Business organizations are constantly changing the spheres of their activities depending on the fluctuations that exist in the market during a particular period. Accounting information system plays a role that is vital in providing information regarding the financial status of an organization used for making decisions within the organization. In the recent past, cloud-based AIS have been considered to be of benefit to organizations since their information capabilities are superior compared to traditional information systems. The adoption of the cloud computing has had an impact on the way information technology is viewed. The report provides a critical analysis of cloud-based AIS adoption in business organizations discussing the challenges and the benefits that come with adopting the environment that is cloud based.
Overview of Cloud computing
Cloud computing is a concept in the contemporary information technology that has attracted attention that is overwhelming from the business and practitioners of the information technology industry. Cloud computing is viewed to be a promising agent that is expected to impact unprecedented flexibility on how businesses consume technological resources and significant cost savings. It is because it can connect a large number of servers across the globe with the aid of the internet and pool the resources that these servers generate. In a nutshell, cloud computing collects the different pieces that are available in technology and computing resources to create a system over the internet that is coherent. Businesses that use cloud computing are advantaged since cloud computing significantly reduces the cost of purchasing and maintaining the information technology infrastructure. Moreover, it provides flexibility with regards to how the buying and consumption of computing resources can be done.
However, despite the fact that cloud computing has attracted a lot of attention, the demand side of cloud computing has not yet matured. Cloud computing is a concept that is vague that in practice, takes various forms and various definitions have tried to bring out different descriptions of the characteristics and forms of cloud computing (Marston et al., 2011). Some of the examples of cloud-based AIS systems which are commercial and are available in the market include SaaS service, Free, and Open source and Standalone. The SaaS service is a system that is cloud-based used to run accounts of a business entirely online. The standalone system is always installed on every computer and is run via the internet. Free and open system is always acquired from free from the web.
Challenges concerning cloud based AIS adoption
Challenges are inevitable in every business entity. Despite the fact that businesses benefit from cloud computing, certain challenges come with the adoption of cloud computing. These challenges affect the organization’s decision to adopt information systems that are based on cloud computing. Below are some of the challenges concerning the adoption of information systems that are based on cloud computing.
Ensuring the continuity of a business entity and service availability as well as service performance is one of the significant challenges related to cloud-based systems (T.G.K, 2015). Even though the service providers of cloud computing can utilize various software and hardware techniques to make sure that there is a better reliability of the service through high fees of service and more strict measures, threats that are related to going out of business are always there. The problems associated with service performance can also be related to the interoperability between an organization’s legacy applications and the cloud-based systems. Lee (2013) argues that there is a possible solution to some of these service performance problems which is to use several cloud computing providers.
Data lock-in and transfer issues.
The aspects that are related to data security, limitations of data transferability and data lock-in are among the major challenges that organizations face while adopting cloud computing (Lee, 2013). There is improved data accessibility through cloud-based information systems; however, it can be problematic to extract the data if there is a need to migrate to another system. The minimization of data lock-in can be done through the usage of APIs and software that are compatible. Beside the problems associated with data lock-in, the costs of transferring data can be high since there are applications that are distributed among the different components of the cloud.
Storing either data that is confidential or sensitive in the cloud relates to one of the major security issues, which is described as one of the biggest challenges of adopting cloud computing. It is believed that there is a challenge in protecting cyberspace data since organizations have no direct control over their data.
Benefits concerning cloud based AIS adoption
It is believed that the adoption of cloud-based AIS results to significant benefits in business due to the superior capabilities of cloud computing as compared to the traditional information systems (Madhavaiah, Bashir, and Shafi, 2012). Below are the benefits of adopting the cloud computing systems in a business organization.
Saving on cost.
Since Cloud technology is paid incrementally, an organization has the possibility of saving money (Hu and Liu, 2013). Cloud computing also brings the flexibility of cost allocation for an organization that aims at moving capital expenditures into operational expenditures. The costs of an organization are also reduced due to the improved operational efficiency, and as a result, more rapid deployment of new products or services is allowed. Moreover, the cost is saved by the organizations due to lower cost of computers for users and no heavy investments in the infrastructure of IT, hardware, or expensive license for software.
The routine business processes are automated through the adoption the cloud computing system with the aim of increasing the efficiency of the process’ performance. It is because the information systems have automation and transactional capabilities. Moreover, by taking a consideration of the automation capability of a cloud-based information system, it can be argued that the principles of infrastructure that is reusable and modularity, allow more efficient automation of processes. This is in comparison to the traditional computing methods (Xuejie, Zhijian, and Feng, 2013).
Smoother update of software.
Cloud computing ensures that the upgrade of software is smooth and the update process is always enabled by decoupling and separation of the business service from the infrastructure that is used in running it. Thus automation of servers used for updates and handling of the challenges experienced in computing by the third party allows an organization to ensure that the service is reliable and accessible.
Increase of profits.
The fact that cloud-based systems decrease the number of employees to operate the IT infrastructure leads to an increase in profits while decreasing the costs (Liu et al., 2016). The main reason why the costs decrease is always related to the fact that the number of employees that are required to operate the IT infrastructure is reduced and savings that are related to the purchase of less IT equipment. Moreover, the principles that cloud computing is based on is reusable of infrastructure and modularity that help in facilitating the automation of the routing processes.
The possibility of the organization to choose various vendors that provide scalable and reliable business services, development environments, and infrastructure that has no long time contracts makes cloud computing flexible (Manvi and Krishna Shyam, 2014). This way, organizations can minimize the risks that are associated with provider lock-in and also achieve flexibility and scalability of services, which are defined as one of the major benefits of cloud computing benefits.
From the above literature, it can be seen that cloud computing has the potential to revolutionize the way the development and distribution of accounting software are done. The impact of the emerging technologies in cloud computing is evident since more businesses are aiming at adopting cloud-based information systems. The cloud computing systems give organizations a clear alternative of acquiring accounting software from the traditional way. The paper noted that the benefits that come with adopting cloud-based information systems are great that the challenges of acquiring the cloud-based information systems. However, the reason why some organizations fail to acquire such systems include limited IT infrastructure, vendor lock-in, low capital budgets, and tight contracts. These barriers should be done away with so that organizations can adopt the cloud-based information systems since technology is fast advancing. More businesses should adopt the cloud-based information systems since by doing this, the organizations will be flexible and cost efficient and will be able to respond to the changing market needs, demands from the organization and the technological advancements. Moreover, AIS will help keep the business ahead of the game thus allowing the organization to focus on the core business requirements and capabilities.
The constant change of the business environment requires an organization to adjust its strategy in line with the global changes both in business and technology which can have an impact on the performance of the business. It has been seen that AIS is vital in an organization since it plays a significant role in the provision of financial information for decision making for any given organization. In this report, it is clear that the benefits of cloud-based systems are more than the challenges of cloud-based systems. Thus, businesses should try and adopt the cloud-based systems since this will impact the performance of the organization.
Lee, J. 2013. A View Of Cloud Computing. International Journal of Networked and Distributed Computing, 1(1), p.2.
Liu, S., Yang, Y., Qu, W. and Liu, Y. 2016. The business value of cloud computing: the partnering agility perspective. Industrial Management & Data Systems, 116(6), pp.1160-1177.
Madhavaiah, C., Bashir, I. and Shafi, S. 2012. Defining Cloud Computing in Business Perspective: A Review of Research. Vision: The Journal of Business Perspective, 16(3), pp.163-173.
Manvi, S. and Krishna Shyam, G. 2014. Resource management for Infrastructure as a Service (IaaS) in cloud computing: A survey. Journal of Network and Computer Applications, 41, pp.424-440.
Marston, S., Li, Z., Bandyopadhyay, S., Zhang, J. and Ghalsasi, A. 2011. Cloud computing — The business perspective. Decision Support Systems, 51(1), pp.176-189.
T.G.K, V. 2015. Strategic Business Challenges in Cloud Systems. International Journal on Cloud Computing: Services and Architecture, 5(4), pp.21-32.
Xuejie, Z., Zhijian, W. and Feng, X. 2013. Reliability Evaluation of Cloud Computing Systems Using Hybrid Methods. Intelligent Automation & Soft Computing, 19(2), pp.165-174.
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