Adel Ben Youssef: Determinants of the adoption of cloud computing by tunisian firms, an exploratory study
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This exploratory study investigates the determinants of cloud computing adoption among Tunisian firms, identifying factors such as firm size, perceived cost advantages, and the influence of competition. Results indicate that the main barriers to adoption include lack of skills and perceived complexity, while the positive effects associated with cost reduction drive interest in the technology. The paper calls for a national strategy to build skills and promote cloud computing to enhance competitiveness in Tunisia.
Adel Ben Youssef: Determinants of the adoption of cloud computing by tunisian firms, an exploratory study
- 1. DATA DIGITAL BUSINESS MODELS, CLOUD COMPUTING AND ORGANIZATIONAL DESIGN (PARIS NOVEMBER 24-25, 2014) Determinants of the adoption of Cloud Computing by Tunisian firms: an exploratory study Adel BEN YOUSSEF (University of Nice Sophia-Antipolis, GREDG-CNRS) Walid HADHRI (ISG Tunis, University of Tunis) Teja MAHERZI (University of Nice Sophia-Antipolis, GREDEG-CNRS)
- 2. 1. Motivation of the paper 2. Research questions 3. Literature Review 4. Data, Sample description 5. Econometric Model 6. Results 7. Summary 8. Policy Recommendations 9. Extensions 10. To go further OVERVIEW
- 3. Increasing digitalization of the MENA Countries (Tunisia - Ben Youssef and Mhenni (2003), Bellon et al. 2006 and 2007, Ben Youssef et al. 2012 and 2014) Several Waves of ICT as GPTs (Bresnahan and Trajtenberg 1995, Helpman, 1998) New opportunities for leapfrogging for Developing countries (mobile phone, mobile payment: M-pensa in Kenya) Cloud Computing as the last wave of GPTs 1. MOTIVATION OF THE PAPER
- 4. Jaeger, Lin and Grimes (2008), define it as a “computing platform that is able to dynamically provide, configure and reconfigure servers to address a wide range of needs, ranging from scientific research to e- commerce”. Marston et al. (2010) CC “is an information technology service model where computing services (both hardware and software) are delivered on- demand to customers over a network in a self-service fashion, independent of device and location. The resources required to provide the requisite quality-of- service levels are shared, dynamically scalable, rapidly provisioned, virtualized and released with minimal service provider interaction. Users pay for the service as an operating expense without incurring any significant initial capital expenditure, with the cloud services employing a metering system that divides the computing resource in appropriate blocks”. What is Cloud Computing?
- 5. Cloud Computing worldwide (research on google trends) http://www.google.fr/trends/explore#q=Cloud%20Computi ng Cloud Computing in France (research on google trends) http://www.google.fr/trends/explore#q=Cloud%20Computi ng%20France Cloud Computing in Tunisia (research on google trends) http://www.google.fr/trends/explore#q=Cloud%20Comp uting%20Tunisia Cloud Computing: who cares?
- 6. What are the main motivations of Tunisian firms when they adopt CC? Do they differ from those identified for other developing countries in similar research? Do classical effects in matter of adoption of ICT work (Competition, Rank and Network Effects)? Do Perceived advantages and perceived disadvantages have any impacts on the process of adoption? 2. RESEARCH QUESTIONS
- 7. Firm size is an important factor affecting the decision to adopt a new innovation such as CC. (J.Ranald et al. 2013). The competitive pressure made that many firms have externalized their infrastructure of information technology to improve not only the effectiveness but also make it possible to offer low process like attempt to increase their part of the deal. (Ranald et al. 2013). The pressure of the business partner is a main determining cause for the adoption and the use of ICT (Pan and Jang, 2008). 3. LITERATURE REVIEW
- 8. Technology Readiness: Firms, which have the technology readiness, are better prepared for the adoption of CC. Absorptive capacity of the firm: Technological infrastructure and the human resources dedicated to innovation and technology (Bellon et al. 2006, Low and al, 2011) Levinthal and Cohen (1988). The top management support: is regarded as a significant impact on the adoption of the new innovations of information technology. It helps the firms by overcoming any barrage and internal resistance to the change. (Ranald et al. 2013). 3. LITERATURE REVIEW
- 9. Perceived Advantages: The relative advantages of Cloud Computing also include: Quality improvement of the operations of businesses, realization of the tasks more quickly, increase the productivity and provides new business opportunities. (Oliveira et al. 2014), (Ranald et al. 2013). Perceived Disadvantages: The perceived complexity of CC is a significant factor in the decision of adoption and can act as a barrier with the implementation of this technology. (Ranald et al. 2013). The Compatibility is a crucial factor for the adoption of the new innovations in matter of information system. (Rogers 2003). 3. LITERATURE REVIEW
- 10. Questionnaire: a face-to-face interview administrated during the summer of 2014 in Tunisia Entrepreneurs or company directors Random sample of 350 Tunisian firms Response rate of nearly 90% Only 311 usable surveys were retained 4. Data, Sample description
- 11. 5. Econometric Model Cloud Computing Adoption CC Perceived Disadvantages CC Perceived Advantages Absorptive Capacity of the firm Environmental and organizational context
- 12. The dependent variable is the adoption of CC. This variable is dichotomy 1 if the firm adopt CC 0 if the firm don’t adopt CC Model: In order to study the determinants of CC adoption, we use a simple Logit econometric model. DEPENDANT VARIABLE
- 13. I. Environmental and characteristics of the Firm Seniority Birth Date of the firm Firm age on years Continuous variable Size Number of employees The logarithm of number of employees Continue variable Competition Number of competitors The logarithm of number of competitors as estimated by the interviewee Continue variable II. Absorptive Capacity of the firm Personal IT The firm practice the policy (one computer per employee) Binary =1 if Yes =0 if Not Dichotomy Centralized IT The firm use the centralized computer (CPUliabilities) Binary =1 if Yes =0 if Not Dichotomy ICT Manager Skills Score of 5 ICT use by the manager Binary =1 if Score=5 =0 if Not Continue variable Explanatory variables (1)
- 14. III. Perceived Advantages Competitor Cloud Computing allows it to be more competitive? Binary =1 if Yes =0 if No Dichotomy Cost Reduction Cloud Computing reduce cost Binary =1 if Yes =0 if No Dichotomy Time Saving Cloud Computing saves time Binary =1 if Yes =0 if No Dichotomy Innovation Cloud computing promotes innovation Binary =1 if Yes =0 if No Dichotomy IV. Perceived Disadvantages Complexity The complexity of implementation of the Cloud computing service Binary =1 if Yes =0 if No Dichotomy Knowledge Problems related no knowledge of cloud computing Binary =1 if Yes =0 if No Dichotomy Internet Connexion Problems Problems with connection technologies Binary =1 if Yes =0 if No Dichotomy Explanatory variables (2)
- 16. Our empirical results show 4 preliminary results: Rank effect is confirmed: We show that the adoption of CC depends on the size of the firm. The Size of the firm reveals the financial capacities of the firm, its human capital stock and its ability to manage the innovation. We found that competition effect works. The more the competitors adopt this innovation, the more the firm adopt it. Innovation may give the competitors radical advantage and hamper the competitive advantages of the firm. Since then, mimetic adoption in key sectors are observed. Cloud computing is diffused through sectorial patterns. Main Results
- 17. CC adoption is pushed by the perceived cost reducing aspect of this technology. Moving from SAAG to SAAS was associated to the capacity of this technology to reduce the costs and to adjust it to the real needs of the firms (elasticity). Our study confirms that this cost reducing aspect works in the case of Tunisia. The main perceived disadvantages of CC it is perceived complexity and the lack of knowledge about its purposes. CC is still a new innovation with little information about its purposes and most of Tunisian firms perceive it as a complex technology. Policies and managerial implications of our findings are discussed in the paper. Main Results
- 18. This paper seeks to identify the determinants of CC adoption by Tunisian firms. It is an exploratory study based on a sample of 350 firms. Four main results were found. The adoption of CC depends on the size of the firm, its perceived cost cutting advantage, its perceived complexity and the adoption by competitors. However, the results show that the adoption mechanism is not depending on its IT absorptive capacity. 7. Summary
- 19. Our paper shows clearly that in the Tunisian case the main forces behind CC non-adoption are the lack of adequate skills (especially the skills of the managers) and perceived complexity of the technology. One of the main argument, that works, for the adoption of this technology is to show their ability to save costs and to cut inadequate costs linked to over-equipment of ICT. 8. Policy Recommendations
- 20. Building the specific skills for the CC is challenging and important in order to raise the competitively of the Tunisian Economy. Several countries like South Africa have engaged their selves in a national strategy called e-skills South Africa. The strategy aims at populating the national (South African) Cloud. Tunisia needs similar strategy targeting the managers of the firms and more generally to adopt a National CC strategy. 8. Policy Recommendations
- 21. (2015) “E-skills, Brains and Performance of the Firms: ICT and ability of firms to conduct successful projects in Luxembourg”, with Leila Peltier and Anissa Chaibi, forthcoming, Journal of Applied Business Research May/June 2015 (Volume 31, Number 3). (2014) “Adoption of Information and Communication Technologies and New Organizational Practices in the Tunisian Manufacturing Sector”, Economics Bulletin Vol. 34 Issue 4, pp. 2237-2252. (with Walid Hadhri and Hatem Mhenni) (2014) “The complementarities between ICT Use, New Organizational Practices and Workers Contextual Performance: Evidence from Europe in 2005 and 2010”. Revue d’Economie Politique (in collaboration with L. Martin and N. Omrani) (2012) « Intra-firm diffusion of innovation: Evidence from Tunisian SME’s regarding Information and Communication Technologies”, Middle East Development Journal. (in collaboration avec H. Mhenni, & W. Hadhri).Vol. 3, Issue 3 : pp. 75-97. (2012) «Adoption and Usage of ICT by Catalan Firms», «Internet Econometrics », New Palgrave MacMillan, Allegrezza & Dubrocard (ed.). Pp. 288-308. (in collaboration with Castillo, D. & W. Hadhri) [email protected] 9. Related Literature
- 22. Ordered probit with sample selection Innovation_CC Bivariate probit CC Coef. z-stat Coef. z-stat I. Environmental and organizational context Age 0.0123** 0.61 -0.0157 -1.38 Age² -0.0002 -102 0.0001 1.06 Size -0.0294 -0.27 0.0004** 2.08 Sector: Other Ref. Ref. Manufacturing 0.0273 0.04 -0.0260 -0.07 Less KIS -0.1109 -0.17 0.6068** 2.02 Knowledge Intensive Services 0.0314 0.04 1.1843*** 3.70 Intellectual Proprety 0.7449* 1.84 General_ICT 0.1283** 2.22 ICT Manager Skill -0.1588 -0.44 -0.1627 -0.71 Competition 0.7883* 1.91 0.5186** 2.31 II. Absorptive capacity Perso_Cental_IT -0.0145 -0.02 Coord_Employ 0.7850** 2.51 1.0317 0.08 tx_NbrEmlpoy_IT 0.7290* 1.66 0.3586** -2.04 III.Perceived Advantages Cost Reduction 0.4205** 2.23 Saves Time 0.2322 1.03 IV. Perceived Disadvantages Complexity -1.2159* -1.72 No Knowledge -0.4433* -1.89 Connection 0.2596 1.34 # obs 81 311 Prob > chi2 0.0000 10. Extension (Cloud Computing and Innovation)
Editor's Notes
- #10: Rogers (2003), states that the compatibility is the degree to which an innovation is perceived like compatible with the values of firm, the past experiences and needed existing of the potential adopters.