Link between Business Archetypes and Relevant Cloud Attributes - Essay Example

I. Optimizers Businesses classified as optimisers draw advantages from cloud computing to improve customer value propositions. The businesses also use cloud to promote organizational efficiency and profitability1. Companies using this business archetype also seek to intensify their customer relationships with special emphasis on preventing the company from risking the latent failure that occurs naturally in new business models. Optimisers can expand the value they present using the enhanced products and services, improved customer experience and more extensive channel delivery options2. However, optimisers tend to benefit from lower market share and lower revenues compared to disruptors and innovators. In regards to business strategy, cloud is a game-changing business enabler that drives improvements across customer value propositions and value chains. Integration of advanced technologies such as internet connectivity, utility computing and virtualisation has enabled an environment that has promoted business model innovations and productivity. Companies are hence able to develop adopt new strategies with the view of attaining scalability, connectivity and agility. This is since cloud supports swift experimentation by enabling companies to try and implement new strategies without the need for substantial upfront costs. For instance, it enables seamless connectivity between a business and its customers or partners, allowing them to share data, collaborate and perform transactions. II. Innovators Innovators tend to adopt cloud services to increase or make new revenue streams. They also use cloud to significantly improve customer value propositions3. These result in new stream of revenue. Through this business model, businesses can transform their roles in the industry or even make headway into an adjacent industry or market space. In the course of extension and transformation, businesses will often stand a chance of combining elements of the valuepropositions and value chains that were previously unrelated to increase competitive advantage4. In regards to business strategy, cloud’s role as a technology enabler enables businesses to embrace opportunities for innovation and growth as it facilitates distinctly new value propositions5. When businesses combine cloud services with pervasive trends such as smart devices, data digitisation, appification, social media and mobility, then cloud can become a catalyst for transformation of businesses models. Business can therefore focus on business-model innovation to drive their strategies and models of operating. Further, business using cloud can leverage its features to increase values of their IT investments. As a result, the roles of IT infrastructure as value-added enablers can help businesses realise favourable business outcomes. For instance, CRM system can be priced basing on the number of employees on the payroll. III. Disruptors Characteristically, companies classified under disruptors share the conception that the cloud services generate completely different value chains. These businesses radically formulate customer value proposition or generate new customer needs6. Using this model, businesses have the potential to capture inimitable competitive advantage through creation of disruptive mechanism in an existing market or industry. Typically, disruptors provide customers with what they were either unaware of or knew that they needed. While businesses using this model face greater risks, they tend to gain from higher rewards. In regards to business strategy, cloud computing has marked the end of plan-build-run and classic IT model making businesses to shift from the traditional own-and-operate approach to IT. Based on this perspective, the main capabilities businesses use cloud to boost strategic position within an organisation include enabling of businesses to easing innovation mandate, become more agile and adopting technology-integrated business strategy in the place of technology-strategy that is based on business strategy7. Overall, cloud can cause significant disruption of business organisations. Traditionally, IT has controlled software and hardware. In addition, it has enabled businesses to connect to customers. Cloud services have replaced the role of IT in application development and selection, since a business can contract directly with cloud service providers to access software solutions at low budget. They also ease scalability, procurement, flexibility as well as deployment8. Causal link between Business Archetypes and Relevant Cloud Attributes Businesses may choose to become disruptors, innovator or optimisers depending on the risk they are willing to undertake and their existing competitive landscape9. Cloud services offer businesses a means to derive benefits from dynamic digital trends, to meet customer needs and to attain growth and competitiveness using the three business models: innovator, optimizer or disruptor10. Customer value propositions and value chains are two critical factors that distinguish whether a company is using cloud as an innovator, optimizer or disruptor. Customer value propositions include strategies through which business apply cloud to improve current product offering and customer experience11. Other strategies include extending cloud to help an organisation create new services and products and inventing new customer needs or entering new markets.Concerning value chains, businesses adopt cloud to enhance capacity to source, partner or collaborate. Use of cloud also helps business to transform new operating capacities and to enter new industries. Lastly, they seek cloud services to create new industry value chains. Based on the analyses, once a business opts to be an innovator, disruptor or an optimiser, it can use the key attributes of cloud services to realise added efficiency, competitiveness and business value (Table 1). A survey of literature revealed several cloud attributes through which businesses use the three business theoretical accounts12. They include market adaptability, cost flexibility, context-driven variability, and connectivity to the ecosystem, hidden complexity and scalability of the business13. Additional attributes include remote accessibility, multitenancy, shared access and security optimization14. Cloud Attributes Market adaptability is another business attribute that businesses consider in their decision to make innovative use of cloud services. More and more businesses are using cloud services to respond fast to the changeful dynamics of the market. Companies are able to seek ways of adjusting products, processes and services to rapidly meet the shifting market needs. Additionally, cloud enables innovation and prototyping, which help to speed time to market15. Context-driven variability also come into play in achieving innovative use of cloud computing. Given the expanded capacity and power of cloud computing, cloud is able to store data on user preferences, which make it easy adjust products or services to meet customer needs. The ability to personalize products and services enable businesses to adapt fast to changes in user preferences (Howell-Barber 4-5). This allows businesses to give end users more personal service allowing for more user-centric experience. Businesses also make innovative use of cloud services for purposes of ecosystem connectivity. Using cloud services, a business is able to benefit from external collaboration with customers and partners leading to increased innovation and productivity. Businesses and their can share apps and documents as well as receive important updates in real-time with other businesses. Padhy and Manas (5) observed that cloud-based platforms can draw together incongruent groups of people by enabling them to share and collaborate information, resources and processes (Ristov 75-76). Security optimization is also a critical attribute through which businesses use cloud services to enhance their efficiency and service delivery16. Using cloud, security is greatly improved due to improved security-focused resources and centralization of data. Customers and their data are greatly secured and security risks mitigated to acceptable levels by using international cloud computing best practices17. Despite this, concerns arise in regards to loss of control of some sensitive data as cloud storage services are provided by a third party and the fact that cloud computing such as PaaS and IaaS resources are rented and shared to a range of customers18. Cost-flexibility is identified as key reason businesses choose to adopt cloud services (Geeth 272). The pay-per-use model of cloud computing offers increases flexibility in return purging huge capital expenditures as businesses would no longer need to procure hardware or pay software license fees once they adopt cloud services (Sharma et al 144-145). Indeed, innovative use of cloud services allows organizations to reduce the fixed costs of IT infrastructure, including the cost of servers, software licenses and networking. Since cloud services are essentially pay-as-you-go services, they only pay for those services they require, hence ensuring minimal capital expenditure on redundant hardware and software (Shayan and Ghotb 2; Sharma, et al (144-145). The observation is consistent with one made by Geetha et al. (272) that cloud computing enhance business operation businesses as it transforms businesses from using traditional low-level IT infrastructure that are costly into using a more advanced technology, where businesses can access more flexible resources that enable them to focus on innovation and creation of business value19. Table 1Linking key attributes and business archetypes: Influential Factors (Attributes) Disruptor (ASCOMP) Innovator (SWISSCOM & Update AG) Optimizer (BSI AG) market adaptability Enables ASCOMP to step into the multi-layer cloud market. Businesses adapt to European market easily BSI CRM enables businesses to attain scalability, connectivity and agility in European market cost flexibility No upfront investment Cheaper switching costs BSI CRM is be priced based on number of employees on payroll, hence reducing costs and redundancy. context-driven variability Can easily be adjusted to altered customer needs can easily be adjusted to altered customer needs BSI CRM customizes product to company preferences connectivity to the ecosystem ASCOMP easily connects to customers and links directly with cloud service providers. SwissCom and Update AG collaborate to share migration cost Easy sharing of apps and documents in real-time with other businesses Security optimization Secure storage of information Secure storage of information BSI CRM resources are security-focused and allow centralization of data Read More