computing would serve as a plat- puting may be attractive, because it can help them focus
form for backing up their information should there be any on their core business process.
internal disaster [sb10] and to ease their workload [sb11].
Resources
Adoption roadmap Cloud computing provides affordable IT solutions to
Cloud computing is not just another specific invention enterprises to help them improve their IT related capabili-
and, as such, is uniquely used by enterprises. There is ties and empower them to be competitive. However, these
therefore the need for individual businesses to have their enterprises are often constrained by limited resources. The
own adoption roadmap to ensure a successful adoption. decision to adopt and use cloud computing is, therefore,
The researcher sought to find out if participants had any determined by the availability of resources. The data
form of roadmap to guide them in their quest to adopt from the interview indicate that prospector and non-
cloud services. The sub-themes that came up from the adopter SMEs had enough financial resources to move
responses are discussed below. to the cloud. However, all participants [sb1-sb11] com-
plained of issues relating to either human resources, infra-
Adoption time frame structural resources or both. SMEs often do not have
Adopters were found to have either started their operation sufficient human resources and skills to adopt new tech-
in the cloud: ‘ … so from inception, we were using cloud nologies (Wanjau, Macharia, and Ayodo 2012). An
computing’ [sb3] or have adopted cloud services for adopter participant commented: ‘We didn’t have human
some time now: ‘We have already moved to the cloud resource and had to train people to use the cloud
for about a year now’ [sb4] and therefore did not have service because it was something new altogether’ [sb4].
any clear adoption strategy especially on the expected Similarly, a prospector stated: ‘For capital resources, we
time frame of adoption. Prospectors, however, stated a have but for human resources, we may need training’
fixed time to migrate to the cloud: ‘Within the first [sb6]. [sb9] corroborated: ‘We are making plans to re-
quarter of 2015, we hope to move to the cloud’ [sb9]. enforce our resources in terms of skills and equipment’.
Another said, ‘We hope to move between 2 to 3 years’ A non-adopter participant who had hope of moving to
[sb7]. On the contrary, non-adopters had no clear time the cloud in future also commented: ‘For personnel, as I
frame for migration. A non-adopter commented: ‘This is said, we will be getting new people’ [sb11]. Therefore,
the first time we are getting to know so it is very new to the level of skills available to SMEs and ways in which
us and therefore no firm decision has been taken’ [sb11]. these skills are acquired are of great importance to
ensure a successful adoption of cloud services.
Functions
Though not all businesses have a clear time-frame for Business applications
adoption, they expect this new technology to perform Cloud-based applications are usually up and running in
some functions that are well beyond what their existing days and they cost less. With a cloud-based applications,
African Journal of Science, Technology, Innovation and Development 205

users just open a browser, log in, customize the appli- concurs and stated, ‘Well it is cost effective’ [sb9]. The
cation, and start using it. Enterprises are therefore issue of cost effectiveness, availability, flexibility, techni-
moving their applications to the cloud to enjoy the offer- cal support and efficiency appeared in the responses
ings it provides. Adopters [sb1-sb3] are software develo- from the remaining prospector participants. Participants
pers and started their operation straight from the cloud. [sb6 and sb7] also mentioned the capacity to store
Most of their business tools and services for development enough data in the cloud: ‘We hope to get most of data
are on the cloud platform from the service provider as indi- up there and also helping us to be able to store more
cated by [sb1]: ‘Business process application is what we data’ [sb6]. Since they have not adopted and know very
are pushing for’, and they ‘ … try to integrate our little about cloud services, one non-adopter stated,
business applications with the cloud platform’ [sb3]. ‘Seriously, we have not even considered cloud computing’
[sb4] adopted the cloud to allow them to unify the oper- [sb10]. However, [sb11] was very optimistic and stated, ‘
ations of the enterprise in terms of IT and are currently … when we join cloud computing, it will help us access
using office 365, and a standard operating system from information fast. At the same time, it will also save time’
the cloud. For prospectors [sb5-sb9], the nature of their [sb11].
work requires them to have their critical business The interview responses give a further confirmation
support system available at all times. They thus intend to that for SMEs to ensure a successful adoption and obtain
adopt an enterprise resource planning (ERP) system, measurable benefits, they need to adopt an adoption
such as: SAP: [sb5, sb8, sb9] and Office 365 [sb6] and strategy.
storage infrastructure to store their information [sb7,
sb8] when they move to the cloud. For future consider- Conclusion and recommendations
ation, non-adopter [sb10] stated: ‘We are using tally, Conclusion
accounting software and I hope cloud computing will SMEs stand to gain from adopting cloud computing. They
help in that area’. [sb11] added: ‘For business appli- perceive cloud computing services as a cost-effective
cation, simple accounting software like Sage, Pastel and approach to computing. Therefore, when they are
Excel is what we hope for’. Businesses therefore have to exposed to the benefits of using cloud computing, it will
rigorously test the security and reliability of a service pro- help raise awareness leading to a successful adoption.
vider’s infrastructure and adopt the necessary application SMEs also need to adopt a strategy for adopting cloud
to improve their operation. computing services. A cloud computing adoption strategy
will help create a better understanding of SMEs’ oper-
Adoption expectations ations and identify how they can adopt the technology.
To stay relevant, IT departments are expected to play a This includes knowing the business goals and the techno-
stronger role to support more strategic initiatives such as logical infrastructure to help achieve those goals, identify-
initiatives to grow the business, support innovation, and ing business applications to move to the cloud, and
improve customer experience (Cisco 2013) through the establishing a roadmap to allow them to adopt cloud com-
use of new technologies. The researcher wanted to find puting with measurable benefits. Thus, such an adoption
out what cloud computing means to participants and strategy should discuss critical adoption factors that
what they hope to establish from the cloud. would address the various technical and social consider-
From the responses, SMEs who have adopted cloud- ations that are necessary to create conditions conducive
based services have already established a lot and cannot for adoption.
exist without cloud computing. One adopter stated: ‘Well
cloud computing means everything to us. I will say Recommendations
about 80% of our services is done in the cloud. The Although many SMEs are familiar with cloud-based ser-
reason is because of the reliability of base infrastructure vices and some are already using cloud-based services, it
here in Ghana. We have a service that run 24 seven, we is recommended that they are adopted to serve the specific
don’t have a stable electricity; it is actually more expens- needs of SMEs. For SMEs to better understand and ident-
ive to host our services here in Ghana than it is to host in ify how they can adopt cloud computing, they need an
the cloud. So it is not what we hope to establish, we have adoption strategy. The adoption strategy should include
established a lot’ [sb2]. Another adopter also stated, ‘Our the adoption approach, adoption goal, adoption roadmap
business needs to be highly available, so from the incep- and adoption expectations.
tion, we were using cloud computing. That is where we Despite the numerous advantages of using a cloud-
host our service. So we started straight from the cloud’ based service, its adoption is slow because there is often
[sb3]. It is evident that participants adopted cloud comput- the lack of consideration of the approach to adoption.
ing to sustain their operation, and to achieve cost reduction For SMEs, the decision for a type of cloud environment
in their operation as well as reliability and availability. is strongly influenced by the services, storage, collabor-
[sb1 and sb4] also stated cost effectiveness and avail- ation and applications they intend to move to the cloud.
ability as what they had established from the cloud. Mean- SMEs can therefore approach the cloud as either private,
while, prospector participants who have not adopted have public or hybrid depending on the nature of their work.
high expectations from the cloud when adopted. As [sb8] Cloud computing is uniquely used by adopter SMEs
stated, ‘Cost reduction as the upfront cost of spending on and, as such, different adoption roadmaps exist for differ-
IT will be eliminated and accessibility as computing ent SMEs. A common feature of the roadmap should,
resources can be accessed from anywhere’. Another however, include time frame for adoption, whether the
206 Adane

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