The business value of cloud computing: the partnering agility perspective
| Pages | 1160-1177 |
| Published date | 11 July 2016 |
| DOI | https://doi.org/10.1108/IMDS-09-2015-0376 |
| Date | 11 July 2016 |
| Author | Sen Liu,Yang Yang,Wen Guang Qu,Yuan Liu |
| Subject Matter | Information & knowledge management,Information systems,Data management systems |
The business value of cloud
computing: the partnering
agility perspective
Sen Liu
School of Logistics, Yunnan University of Finance and Economics,
Kunming, China, and
Yang Yang, Wen Guang Qu and Yuan Liu
School of Management, Zhejiang University, Hangzhou, China
Abstract
Purpose –The purpose of this paper is to focus on the value creation potential of cloud computing in
inter-firm partnerships. It examines how cloud-based IT infrastructure capabilities in flexibility and
integration contribute to partnering agility and, consequently, firm performance. This study also
introduces business lifecycle and market turbulence as internal and external context variables,
respectively, to investigate the different roles of cloud computing in value creation.
Design/methodology/approach –A questionnaire was used to collect data from 184 client firms of
the largest cloud computing services provider in China (Alibaba Cloud). The theoretical model was
tested using PLS analysis.
Findings –Cloud infrastructure (CI) flexibility has a positive effect on partnering agility, while the
effect of CI integration on partnering agility is moderated by business lifecycle and market turbulence.
Research limitations/implications –The surveyed firms are all Alibaba Cloud clients, which may
limit the generalization of the findings.
Practical implications –The study suggests that besides the cost benefits, the value creation aspect
of cloud computing should also be emphasized in research and practice. The study provides a new
perspective to understand the business value of cloud computing in inter-firm partnerships.
Originality/value –The study suggests that the flexibility-related and integration-related features of
cloud computing can create value for firms by facilitating inter-firm collaboration in exploiting
business opportunities.
Keywords Cloud computing, Lifecycle, Cloud infrastructure flexibility,
Cloud infrastructure integration, Market turbulence, Partnering agility
Paper type Research paper
1. Introduction
Cloud computing refers to an “IT service model where computing services are delivered
on demand to customers over a network in a self-service mode, independent of device
and location”(Marston et al., 2011). Compared with traditional IT, cloud computing has
some special features such as ubiquity, elasticity, resource sharing, data concentration,
low cost, and pay-per-use (Armbrust et al., 2010). By changing the way IT software and
hardware are designed and purchased, cloud computing has begun to change the IT
industry and business in other industries (Son et al., 2014).
The use of cloud computing has become increasingly popular in both private and
public sectors (Son et al., 2014). The huge potential of cloud computing has raised the
Industrial Management & Data
Systems
Vol. 116 No. 6, 2016
pp. 1160-1177
©Emerald Group Publishing Limited
0263-5577
DOI 10.1108/IMDS-09-2015-0376
Received 19 September 2015
Revised 2 January 2016
Accepted 16 January 2016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
This research was supported by the National Natural Science Foundation Council of China under
Project 71502159 and 71572180; the Applied Basic Research Science Foundation of Yunnan
Provincial Department of Science and Technology under Project 2015FD028.
1160
IMDS
116,6
attention of some researchers. Some studies have noticed how cloud computing
creates value for firms. For instance, Iyer and Henderson (2010) mentioned that, by
implementing cloud computing, an enterprise can gain the agility to respond to
changes in the environment. Sultan (2011) used a case study to illustrate that cloud
computing can promote collaboration with customers and information sharing among
work staff. Chen and Wu (2013) used a mathematical method to study the impact of cloud
computing on market structure and related issues. Although the above studies have
provided important insights, they usually either provide only qualitative description or
focus on the technical aspects of cloud computing. There are many questions remaining.
For instance, besides the cost advantage, what are the most important features of cloud
computing for value creation? How can cloud computing create value for firms? Research
to date has not provided sufficient answers to such questions.
Some studies have indicated that a key benefit of cloud computing is to enhance
the collaboration between enterprises. For example, Truong (2010) suggested that
businesses can enhance their competitive advantage through the effective collaboration
with partners by implementing cloud computing. Demirkan and Delen (2013) suggested
that cloud computing can facilitate inter-organizational collaboration in workflows and
business processes. Grant and Tan (2013) also pointed out that cloud computing is the
future IT for effectively promoting inter-organizational relationships.
Nowadays in many industries, more and more supply chains or firm networks are
replacing individual firms as the competitive unit. Increasingly, firms have started to
manage resources across their production and distribution networks and collaborate with
network partners, rather than manage their internal resources alone (Liu et al., 2013).
Research has shown that the access to complementary resources from external sources,
such as business partners,contributes to firmperformance strategically(Faria et al., 2010).
This paper proposes that the unique characteristics (e.g. ubiquity, elasticity,
resource sharing, data concentration, low cost, and pay-per-use) of cloud computi ng are
the keys for firms in creating value in inter-firm partnerships. Therefore, in this study,
we investigate how cloud computing creates value for firms through the angle of
partnering agility. We identify two very important characteristics of cloud computing
(i.e. flexibility and integration) that can facilitate the partnering agility of firms. More
specifically, we suggest that cloud-based IT infrastructure can effectively promote
organizational agility through the interaction with partners (i.e. partnering agility) in
pursuing market opportunities, thus enhancing firm performance.
We also introduce business lifecycle and market turbulence as internal and external
contextual variables, respectively, to investigate the different roles of cloud computing
in different environments. Internal context variables usually reflect a firm’s own
features, such as firm scale and organizational structure; and external context variab les
usually reflect the environment for a firm’s survival and development, such as market
environment (Franz and Robey, 2007). Business lifecycle theory claims that businesses
also have a lifecycle with stages of birth, growth, maturity, and death (Wang and
Singh, 2014). The organization lifecycle model sustains that all organizations go
through predictable developmental stages and their strategies, structures, and
activities match their developmental stages (Kori and Misangyi, 2008). Business
lifecycle theory indicates that firm performance will be influenced by the different
organization and management characteristics in different developmental stages.
Researchers have investigated various management problems by using this theory
(Kori and Misangyi, 2008; Wang and Singh, 2014). In this study, we treat business
lifecycle as an internal context variable. On the other hand, market turbulence usually
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