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THE ADOPTION OF CLOUD COMPUTING FOR SMALL
AND MEDIUM ACCOUNTING FIRMS
A thesis submitted in partial fulfilment of the requirements for the Degree
of Master of Commerce in Accounting
in the University of Canterbury
by Xinding Ma
University of Canterbury
2015
Acknowledgements..................................................................................................................7
Abstract....................................................................................................................................8
Chapter1. Introduction......................................................................................................9
Chapter2. LiteratureReview:CloudComputing.............................................................11
DefinitionofCloudComputing...............................................................................11
TheBusinessCaseforCloudComputing................................................................13
2.2.1 RisksandUncertainties..................................................................................15
2.2.2 AttitudetowardsCloudComputing................................................................17
CloudComputingandAccounting..........................................................................18
Summary................................................................................................................19
Chapter3. LiteratureReviewonISAdoption...................................................................20
DiffusionofInnovationstheory..............................................................................20
Technological,OrganisationalandEnvironmental(TOE)Framework....................21
Iacovou’sEDIadoptionmodel................................................................................22
3.3.1 AnApplicationinNewZealandcontext:Mehrtensetal(2001)....................24
Chapter4. LiteratureReview:EmpiricalStudiesofCloudComputingAdoption.............27
BenefitsandDrawbacksofCloudComputing........................................................28
Organisational........................................................................................................30
ExternalEnvironment.............................................................................................31
Chapter5. ResearchGaps,QuestionsandModel............................................................33
ResearchGaps........................................................................................................33
ResearchTopicandQuestion.................................................................................34
ScopeofResearch..................................................................................................35
5.3.1 SmallBusinesses.............................................................................................35
5.3.2 CloudAdoption...............................................................................................37
ModelDevelopment...............................................................................................38
Chapter6. ResearchDesign.............................................................................................40
ResearchFramework..............................................................................................40
Methodology..........................................................................................................40
6.2.1 MultipleCaseStudy........................................................................................41
6.2.2 DataCollection...............................................................................................42
6.2.3 Semi-StructuredInterviews............................................................................43
Chapter7. Within-caseFindings......................................................................................44
FirmA.....................................................................................................................45
7.1.1 CloudComputingforClientService................................................................46
7.1.2 CloudComputingforPracticeManagement..................................................48
FirmB.....................................................................................................................49
7.2.1 CloudComputingforClientService................................................................50
7.2.2 CloudComputingforPracticeManagement..................................................54
FirmC.................................................................................................................................55
7.2.3 CloudComputingforClientService................................................................56
7.2.4 CloudComputingforPracticeManagement..................................................56
FirmD.....................................................................................................................60
7.3.1 CloudComputingforClientService................................................................61
7.3.2 CloudComputingforPracticeManagement..................................................63
FirmE......................................................................................................................64
7.4.1 CloudComputingforClientService................................................................65
7.4.2 CloudComputingforPracticeManagement..................................................68
FirmF......................................................................................................................68
7.5.1 CloudComputingforClientService................................................................69
7.5.2 CloudComputingforPracticeManagement..................................................72
ProviderOmicron...................................................................................................74
7.6.1 CloudComputingforClientService................................................................74
7.6.2 CloudComputingforPracticeManagement..................................................75
Chapter8. Cross-caseFindings.........................................................................................77
Summary:CloudComputingforClientService......................................................78
8.1.1 PerceivedBenefitsandRisks..........................................................................80
8.1.2 OrganisationalFactors....................................................................................82
8.1.3 ExternalEnvironment.....................................................................................83
Summary:CloudComputingforPracticeManagement.........................................85
8.2.1 PerceivedBenefitsandRisks..........................................................................87
8.2.2 Organisational................................................................................................88
8.2.3 Environment...................................................................................................89
Chapter9. Discussion.......................................................................................................91
TheRolesofCloudComputing...............................................................................91
9.1.1 InterorganisationalNatureofCloudComputing............................................92
9.1.2 PracticeManagementSystemsasERP...........................................................92
CompetitiveadvantageofCloudSoftware.............................................................94
9.2.1 Value...............................................................................................................94
9.2.2 Rarity..............................................................................................................96
9.2.3 TheEarthquakeEffect....................................................................................97
Implicationsofcloud“paradigm”forAccountants................................................97
Cloud-basedERPforaccountants..........................................................................99
9.4.1 Adopters.......................................................................................................100
9.4.2 Non-Adopter:ReasonsforNon-Adoption....................................................100
Chapter10. Conclusion....................................................................................................103
ResearchQuestionRevisited................................................................................103
ContributionstoLiterature...................................................................................106
ImplicationstoPractice........................................................................................107
LimitationsofStudy..............................................................................................107
FutureResearchDirections..................................................................................109
Appendix1: InterviewQuestionsandSchedule...............................................................111
Bibliography.........................................................................................................................113
TablesofFigures
Table2-1:empiricalstudiesregardingtheattitudetowardscloudcomputing.....................17
Table3-1:DiffusionofInnovation(DOI)theory.....................................................................21
Table3-2:Technological,OrganisationalandEnvironmental(TOE)Framework...................22
Table3-3:modelusedinMehrtensetal.(2001)BoldindicatesadditionsfromIacovouetal
(1995)model..........................................................................................................................26
Table4-1:cloudadoptionstudies..........................................................................................28
Table5-1:Summaryofgapsidentified...................................................................................34
Table5-2:Comparisonofthedefinitionofsmallbusinesswithothercountries..................36
Table7-1:SummaryofInterviewees.....................................................................................44
Table7-2:cloudadoptionforFirmA.....................................................................................46
Table7-3:cloudadoptionforFirmB......................................................................................50
Table7-4:cloudadoptionforFirmC......................................................................................56
Table7-5:cloudadoptionforFirmD.....................................................................................61
Table7-6:cloudadoptionforFirmE......................................................................................65
Table7-7:cloudadoptionforFirmF......................................................................................69
Table7-8:ProviderOmicron'sremarksaboutcloudaccounting...........................................74
Table8-1:Summarisedfindingsforcloudasclientservice.Italicindicatesafactorthat
inhibitedadoption..................................................................................................................79
Table8-2:Summarisedfindingsforcloudaspracticemanager.Italicindicatesafactorthat
inhibitedadoption..................................................................................................................86
Figure1:EDIAdoptionmodel,fromIacovouetal(1995)......................................................23
Figure2:Researchmodel.......................................................................................................38
7
Acknowledgements
Iwouldliketothankeveryonewhohasprovidedmewithsupport,guidanceandcarewhileI
amresearchingandwritingthisthesis.
Firstly,Iwouldliketoexpressmygratitudetowardsmysupervisors,MrTrevorNesbitand
AssociateProfessorRichardFisher,whohaveprovidedmewithinvaluableassistance
throughouttheproject.Thethesiswouldnothavebeenpossiblewithouttheirhelp.
Secondly,aspecialthank-youtotheintervieweesofthisstudy,whotooktheirvaluabletime
totalktomeandsharedwithmeinformationabouttheirfirms.
Finally,Iwouldliketothankmyparentsfortheiremotional(andlogistical)supportduring
mystudies,andforalwaysbeingthereformeduringgoodandbadtimes.Iwouldalsolike
tothankmyclassmates,whoprovidedmewithinspirationandsupportduringthestressful
times.
8
Abstract
Cloudcomputingisacontemporaryinformationtechnology(IT)conceptthathasattracted
overwhelmingattentionfromtheacademicsandpractitionersoftheITindustry.By
connectingalargenumberofserversaroundtheworldviatheinternetandpoolingthe
resourcesthattheygenerate,cloudcomputingisapromisinginnovationthatisexpectedto
deliversignificantcostsavingsandunprecedentedflexibilityonhowbusinessesconsumeIT
resources.Theaccountingindustry,inparticular,perceivescloudcomputingasapotent
threattoitself.However,priorstudiesthatexaminecloudcomputingfromthebusiness
perspectivearelimited.Moreover,despitetherapidgrowthofcloudcomputinginthe
accountingindustry,thereisnopriorstudythatfocusedontheaccountingindustry.
Thepurposeofthisstudyistoexplorethefactorsthatledtotherapidgrowthofcloud
computingspecificallyintheaccountingindustry,andtoexploretherolesthatcloud
computingplayedwithintheaccountingfirms.Theaccountingindustryischosenduetothe
highpopularityofcloudcomputingwithinit,andthehomogeneousnatureofthe
accountancyservices.Thisstudyusesamultiplecasestudydesign,andsemi-structured
interviewsarecarriedoutwiththedecisionmakersofsixaccountingfirms.
Theresultsrevealedthattheconceptofcloudcomputingreferstomanytypesof
applications.Foraccountingfirms,cloudcomputingconsistedofanexternal(client-oriented)
roleandaninternal(practicemanagement)role.Therapiddevelopmentofcloudcomputing
occursprimarilyintheexternalrole,wherecloudcomputingisusedasacompetitivetool.
Ontheotherhand,theusefulnessofcloud-basedpracticemanagementsystemsislimited
tothemicroaccountingfirmsonly.
Thisstudymakesanimportantcontributioninthefieldofcloudcomputingresearch.It
shouldberecognisedthattheroleofcloudcomputingextendsbeyonditstechnological
merits,andvariesdependingonthecharacteristicsoftheindustryandthestrategyofthe
business.Itisrecommendedthatfuturestudiestakeintoaccountthewaysfirms
incorporatecloud-enabledtechnologyintothefirm’sbusinessprocessandstrategy.
9
Cloudcomputinghadattractedconsiderableattentionfromtheinformationtechnology(IT)
industrysincethetermwascoinedin2008.Describedasaparadigm-shiftinginnovation,
cloudcomputingbringstogetherdifferentpiecesoftechnologyandcomputingresourcesto
createacoherentecosystemovertheinternet.Thisresultedinsignificantimprovementsto
theabilityforITserviceproviderstoaggregateandcoordinateresourcesforcomputing-
intensivetasks.Forbusinessesthatusecloudcomputing,cloudcomputingreducesthecost
ofpurchasingandmaintainingITinfrastructure,aswellasprovidingbetterflexibilityin
termsofhowcomputingresourcescanbeboughtandconsumed.
However,duetothecontemporarynatureofcloudcomputingtechnology,thedemandside
ofcloudcomputingisyettomature.Cloudcomputingisavagueconceptthattakesvarious
formsinpractice,andtherearemultipledefinitionsthatattempttodescribedifferent
characteristicsandformsofcloudcomputing(Marston,Li,Bandyopadhyay,Zhang,&
Ghalsasi,2011).Thetheoreticalbenefitsthatcloudcomputingprovideareyettobefully
realisedbyITprofessionals,asmanyoftheexistingcloudproductseitherdonotfullyutilise
thesebenefits,orsimplymarketinghype(Hoberg,Wollersheim,&Krcmar,2012).The
conceptalsoinducesconcernsanduncertaintiesregardingthesafety,privacyandreliability
ofcloudcomputing.
Inspiteofthetheoreticalbenefits,confusionandconcernsofcloudcomputing,the
accountingindustryisoneareathatcloudcomputingisflourishing.Cloud-basedaccounting
softwarelikeXerohadexperiencedexponentialgrowthintermsofpopularity,marketshare
andsharepricesince2008(Xero,2014).Cloud-basedaccountingapplicationshavebeen
perceivedbytheaccountingindustryaspotentthreatsagainstconventionalaccounting
practices,eventhoughtheirfeaturesarenotascomprehensiveasthedesktopcounterparts.
CloudserviceproviderslikeWorkflowMax(2013)andCCH(2013)positedthatthe
popularisationofcloudcomputingcoulddrasticallyalterthestateoftheaccounting
industry,buttheirinterestinthecloudcomputingmarketreducesthecredibilityoftheir
claims.
Themotivationofthisstudyprimarilystemsfromtherateofadoptionofcloudcomputing
withintheaccountingindustry,whichappearstohavefaroutpacedtheothers.Existing
10
cloudcomputingadoptionstudiesalsodonotprovideanadequateexplanation.The
majorityofexistingcloudcomputingliteraturetendstofocusonthetechnical,supply-side
issuesofcloudcomputing(whatisthemostefficientwaytogenerateanddistribute
computingresourcesthatmeettheusers’needs?),ratherthanthedemand-side(whydo
peopleandbusinessesusecloudcomputing?).Thedemand-sidestudiesofcloudcomputing
alsovaryconsiderablyintermsofthecontextualfactors.Thesefactors,suchascountryand
industry,generallyhaveastronginfluenceonhowbusinessesconducttheiroperationsand
achievetheirgoals.Moreover,theadoptionstudiesdonotexplicitlylinktheadoption
behaviourwiththebusiness’operatingenvironments,strategiesorprocesses.
Thisisanexploratorystudythatintendstoinvestigatethedemand-sideaspectsofcloud
computinginthecontextoftheaccountingindustry.Amultiplecasestudydesignisused.
Theunitofanalysisisaccountingfirms(firm-level),withanemphasisplacedonsmall
accountingfirms.Dataisgatheredbyconductingsemi-structuredinterviewswiththe
decisionmakersfromsixdifferentaccountingfirms.Thestudyfocusesonthedecision
makers’perceptiontowardsthenewcloudphenomenon,andthefactorsthatledtotheir
decisiontoadopt(orreject)cloudcomputing.
Theaccountants’usageofcloud-basedtechnologyisdividedintotwocategories:adopting
cloudcomputinginordertoimprovetheservicetotheirclients(asaninterorganisational
system),andusingcloud-basedpracticemanagementsystemsfortheirownuse.Thisisan
importantdistinction,aspriorstudiesofcloudcomputinghavenotclearlydefinedthescope
ofcloudcomputingintermsofthepurposeofthesystems.
Thisthesisisstructuredasfollows.Chapters2to4reviewtheexistingliteratureonthe
meaningandthesignificanceofcloudcomputingtothebusinesscommunity,followedbya
reviewofpreviouscloudcomputingadoptionstudies.Chapter5identifiesthegapsinthe
literature,andspecifiestheresearchquestionsandscopeofthisstudy.Chapter6discusses
andjustifiesthemethodsthatarechosentoundertakethestudy.Chapters7and8present
thefindingsfromtheresearchandanalysetheresultstoidentifypatterns.Chapter9
attemptstoexplaintheobservationsbyestablishingconnectionsbetweentheresultsand
therelevanttheories.Finally,Chapter10concludesthestudybydiscussingthe
contributions,potentialimplicationsandlimitationsofthisstudy.
11
Cloudcomputingiswidelyregardedasaparadigm-shiftinginnovationthatcansignificantly
alterthewayITresourcesareprovided,usedandpaidforbusinesses(Armbrustetal.,2010).
UnlikeotherITinnovations,cloudcomputingcombinespre-existingheterogeneous
technologiesintoacoherentecosystem,ratherthanestablishinganewsetofsystems
entirely(Avram,2014).Unfortunately,thismakesthedefinitionandthescopeofcloud
computingparticularlydifficulttoascertain.
Theliteraturereviewisseparatedintothreechapters.Thischapterexaminesthedefinition
ofcloudcomputing,theargumentsthatfavourandrejectthefeasibilityofcloudcomputing,
andtheclaimsofcloudcomputing’simpactontheaccountingindustry.Chapter3discusses
thefirm-levelinformationsystem(IS)adoptionmodels,whileChapter4reviewsthe
empiricalstudiesoncloudcomputingadoption.
DefinitionofCloudComputing
ThemostwidelyaccepteddefinitionofcloudcomputingisproposedbyNationalInstituteof
ScienceandTechnology(NIST).Thisdefinitioniscommonlyusedasafoundation,where
laterstudiesderivetheirinterpretationsofcloudcomputingbasedonthesefactors(Hoberg
etal.,2012).AccordingtoNIST,cloudcomputingisdefinedas“…amodelforenabling
ubiquitous,convenient,on-demandnetworkaccesstoasharedpoolofconfigurable
computingresources…thatcanberapidlyprovisionedandreleasedwithminimal
managementeffortorserviceproviderinteraction”(Mell&Grance,2011).Thisdefinition
outlinedfivecharacteristicsthatareessentialtoacloudcomputingmodel:
• on-demandself-service(computingresourcesareallocatedautomaticallybasedon
load),
• broadnetworkaccess(resourceisaccessibleviatheinternet,irrespectiveofclient’s
platform),
• resourcepooling(allcomputingresourcesaregeneratedandpooledtogetherbefore
allocatingthemtousers),
12
• rapidelasticity(abilitytoincreaseorshrinkcomputingresourcestomeet
fluctuationsinusers’resourcepattern),and
• measuredservice(users’resourceusecanbemonitoredandcontrolled).
SoftwareasaService(SaaS)isthemostcommonandmostmatureformofcloudcomputing.
UnderSaaS,thehardwareandsoftwareareprovidedbythecloudserviceprovider,and
usersaregrantedaccesstothesoftware(Gupta,Seetharaman,&Raj,2013;Sultan,2011).
Typically,theSaaSmodelrelievesusersfromtheexpertiseandeffortsrequiredtomaintain
theirownsoftware,butallowsverylimitedscopeforuserstocustomisethesystem(Mell&
Grance,2011).
SaaSisnottheonlyformofcloudcomputing,however.Itiscommonlyestablishedthat
cloudcomputingisavailableinthreeforms:SaaS,PlatformasaService(PaaS)and
InfrastructureasaService(IaaS)(Mell&Grance,2011).IncontrasttoSaaS,IaaSprovides
onlydatastorageandcomputingresourcehardwareinfrastructure,andusershaveto
deploytheirownoperatingsystemsandsoftware(Mell&Grance,2011).IaaSeliminatesthe
needtomaintainhardwarewhileallowingforahighdegreeofflexibilityandcustomisation
bytheuser,butdoesnottypicallyrelievetheuserfromhavingtomaintaintheirown
software.Forthisreason,IaaSismostfavouredbylargeinstitutionssuchaslarge
corporations(PwC,2011)anduniversities(Sarkar&Young,2011).PaaSoffersamiddle
ground,wherethecloudserviceprovidermaintainsaplatformofsystemsandtoolkits,and
usersmaydeploytheirownapplicationsthatarecompatible(Mell&Grance,2011).The
boundarybetweenIaaSandPaaSisnotwell-defined,asneitherofthemprovidesanout-of-
the-boxsolutionlikeSaaS(Armbrustetal.,2010).However,therearesubtledifferencesin
theirintendedmarkets:PaaSfocusesmoreonsupportingbusinessestodeveloptheirown
applications,ratherthanprovidingthehardware(Weinhardt,Anandasivam,Blau,&Stößer,
2009).
Effectively,thecoreprincipleofcloudcomputingisthecentralisingofcomputerresources
(intermsofhardwareandapplications)andprovidingthemtomanyusersasaservice
(Stanoevska-Slabeva&Wozniak,2010).Cloudcomputingdoesnotrefertoatangible
productorpieceoftechnology,butaparticulararrangementofcomputingresources.As
13
thepreviousdefinitionsuggests,cloudcomputingcanrefertoanyITinfrastructurethat
separatestheuserofcomputingresourcefromtheprovidersofsaidresources.
However,theconceptsincipientincloudcomputingisnotunique,ornew.Critics
questionedtheappropriatenessoflabellingcloudcomputingasanewparadigm,becauseof
itsresemblancetoexistentconceptssuchasgridcomputingandapplicationservice
providers(ASP)(Weinhardtetal.,2009).Thesimilaritycausedsignificantconfusionoverthe
substanceofcloudcomputinganditsimprovementsoverthepredecessors(Armbrustetal.,
2010).Evidently,earlierarticlesanddefinitionshadimplicitlyequatedSoftwareasaService
tocloudcomputing,eventhoughSaaSwasonlyapartofthelatter(Payton,2010;
Stanoevska-Slabeva&Wozniak,2010).Thisalsocreatedlabellingissues,asITproviders
misused“cloudcomputing”formarketingpurposes(Hobergetal.,2012).Forexample,web-
basedemailservices(suchasHotmail)satisfythedefinitionofcloudcomputing,yetit
existedwellbeforethetermcloudcomputingwasinvented(Du&Cong,2010).
Cloudcomputingdoesdistinguishitselffromgridcomputing,inthatitutilisesvirtualisation
muchmoreheavilythangridcomputing.Thisallowsthecomputingresourcestobe
accessedfromtheinternetratherthanaspecialisedinterface,andmakesitpossibleto
enforceservice-levelagreementsbetweenthecloudproviderandcustomers(Stanoevska-
Slabeva&Wozniak,2010;Weinhardtetal.,2009).However,adetaileddiscussionregarding
thetechnicaldifferencesbetweengridandcloudcomputingisoutsidethescopeofthis
study.
TheBusinessCaseforCloudComputing
Cloudcomputingisdescribedasanewparadigmintheformof“…convergencebetween…
ITefficiency…andbusinessagility”(Marstonetal.,2011,p.177).Effectively,theconceptof
cloudcomputingallowsbusinessestouseITservicesmoreflexiblythanconventionalin-
housesolutions,andoftenatamuchlowercost.
Cloudcomputingpermitsgreaterflexibilityinhowcomputingresourcesareusedby
businesses.Becausecloudcomputingconnectsawiderangeofcomputingdevicesviathe
internet,cloudcomputingcreatesanillusionofinfiniteresources(Armbrustetal.,2010).
14
Resourcesunderthecloudcomputingmodelarepooledandcanbeprovidedtoanyuserat
anygiventime,whichmeansthatcloudserviceproviderscansupplyavirtuallyunlimited
amountofcomputingresourcestotheirusersataveryshortnotice,aswellasreallocating
computingresourcesthatausernolongerneedstootherusers(referredtoasrapid
downscaling).
Inpractice,thisallowsbusinessuserstomakelast-minuteadjustmentstotheirITservicesto
matchtheiractualdemand.Thisrelievesbusinessesfromhavingtoforecastresourceusage
intothefuture,orcarryadditionalcapacitythatarenotneededduringthemajorityofthe
year(andpayingforthoseunusedcapacity)(Armbrustetal.,2010;Marstonetal.,2011).
Thisisparticularlybeneficialforbusinesseswhoseresourceusagepatternfluctuates
significantly,orthedemandforcomputingresourcesconsistsofirregularpeaksandtroughs
(Marstonetal.,2011).Additionally,cloudcomputingprovidestheabilitytospread
computation-intensivetasksoveralargeamountofserversaroundtheworld.Forprojects
thatwerepreviouslydeemedtobetooresource-consumingusingtraditionalIT
infrastructure,cloudcomputingcantapintoamuchlargerpoolofcomputingresourcesto
completethecomputing-intensivetasksmorequickly(Grossman,2009).
CloudcomputingalsoreducestheriskofinvestinginITinfrastructurebysubstitutingcapital
investmentwithoperatingexpenses.ITinfrastructureisahighlyriskyinvestment,because
whileITsystemsareoftenbelievedtoproducesignificantbenefitsandevencompetitive
advantages,thereisnoguaranteethatsuchbenefitswouldnecessarilyaccruetothefirm
(Clemons,1986;King,Grover,&Hufnagel,1989).Infact,therelationshipbetween
implementingnewITsystemsandthefirm’scompetitiveadvantageisanecdotalatbest,
andquestionableatworst(Zhang&Lado,2001).Inmorerecentyears,theGlobalFinancial
Crisishadseverelycutbackbusinesses’capitalinvestmentsanddiscouragedrisk-taking
behaviour(Grubisic,2014).
Thefactthatcloudcomputingrequirespracticallynoup-frontITinvestmentwasperceived
asaverydesirabletrait.Sincecloud-basedservicesarechargedbasedonusageor
subscription,businessesareabletoacquirenewITsystemswithoutincurringsignificant
costsinacquiringthenecessaryIThardware,softwarelicensesortheongoingmaintenance
cost(Du&Cong,2010;Grubisic,2014).Thisfeatureisparticularlyappealingtosmaller
15
businesses,astheygenerallylackthefinancialcapitalandexpertisenecessarytoacquire,
implementormanagesophisticatedITsystems(Iacovou,Benbasat,&Dexter,1995).The
eliminationofup-frontinvestmentbycloudcomputingmeansthatsmallbusinessesarealso
abletoadoptcutting-edgeITsystems,derivebenefitsfromthem,andmakethembetter
equippedintermsofinformationsystemstocompetewiththeirlargercounterparts
(Marstonetal.,2011).
Finally,bycentralisingcomputingresources,cloudcomputingoffersgreaterefficiencyand
lessmaintenanceontheuser’spart.In-houseITsolutionsareusuallyhighlyinefficient,as
mostcorporateservershaveanaverageutilisationrateofapproximately30%(Marstonet
al.,2011).Bycombiningandconsolidatingcomputingresources,cloudserviceproviderscan
takeadvantageofeconomiesofscaleandrealisecostsavingsuptoafactorofseven
(Armbrustetal.,2010).Thiscostsavingsmaybepassedontotheusers,whichultimately
lowerstheirtotalITcost.Moreover,sinceapplicationsandinfrastructureoverthecloud
residewiththecloudserviceprovider,thiseliminatestheneedontheuser’sendtoincur
additionalexpenditureortimetomanagetheITsystems.
2.2.1 RisksandUncertaintiesDespitetheapparentbenefitsofcloudcomputing,thecharacteristicsofcloudcomputing
embodyinherentrisksanduncertaintiesforitusers.Ascloudcomputingisprovidedbya
thirdpartyovertheinternet,dataisstoredinremoteservers,ratherthanonsite.Asaresult,
cloudcomputingrequiresbusinessestorelinquishtheirphysicalcontrolovertheirdata,and
maygiverisetoanxietiesregardingthesecurity,reliabilityandprivacyoftheusers’data
(Armbrustetal.,2010).
Thesecurityofcloud-basedstorageisaconcernparticularlyforCPAfirms(chartered
accountants),duetothefactthataccountantshandlesensitiveandconfidentialinformation
(Du&Cong,2010).Theanxietyoversecurityprimarilystemsfromthefactthatbusiness
usersthatadoptclouddonothavephysicalcontrolovertheirdata.Thedatamaybelostor
exposedtounauthorisedparties,andusersmustrelyontheserviceproviderstoimplement
propercontrolsandsecuritymeasures.However,therehadbeenanexpandingpoolof
literaturethatrefutesthisconcern.MolnarandSchechter(2010)suggestedthattheuser’s
16
dataareinfactsaferinthecloud,ascloudprovidershavebettereconomiesofscaleto
implementproperaccesscontrols.Incomparison,businessesthathosttheirIT
infrastructurein-housemaynotbeabletoimplementtheequivalentlevelofsecurity
measure,duetothelackofresources.Moreover,morerecentempiricalstudiessuggest
thatsmallerfirmsperceivedatasecuritylessimportantlythantheirlargercounterparts,and
smallbusinessesareinabetterpositiontonegotiateatrade-offbetweenthebenefitsof
cloudcomputingandperceiveddatasecurity(Guptaetal.,2013;Sobragi,Maçada,&
Oliveira,2014;Sultan,2011).
Privacyisanothermajorconcernforusersofcloudcomputing.Whilesecurityandprivacy
areoftenmentionedtogether,thesecuritymeasuresdiscussedabovedonotgenerally
resolveprivacyconcerns(Armbrustetal.,2010).Sinceusers’dataresidewithcloud
providers,thisgivesrisetotheperceptionandsuspicionthatcloudprovidersmayabuse
theirprivilegedaccesstotheusers’datafortheirowncommercialbenefitwithoutthe
knowledgeorconsentoftheuser(Du&Cong,2010;Guptaetal.,2013;Kingsford,2014).
Forsmallerbusinessesseekingtoadoptcloud-basedERPsystems,dataprivacyrepresents
oneofthemostsignificantobstaclestoitspopularityandreception(Grubisic,2014).Unlike
datasecurity,thesolutionstotheprivacyconcernslieinsocialtools(contractsand
enforceableagreements)ratherthantechnicalmeasures(Armbrustetal.,2010).
Finally,thedetachmentofphysicalcontrolgivesrisetotheissueofreliability,where
businessesfearlosingaccesstotheirbusinessprocessanddata.Onereliabilityconcernis
theavailabilityofcloud-basedservice,wherebusinessesareconcernedthatcloudservices
maybecomeunavailableatanygiventime,resultinginlostrevenueandhindranceto
businessefficacy(Sultan,2011).WhilereliabilityisaprobleminallITsystems,theuser’s
abilitytoinsulateormitigateagainstdatalossandwithdrawalofvendorservicesisseverely
morelimitedwhentheITsystemsarehostedinthecloud(Du&Cong,2010).
17
2.2.2 AttitudetowardsCloudComputingTheinterestandstrengthsofcloudcomputingdidnotnecessarilytranslateintointention,
however.Asthetwostudiesbelowshow,ITprofessionalswerescepticaltowardswhether
cloudcomputingisviableenoughtoreplacethetraditionalITmodel.
Author DataSource Factors
(Lin&Chen,2012) ITProfessionals,Taiwan Customerneeds,compatibility,
relativeadvantage,maintenance.
(PwC,2011) Seniorandmiddle
managersoflarge
businesses;andIT
outsourcers.
Security,relativeadvantage,workload
readiness.
Table2-1:empiricalstudiesregardingtheattitudetowardscloudcomputing
LinandChen(2012)investigatedtheunderstandingandconcernsofcloudcomputingbyIT
professionals.AnITprofessionalwasdefinedassomeonewithatleastthreeyearsof
workingexperienceinITcompaniesortheITdepartmentoflargecompanies.The
respondentsidentifiedcustomerneedsasamajordeterminantfortheircloudadoption
decision,asthebusinessesarereluctanttoadoptcloud-basedsolutionswithoutexplicit
requestfromtheircustomers.Thecompatibilityofcloud-basedsoftwarewiththe
company’sexistinginformationsystemsandpoliciesisanotherconcernthatimpedesthe
respondents’enthusiasmtowardscloudcomputing.Cloud-basedsystemsareconsideredto
bebeneficialforindividualstaffmembersandinformalteams,butadoptingcloud
computingfortheorganisationasawholelacksapparentbenefitindoingso.Theinterest
towardscloudcomputingwasfurtherdampenedbythepotentialriskssuchaslossof
controloverinformationsystems,hiddencostsandtheneedtoretrainstaffmembers.
AsimilarthemeisechoedinPwC(2011)study.Surveying489seniorandmiddlemanagers
inlargecompanies(ninetypercentofwhichexceeds$500millioninrevenue)and261IT
outsourcingproviders,therewasanoticeablegapbetweentheperceptionofcloud
computingandtheplansthatwereinplacetoensureadoption.Despitetherespondents’
apparentoptimismtowardsthetrendofcloudcomputing,mostofthemestimatedthatan
18
additionalworkloadofonly3%wouldbemigratedintothecloudinthenextthreeyears.
Theconcernforsecurity,especiallythelossofcontroloverdata,wasperceivedasamajor
issueby62%ofrespondents.Thelargecorporationsalsofacedsubstantialswitchingcosts,
duetothefactthattheirexistingdatabasemanagementsystemsandcertainapplications
wereoriginallywrittenforthetraditionalITservicemodel,andsignificantmodifications
werenecessarytotakeadvantageofthecloud-basedarchitecture.
Inshort,thestudiesindicateastrongreluctancebyITprofessionalstoadoptcloud
computing.Thissuggestthatthebenefitsofcloudcomputingaremostlytheoreticaland
unexplored.Sincetherewaslittletimeforcloudcomputingtoevolveandmature,thisresult
ishardlysurprising.However,theaccountingindustryisanotableexception.
CloudComputingandAccounting
Historically,accountingsystemsweretheprimarydrivingforcebehindthedemandsforIT
systems(Cragg&King,1993).Inrecentyears,theriseofnew,cloud-basedaccounting
softwarehadledtosombreforecastsintheaccountingsector.Itislittlesurprise,perhaps,
thataccountingfirmshavebecomeparticularlyinterestedintheadoptionofcloud
computing,andanincreasingnumberofaccountantsbegantoprovidecloud-based
accountingsolutionstotheirclients.Yet,despitetherateofdevelopment,academicstudies
thatexplicitlyexaminedtheimpactofcloudcomputingonaccountingindustrywasvirtually
non-existent.
AresearchreportconductedbyCCH(2013)hadindicatedanoverwhelminginterestin
cloud-basedaccounting.Thereportsurveyed1018ownersofsmalltomediumenterprises
(SMEs)and212accountantsacrossAustraliafortheirperceptionstowardscloudcomputing.
Accordingtothereport,65%oftheSMEsand60%oftheaccountantsindicatedthatthey
wouldconsideradoptingcloudcomputing.Theinterestismuchstrongeramongyounger
accountantsandbusinessowners(35yearsofageandyounger).
Moreover,thereportconcludedthatcloudaccountingmayprovetobeathreatfor
accountants’futuresurvival.Thestudyshowedthat53%ofSMEownersindicatedthatthey
wouldreplacetheiraccountantsiftheyfailtoadoptcloudcomputing.Thisisparticularly
19
disturbingnewstoaccountants,giventhat63%ofaccountants’workconsistsof
transactionalservices.Transactionalservicesincludefinancialreporting,taxreturnsand
simplefinancialanalysis,whichcanbeeasilyautomatedbycloud-basedsoftwareduetothe
highlystructuredandlowskilllevelrequirementnatureofthework.Inotherwords,
accountantsriskhavingtheir“cashcow”businessescutoutbycloudcomputingviatheloss
ofbusinessorreductioninrevenuepotentialduetoautomation.
Thisconcernisechoedbyotherprovidersofcloudaccountingsolutions,albeitlesssombre.
WorkflowMax(2013),forexample,suggeststhatcloudcomputingwouldtransform
accountants’jobsbyautomatingthe“mundane,number-crunchingtasks”,andsupporting
accountants’rolesasbusinessadvisors.Nonetheless,iftheargumentofCCH(2013)is
acceptedthatnumber-crunchingcomprisesoverhalfofaccountants’job,cloudcomputing
isexpectedtosignificantlychangetheformandwaysaccountingispracticed.
Althoughitisimprudenttodiscounttheirstatementsentirely,itshouldbenotedthatthat
theneutralityoftheviewpointsabovearequestionable.SincebothCCHandWorkflowMax
arecloudserviceprovidersintheaccountingindustry,thisgivesthemavestedinterestin
thefutureofcloud-basedaccountingsolutions.Theirviewpointsmaycontainmarketing
hype.Itisalsodifficulttoascertaintheextenttowhichtheirfindingsandcommentariesare
taintedwiththeirownvestedinterestsandbiases.
Summary
Insummary,cloudcomputingisrecognisedasanimportantinnovationthatcanpotentially
transformhowbusinessesuseITtoconducttheiroperations.Meanwhile,thereisa
considerabledisconnectionbetweenenthusiasmandaction,asITprofessionalsdonot
perceivethecloudproductstobestableandmatureenoughforadoption.Thesamecannot
besaidfortheaccountingindustry,whichappearstobeexperiencingsignificantchangesin
lightofthenewcloudcomputingtechnology.
20
ThischapterexaminestherelevanttheoriespertainingtoISadoption.Theadoptionof
informationtechnologysystemsistheprocessof“…usingcomputerhardwareandsoftware
applicationstosupportoperations,management,anddecisionmakinginthebusiness.”
(Thong,1999,p.192).AdoptionspecificallyprescribesthattheISisusedproductively,which
impliesthattheISmustbegeneratingsomeformofbenefit(Oliveira&Martins,2011;
Thong,1999).AnISadoptiontheoryprovidesaframework,basedonwhichthefactorsthat
affecttheadoptionofaninformationsystemarecategorised.
ThevastmajorityofstudiesonISadoptionutiliseoneofthefollowingmodels:Diffusionof
Innovations(DOI)theory,andTechnological,OrganisationalandEnvironment(TOE)
Framework.Thesemodelsarecombinedandrefinedbysubsequentstudies.Thissection
providesanoverviewofthesemodels.Alternativetheories,suchasTechnologyAcceptance
Model(TAM)andUnifiedTheoryofAcceptanceandUseofTechnology(UTAUT)arenot
examined,astheyrelatetoindividual-leveladoption.Hence,theyareoutsidethescopeof
thisstudy.
DiffusionofInnovationstheory
DOIatthefirmlevelproposesthatorganisationalinnovativenessisrelatedtothreefactors:
leadercharacteristics,organisationalstructureandorganisationalcharacteristics(Rogers
(1995),ascitedinOliveira&Martins,2011).Thefactorsareshowninthetablebelow.
Inthe“internalcharacteristicsoforganisationalstructure”categoryofthemodel,
centralisationreferstotheextentofwhichdecisionmakingauthoritywithinafirmrests
withtheminority.Complexityreferstotheknowledgeandexpertisethemembersinthat
businesspossess.Formalisationreferstohowrigidlyruleswithintheorganisationare
followed.Interconnectenessmeasurestheextentofsocialnetworkstheorganisationhas.
Organisationalslackreferstotheavailableresources(financialorotherwise)the
organisationcancallupon.Finally,firmsizeismeasuredbythenumberofemployees
(Oliveira&Martins,2011).
21
WhileDOIprovidesacomprehensivesetoffactorstoevaluatethetechnicalmeritsofanIS
innovation,theomissionoftheexternalenvironmentaspectisamajordrawback(Oliveira&
Martins,2011;Oliveira,Thomas,&Espadanal,2014;Yazn,Savvas,&Feng,2013).Forthis
reason,DOIismorecommonlyusedasacomplementaryperspective,ratherthanasa
standalonemodel.
Category Sub-category
Leadercharacteristics Attitudetowardschange
Internalcharacteristicsoforganisational
structure
Centralisation
Complexity
Formalisation
Interconnectedness
Organisationalslack
Size
Externalcharacteristics SystemopennessTable3-1:DiffusionofInnovation(DOI)theory
Technological,OrganisationalandEnvironmental(TOE)Framework
TheTOEmodeldescribestheprocessofinnovationbyanenterpriseintermsofthree
factors:technology,organisationandexternaltaskenvironment(TornatzkyandFleischer
(1990),ascitedinOliveira&Martins,2011).Thefactorsidentifiedarelistedasbelow:
22
Technological,OrganisationalandEnvironmentalframework
Technology Availability
Characteristics
Organisation Formalandinformallinkingstructures
Communicationprocess
Size
Slack
Externaltaskenvironment Industrycharacteristics,marketstructure
Technologysupportinfrastructure
GovernmentregulationTable3-2:Technological,OrganisationalandEnvironmental(TOE)Framework
ComparedtotheDOItheory,TOEfocusesmoreonthesurroundingenvironment,rather
thantheinnovationitselfortheorganisation.TheTOEFrameworkisnotexclusivetoany
specificinformationsystems,whichmakesitaversatileframeworksuitedtoawiderangeof
ITinnovations(Oliveira&Martins,2011).
Iacovou’sEDIadoptionmodel
Iacovou’smodelwasdevelopedbyIacovouetal.(1995),andwasoriginallyusedtostudy
thefactorsforsmallbusinessestoadoptElectronicDataInterchange(EDI)systems.EDIisa
standardthatfacilitateddirectcommunicationinterfacebetweenfirmswithinthesupply
chain.AdoptingEDIsystemseliminatedtheneedforbusinessestoprocessdocumentssuch
aspurchaseordersandinvoicesmanually,aswellasimprovementstothebusinesses’
responsetimeandoperatingefficiency("WhatisEDI?").OneoftheunusualfeaturesofEDI
isthatanEDIsystemismosteffectivewhen,andonlywhen,allofafirm’stradingpartners
areadoptingthesamesystem.ThiscreatesadditionalfactorswhenconsideringEDI
adoption.
Theauthorsproposedanalternativeversionoftheadoptionmodel,asshowninFigure1.
23
Figure1:EDIAdoptionmodel,fromIacovouetal(1995)
AsshowninFigure1,theauthorsestablishedEDIIntegrationasaseparateconcepttoEDI
Adoption.Accordingtotheauthors,EDIadoptionreferredtothebusiness’capabilityto
transactviaEDI,andintegrationreferredtotheextenttowhichEDIisembeddedwithinthe
businesspractices.ThisistorecognisethatsomefirmsoperatedEDI-capableequipmentsin
isolationtotherestofthebusiness.EDIintegrationcanbefurtherdividedintointernal
integration(interconnectionbetweenvariousbusinessapplications)andexternal
integration(linkagebetweenitselfandexternaltradingpartners).
Theperceivedbenefitsfactoremphasisedtheimportanceofcompetitiveadvantageinan
environmentwhereISaffectedmorethanonefirm.Thebenefitsmaycoverallofcost,
competitiveadvantageandperceptionaspectsofoutsourcingdecisions.Iacovouetal(1995)
foundthatbenefitsofEDIadoptionaccruedintwoforms:directbenefitsandindirect
benefits.Directbenefitsrefertocostreductionandefficiencyimprovements,whileindirect
benefitsincludeimprovedbusinessrelationshipsandcustomerservicequality.Itwasfound
that,byachievinghigherlevelofEDIintegration,thefirmderivedgreaterindirectbenefits
intermsofcompetitiveadvantage.
Organisationalreadinessreferstothefinancialandtechnologicalresourcesthatare
availabletothebusiness.Financialresourcesarenecessaryfortheinstallationcostand
24
operatingexpensesofEDIsystems.Inaddition,theefficacyofEDIsystemsdependsonthe
extentofintegrationintoexistingbusinesspractices,whichcanbecostly.Technological
resourcesrefertothelevelofsophisticationofITusagewithinthefirm,asfirmsthatare
morefamiliarwithITsystemscanadoptnewITsystemsmorequicklyandcomfortablythan
thosethatdon’t.ThisviewcanbeexpandedusingotherfactorsidentifiedinrelevantIS
adoptionliterature,suchasfirmsizeandmanagementattitude(discussedinsection4.2:
Organisational).
Animportantcontributionofthestudyistheidentificationoftradingpartnersasasourceof
pressure.BecauseEDIreliedonnetworkingbetweenfirms,theeffectivenessofEDIwas
optimisedonlywhenallofafirm’stradingpartnersadoptedthesametechnology.This
providedtheincentiveforbusinessestourgeitscustomersandsupplierstoadoptEDI,and
smallfirmswereparticularlyvulnerabletosuchpressureduetotheir(lackof)relative
powerandposition.
WhiletheIacovoumodelappearstobesimilartotheTOEframework,theformer
incorporatesconceptsandfactorsthatwerespecifictoEDI,suchasthenotionof
competitiveadvantageandpressurefromtradingpartners.
3.3.1 AnApplicationinNewZealandcontext:Mehrtensetal(2001)ThestudyconductedbyMehrtens,Cragg,andMills(2001)studiedthefactorsthat
promptedsmallfirmstoadoptinternet-relatedtechnology.Usingthesameadoptionmodel
andresearchmethodasIacovouetal.(1995),thisstudyprovidedsupportthattheIacovou
modelcanbegeneralisedintootherformsofISadoptionstudies.Thisstudyismoreclosely
alignedwiththecurrentstudy,duetothefactthatitwasconductedintheNewZealand
context,andthatthetechnologyexaminedbearssimilaritieswithcloudcomputing.
ComparedtoEDI,thefeaturesofinternetbetterresembledcloudcomputing.Thestudy
definedinternetasbusinesswebsiteandemailaccount,forwhichtheacquisitionand
ongoingmaintenancecostwasminimalcomparedtoEDI.Thisresembledthelowupfront
investmentandlowmaintenancefeaturesofcloudcomputing.Moreover,theinternetwas
lessindustry-specificcomparedtoEDI:EDIismorecommoninmanufacturingsectors
25
characterisedbylongandcomplexsupplychains.Theinternet-basedtechnologyisused
primarilyininformationsectors.
ThestudyundertakenbyMehrtensetal.(2001)alsoutilisedamultiplecasestudyresearch
design,andinheritedthethreecategoriesfromIacovou’smodel:perceivedbenefits,
organisationalreadinessandexternalpressure.Thefinalmodelofthestudyisshownin
Table3-3,withthefactorsthatwereadditionaltotheIacovou’smodelshowninbold.
Intermsofperceivedbenefits,threefactorswereobserved.Theinternethadarelative
advantageovertraditionalmethodsofcommunicationliketelephoneandfaxes,inthatthe
internetexpandedbusinesses’sourceofinformationtoaglobalscaleandallowedbetter
communication.Thewebsiteprovidedabetterchannelofadvertisingandcustomerservice.
Inaddition,adoptionoftheinternetalsosoughttoreinforcethebusiness’imageand
promotion.
Findingspertainingtoorganisationalreadinessrevealedthattheknowledgeofnon-
professionalsplayedamoresignificantrolethanprofessionals.Thisisprimarilyduetothe
businesses’lackofaccesstoexperts:commonly,adoptionofinternetischampionedby
owners,whodonotnecessarilyhaveprofessionalexpertiseintechnology.Sophisticationof
thebusiness’ITsystemwasanotherrelevantfactor.However,amajordeparturefromthe
Iacovoumodelisthatfinancialresourcesandfirmsizewerefoundtobeirrelevant.One
likelyexplanationforthefinancialresourceisthattheadoptionofinternetdidnotresultin
significantresourceexpenditure,forwhichthesamecanbesaidaboutcloudcomputing.
Whileexternalpressurewasalsoanimportantfactor,thesourceofpressurediffered
considerablyfromIacovouetal.(1995).Inthecaseofinternetadoption,themost
prominentsourceofexternalpressurewasfromcustomers,asopposedtotradingpartners.
Thisisduetothefactthatbusinessesthathadawebsiteandemailaccountwereperceived
tobemorecrediblecomparedtothosethatdidn’t.Asaresult,businesseswerefacedwith
theexpectationfromtheircustomers,whichmotivatedthemtoadopttheinternet.
26
Mehrtensetal
Perceivedbenefits Relativeadvantageintermsofefficiencyandcost.
Sourceofinformation.
Businesstool(firmimageandpromotion).
Organisationalreadiness Internetknowledgeamongnon-professionals.
Adequatecomputersystems.
ExternalPressure Pressurefromcustomers.
Pressurefromothergroups(suppliers,prospective
employees)
Table3-3:modelusedinMehrtensetal.(2001)BoldindicatesadditionsfromIacovouetal(1995)model
27
Thischapterreviewstheempiricalstudiesofcloudcomputingtoexaminetheirmethods
usedandtheirkeyfindings.AsummarytableofstudiesreviewedisshowninTable4-1.Due
tothedifferencesingeographicallocations,time,samplecharacteristicsandthescopeof
cloudcomputingofthestudies,careshouldbetakenwhencomparingthefindingsdirectly.
Nonetheless,thesestudiesprovidedempiricalevidencetowardsthefactorsthat
encouragedcloudcomputingadoption.
Authors Modelused SampleandMethod Prominentfindings
(Benlian&Hess,
2011)
Opportunityand
riskframework
(Theoryof
Reasoned
Action)
349responsesoutof
2,000German
companies.Survey
method.
Costadvantage,strategic
flexibilityandquality
improvementsarethe
mostsalientperceived
opportunity;whilesecurity
risksisthemostsalientrisk
belief.
(Benlian,Hess,&
Buxmann,2009)
374responsesfrom
297German
companies(from
randomsampleof
5,000).Survey
method.
SaaSwithlowspecificity,
strategicsignificanceand
uncertaintyaremostlikely
tobeadopted.Officeand
collaborationmost
adopted;ERPleast
adopted.
(Guptaetal.,
2013)
n/a(benefits
andriskfactors
only)
211smallandmicro
firmsinAPACregion.
Surveymethod.
Easeofuseand
conveniencemost
important;costnotmost
importantfactor;security
andprivacyofcloud
deemedacceptable.
28
(Low,Chen,&Wu,
2011)
TOE 111high-techfirms
fromTaiwan(outof
top500firms).Survey
method.
Environmentalfactor
significant;relative
advantagesignificantly
negative.
(Oliveiraetal.,
2014)
TOE+DOI 369firmsinPortugal
inmanufacturingand
servicesectors.
Surveymethod.
CombinedDOIandTOE
models;technology
readiness;environmental
notsignificant.
(Yaznetal.,2013) TOE 15SMEsinnortheast
England.Multiple
casestudymethod.
Geo-restrictionwas
importantfactor;top
managementcrucialto
adoptionsuccess.Table4-1:cloudadoptionstudies
BenefitsandDrawbacksofCloudComputing
Priorcloudcomputingadoptionstudieshavefoundthatthemostimportantfactorsthat
promptedbusinessestoadoptcloudcomputingarecostreduction,scalability,andeaseof
use.Ontheotherhand,themostprominentimpedimentstoadoptingcloudcomputingare
concernsregardingthesecurityandprivacyofcloudcomputing.
Costreductionisoftenviewedasthekeyfactorthatledtotheadoptionofcloudcomputing,
ifnotthedominantone.Sobragietal.(2014)foundcostsavingstobeadecisivefactorfor
firmstoadoptcloudcomputing,andMorganandConboy(2013)foundthatcostsavings
werestrongmotivatorstowardsadoptingthecloud.Smallbusinessstudies,suchasOliveira
etal.(2014)andCarcary,Doherty,Conway,andMcLaughlin(2014),alsofoundthatcost
reductionwasthemostcommonbenefitexperiencedbysmallbusinesses.
However,theimportanceofthecostbenefitwasnotsupportedbyallstudies.IntheAsia-
Pacificcontext,Guptaetal.(2013)foundthatcostwasthethirdmostimportantfactor,with
easeofuse,andprivacyandsecurityperceivedtobemoreimportantthancost.Likewise,
whileYaznetal.(2013)recognisedthatthelowcapitalexpenditureencouragedsmaller
firmstoadoptthecloud,particularlystart-upmicrobusinesses,thediscussionofthecost
29
aspectofcloudcomputingisverylimited.Apossibleexplanationforthisdifferencecouldbe
duetodifferentbusinessenvironments.Yaznetal.(2013)studiedfirmsininformation-
basedserviceindustries,suchasIT,businessservicesandeducation.TheAsia-Pacific
contextofGupta’s(2013)studyisalsolikelytogiverisetocontextualdifferencesinthe
operatingenvironment.
Scalabilityreferstotheabilitytoadjustcapacityaccordinglytoseasonaltrendsandbusiness
growth.Forsomefirms,itwasadecisivefactortoadoptcloudcomputing(Sobragietal.,
2014).Theabilitytochangetheamountofcomputingresourcesprovidedallowsfirmsto
controltheiroperationsandITinfrastructuremoreeffectively,andsignificantlyreducethe
developmenttimetoreleasenewproducts(Morgan&Conboy,2013;Yaznetal.,2013).
However,thebenefitofscalabilityappearstobedependentontheindustryandnatureof
thebusiness.Somebusinesses,suchasinformationbasedserviceindustries,didnot
perceivescalabilitytobeabenefit(Yaznetal.,2013).
Easeofusewasanotherimportantfactorthatcanpotentiallyassistorhindercloud
adoption.Itisbecominganexpectationthatcloudservicesareeasiertousethantheir
desktoppredecessors(Yaznetal.,2013).Guptaetal.(2013)foundthateaseofusewas
evenmoreimportantthancostreduction,althoughthedefinitionofeaseofuseinthat
studyincludedtheexperienceonmobiledevices.Softwareapplicationsthataremore
straightforwardandintuitivecaneasetheprocessoftransitioningemployeesontothenew,
cloud-basedservices(Morgan&Conboy,2013).
Concernsofcloudcomputingprimarilystemmedfromuncertaintyoverthesecurityofthe
data.Aconsiderableportionofsecurityofthecloudsystemrelatestothebusiness’lossof
ownershipoveritsdata,andtheassociatedprivacyconcerns.Thecloudcomputingmodel
inducesuncertaintyandconcernsfromusersduetothefactthattheusersmaynotbefully
awareofthesecurityimplicationsofcloud-basedsystems(Benlian&Hess,2011).Yaznetal.
(2013)foundthatthebusiness’trusttowardsthecloudprovideriscrucialinalleviatingthe
securityconcerns.Thistrustcanbebuiltbythesigningofconfidentialityagreements
betweentheclientandthecloudserviceprovider,aswellasgeo-restrictionconditionsthat
stipulatewheretheserversanddataarephysicallystored(Sobragietal.,2014;Yaznetal.,
2013).Some,however,perceivecloudtobesecureenough,andsmallerfirmswere
30
generallymorewillingtotradesecurityforconvenience(Guptaetal.,2013;Oliveiraetal.,
2014;Sultan,2011).
Organisational
InadditiontothemeritsofISitself,thecharacteristicsoftheadoptingfirmitselfarealso
highlyrelevanttothedecisiontoadoptnewinformationsystem.Basedonpriorliterature,
theprominentorganisationalfactorsincludetheowner’scharacteristicsandfirmsize.
Owners’characteristicshadbeenidentifiedbyThong(1999),whonotedthatsmallerfirms
tendtohaveamorecentraliseddecisionmakingstructure.Asaresult,theowners’attitude
andmanagementstyleexertsgreaterinfluenceonthefirm’sdecisions.Priorliteraturehad
consistentlyidentifiedtheowner’sITknowledgeasaprominentfactor.CraggandKing
(1993)foundthatsmallbusinessownersandmanagersthatweremoreenthusiastic
towardsITtechnologyweremorelikelytoadoptnewISfortheirbusinesses,while
businesseswhoseownershadlimitedITexpertiseandtimewerelesssupportivetowards
adoptingnewIS.Owner-managersgenerallyplaythecrucialroleofprovidingsupporttothe
adoptionofnewtechnologythroughactivechampioning(Mehrtensetal.,2001)and
allocatingthenecessaryresources(Yaznetal.,2013).
FirmsizehadbeenidentifiedbyaverylargenumberofISadoptionstudiesasarelevant
factor(forasummary,seeOliveiraandMartins(2011)orYaznetal.(2013)).Yet,empirical
observationshadnotbeenconsistent.Conventionally,largerfirmswerebelievedtobe
morelikelytoadoptnewIS,duetothefactthatlargerfirmshaveaccesstomoreresources
andexpertise,whichimprovesthequalityofsaidadoption(Thong,1999).Furthermore,the
resourcefulnessoflargerfirmsmakethemrelativelybetterequippedtohandlefailuresinIS
adoption(Sadowski,Maitland,&vanDongen,2002).Thisappearstobesupportedby
Oliveiraetal.(2014);andLowetal.(2011).However,Mehrtensetal.(2001)foundno
apparentrelationshipbetweeninternetadoptionandfirmsize,whileYaznetal.(2013)
foundthatsmallbusinesseswere,infact,morelikelytoadoptcloudcomputing.These
observationsarelikelytobeduetothefactthatsmallerbusinesseshavemoreflexible
organisationalstructuresthatallowthemtoadoptISmoreeasilyandrapidly(Sadowskiet
31
al.,2002),andthatbothinternet-basedservices(cloudcomputingincluded)lowerthe
barrierstoconductingbusiness.
ExternalEnvironment
Despitethedifferencesinthecharacteristicsthatexistbetweeninformationsystems,
competitivepressureandcustomerpressurewereconsistentlyidentifiedastheprimary
sourcesofexternalpressure.Inthemeantime,serviceprovidersandconsultantscanplayan
importantroleinsupportingbusinessestoadoptcloudcomputingproducts.
CompetitivepressurecanbeapowerfulsourceofmotivationforadoptingIS,butempirical
studiesthusfarreportinconsistentfindings.CraggandKing(1993)foundthatsmallfirms
considerITasacompetitivenecessitytomaintaintheirowncompetitiveposition.Mehrtens
etal.(2001)concursthatbusinessesmaybeexpectedtoadoptcertaininformationsystems
(suchastheinternet),sothattheyappearcompetentandup-to-date(Johnston&Vitale,
1988).Lowetal.(2011)foundcompetitivepressuretobeasignificantvariableincloud
computingadoption.Ontheotherhand,severalstudieshavefoundnorelationship
betweencompetitivepressureandadoptionbehaviour(Oliveiraetal.,2014;Thong,1999;
Yaznetal.,2013).
Alternatively,customersareanothermajorsourceofpressure.Thedemandsfromthe
customerscanbeapowerfulmotivatorforfirmstoadoptnewIS,andbusinessesareless
likelytoadoptnewinformationsystemswhennosuchneedsexist(Lin&Chen,2012).On
theotherhand,somecustomersmaybereluctanttousenewtechnology,whichmayhinder
theadoption.Inthecaseofcloudcomputing,therisksassociatedwithrelinquishingcontrol
canpotentiallycauseclientstodiscouragethefirmfromadoptingcloud-basedsoftware
(CCH,2013).
Finally,externalexpertsmayplayanimportantroleinsupportingfirms’decisiontoadopt
cloud-basedsystems.FrequentcontactwithexpertscanhelpthefirmtoutiliseitsIT
systemsmoreeffectively(Cragg&King,1993).Similarly,intermsofencouragingbusinesses
toadoptcloudsystems,cloudvendorsplayaveryimportantrolethroughpromotingtheir
productsandprovidingclarificationregardingthenatureoftheirservices.Yaznetal.(2013)
32
foundthatthelackofsuppliersupporthavemadeitmoredifficultforfirmstoevaluatethe
relativebenefitsofcloud-basedpackages,whichsubsequentlyhinderedtheirwillingnessto
adoptthecloud.
33
Basedonthereviewoftheliteratureoncloudcomputingandrelevantempiricalstudies,
thischapteridentifiesthegapswithinthebodyofliteraturereviewed,andposesthe
researchquestionsthatthisstudyseekstoanswer.Thissectionalsodefinestheparameters
andscopeofthisstudy,andspecifiesthemodelthatisusedtoguideresearchdirection.
ResearchGaps
Firstandforemost,researchintothebusinessperspectiveofcloudcomputingislimited.The
businessperspectiveisconcernedwiththewayscloudcomputingcanprovidevalueto
customers(Marstonetal.,2011).Untilrecently,fewstudieshadinvestigatedthefactors
thatmotivatedordiscouragedbusinessestoadoptcloudcomputing(Hobergetal.,2012).
Basedonthereviewofempiricalstudiesoncloudcomputingadoption,theexistingpoolof
literaturedoesnotprovideaconsistentbodyofevidence,fromwhichinferencescanbe
drawnreliably.Asthestudiesuseavarietyoftheoriesandperspectives,thestudiesretains
ahighlevelofautonomytopickspecificbenefits,limitationsandrisksofcloudcomputing.
ThisfeatureiscriticisedintheTOEframework(Yaznetal.,2013).Moreimportantly,the
studiestendtoquotethedefinitionofcloudcomputingdirectlyfromMellandGrance
(2011),whichishighlyabstractandisveryambiguousinscope.
Thelackofstudiesintheaccountingindustryisalsoamajorgap.Cloudcomputingin
accountingindustryisexperiencingmuchmorerapidgrowththanotherindustries.Yet,little
isknownaboutthereasonsorthefactorsthatfuelledthisgrowth,astherewerenostudies
oncloudphenomenoninaccountingfirms.Also,duetothedifferencesinbusiness
environmentbetweendifferentindustries,itisverylikelythattheaccountingindustry
differsconsiderablyfromtheotherindustries.
34
Gaps Implication
Lackofdemand-sidecloudcomputing
adoptionstudies.
Thereareinevitablyfewerstudiesofcloud
computingadoption,whichmeansthatthe
empiricalsupportforthepreviousfindingsis
weak.
Ambiguousscopeofcloudcomputing Cloudcomputingisanabstractconcept.
Withoutcarefullydefiningwhatcloud
computingdoesandhowitsupportsthe
business’process,theambiguityofcloud
computingbecomessolargethattheresults
havelittlecomparability.
Lackofstudiesthatarespecifictothe
accountingindustry,despitethepopularity.
Thebusinessenvironmentineachindustryis
unique,whichmeansthatfindingscannotbe
generalisedtootherindustriesreliably.
Asaresult,understandingofwhycloud
computingissopopularintheaccounting
industry(andnotothers)isnon-existent,
duetothelackofliterature.
Table5-1:Summaryofgapsidentified
ResearchTopicandQuestion
Thisstudyseekstoprovidesomeempiricalevidencetowardstheresearchgapsdiscussed
above.Thisisanexploratorystudythatinvestigatesthefactorsthatmotivatedsmall
accountingfirmstoadoptcloud-basedtechnology,andtheimplicationsfortheaccounting
sectorasaresultofthepopularisationofcloudcomputing.
Specifically,thisstudyaddressesthefollowingquestions:
1. Whataretherolesthatcloudcomputingplayintheprofessionalaccountingservices
industry,andhowdotherolesdifferfromeachother?
35
2. Whydoaccountingfirmschoosetoadoptcloud-basedsoftwaresolutionsfortheir
business,andfortheirclients?Whatarethefactorsthatmotivatedordiscouraged
theadoptionofcloudcomputing?
3. Whataretheaccountants’perceptionstowardsthecloudcomputingparadigm?
Whatarethelikelyimplicationsofcloudcomputingfortheaccountingindustry?
ScopeofResearch
5.3.1 SmallBusinessesThisstudyfocusesprimarilyonsmalleraccountingservicefirms,forthefollowingreasons:(i)
priorliteraturehadexplicitlyrecognisedthedifferentISadoptionbehaviourbetweensmall
firmsandlargefirms,(ii)largeraccountingfirmsareofteninfluencedbytheirparent
organisations,and(iii)cloudcomputingisexpectedtobemuchmorebeneficialtosmall
businessesthantheirlargercounterparts.
Thedistinctionof“small”businessesissignificantintheISadoptionliterature,asthe
adoptionmodelsforlargerfirmsarenottransferabletosmallbusinesses(Kuan&Chau,
2001;Sadowskietal.,2002;Thong,1999).Smallbusinessesfacedrasticallydifferent
circumstancesandchallengesfromtheirlargercounterparts.Generallyspeaking,small
businessesarecharacterisedbytheirinherentlymoreflexiblemanagementstructure
(Sadowskietal.,2002)andhighlycentraliseddecisionmakingauthority(Thong,1999).
ThesefeaturesallowthemtoadoptnewITinnovationsmorerapidlythantheirlarger
counterparts.Ontheotherhand,smallerbusinessesfacefiercercompetition,andtheir
accesstofinancialandhumanresourcesaremorelimited(Kuan&Chau,2001;Thong,1999).
ThismakesitmoreriskyforsmallbusinessestoadoptISinnovations,astheirlackof
resourcesmaypreventthemfromderivingthefullbenefitofnewtechnology(Iacovouetal.,
1995),aswellasplacingtheminamorevulnerablepositioniftheadoptionofthenew
systemfails(Sadowskietal.,2002).
BecausealmostallISadoptionstudiesareconductedoverseas,theterm“small”shouldbe
interpretedinlightofothercountries’standardsforsmallbusinesses.NewZealand
businessesthatemployfewerthan50peoplecomprise99%oftotalbusinesses,and
36
accountfor44%ofoverallemployment(MinistryofEconomicDevelopment,2011).
Moreover,at19employeesorfewer,NewZealand’sdefinitionofsmalltomedium
enterprises(SMEs)ismuchlowercomparedtootherjurisdictions.Forexample,European
Union(EU)definessmallbusinessesas50employeesorfewerandSMEsas250employees
orfewer(CentreforStrategy&EvaluationServices,2012),whileSingapore’sdefinitionof
SMEis200employeesorfewer(SpringSingapore,2014).
Country Employee Financial Source
NewZealand 20orfewer None (MinistryofEconomic
Development,2011)
European
Union
250orfewer EUR50millionorless
turnover,OR
EUR43morlessbalance
sheettotal
(CentreforStrategy&
EvaluationServices,
2012)
Australia Nostandarddefinition (D&BSmallBusiness,
n.d.)
Singapore 200orfewer S$100morlessannualsales (SpringSingapore,2014)
Table5-2:Comparisonofthedefinitionofsmallbusinesswithothercountries
Moreover,smallerbusinessesaremorelikelytoadoptcloudcomputingthantheirlarger
counterparts.LargefirmsgenerallyhavemoreorganisationalobstaclestoadoptingnewIS,
suchas:greaterretrenchmentandresistancetochangebystaff(Benlian&Hess,2011;
Marstonetal.,2011),existingITinvestmentsintheformofsunkcosts(PwC,2011)and
greaterconcernstowardsthesecurityandprivacyoftheirdata(Sobragietal.,2014).Since
theseobstaclesareorganisational-level,theyarelessrelevanttothetechnologybeing
adopted.
37
5.3.2 CloudAdoptionTheterm“cloudcomputing”encompassesconsiderableambiguity,ascloudcomputingcan
refertoalargenumberofapplicationsandforms.Forthepurposeofthisresearch,“cloud
computing”foraccountingfirmsiscategorisedintotworoles:cloudcomputingofferedas
clientservice;andcloudcomputingforpracticemanagement.
Thedistinctionofthetworolesisbasedontheinternallyandexternallyfocused
applicationsproposedbyClemons(1986).Externallyfocusedapplicationsaddvalueby
bringingrealbenefitstothefirm’scustomers,aswellasthefirmitself.Internallyfocused
applicationsareusuallyinvisibletothefirm’scustomers,andaddvaluebyproviding
benefitstothefirmonly.Thisdistinctionisimportantforanalysinghowinformationsystems
contributetoafirm’scompetitiveadvantage,asthepurpose,featuresandbenefitsofan
externallyfocusedapplicationdifferconsiderablyfromthatofaninternallyfocusedsystem.
Theclientserviceroleofcloudcomputingemphasisestheaccountants’capacityasbusiness
advisorsfortheirclients.Businessadvisoryrequiresextensiveinformationsharingbetween
theaccountantandtheclient,andaccountantsmaybedirectlyinvolvedinmanagingtheir
clients’accountinginformationsystem(CCH,2013;WorkflowMax,2013).Inthisrole,cloud
computingreferstothecloud-basedsoftwarepackagesthatsupporttheclient’saccounting
system,whichmaybemanagedbytheaccountingfirm.Thecloud-basedaccounting
softwareapplicationsareintendedtocreatevaluefortheclient,andtheaccountingfirm
doesnotderiveanybenefitfromadoptingthesystemotherthanfeesfromitsclients.Xero
isthemostfrequentlyusedcloud-basedaccountingsoftware.
Thepracticemanagementrolefocusesontheuseofcloudcomputingbytheaccountant
firmtomanageitsowninternalprocess.Thepracticemanagementsystemisinternally
focused,whichmeansitdoesnotinteractdirectlywiththeclients,andthattheaccounting
firmadoptsthepracticemanagementsystemasthefinaluser.
Thisdistinctionbetweenclientserviceandpracticemanagementisparticularlyimportant,
becausealthoughbothcanbecalled“cloudcomputing”,thedifferencesintheirintended
purposemeanthatthefactorsthatmotivatetheiradoptionarelikelytobeverydifferent.
Thisdistinctionisalsoacontributiontotheliterature,asexistingcloudcomputingadoption
studiesdonotappeartoexplicitlydifferentiatebetweenthetworoles.
38
ModelDevelopment
TheresearchmodelisdepictedinFigure2.Thedepictionprovidesavisualillustrationthat
differentiatesthetwoaspectsofadoptiondiscussedinthissection,andthetheoriesthat
areprimarilyusedtostudytheadoptionbehaviour.
CloudComputingAdoption
PerceivedBenefits
DirectBenefits
IndirectBenefits
OrganisationalReadiness
FirmSize
Non-professionalITKnowledge
EnvironmentalInfluence
Clientservice
PracticeManagement
CustomersCompetitors
CloudSystemVendors
Effectson:
Effectson:
Figure2:Researchmodel
ThisresearchmodelisbasedonIacovouetal.(1995)andMehrtensetal.(2001),which
featuredthesamethreebasecategories:perceivedbenefits,organisationalreadinessand
externalpressure.Inthisstudy,theexternalpressurefactorwasrenamedtoenvironmental
influence,torecognisethatnotallexternalinfluencesarenecessarilybad.Also,thisstudy
substitutedEDIIntegrationforeffectsonclientserviceandpracticemanagement.Thisisto
39
recognisethatcloudcomputingcomprisestworoles.Thetworolescorrespondtothe
discussionof“cloudadoption”inSection5.3.2.
Eachofthethreebasecategoriesissplitintotwosubcategories.ForPerceivedBenefit,
directbenefitsrefertotangible,explicitandeasilyquantifiablebenefitsasaresultof
adoptingcloudcomputing,suchasreducedcostandimprovedefficiency.Indirectbenefits
refertothemoresubtleyetprofoundeffectsthataredifficulttoquantify,suchasmarket
competitivenessandfirmimage.
InOrganisationalReadiness,thetwoobservedfactorsarefirmsizeandnon-professionalIT
knowledge.Theformerisincludedbecauseoftheinconclusivefindingsregardingthe
relationshipbetweenfirmsizeandITadoption.ThelatterisderivedfromMehrtensetal.
(2001),whofoundthat,withinthecontextofinternet-basedtechnology,non-IT
professionals(particularlytheowners)playedasignificantroleinitsadoption,whiletherole
ofITprofessionalswasnegligible.Duetothenatureofreducedmaintenance,thestaff’sand
partners’expertiseincomputersandtechnologyisevenmorecrucialinacceptingthecloud
concept.
Lastly,externalinfluencecoversboththepressuresfromexternalstakeholdersandthe
supportfromthem.Pressurefromcustomersandcompetitorsareinterrelated,astheyarise
fromthesamefear.Customerswouldleavetheaccountingfirminfavourofitscompetitors
iftheirneedsarenotmet(customerpressure),orifthecompetitoradoptsproductsthat
betterfitsthecustomers’needsandwants(competitivepressure).Alternatively,cloud
systemvendorsmayalsohaveconsiderableinfluenceonthefirm.Itshouldbenoted,
however,thattheinfluenceisnotnecessarilynegative.Cloudservicevendorsmayoffer
incentiveprogrammesandestablishcollaborativerelationshipswiththeaccountants.
40
Thischapterdetailsthemethodsthatareusedtocarryouttheresearch,andprovides
justificationsforthechosenmethods.AccordingtoMcKerchar(2010),atypicalresearch
designconsistsofthreeconsistentandcoherentcomponents:researchframework,
methodologyandmethods.Thethreecomponentsarediscussedinthesectionsbelow.
ResearchFramework
Researchframeworkisthefundamental,intuitionalbeliefsofrealitytheresearcherholds
towardsthephenomenon(McKerchar,2010).Thisstudyadoptsaresearchframeworkof
postpositivism,whichimpliestheontologicalpositionofcriticalrealism.Criticalrealismis
thebeliefthat,whileanexternalrealityexistsindependentlytothesubjectiveassessment
oftheobservers(researchers),theunderstandingofthatrealityisinfluencedbythe
observer’ssensoryexperienceandothermediums(Bisman,2010).Subsequently,the
purposeofpostpositivistresearchistoidentify“structuresthatgiverisetoactionsand
eventsthatcanbeexperiencedintheempiricaldomain”(Wollin,1996,ascitedinBisman,
2010).
Asthestudyisintendedtobeexploratoryinnature,thepostpositivismframeworkis
particularlysuitable.Thepurposeofthisstudycanbeviewedasdiscoveringanexternal
phenomenonthatisalreadyineffect(i.e.theadoptionofcloudcomputingbyaccounting
firms).Postpositivismisbettersuitedtothisstudycomparedtopositivismand
interpretivism,becausepositivism’snaïverealismontologicalperspectivecannot
accommodateformultipleorinconsistentfindings(hence,unnecessarilyrestrictingthe
findingsofthisstudyandlossofvaluableinformation).Interpretivism,ontheotherhand,is
toocontext-specific,whichwouldconstraintheexploratoryvalueofthisstudy.
Methodology
Methodologyistheintermediarybetweenphilosophicalbeliefsandspecificmethods
employed,anddeterminesthegeneraldirectionhowtheresearchisconducted(McKerchar,
2010).Whilemethodologyconventionallyreferstoquantitativeandqualitativeapproaches,
41
manyresearchers,includingBrymanandBell(2011),questionedtheextentofopposition
betweenthetwoapproaches,asthereisnodeterministicrelationshipbetween
quantitative/qualitativeapproachesandphilosophicalbeliefs.Furthermore,as
postpositivismisamiddle-groundbetweenpositivismandinterpretivism(Bisman,2010),
thesimpledistinctionbetweenquantitativeandqualitativeisnolongeruseful.Thisstudy
adoptsaprimarilyinductivemethodology,throughtheuseofqualitativemethods.
Inductiveapproachistheprocessofbuildingtheoriesfromempiricalobservations
(McKerchar,2010).Incontrasttodeduction,inductiveapproachfocusesongenerating
meaningfultheoriesandexplanationsthatarecontext-andpopulation-specific,ratherthan
universally-applicablerulesorlaws.Thisfeatureisconsistentwiththepurposeofthisstudy,
whichseekstogaindetailedinformation(i.e.howandwhyquestions)andcreatenew
theories,ratherthantestingexistingtheories.Deductiveapproach,ontheotherhand,
wouldbelesseffectiveinthisparticularstudy,becauseexistingempiricalstudiesisvery
limited,andadeductiveapproachwouldresultinverylittlegainsinnewinsights.
Thisstudyiscarriedoutusingthemultiplecasestudydesign,andsemi-structured
interviewsareusedastheprimarymethodofdatacollection.Thismethodologyisselected
duetoitseffectivenessinaddressingtheresearchquestionsandgapsinliterature.
6.2.1 MultipleCaseStudyCasestudyistypicallyusedto“…[understand]thedynamicspresentwithinasinglesetting”
(Eisenhardt,1989,p.534).Thefocusofcasestudyistomakeobservations,wherethe
researcherdoesnotseektoinfluencethebehaviourofsubjects(Yin,2009).Becausecase
studiesarelessreliantonpriorempiricalstudiescomparedtomethodssuchassurveysand
experiments,casestudiesareespeciallysuitablefordevelopingtheoriesonemerging
phenomenonthathavelimited,weakorinconsistenttheoreticalframework(Eisenhardt,
1989).Asdiscussedpreviously,empiricalstudiesoncloudcomputingadoptionarelimited
andtoodispersetoformasolidtheoreticalframework.Thefactthatcasestudydoesnot
dependonexistingempiricalevidenceandtheabilitytogeneratetheoriesmakescasestudy
particularlyappropriateforthisstudy.
42
Multiple-casestudymethodretainstheabilitytocollectandanalysedatathatisrichand
detailed,andprovidesgreaterexternalvalidityoversingle-casestudies.Thedifferentcases
inamultiplecasestudyprovidemultipleperspectivesthatcanbeusedeithertoreinforce
thetheorythroughreplicationlogic,orexaminecaseswithopposingcharacteristicsasrival
theories(Yin,2009).Multiple-casestudyalsoreducestheextenttowhichthecaseisoverly
narroworidiosyncraticduetospecificfactorsassociatedwithcertaincases(Eisenhardt,
1989).Giventhatpriorresearchontheareaofcloudcomputingforaccountingindustryis
virtuallynon-existent,themulti-perspectiveprovidedbythecasesisacrucialcontribution.
Theunitofanalysisforthisstudyisorganisationlevel,asitallowstheresearchtobe
focusedontheaccountingfirms.Acaseconsistsofasinglecharteredaccountingfirm.
Whenanaccountingfirmhasmultiplebranches,acaseconsistsofasinglebranchofthe
firm.However,careistakenthatonlyonebranchofanationalnetworkoffirmisselected.
Forthisresearch,studyingasingleindustryofaccountancycontributestotheinternal
validity,astheindustryprovidesacontrolthateliminatesthedifferencesduetoindustry
characteristics.Furthermore,becauseaccountingfirmsarehighlyhomogeneous,thefirms’
owncircumstancesarelesslikelytovarysignificantly,andthereisareducedlikelihoodof
“noise”thatmaybepresentinthefindings.
6.2.2 DataCollectionThesubjectfirmswereselectedonthebasisofreplicationapproach.Underthisapproach,
datacollectionanddatagatheringissimultaneous.Datafromeachfirmiscollected
individuallyandanalysed,thefindingsofwhichdetermineswhetherfurthercasesare
necessary,andthecharacteristicsthatareusefulinreinforcingorcontrastingwithexisting
evidence(Yin,2009).Sixcaseswereinvestigated,whichprovidedasuitablebalance
betweenprovidingarobustempiricalgrounding,andthecomplexityandresource
constraints(Eisenhardt,1989).
Thecaseswerechosenprimarilyfromthelistofaccountingfirmsthatarepartnerswith
XeroandMYOB.XeroandMYOBarecloudserviceprovidersthatestablishrelationships
withaccountingfirmstoprovidesupporttotheirproduct.Bothfirmspublishthelistoftheir
43
accountingfirmpartnersontheirrespectivewebsites.Existingcontactsarealsoutilised
whenevertheyareavailable.
6.2.3 Semi-StructuredInterviewsThedecisionmakersandtheITchampionswithineachaccountingfirmareidentified,anda
semi-structuredinterviewisundertakenwithuptotwoofthem.Interviewingtwopeople
ensuresthatinformationisgatheredfromboththeinternalpracticemanagement
perspectiveandtheexternalclientserviceperspectives.Itisexpectedthateachinterview
takesbetween30and45minutes.
Semi-structuredinterviewresultsinricherandmoredetailedinformationtobegathered
(Bryman&Bell,2011).Asemi-structuredinterviewconsistsofabasicplanoftopicsand
questionsthatguidestheinterviewingprocess,buttheprocessallowsforflexibilityasthe
interviewercandeviatefromprescribedtopicsinordertoseekgreaterdetail,perspectiveor
uncovernewinformation.Theflexibilityofsemi-structuredinterviewsisparticularlyuseful
forseekingexplanationanddetailsineachcase,withoutbeingtoorestrictive.
44
Thischapterprovidestheresultsforthesixcasefirms,andthefactorsthatweresignificant
inadoptingcloudtechnologiesareanalysed.Table7-1providestheprofilesofthe
interviewees.
Inadditiontotheaccountingfirms,amanagerfromacloud-basedsoftwareproviderisalso
interviewed.Acloudserviceproviderprovidesacomplementaryperspective,ashewould
beinabetterpositiontocommentontheindustryasawhole.
Firm Interviewees
A Partnerofthefirm,whoisresponsibleforofferingsoftwareproductsforclients
anddecidingtheinformationsystemstousewithinthebusiness.
B Businesssystemsspecialistwithinthefirm,whoisresponsiblefor
recommendinginformationsystemstothefirm’sclientsandthefinaldecision
makerswithinhisownfirm.
C Directorsofthefirm,whoareresponsiblefordecidinghowthefirm’s
informationsystemismanaged,andwhatproductsandservicestoofferto
theirclients.
D Directorofthefirm,whomakesthedecisiononhowthefirm’sinformation
systemismanaged,andwhatproductsandservicestooffertoclients.
E Seniormanagerofthebusinessadvisorydepartment,whoactivelychampioned
theuseofcloudcomputinginbusinessadvisoryservices.
F Directorofthefirm,whomakesthedecisiononhowthefirm’sinformation
systemismanaged,andwhatproductsandservicestooffertoclients.
n/a
(Provider
Omicron)
Accountsmanagerofamajorcloudsystemvendor,whocommunicateswith
accountingfirmsandpromotecloud-basedsolutionstothem.
Table7-1:SummaryofInterviewees
45
FirmA
FirmAisasmallaccountingfirmlocatedinChristchurch.Itsprimarybusinesslinesconsistof
transactionalaccountingservices(suchasbankreconciliations,receivables,payablesand
payroll)andinformationsystemconsulting(implementingappropriateITinfrastructurefor
clients’businessneeds).Businessadvisoryislimitedtooperationalissues,suchasbudgeting
varianceanalysisandcashflowplanning.Auditorassuranceservicesarenotoffered.Its
clientsarepredominantlyagriculturalandconstructionbusinessesaroundtheCanterbury
region.Thebusinessemploysapproximately10employeesintotal.
Thefirmhastwopartners,eachmanagingoneofthetwobusinesslines(bookkeepingand
ITconsulting).Theaccountingfunctionismanagedbyasinglepartner,whooverseesthe
strategicandbusinessprocesses,includingdeterminingwhatsoftwareandinformation
systemsareusedtoaddressclients’specificneedsandmanagethefirm’sownoperations.
TheITbusinesslineprovidesawiderrangeofIT-relatedconsultingandimplementationfor
clients,suchas:serversetup,emailandsystemsdevelopmentusingoff-the-shelfsoftware.
Theinterviewwasundertakenwiththeaccountingpartner,whoisbothachartered
accountantandhadexperienceworkingwithITprojects.
46
Enablers/Inhibitors Client PracticeManagement
Adoption Yes(Xero,WorkflowMax)
Since2008
Yes(cloud-basedSaaS)
Benefits Flexibilityw/services
Easytouse(forclients)
Communicationw/external
parties
Short-termcommitment
Flexibilityinsupportingbusiness
process
Limitations/risks LackofFeature None
Organisational Owner’sITexpertise
AccesstoITexpertise
Outsourcingofbookkeeping
Owner’sITexpertise
AccesstoITexpertise
PriorISarrangement
Firmsize
Firmsize <10employees
Environment Clientpressure
Softwareecosystem
Vendorsupport
Ecosystem(linkagew/clients’
products)
Table7-2:cloudadoptionforFirmA
7.1.1 CloudComputingforClientServiceFirmAoffersXeroandWorkflowMaxtoitsclientsforaccountingsolutionsandworkflow
management,respectively.ClientsaregivenaccesstotheirownXeroandWorkflowMax
accounts,andtheycaninputday-to-daytransactionsintothesystems.Examplesinclude:
inputtingtimesheets,recordingsalesandpurchaseinvoices,andperformbank
reconciliations.FirmA,however,retainsfullcontrolovertheclients’accounts.
ForFirmA,anoverwhelmingmotivationtooffercloud-basedaccountingsoftwaretoits
clientsistheperceivedbusinessopportunity.Cloud-basedpackagesprovideopportunities
foraccountantstoprovidegreatervaluetotheirclients:
47
“Traditionally,accountantshavebeenfocusinginwardly,andassuchhavebeen
promotingtheuseofsoftwarethathelpsthemattheirendbutnottakinginto
accounttheneedsonadaytodaybasisoftheclient.Manyofthenewproductsto
markethavebeendevelopedwiththeclientinmindsoifyoucanhelpimplement
thesetypesofsolutionstheclientisgettingfargreatervalueanditdemonstratesthe
valueyouareabletobring–ultimatelybringingclientscloser.”
Cloud-basedsoftwarehasallowedthefirmtobecomemoreflexible.Flexibilityis
interpretedastheabilityforthecloud-basedsoftwaretomatchtoclients’needs:
“Thebusinessoutsourcessomeofourdata-entryworktoexternalparties,sowewere
lookingforproductsthathadthebestfunctionalityandprovidedthemaximum
efficiency/productivitygains…Xerosuitedourbusinessmodelwell[asanaccount
managerandbookkeeper]…[Also,]therangeofadd-onsmakesitveryvaluablefor
[our]clientsacrosstheirentirebusiness”
ForFirmA’sclients,theeaseofuseandintuitivenesswasanimportantconsideration,and
onemajorfactorthatledtothechoiceofXero.AnexampleofXero’seaseofuseisthebank
reconciliationprocess,aprocessthatisessentialtomanagingthecashflowofabusiness,
yetacomplexconceptinaccounting:
“WithXero,all[theclients]needtodoisclick‘match’,anditwilldoalltheworkfor
you.Thetick-and-matchprocessisveryintuitive,andtheclientdoesn’tneedtoknow
anythingabouthowtoprepareabankreconciliationstatement.”
Whenaskedaboutthesecurityofcloud-basedsoftware,theintervieweedoesnotperceive
ittobeamajorrisk,astheydidnotaffectonlinebankingservicesfrombecomingpopular,
despitethesensitivenatureoftransferringmoney:
48
“Onlinebankinghadbeenaroundforyears,andeveryoneusesit…Peopledon’tfeel
thatit’sunsafetotransfermoneyovertheinternetanymore…Andthesamethingwill
probablyhappentoXeroonceitgainscriticalmass.Xero’sagoodplacetostartfor
those[clients]whowanttogettheirfeetwetwiththewholecloudthing.”
WhileexternalpressurewasnotaprominentthreatforFirmA,theintervieweeidentified
thatclientsmayexertconsiderablepressureonaccountantsthatareunwillingtoadopt
cloud.Thebenefitsofcloud-basedaccountingsoftwareareintendedtoappealtonon-
accountingprofessionals,ratherthanaccountantsthemselves:
“Xeroisdesignedwithnon-professionalsinmind,notaccountants.Xeroisdesignedin
suchawaythathidestheuglyaccountingbehinditsintuitiveinterface.Accountants,
ontheotherhand,don’tnecessarilyfindXerotobeanyeasiertousethanwhat
they’reusedto…Inaway,someaccountantsare‘forced’toadoptcloud-based
softwarebecausethat’swhattheirclientswant”.
Also,thesoftwareecosystemplayedasignificantroleinconvincingthemtostaywithXero.
AsXerohadbeenaroundforlongerthanitscompetitors,itwasabletoestablishastronger
softwareecosystem:
“WecurrentlyhavenointentiontoreplaceXerowithanyalternatives.Wewereusing
Xeroforalongtime,andsowehavebecomeexpertsinitsuse…Alsotherangeof
add-onsmakesitveryvaluableforclientsacrosstheirentirebusiness.”
7.1.2 CloudComputingforPracticeManagementFirmAalsoutilisedcloud-basedpackagesformanagingitsownpractice.Xeroand
WorkflowMaxareusedtomanagethebusinessaccountsandprocesses,respectively.The
firmalsousesDropboxforfilesharingandMicrosoftSharePointforcollaboration.
49
FirmAenjoysaconvenientaccesstoITexpertise,duetothefactthattheaccounting
partnerhaspreviousexperienceinITprojectsandthefirm’scloseproximitywiththeIT
consultingdivision.Theexpertisealsoallowedthefirmtooperateanin-houseremote
access-basedsysteminasimilarmannertocloudcomputing:
“Priortocloudcomputingwehadaserverin-housethatkeptourclients’accounting
dataandaMicrosoftExchangeemailsystem.Wecanaccessthefilesviatheterminal
server…Sowhenthecloudcomputingconceptgainedtraction,it’sreallyalogicalstep
forustomake.”
Thedecisiontoadoptcloud-basedsoftwaresystemsforinternalbusinessmanagement
followedthebusiness’desiretobeflexible:
“Wehaveateamoverseasthatdoesallourbookkeepingforus,andwehavetobe
highlyflexibletoensurethatweprovideourclientswithalltherightservices…Cloud
systemsaresomucheasier,intherespectthatwecangetwhateversoftwarewe
needatamoment’snotice,withouthavingtoinvestalotofmoneyinhardware”.
FirmB
FirmBisamedium-sizedcharteredaccountingfirmlocatedincentralChristchurch.It
employsapproximately50staffmembers.Asafull-fledgedaccountingfirm,itsaccounting
servicesinclude:compliance(preparationoffinancialstatementsandtaxreturns),tax
consulting,businessplanningandgrowth,managementconsultingandaccounting,and
auditing.Inaddition,FirmBalsooffersinformationtechnologyservices,whichassistclients
withselectingandimplementingnewsoftwareformanagingtheirbusinesses,aswellas
providingtraining.Thefirmservicesadiverseportfolioofclients,bothfor-profitandnotfor
profitentities.
FirmBhadnobranchesinotherlocations,whichallowedittooperateinalargely
autonomousfashion.Despitethefactthatthefirmisaffiliatedwithaninternational
50
accountinggroup,inter-firmcollaborationislimited.FirmBismanagedbyseveralpartners
thatspecialiseindifferentbusinesslines.Moreover,whilethefirmhasanin-house
informationsystemdepartment,theroleofthedepartmentisemphasisedonthebusiness
potentialofITinnovations,insteadofroutinemaintenance.
Theinterviewiscarriedoutwiththesystemsmanager,whoisresponsibleforparticipating
inthelatestdevelopmentsofaccountinginformationsysteminnovationsand
recommendingthemtothefinaldecisionmakers.
Client PracticeManagement
Adoption Yes(Xero)
Since2011
No(in-houseserver)
Benefits Strategicallybeneficial
Easytouse(forclients)
Easytomaintain
Flexible(clients)
Security(internalcontrol)
None(noincrementalbenefit)
Limitations/risks Lackoffeatures
Perceiveddatasafety
Lackoffeatures
Organisational ITexpertise
Firmsize
Firmsizeistoolarge
FirmSize Approx.50employees
Environment Competitivepressure NoneTable7-3:cloudadoptionforFirmB
7.2.1 CloudComputingforClientServiceFirmBheavilyfocusesoncloud-basedaccountingpackages,notablyXero.Thisisevident
fromthefactthatXerowaslistedasaseparateservicelineonthefirm’swebsite.BothFirm
Banditsclientshaveaccesstotheaccountingfile.Theclientswouldinputtheirday-to-day
transactionsintoXero,andFirmBwouldusetheinformationtopreparereportsand
51
provideadvisoryservicesbasedontheinformation.Cloud-basedsolutionsarealsousedto
assistclientswiththeirbudgetingandreportingneeds.
ThereasonthatFirmBwassoproactiveinpromotingcloud-basedaccountingsoftwareto
itsclientsisduetothere-evaluationofthefundamentalpurposeofaccountants.Notably,
accountants’valueslieinhelpingbusinessescreatevalue,ratherthanmanipulating
numbers:
“We[theaccountants]arenotjustthesemysteriouspeoplewhositbehindtheirdesks
allday,crunchingnumbersandcompletelyunawareofwhat’sgoingonouttherein
the[business]world.”
Theintervieweewentonfurthertostatethatoneofthekeybenefitsofcloud-based
accountingpackagesistheabilitytomonitorclients’accountingrecordsandcompile
reportsinrealtime:
“Accountantshavetraditionallybeentheambulanceatthebottomofthecliff.
Accountantscreatereportsusingtheirclient’shistoricaldata,andbythetimethe
accountantsgotholdofthereport,theissueswouldhavebecomeworse…”
“Cloudcomputingallowsaccountantstobethefenceatthetopofthecliff,rather
thantheambulanceatthebottom.[Cloud-basedaccountingsystems]provide
accountantsreal-timeaccesstoclients’file,whichallowsustopickupandacton
businessproblemsimmediatelyratherthanafewmonthsdownthetrack.”
Moreover,cloud-basedaccountingsystemsalsohavetheaddedbenefitofloweringthe
levelofmaintenanceofclients’accounts.Itisworthnotingthat“maintenance”inthiscase
referstomaintainingtheaccuracyoftheclient’saccountingfilesratherthanIT
infrastructure.Thelackofcustomisationandeaseofusemakecloud-basedaccounting
softwarearelesspronetoclutter,andallowaccountantstorectifyanyproblemsmore
easily:
52
“Somepeople[accountants]sayXeroistoosimplified,butthat’sjustoldaccountant
thinking.People[non-accountingprofessionals]canbesurprisinglyrecklesswhenit
comestostuffingupaccountingrecords,andit’seasiertofixproblemsinasimple
systemthanacomplexone…Plus,withcloud-basedsoftware,youcandoitremotely.”
Whileeaseofuseisgenerallybelievedtobeabenefitfornon-professionals,FirmB
reportedthatXero’seaseofuseaccruesbenefitsintermsofreductionsinnon-value-adding
activities:
“It’smucheasiertosetupabusiness[account]inXerothanMYOB…Whenallwe
needtodoistoprepareasetofreportsfortheclient,MYOBasksalotofquestions
[whensettingupthecompanyaccount];Xeroismoreusable‘outofthebox’…With
Xerowe’respendinglesstimesettingupacompanyaccount…[Our]clientswant
reports,andXeroprovidesthesereportsquicker.”
Forclients,cloud-basedaccountingpackagesprovidevalueintheformofgreaterflexibility.
Forexample,cloud-basedsystemsallowbetterconcurrentaccess:
“Oneofourclientswasahusband-and-wifeshop,andpreviouslyusedadesktop-
basedaccountingsoftwaretomanagetheiraccounts.Thehusbandenteredinvoices,
andthewifedidthebanking.Sinceeverythinggetsenteredintothesamesystem,
theywouldalwaysfightoverthecomputeraccess…WithXero,theydon’thavethe
problemanymore:theycanbothbeputtingdataintotheirXeroaccountingfileatthe
sametime,andtheydon’thavetousethatonecomputertodoso.”
Likewise,theabilityforcloud-basedsoftwaretointerfacewithotherdatasourcesprovide
usersgreaterflexibilityintermsofperformingtheirtasks,
“Whatgenerallyhappens[withtraditionalaccountingsystem]isthatattheendof
eachmonth,theownerhastospenddaystofindeveryinvoiceandreceipt,andcheck
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themoffagainsttheirbankstatement.Thismakesitdifficultfortheownerstodo
anythingelseduringthosedays…BecauseXeroretrievesbanktransactiondata
automaticallyonareal-timebasis,theycanreconcilebankaccountastheycomein;
effectivelyspreading[theworkload]outthroughoutthemonth.”
Despitethenumerousbenefitsthatcloud-basedsoftwareoffer,theintervieweedidnot
perceivecloudcomputingasathreattotheaccountingindustry.Theprofessional
capabilitiesofaccountantsarenotsubstitutablebyautomation:
“Cloud[-basedaccountingpackages]won’treplaceaccountants’hardknowledge…If
Xeroreallycanreplaceaccountants,itwouldhavehappenedalongtimeagowith
desktop-basedaccountingsoftware…We[theaccountants]aretheexperts,andwe’re
theretoprovideprofessionalhelpwhenthey[theclients]arenotsurewhattodo…
Cloud-basedaccountingsoftwareisactuallyhelpingustoextractbetterinformation
fromourclientswithlesstime.”
Inrespectofthesecurityofdatastoredinthecloud,theintervieweebelievedthatthe
problemisonetodowithpeople’sperceptionsofsecurity,ratherthanactualsecurity:
“Whenpeopletalkaboutthe‘security’ofthecloud,theyarereallyreferringtothe
physicalcontrol[oftheirdata].Theyfeelsaferwhentheirdataisstoredonahard
drive,becauseitissomethingtheycanholdintheirhands…Buteventhen,harddrives
canfail,andUSBdrivescangetlost.”
Cloud-basedsoftwareasaservicemay,infact,beevensaferthananon-cloudoneinterms
ofinternalcontrol,astheusers’abilitytomanipulatethesystem:
“It’shardertoconcealstuffinacloud-basedsystem.[Fordesktop-basedsystems,]the
auditorsmaybeconcernedthattheusershavemodifiedtheiraccountingsoftwareto
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concealsometransactions…Thisissimplynotpossibletodoincloudsoftwarelike
Xero.”
Intermsofexternalpressure,competitionwasaconsiderablemotivatorforcloudadoption:
“WedecidedtoadoptXerobecausewe’reafraidthatwemightloseclientsifwe
don’t…”
7.2.2 CloudComputingforPracticeManagementFirmBhadalreadyimplementedapaperlessofficepriortotheintroductionofcloud
computing.Theserveriskeptonpremise,whichsupportsthedesktop-basedpractice
managementsystemanddocumentmanagement.Documentsandrelevantbusiness
processesarekeptinthefirm’sintranet,andsharingofdocumentswithexternalparties
(suchasauditors)isachievedbyprovidingcontrolledaccesstotheparties.
Whenthepracticemanagementsystemwasfirstimplemented,itwaschosenduetothe
featuresandcost:
“Whenwewerelookingatpracticemanagers,MYOBAEwasthe‘best’onewecould
find.Ithadallthefeaturesweneed,andwasthebestvalueformoneytoo.”
Additionally,thepracticemanagementsystemfillsanimportantvoidthatXerodidnotfulfil:
additionalfeaturesthatXerodidnotprovide.
“NotallofourclientsareonXero;westillkeepalotofourclients’filesonMYOB…
Thedecisionreallydependsonhowcomplextheclient’saccountsare,andhowmuch
customisationtheyneed…Forexample,oneofourclientshassomesubsidiaries
overseas,soweusedXerofortheoverseassubsandMYOBAOfortheNewZealand
headquarters…Consolidatingtheaccountsaresimplytoocomplicated[forXero].”
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FirmC
FirmCisasmallcharteredaccountingfirmlocatedinWhangareiofNorthIsland,New
Zealand.Itemploysapproximately10staffmembers.Itprovidesthebasicaccountancy
servicesthatmostotheraccountantsdo:assurance,businesscoachingandturnaround
management;andcompliancewithtaxationrequirements.Itdoesnotappeartoprovide
anyIT-relatedservices,however.
FirmC’sclientsareprimarilysmallbusinessesandnot-for-profitentitieswithinthelocal
community.ThemarketforaccountancyinWhangareiappearstobehighlycompetitive,
withmanysmallcharteredaccountingfirmsservicingthelocalbusinessesandentities.
TheinterviewisundertakenwiththepartnersofFirmC.Thefirmhaddecidedtoimplement
acloud-basedpracticemanagementsystem,andtheinterviewfocusedonexploringthe
decisionmaker’smotivationsandperceptionsbehindthisdecision.
Client PracticeManagement
Adoption Partial(Xero)
Since2012
Yes(cloud-basedSaaS)
Benefits Improvementinservicequality Disasterrecovery
Reducedmaintenance
Security
Cost(noadditionalITinvestment)
Limitations/risks None Dependencyoninternetaccess
Locationofcloudserver
Organisational LackofITexpertise Firmsize
FirmSize Approx.10staff
Environment None(insufficientclientdemand) Vendorpressure(changing
productoffering)
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Category Non-adopter Readyadopter
Table7-4:cloudadoptionforFirmC
7.2.3 CloudComputingforClientServiceFirmCdoesnotexplicitlypursueacloud-basedstrategy.WhilethefirmoffersXeroasan
optionforclients,itdoesnotadvertiseXeroonitswebsite,orhaveanypreferencebetween
cloud-basedanddesktop-basedsoftware.
“Wedon’trecommendourclienttochangeovertocloudsystem;wewaituntilthe
conversationemerges.XeroandMYOBarethemostreliable;theyarethetwomajor
ones[cloud-basedaccountingsoftware]inthesmallbusinessspace.”
Thatbeingsaid,theintervieweesdidrecognisethatcloud-basedaccountingsoftwarecan
potentiallyprovideabetterqualityofservicetotheclients:
“Fromaclient’sperspective,usingcloudgetstheiraccountsfinishedalotfaster,
becauseit’seasiertogetthedata.Theyalsoreceivebetterservicefromourfirm
throughouttheyear,becauseifthey’restuckonwhatever,theycanringusupand
solvetheproblemimmediately.”
7.2.4 CloudComputingforPracticeManagementFirmCoutsourcestheirITmaintenancefunction.AnexternalITfirmensuresthesmooth
operationofthefirm’sownserversandnetworks,whileFirmC’sadministrativestaff
membersetsuptheinternalcontrolstothesystemandperformsthenecessarysoftware
upgradeswhenrequired.
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VendorpressureisthemainreasonforFirmCtoadoptcloud-basedpracticemanagement
system.Acombinationofvendorsdroppingsupportfortheexistingsystemandthelackof
non-cloudalternativesleftFirmCwithnochoicebuttoadoptcloud:
“Mostofthepracticemanagementsoftwareonlyofferedcloud-basedsystem,so
actuallywedidn’thaveachoice.Wecanstayonthesystemwe’recurrentlyon,but
ultimatelyitwouldbecomeobsoletewithin12months.We’veaskedoneofthe
providers,andthebestsolutionwasonthecloud.”
“Intermsofpracticemanagementsystem,therewasonedesktopprovider,butthey
wereaverynichefirmanddidn’tholdmuchmarketinNewZealandatallprobably.
SincehalfofNewZealand’saccountingfirmswereoursizeorsmaller…theprovider’s
effectivelytellingus‘ifyouwanttobewithus,it’sgoingtobethecloud.Takeitor
leaveit.’”
Competitorsareanotherlikelysourceofexternalinfluence,asmostotherlocalaccountants
haveadoptedcloud-basedsystems.However,thiscanbeinterpretedintwoways:either
FirmCfeltpressuredtoconformtoitspeers,orthechoicesmadebyothersprovided
confidenceregardingtheviabilityofthecloud:
“[For]theotherthreepracticemanagementsystem,weconsideredcloudsystemas
well.Thereareabout30accountingpractices,andonlyonehadaunique,in-house
systemthatnooneuses…Atleasthalfofthose[accountingfirmswhoadoptedthe
cloud]migratedtothecloudinthelast12months.”
ForFirmC,thereductioninmaintenanceisthemostsignificantbenefit.Thisisunsurprising
giventhelackofresources,andthefactthattheITroleissharedwithadministration:
“Therearesomeefficiencybenefitstohavingthesoftwareontheprovider’sserver.
They[theproviders]performalltheupgrades,ensureallsoftwareisrunning,manage
theaccessissues…Wedon’thavethesamerequirements.It’saspeedimprovement
fromourpointofview.”
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“Forexample,MYOBputoutanewrelease,orapatch,whateveryoucallit…Wehad
toinstallthoseourselvesonourserver,andontoeachofourdesktop.Ittakesabout
halfanhourtoanhourtoinstalloneachcomputer,anditalwaystakethe
administratoradaytodojustthat.Whereaswithcloud[-basedsoftware],theupdate
takesplaceat2inthemorningandcostsusnotimeatall.”
“Thevendorthatsuppliedthesoftwaretouswouldgivesomeprotectionover
securityandunauthorisedaccess…Theadministratorthatcomesinduringthe
weekendstodoupgradeswouldcertainlylikeitwhenwemigratetothecloud”.
Whilethedirectcostofcloud-basedsolutionissimilarwithadesktop-basedone,the
intervieweesnotedthatthehardwareupgradecostsassociatedwithdesktop-basedsystem
canaccruerapidly:
“Fromthecostpointofview,[thelicensefeeis]aboutthesame.[But]forsomeclients,
theirserversanddesktopshadtobemorepowerfultohandlethecomputationson
theirowncomputers[hencenecessitatingthepurchaseofnewhardware].Butwith
cloud,thehardwarerequirement’slower.Theoldercomputerscanbeusedas
‘dummyterminals’,andavoidhardwareupgradecosts.”
Flexibility,theoften-toutedbenefitofcloudcomputing,wasnotamajorconsiderationfor
FirmC:
“Remoteaccessisone[oftheadvantagesofcloudcomputing],butnotthemainone
forus;wedon’tgenerallydoworkawayfromtheoffice.Apotentialbenefitmaybeto
shareinformationtotheclients,butcurrentlywedon’tdothat[sharinginformation
fromthepracticemanagementwiththeclientsdirectly].”
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Intermsofpotentialweaknessesofthecloud,networkaccesswasidentifiedasthemost
prominentthreattocloudcomputing.However,theintervieweesacknowledgedthat
networkaccessisapartofunavoidablebusinessrisk:
“Oneofthemajordownsideisthatiftheinternetisslowordown,yourwholepractice
grindstoahalt;whereasyoucancontrolyourin-housepracticemanagertoalarge
extentintermsofaccessandreliability.Onceyougoonthecloud,you’remoreopen
[vulnerable]tothetelecommunicationcompanieswhentheyhaveasystemproblem.
That’sreallytheonlynegativeIcanthinkof.”
Ontheotherhand,securitywasnotperceivedtobeamajorissue.Thisispartiallydueto
thefactthatotherservicesthatsharethesameunderlyingcharacteristicswithcloud
computingwerealreadywidelyused:
“Toalargeextent,we’reusingcloudsystem[Skype]totalkrightnow,andpotentially
millionsofotherpeoplecouldtapintothisconversation.Yetwe’requitecomfortable
withthat…BecausethelargecloudprovidersuseUNIXsystemstomanagethetraffic
andlogins,thelevelofriskisnodifferenttocrackingtheloginsonyourownserver.
Anybodythatlogsintotheirbankaccountisusingacloud-basedsystemtoseewhat
theirbalancesareandpaystheirbills,andnearlyeveryoneinNewZealanddoesthat…
Iguesswe’reallusingcloudinsomeway,anyway.”
Furthermore,cloud-basedsolutionsarelikelytobesaferintermsofrepellingunauthorised
access:
“Evenifwe’renotonthecloud,peoplecouldbreakdownourfirewallsandgainaccess
tothesameamountofinformationasifwe’reonthecloud.We’rerelyingonthe
serviceproviders’securityprotocols,andthecontractswehavewiththeservice
providers”.
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Salientdisasters,suchastheChristchurchearthquake,playedaroleinraisingpeople’s
awarenessofcertaindisasterrecoveryneeds,inwhichcloudcomputingwasanappropriate
choicefor.DespitethefactthatFirmCwasnotaffectedbytheearthquake,itnevertheless
providedapositivemotivationtoadoptcloudcomputing:
“IhadafriendwhosebusinesswasintheRedZone.Theywerelockedoutoftheir
businessesbythecivildefence.Theycouldn’tgetaccessandhadtosetup[their
temporarybusiness]insomeone’shouse,[butthey]stillcouldn’tgetaccesstotheir
server.Therewerebackups,buttheywereinanotherbuildingintheRedZone,so
theycouldn’tgettheirbackupseither.Effectivelytheyweredownforaquitealong
time.Hadtheygoneforthecloud,theywouldhavebeenabletoaccessatleastsome
oftheirdocumentsintheoffice.It’squiteagoodreason.”
Oneimportantcriterionforcloud-basedservices,however,isthephysicallocationofwhich
theserversreside:
“IknewquiteafewpeopleinChristchurchhadmigratedtocloudcomputing,because
theydon’twanttoexposetheirbusinessestothatrisk.Theyactuallywantedtoknow
wheretheirserversarelocated,sotheirdataisnotsittinginChristchurch.”
FirmD
FirmDisamedium-sizedaccountingfirmlocatedincentralChristchurch,andemploys
approximately50staffmembers.Itoffersawiderangeofservices,includingcompliance,
assurance,businessmanagement,strategicadvice,accountingfornot-for-profitentitiesand
trusts.Thefirmoffersinformationservicesintermsofmatchingbusinessrequirementswith
appropriateITsystems,butdoesnotexplicitlyadvertiseitorcloud-basedcomputing.
FirmDisapartofanationalnetworkofindependentfirms,butitoperatesindependentlyin
termsofresourcesandbusinessstrategy.TheChristchurchbranchismanagedbyseveral
partnersthatspecialisesinoneormoreservicelines.Theinterviewwasundertakenwith
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thepartnerthatspecialisesinbusinessadvisory,whowasinvolvedinprovidingcloud-based
accountingsoftwaretoclients.
Client PracticeManagement
Adoption Yes(Xero,MYOB)
Since2012
No(non-cloudoutsourcing)
Benefits Strategicbenefit
Datasharingwithclients
Cost
Reductionofmaintenance
Flexibility(remoteaccess)
Security/Disasterrecovery
Physicallocationofcloudserver
Limitations/risks Lackoffeaturesandcustomisation
Organisational Nofactors. Firmsize.
ExistingIToutsourcing.
FirmSize Approx.50staff
Environment Threattobusiness/competitive
pressure
Clients’resistancetowardscloud
None.
Category Unmotivated Non-adopterTable7-5:cloudadoptionforFirmD
7.3.1 CloudComputingforClientServiceTheprincipalmotivationtooffercloud-basedaccountingsystemsforclientsisthepotential
forautomation,andthesubsequentlossofrevenue:
“Currently,number-crunchingandcompliance-basedworktakesupabout80%ofan
accountant’sjob;andcloud-basedaccountingsoftwarewillsignificantlychangehow
theaccountingindustryworks,whichiscurrentlyheavilycompliance-based…”
“[Ithink]Cloudcomputingwillbeessentialtoeveryaccountingfirminfiveyears’
time…Learningnewskillsandadaptabilitywillbeessentialforaccountantstokeepin
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business,ortheywillrisklosingbusinesses[tocloud-basedaccountingsoftware]…
clientswilldemandaccountantstoprovidemoreservicesforalowercost,andthose
[accountants]whousecloudsoftwarewillbeinabetterpositiontoundercutthe
traditionalaccountants[thatdonotadoptcloudcomputing]”
Intermsofperceivedbenefits,easeofusewasperceivedtobethebiggestbenefitofcloud
computing,followedbytheeasierdataaccessbetweentheclientandtheaccountant:
“Cloud-basedaccountingsoftwareprovidesaccountantsreal-timeaccesstoclients’
financialdata,whichgivesaccountantshugeopportunitytoprovideaccounting-
relatedservicesthathavehigherqualityandintegrity…Serviceslikereal-time
reportingareturningaccountantsintoteachersandadvisorsforbusinesses…”
“…Priortocloudcomputing,boxesofaccountingfilesandUSBdrivesaremoved
betweentheclient’spremiseandtheaccountant’s…Sometimesthedatagetslost,
whichisincrediblyfrustrating,andtheclienthadtorecreatethosetransactions…”
ForFirmD,lackoffeatureshadbeen,andiscontinuingtobe,amajorobstacleinofferingit
toallbusinesses:
“Welookedatcloud-basedsoftwareaboutsevenyearsago,andconcludedthatthey
werestillveryimmature…Theirfunctionsweresolimitedthattheywereonlysuitable
formicrobusinesses…Whentheirfunctionsbecamemorecomprehensiveandmet
ourneeds,wemigratedtothecloud.”
ItisalsoevidentthatclientsareanimportantsourceofinfluenceforFirmD’sadoptionof
cloudcomputing,intermsoftheirneedsandtheirattitudestowardscloudcomputing.
“Notallofourclientsarecurrentlycloud-based.Themainissueisthelackoffeatures
inXero;forexample,Xerodoesn’tallowustocustomisehowreportslooklike…Also
someclientsaremoreresistanttowardsthecloudidea,astheywereconcernedthat
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theywouldnolongerhavecontrolovertheirdataoncetheiraccountingsystemgoes
inthecloud…”
Consistentwiththeothers,therespondentdidnotperceivesecurityasanissue.Hebelieves
thatitisinthecloudserviceproviders’bestinterestsandabilitytoprovidetherobust
securityandhighlyreliablefortheusers’data:
“We’renottooconcernedaboutXero’ssafety,becausetheir[cloudserviceproviders’]
wholebusinessmodelisbasedonkeepingclients’datasafe.Ifasafetyfailuredoes
happen,itwouldgooutofbusinessinstantly…SoXerowilldoeverythinginitspower
tokeepclients’datasafe”
7.3.2 CloudComputingforPracticeManagementFirmDhadoutsourceditspracticemanagementsystemtoexternalITproviders.Theservers
arelocatedwithinChristchurch,whichindicatesthatcloudsystemisnotusedbyeitherthe
IToutsourcingproviderorFirmD.
ThefirmhadrejectedadoptingSaaS,duetothefactthattheydidnotprovidethecapacity
forlargerfirms:
“WelookedatthelikesofWorkflowMaxanddecidedthatcloudsoftwarelike
WorkflowMaxdidn’tofferenoughfunctionalityorcustomisabilitytomakethem
usableforus…Theywereclearlydesignedforsmallfirms,sotheydidn’tfitthebillfor
us.”
Outsourcingtheserverwasmotivatedbyreductionincostandmaintenance,and
improvementsinreliability:
“Weusedtokeeptheserversinouroffice,andtheywereverynoisyandcostalotof
electricitytorun…Thecostofrentingtheserverspacewasroughlythesametothe
amountwepaidfortheserver’selectricity…”
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“Theoutsourceprovidertakescareofmaintainingtheserverforus…Ifweneedany
software,allweneedtodoisgivethe[IToutsourcingprovider]acall,andthey’lltake
careofeverythingforus…Wecanaccessthesoftwareinstalledontheserver
anywhereviainternet.”
“The[rented]serversarekeptinreinforced-concretebunkersdownonDurham
Street,andthey[thevendorsoftheservers]havetwobackupdieselgeneratorsas
wellasredundancies…Thedatawillbeverysafeincasethere’sanearthquake,and
weknowexactlywheretheserveris.”
FirmDhasnointentiontoincorporatecloudtechnologyintheirpracticemanagement
system,duetotheapparentlackofbenefitsofdoingso:
“We’rehappywiththearrangement,andwecan’treallyseewhatbenefitswewould
gainbymovingtothecloud.We’realreadypayingaflatratefortheservers,wecan
retrievedataweneedfromanywhereanyway,andourITproviderisalreadytaking
careofmaintenanceandsoftware…Therehastobeaverystrongcaseforusto
considermovingourpracticetothecloud.”
FirmE
FirmEistheChristchurchbranchofalargecharteredaccountingfirm.FirmE’sITsystem,as
wellasthemanyregionalbranchesofthesameaccountingfirm,areprovidedcentrallyby
theheadquarterofficeinAuckland.FirmEoffersawiderangeofservices,including
assurance,privatebusiness,taxandmanagementaccounting.Eachservicelinebelongstoa
department;andduetothesizeofthefirm,eachdepartmentoperatesautonomouslyand
largelyindependentfromeachother.
Thisstudyexaminedtheprivatebusinessdivision,whichprovidesbookkeepingservicesand
businessgrowthadvicetoclientsofvaryingsizesandindustries.Theprivatebusiness
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divisionhadrecentlybegunadoptingcloud-basedaccountingsoftwareasapartofthe
servicesitprovidestotheclient.
Theinterviewisheldwithtwopeople:amanagerwithintheprivatebusiness,anda
frontlinestaff.Themanagerchampionedtheadoptionofcloudcomputing,whilethestaff
hadfirst-handexperiencewithusingitforbusinessoperation.
Client PracticeManagement
Adoption Yes(Xero)
Since2013
No(ITviaHQ)
Benefits Betterservicetoclients
Flexibility
Dataconsolidation
Ecosystemviaadd-ons
n/a
Limitations/risks n/a
Organisational Firmsize Firmsize
OrganisationalStructure
FirmSize Large(>50)
Environment Competitivepressure
Perceptionfromclients
Otherbranches
Category Unmotivated Non-adopter
Table7-6:cloudadoptionforFirmE
7.4.1 CloudComputingforClientServiceDespite(orperhapsbecauseof)thebusinesssize,FirmEdidnotbeginadoptingcloud
computinguntil18monthsago.
TheprimaryreasonforadoptingXeroisduetopressurefromtheindustry:
“Cloud-basedaccountingsoftwarehadpreviouslybeenneglectedbyourfirm…The
customersarepressuringustoofferaccountingproductsthathavefeweroptions
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[easiertouse]andaremoreflexible…That’swhenthepartnerdirectedmeto
investigateXeroforourfirm.”
Xeroisusedasthedefaultsoftwarepackagefornewclients,butthereisnointentionto
migrateallclientstoXero:
“We’renotpromotersofXero,andwedon’tseektopushXerotoallofourclients…The
decisionwhethertoprovidecloudtoclientsismadeonacase-by-casebasis.Iftheclient’s
existingaccountingsystemisworkingnormally,wewouldleaveitasitis…However,ifthe
clientdoesn’thaveaproperaccountingsystem,orneedsanewaccountingsystem,Xerois
ourfirstrecommendation”.
Therespondentbelievesthatcloud-basedsoftwarelikeXeroismutuallybeneficial,inthat
boththeaccountantandtheclientcanbenefitfromthehigherdegreeofflexibilitythe
cloud-basedsolutionoffers.Forinstance,theoneledgersystemhadgreatlysimplifiedthe
sharingoffinancialinformationbetweentheaccountantandtheclient:
“With[cloud-basedaccountingsystem],allofclient’saccountinginformationisstored
inasingleplacethatcanbeaccessedfromtheweb[e.g.withinXero].Soaccountants
constantlyhavethelatest,up-to-dateaccountinginformationtoworkwith,andany
changesmadebytheclientareinstantlyreflected.Thiseliminatestheproblemwith
differentversionsbackandforth.”
Xeroisalsomoremobile-friendlythanitscompetitors,offeringappsforiOSandAndroid.
This,combinedwiththeone-ledgerproperty,allowsaccountantstoprovideassistancewith
minimaldelay:
“IfaclientisunsurewhetheratransactioniscodedcorrectlyinXero,allI[the
accountant]needtodoissignintotheclient’saccountingrecordsonmyphoneand
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checkiftheywerecodedcorrectly.Itwouldonlytakeme10secondstocheck,andI
candoitanywhere;including10pmathome.”
Sincetheprivatebusinessdivisionalsopreparesend-of-yearfinancialreportsforclients,the
flexibilitytricklesdownthroughouttheyear:
“Becausewe’recheckingourclient’sentriesaswegothroughouttheyear,wedon’t
needto‘cleanup’ourclients’accountingrecordsasmuchattheendoftheyear,
whenweneedtoprepareend-of-yearaccountsforthem.Thismeanslessworkforus
attheendoftheyear,andtheirreportsgetdonefaster.”
Usingcloud-basedsoftwarealsohastheadditionalbenefitofperceivedvalueofthe
accountants’service:
“WhenweuseXero,there’slessmechanical[non-value-added]worktodo…This
allowsustobetterfocusonprovidingadvisoryservicestoourclients,ratherthan
keyinginnumbers…Ultimately,advisoryworkiswhatcreatesthemostvalueforour
clients,andourclientswillalsoperceiveourservicestobeofbettervalueformoney.”
Xero’srichecosystemofadd-onsalsomeantthatclientsthatadoptedXerocouldobtain
greaterbenefitsbyusingtheassociatedaddons:
“OneoftheXeroaddonsweuseanalysesthefinancialstatement…Itcreatesgraphs
andmodelsautomaticallybasedonfinancialdatainXero,andalertanythingthat
requiresourattention…PriortoXerowecreatedthemodelsourselvesusing
spreadsheets,buttheywereverycomplextocreateandunderstand…ThatXero
addonsavedusalotofheadaches.”
DespitethebenefitsthatXeroprovides,however,theefficiencygainsfromadoptingXero
areperceivedasabonus,ratherthanadecisivefactor.
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7.4.2 CloudComputingforPracticeManagementFirmE’sITsystemislinkedwithotherregionalbranchesandprovidedcentrallybythe
headquarterofficeinAuckland.IT-relateddecisionsaremadeatanenterpriselevel,and
FirmEhasnoauthorityovertheoutsourcingdecision.Nonetheless,theintervieweedoes
notconsideroutsourcingtobelikely:
“Idon’tthinktheITsystemwillbeoutsourcedanytimesoon…Ourpractice
managementsystemiscustom-built,andislinkedwiththenationalgrid…Theproject
tomigratethewholecountry’sITsystemissimplytoolarge.”
FirmF
FirmFisasmalltomediumaccountingfirmlocatedinChristchurch.Itismanagedbya
singledirectorandemploysabout20staffmembers.Thebusinessconsistsofthreemain
servicelines:businessadviceforassistingclientstogrowtheirbusinessandovercome
hardships;theaccountingservicethatkeepsaccountingrecordsandfulfilstaxandreporting
obligations;andaseparatebusinesslinethatspecialisesinassistingfirmsinthe
constructionsectortoimplementasystematicsetofITtoolstomanagetheiraccounting
andoperations.Additionally,thefirmhasitsownin-houseITdepartmentandstaffwithIT
background.
TheinterviewisundertakenwiththegeneralmanagerofFirmF.Theinterviewee’srole
primarilyprovidesadvisoryservicetoclientsintheconstructionindustry,andhasahigh
levelofdecisionmakingauthoritywithinthefirm.Theinterviewfocusedontwoaspects:
thedecisiontoprovidecloud-basedsoftwaresystemstoclientsintheconstructionsector,
andtheexperiencesregardingthecloud-basedpracticemanagementsystem.
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Client PracticeManagement
Adoption Yes(Xero)
Since2011
No(abandonedcloud-basedSaaS)
Benefits Flexibility(forclients)
Reducedmaintenance(forclients)
Cost(forclients;nocommitment)
Easytouse(forclients)
Dataconsolidation
Real-timereporting
Disasterrecovery
Limitations/risks PerceptionofPrivacy Under-deliveryoffeatures(hype)
Networkaccess
Organisational ITexpertise(onpremise)
Clientportfolio
DestructionofexistingIT
infrastructure
Migrationcosts
FirmSize Approx.20
Environment None Relationshipwithvendor
Table7-7:cloudadoptionforFirmF
7.5.1 CloudComputingforClientServiceCloudcomputinghasasignificantpresenceinthefirm’sservicelines.FirmFhadadopted
cloud-basedsoftwaresince2008,andhadestablishedstrategicallianceswithanumberof
cloud-basedsoftwaresystems.Thekeycloud-basedsoftwarebeingofferedincludesXero,
WorkflowMaxandAdvancedBusinessManager(ABM).
Themotivationforofferingcloud-basedsystemsisduetothebenefitsthecloudprovides,
andwhetherasoftwarepackageiscloud-basedornotisoflittlerelevance:
“Wedon’tmarketthecloud;wemarketthefunctionalityofthesoftware…Cloudis
notoneofthecornerstonesweoffer;it’sjustawayoffacilitatingwhatweoffer.”
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Theabilityforclientstoaccesstheircloud-basedsystemsanywhereviatheinternet,aswell
asthereducedneedformaintenance,aretwoparticularlyimportantadvantageforthe
constructionsector:
“Ithinkit’sgotitsbase,andit’sgood.It’sgoodforbusinessessuchastradesand
construction,wherethey’refield-basedsotheyandtheirworkforcecanhaveaccess
tocentralisedsoftwaresystemfromanywhere…Theyalsodon’thavetoworryabout
upgrades,serversorofficessincealotofthemworkfromhome…”
“Althoughdesktop-basedsoftwarecanalsobeaccessedremotely,there’sstillthe
hassleofsettingupremoteaccess.Alotofthestufftheclientsaredoingisdriven
fromsite[awayfromtheiroffices],sopeoplewouldputinelectronictimesheets,and
purchaseordersstraightfromthesite.Withcloudtechnologytheycanaccessallof
themontheirmobiledevices”.
Cloud-basedsystemsareparticularlysuitedtotheconstructionsector,duetothehighly
mobilenatureofthework,andthelackofaccountingandITknowledgebymost
constructionclients:
“They[thesmallconstructionfirms]areperfectforcloudsoftwarebecausethey
generallydon’thaveanoffice,theybecamequiteswitched-onaboutsmartphones
andtablets,and[thecloud-basedsoftware]aregenerallycheapsincetheygenerally
don’tneedaserver.Forsomeoftheclients[e.g.plasterers],alltheyhavearetheir
materiallists,whichwereverysimple.Theydon’tholdstock,andtheythey’veonly
got4-5taskstoeachwork.Whereasforbuildersthey’vegotalotmorejobsandeach
taskismorecomplicated.”
Consequently,easeofusewasmuchmoreimportantfornon-accountingprofessionals:
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“WeofferbothXeroandMYOBAccountRight.Wewouldsuggestclientstoadopt
AccountRightbecausethey’remorefamiliarwiththat.ButwegenerallypushXero.
Eventhoughit’smoreexpensive[thanMYOBAccountRight],it’sjustsoeasytouse…
It’sintuitive,justlikeaniPhone,soclientscanfindtheirwayaroundontheirown.”
FirmF’sexperiencesuggeststhatthefirm’sclientsfavourcloud-basedsoftware,evenwhen
othernon-cloudsolutionsareavailable.Thisisprimarilyduetotheeaseandlowcostof
settingupcloud-basedsystems:
“ABM,theydoserver,hostedorcloud.Prettymucheveryonewe’vetalkedtotookthe
cloudoption.It’scheaper,it’seasierandtheydon’thavetoworryabout
[maintenance]…It’sprobablycostmorelong-termbutit’smorecost-effectiveinthe
shortterm…Withupto$50,000paidtogeteverythingconfiguredanduserlicenses
sortedout,thelastthingwe’dbedoingiscoughingupforanewserver.”
Anaddedbenefitofcloud-basedsoftwareistheenhancedcommunicationbetweenthe
constructionfirmsandtheirownclients.Forexample,improvedprogressreportingand
monitoring:
“Theworkflowismanagedbycloud-basedsoftware;thatis,milestonestothejob,
peoplecantickthemoffastheycomplete,andtheclientcanchecktheprogressin
realtimeaswell.”
Intermsoftheprivacyandsecurityofthedata,theintervieweedismissedtheplausibilityof
lossofprivacy,citingthataccountingrecordsforsmallbusinessesarenotlikelytobetargets
ofattacks:
“…Acoupleofpeoplesaidtheywouldn’twanttheirsolutionsinWFMorXero,
becauseofaccesstotheirdata[accountingrecords].Theywereworriedthatthey
didn’townthedata,andsomebodywouldhackintoit…Thereweresomeconcerns
72
aroundconfidentialityandsharingofdata;Xerohasamassiveamountofdata,and
theymightbesellingsomeofthem.”
“Realisticallythey’resmall-timebusinesses,andnoone’sinterestedintheirdata
anyway.Besides,Xerocan’taccessthebankaccountsdirectlyviabankfeeds…”
Intermsofperceptiontowardsthecloud,theintervieweedidnotviewcloudasathreat,
butatoolthatcanbeleveragedtoprovidebetterqualityofservice:
“[Cloud-basedsoftware]isnotasthreattomethough.It’sjustanothertoolwecan
offertotheclientinprovidingbusinessmanagementandaccountingsolutionstoa
levelthatcouldneverbereachedbeforehand.Forme,theabilitytogetclients’
accountinginformationandsummaryrightnowbeforeImeettheclient,itprovidesa
wholedifferentlevelofbusinessadvisory…It’sgoingtohaveitsownspace.It’snot
goingtobethebe-allortheend-all.”
7.5.2 CloudComputingforPracticeManagementFirmF’sexperiencewithcloud-basedpracticemanagementsystemwaspredominantly
negative.FollowingtheChristchurchearthquake,FirmFhadadoptedWorkflowMaxfor
eighteenmonthsbeforereturningtodesktop-basedsystems.
Themainreasonforadoptingcloud-basedpracticemanagementsysteminthefirstplace
wasacombinationofconcernsoverdisasterrecovery,lossofexistingsystem,andvendor
relationship:
“WegotturfedoutofourbuildingonFebruaryandwecouldn’tgetourserver…
Peoplebecameveryconsciousaboutdisasterrecovery,andhavingacloud-based
systemmeantyoucanworkanywhere.It’smoreaboutthepracticalitiesofworkingin
adisasterzone.”
73
Duringtheaftermathofadisaster,itisevidentthattheperceivedimportanceofremote
backupandsystemscontinuityhadbeenincreasedsignificantly:
“Itwasacombinationbetweenmarketingandrelationship,sincewewerealarge
providerofXeroinCanterbury…Andwehadtofindanewpremisewithoutaserver…
Ifithadn’tbeenthroughanearthquakeweprobablywouldn’thavemovedtoit
[cloud-basedpracticemanagementsystem]”
However,thesub-parperformanceofWorkflowMax,andthelowqualityofnetworkaccess,
forcedFirmFtodismissthecloudandre-implementdesktop-basedsystems.
“WorkflowMaxoversolditsinternalworkflowsystem…Itsaiditdidalotoffunctions
whereitdidn’treallydo[primarilyrevolvedaroundtheresponserateofthe
WorkflowMaxservers].Alsowehadasignificantconnectionspeed[issue],aswecan
onlygetADSLhere.Thedatatransferwasreallyslow…Ifyouhaven’tgotafibre
connectionoryou’rehandlingalotofdata,thecloud’snotagoodoption.Some
clientsthathavehugeamountsofdatatransactionornotagoodconnectionwere
alsoproblematic[withcloud-basedsystems]”.
Thisalsoillustratesthatevenifcloud-basedsoftwarehasnoinitialcost,thecostoffailed
implementationcanalsobeconsiderable:
“Itwascostly.Wehadtoconfigureeverything,putourledgersinWorkflowMax.But
intheendIdrewalineandsaid,‘that’sit,we’repurchasinganewserver’andundid
everythingwehavedone…Onedaywemighthaveanotherlookatit,butnotfor
another5years.”
74
ProviderOmicron
Theinterviewwasheldwiththeaccountsmanagerofamajorproviderofcloud-based
practicemanagementsystem.Priortohisposition,theintervieweewastheformerowner
ofacloudsystemproviderintheaccountingindustry,andjoinedOmicronwhenhisown
businesswasmerged.
Thepurposeofthisinterviewistogaincontextualinformationonthemarketforcloud-
basedaccountingsoftware,andobtainanalternativeviewpointonthefeasibilityofcloud-
basedsoftwareforaccountants.
Client Outsourcing
Benefits Dataconsolidation
Betterservicetoclients
Cost(eliminatesneedfor
hardwareupgrade)
Lowermaintenance
Disasterrecovery
Security
Limitations/risks Privacy(SLA;client-side
encryption)
Organisational Outsourcingofbookkeeping
function
Flexibleworkofemployees
Firmsize
Environment VendorsupportTable7-8:ProviderOmicron'sremarksaboutcloudaccounting
7.6.1 CloudComputingforClientServiceAhigherlevelofflexibilityofaccountingsoftwarewasnecessary,duetothepressuresfrom
offshorebookkeepingandrequirementsforremoteworking:
“AccountantsareoffshoringmoreandmoreoftheirbookkeepingworktoAsia,where
thetransactionscanbeprocessedforcheaper,andthere’salotofdatatransferring
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backandforthbetweentheaccountantandthebookkeeper…Inthemeantime,the
staffmembersarebecomingmore‘transy’,astheydemandmoreflexibleworking
arrangements.”
“The‘one-ledger’conceptofcloud-basedaccountingsoftwaresolvestheproblem.
Accountants,bookkeepersandclientsworkonthesamedatafile,andanychangesare
updatedinstantaneously.Accountantsarekeptmoreup-to-datewithwhat’s
happeningintheirclients’accounts…Cloudcomputingalsoeliminatestheneedto
carryfileseverywhere,aseverything’sontheinternet.”
Intermsofprivacyofcloud-baseddata,theintervieweedidnotbelieveittobeamajor
issue,giventhataccountantsarestartingtooutsourcetheirdataentryworkanyway.
However,Omicrondoeshavemeasuresinplacetosafeguardagainstdataownershipissues:
“Wesignservice-levelagreements(SLA)withourclients,andtheagreement
reiteratesthatthatourcustomersretaintheownershipoftheirdata…Alsowedon’t
haveaccesstoourclients’actualdata;they’reallstoredonourserversasencrypted
[bytheclientside].”
7.6.2 CloudComputingforPracticeManagementThemarketforpracticemanagementsystemwaspreviouslydominatedbyMYOB.However,
technologicalobsolescenceledtoopportunitiesforalternativeofferings:
“MYOBAccountants’Office(AO)usedtobethede-factopackageforpractice
management,eventhoughtheydidn’tlookaftertheaccountantswell…Thenthe
programminglanguageinwhichAOwaswritteninbecameobsolete,whichforced
MYOBtouptheirgames.Thenewversion,calledAccountants’Enterprise(AE),had
significantlyhigherhardwarerequirements,becauseit’sinadifferentlanguage,and
thisforcedaccountantstoupgradetheirservers.”
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Thegapofupgradingprovidedopportunitiesforemergingcloud-basedpractice
managementproviders,whoadvertisedlowersupportfeesandupfrontinvestment.
Likewise,theintervieweealsoobservedthattheChristchurchearthquakeplayedamajor
roleinpromotingthepopularityofcloud-basedsystem.
“TheChristchurchearthquakemademanyaccountants[andbusinessownersalike]
realisethat,ifsomethinghappenstotheirofficeandtheycan’tgetinanymore,it’s
veryhardforthemtokeepcarryingonwiththeirbusinesses.Cloudcomputingislikea
remotebackup[oftheirbusinesses’informationsystems].”
Intermsofthesecurityofcloudsystem,theintervieweebelievesthatclients’dataare,in
fact,betterprotectedincloud-basedsystems:
“CloudcomputinginfrastructureislookedafterbyITprofessionals,whohavemore
expertiseandresourcesovercontrollingforunauthorisedaccess…Youcanexpect
mostcloudproviders’serverstobeverysafe;otherwisetheywouldbeoutof
business”.
77
Thetwotypesofcloudcomputingsystemsarediscussedinseparatesectionsbelow.Table
8-1showsthesummaryforfactorsrelatingtoprovidingservicetoclients,andTable8-2
showssummaryforfactorsofusingcloudasameansofoutsourcing.
Basedontheresults,itisclearthatallcasestudyfirmshaveadoptedcloud-based
accountingsoftwareinsomeform(Xerotobemoreprecise).However,notallfirmsare
utilisingthecloudsoftwaretothesameextent.Forexample,FirmBandDrecognisedcloud-
basedaccountingsoftwarehavestrategicimplicationsfortheirbusiness;whilethedesire
foradoptingthesoftwareisweakerforfirmsCandE.
78
Summary:CloudComputingforClientService
Firm
(FirmSize)
Adopted? Benefits Limitations/risks Organisational Environment
A
(Small)
Yes
(Xero,
WorkflowMax)
Flexibilityw/services
Easytouse(forclients)
Communicationwith
externalparties
Lackofcommitment
LackofFeatures Owner’sITexpertise
AccesstoITexpertise
Outsourcingof
bookkeeping
Clientpressure
B
(Medium)
Yes
(Xero)
Strategicallybeneficial
Easytouse(forclients)
Easytomaintain
Flexible(clients)
Security(internalcontrol)
Lackoffeatures
Perceiveddatasafety
ITexpertise
Firmsize(large)
Competitivepressure
C
(Small)
Partial
(Xero)
Improvementinservice
quality
Privacyandsecurity LackofITexpertise None(insufficientclient
demand)
D
(Medium)
Yes
(Xero,MYOB)
Strategicbenefit
Dataconsolidation
Lackoffeaturesand
customisation
Firmsize(large) Threatto
business/competitive
pressure
Clients’resistancetowards
cloud
79
E
(Large)
Yes
(Xero)
Betterservicetoclients
Flexibility
Dataconsolidation
Ecosystemviaadd-ons
Firmsize(large) Competitivepressure
Perceptionfromclients
F
(Small)
Yes
(Xero)
Flexibility(forclients)
Reducedmaintenance(for
clients)
Cost(forclients;no
commitment)
Easytouse(forclients)
Dataconsolidation
PerceptionofPrivacy ITexpertise(on
premise)
Clientportfolio
Omicron
(n/a)
n/a Dataconsolidation
Betterservicetoclients
Privacy(SLA;client-
sideencryption)
Outsourcingof
bookkeepingfunction
Flexibleworkof
employees
Table8-1:Summarisedfindingsforcloudasclientservice.Italicindicatesafactorthatinhibitedadoption.
80
8.1.1 PerceivedBenefitsandRisksIntermsofperceivedbenefits,allfirmshaveidentifiedsomeformofbenefitsinadopting
cloud-basedaccountingpackagesfortheirclients.Eventhoughcloud-basedsoftwareis
initiallytargetedatclients,accountantsnonethelessrecognisedthebenefitsthatare
realisedwhencollaboratingwiththeirclients.
Theflexibilityofcloudtechnologyprovidessignificantpotentialforimprovingthe
operationalefficiencyandstrategiceffectiveness.Nearlyallfirmshavefoundthatcloud-
basedsoftwarehadincreasedtheircommunicationefficiencywiththeirclients.Effectively,
cloud-basedaccountingsoftwaremadeitpossibletomaintainasinglecopyofafirm’s
accountingrecordsthatisaccessibletomultipleparties,andanychangesareupdated
instantaneously.Thisisreferredtobysomeasa“oneledger”system.Efficiencyisincreased
asaresultoftheoneledgersystem,whereauditors,bookkeepersanddifferentuserswithin
theclientbusinesscanaccesstheaccountingfilesimultaneouslywithoutissuesinvolving
mergingchanges.
Flexibilityofcloud-basedsoftwarealsoreferstothedegreeofintegrationbetweendifferent
software.The“ecosystem”ofcloudsoftwarereferstotheextenttheycanintegrate
seamlesslywithothersoftware.Cloud-basedsoftwaretakesadvantageofapplication
programinterface(API)forseamlessdatatransmissionbetweendifferentcloud-based
servicesinreal-time,whichprovidesahigherlevelofintegrationthandesktop-based
software.Inthiscase,Xero’secosystemofawiderangeofadd-onshadbeenanimportant
considerationforaccountingfirmstoadoptXero,asopposedtoitscompetitors.Inaddition
toXero,firmsA,BandEalsoadoptedotheradd-onsthatprovidedadditionalfeaturesto
Xero,suchasbudgetingandreporting.
Thisimprovedstrategicsignificanceiscoupledwiththereductionofnon-valueadding
services.SoftwarelikeXeroisreportedtobeeasiertouseforclients,especiallythosethat
lackaccountingknowledge.Moreexplicitly,thisallowsclientstocompletetransactional
bookkeepingwork(likebankreconciliation)moreeasily,andbeabletousefeatureswithin
thesoftwarewithoutextensiveknowledgeinaccounting.Providingclientswithsoftware
thatiseasiertouseincreasesthevalueoftheaccountant’sservices,bydecreasingthe
amountoflow-valuework(suchasdataentrybookkeeping)accountantshavetoperform
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priortothemorevaluableadvisoryandconsultancywork.Alternatively,theeasytouse
natureofthesoftwarealsodecreasesthelikelihoodandseverityoferrorsthatarecaused
bytheclientduetounfamiliaritywiththeaccountingconcepts.
Thecombinationofeaseofuseandflexibilityprovidessignificantpotentialforcollaboration
improvementsontheaccountant’send.Sinceaccountantscanobtainfinancialdatafrom
clientsmoreeasily,andwithlesslow-valuemanualwork,thispermitsaccountantsto
providevaluableassistancetotheirclientsfromahigherlevel.Forexample,accountants
canmonitortheirclients’financialhealthonareal-timebasis,andalerttheirclientsofany
potentialopportunitiesbeforetheyelapseandanyrisksbeforetheygrowintomore
significantthreats.Alternatively,accountantshaveconsiderablymorescopeto“farmout”
thelow-valuebookkeepingworktotheirclients,astheflexiblenatureofthesoftware
allowsaccountantstoprovideassistanceon-demand,andonlywhereassistanceis
necessary.
Costwasanotherimportantconsideration,butitisananalogousconcepttotrialability.
Becausecloud-basedsoftwarepackagesarechargedonasubscriptionfeemodel,this
relievesclientsandaccountantsfrommakinghighinitialinvestments.Also,accountantsare
freetoexperimentthecloudsoftwareingreaterdetail,astheyarenolongerheldcaptive
byanysunkcostsofinitialinvestment,orlong-termservicecontracts.Asaresult,whenever
accountantsareinvolvedwithrecommendingnewinformationsystemsandaccounting
systemsfortheclient(asinthecasesforFirmB,D,EandF),theywouldbemoreinformed
oftheavailablealternatives,andproposesolutionsthatbetterfitstheclient’sneeds.The
lackofinvestmentbarrieralsomakesclientsmorereceptivetowardsnewsoftware,asin
thecaseofFirmF.
Despitethefactthatcloudcomputingwasinitiallyviewedwithscepticismduetothe
potentialsecurityandprivacyissues,therespondentsdidnotsharethesameconcern.The
intervieweesbelievedthattheirinterestofkeepingtheclients’datasafefromunauthorised
accessisfundamentallyalignedwiththecloudprovider’sdesireofmaintainingapositive
reputationfordatasecurity,whichmotivatesthecloudproviderstodevelopadvanced
securityandencryptionmeasures.SincecloudprovidersaremorespecialisedinITservices
82
thanaccountants,theywouldbeabletoprovideahigherstandardofprotectionthanif
accountantsstoredthedataontheirownservers.
Ontheotherhand,theissueofperceivedprivacywithcloud-basedsoftwareisamore
salientconcern,inthatanagencyissuemayarisewhenthecloudprovidermayprofitfrom
spyingonorsellingtheirclients’data,especiallywhencloudprovidershavefullaccessover
thestoragefacilitiesthathousedthedata.Theperceptionproblemislikelytodiminishover
time,ascloud-basedservicesbecomemoreubiquitous(suchasonlinebanking).Theclients’
doubtscanalsobemitigatedpartiallythroughservice-levelagreementsbetweentheusers
andthecloudprovider,andtechnicalsafeguardslikeclient-levelencryption(which
theoreticallyeliminatesthepossibilityforcloudproviderstoviewclients’data).Insome
cases(suchasFirmD),however,theclients’concernovertheprivacyoftheirdataonthe
cloudhadpreventedaccountantsfromprovidingcloud-basedservicestothem.Likewise,
theinformationonFirmC’swebsitesuggeststhatthefirmdidnotactivelypromotecloud-
basedaccountingsoftwareduetoprivacyandsecurityconcerns.
Currently,thebiggestimpedimenttocloudadoptionisthelackoffeatures.Duetothefact
thatsoftware-as-a-serviceisnotintendedforextensivemodificationbytheuser,
accountantsfinditdifficulttouseitformorespecialisedpurposes.Forexample,Xerodoes
notyetprovidecustomisedreportsandadvancedconsolidationfunctions.Nonetheless,the
currentstateofcloud-basedaccountingsoftwarecomplementsdesktop-basedsystems
ratherthanreplacingthem.
8.1.2 OrganisationalFactorsTheresultsindicatethatallfirmsoffercloud-basedsoftwareforclients.Thecharacteristics
oftheaccountingfirmarelinkedtotheiradoptionofcloud-basedsoftwareintermsofthe
organisation’sITexpertise,eitherthroughtheowner’sexpertiseinITorwhetherthe
accountingfirmprovidesanyIT-relatedservices.FirmsBandDprovidedITconsulting
services,wheretheyassesstheirclients’requirementsandmaderecommendationsbased
ontheirneeds.ThepartnerfromFirmAhadexperienceinITprojects,aswellasthefact
thattheyhadclosepartnershipwithanITconsultancyfirm.FirmFemployedstaffwithIT
background.
83
Ontheotherhand,FirmCdoesnotapparentlyofferanyIT-relatedservices.Incidentally,
whiletherespondentsofFirmCindicatedthattheirfirmdidofferXero,itdoesnotpromote
itasmuchastheothers.Also,whileFirmEdoesprovideITconsultancyservices,thefirm
wastoolarge,whichmeantthatthebusinessadvisorydepartmentwassomewhatmore
distantfromITconsultancy.Thatbeingsaid,FirmEwasquicktorealiseandcapitalisethe
potentialofcloud-basedaccountingsoftware,despitebeingarelativelylateentranttothe
cloudaccountingarena.
Intermsoffirmsize,TheresultsappeartobeconsistentwithMehrtensetal.(2001).The
firmsizedoesnotappeartomateriallyinfluencetheextentofcloudadoption.Forexample,
FirmsB,DandEwerenoticeablylargerthanFirmsA,BandF,yetFirmFhadestablished
partnershipwithcloud-basedsoftwarevendorsthatwereequivalenttothelargefirms.This
findingwascontrarytotheonesfromOliveiraetal.(2014).Ontheotherhand,beingthe
biggestfirmoutofthesixcases,FirmEstartedofferingcloud-basedsoftwareatamuch
latertimethanitspeers.WhilethisappearstobeconsistentwiththefindingsinYaznetal.
(2013),FirmBandFirmFadoptedcloudcomputingaroundthesimilartime.Inaddition,
FirmCusescloud-basedsoftwareinamorelimitedextentthanallotherfirms.Inlightof
thisresult,itisplausiblethattherelationshipbetweenfirmsizeandadoptionofaparticular
informationsystemisshapedbyarangeoffactorsthataffectlargeandsmallfirms
differently,andarespecifictotheinformationsysteminquestion.
8.1.3 ExternalEnvironmentIntermsofadoptingcloudcomputingforclients,theanticipatedpressurefromclientsand
thecompetitionweremajorsourcesofexternalpressureformostfirms.Meetingclients’
needswasasignificantfactorforFirmA,whileFirmBfearedthelossofclientsasaresultof
notadoptingcloudaccounting.ForFirmD,theadoptionofcloudcomputingwasmotivated
bytheprospectsofintensifyingcompetition(andthelossofmarketandrevenueasaresult),
whileFirmEadoptedcloudaccountinginanefforttocatchupwiththesmalleraccountants.
Incomparison,FirmsCandFexperiencedsomewhatlowercompetitivepressure,although
fordifferentreasons.FirmFhaveofferedcloud-basedsoftwarepackagesrelativelyearly,
andtheyaremorefocusedintheconstructionsector,whichallowedthemtoavoidthe
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competitivepressure.Ontheotherhand,demandforcloud-basedsoftwarefromFirmC’s
clientsisverylow,whichprovidednourgencyforFirmCtoadvertisecloud-basedsoftware
ontheirwebsiteatall.
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Summary:CloudComputingforPracticeManagement
Firm
(Firm
Size)
Adopted? Benefits Limitations/risks Organisational Environment
A
(Small)
Yes
(cloud-basedSaaS)
Flexibility(support
businessprocess)
Owner’sITexpertise
AccesstoITexpertise
PriorISarrangement
Firmsize
Vendorsupport
Ecosystem(linkage
w/clients’products)
B
(Medium)
No(in-houseserver) None(noincremental
features)
Lackoffeatures Firmsize(toolarge) None
C
(Small)
Yes
(cloud-basedSaaS)
Disasterrecovery
Reducedmaintenance
Security
Cost(noadditional
investmentinIT
infrastructure)
Dependencyoninternet
access
Firmsize Vendorpressure
(changingproduct
offering)
D
(Medium)
No
(non-cloud
Cost
Reductionofmaintenance
Firmsize(toolarge)
ExistingIToutsource
None.
86
outsourcing) Flexibility(remoteaccess)
Security/Disaster
recovery
Physicallocationofcloud
server
arrangement
E
(Large)
No
(ITviaHQ)
n/a n/a Firmsize(toolarge)
OrganisationalStructure
Otherbranches
F
(Small)
No
(abandonedcloud-
basedSaaS)
Disasterrecovery Under-deliveryoffeatures
(hype)
Networkaccess
Destructionofexisting
ITinfrastructure
Migrationcosts
Relationshipwith
vendor
Omicron
(n/a)
Cost(eliminatesneedfor
hardwareupgrade)
Lowermaintenance
Disasterrecovery
Security
Firmsize Vendorsupport
Table8-2:Summarisedfindingsforcloudaspracticemanager.Italicindicatesafactorthatinhibitedadoption.
87
8.2.1 PerceivedBenefitsandRisksIntermsofcloud-basedsystems,theChristchurchearthquakeplayedacrucialrolein
supportingcloudcomputing,byraisingtheawarenessforremotebackupanddisaster
recovery.Otherwise,thereductionofcostandmaintenanceisanimportantfactorfor
accountingfirmstomigratepracticemanagementsystemsintothecloud.However,the
qualityofinternetaccessrepresentsamajorobstacletocloud-basedpracticemanagement
systemsbeforeitcouldwarrantanyproperattentionfromthefirms.
ThestrongestmotivationformigratingcloudistheChristchurchearthquakethatoccurred
between2010and2011.FirmsC,D,FandProviderOmicronexpressedthatdisaster
recoverywasanimportantconsiderationwhenafirmselectshowitspracticemanagement
systemistobehosted.AsmanyChristchurchbusinesseswerelockedoutoftheirofficefor
extendedperiodoftimeaftertheearthquake(hence,causingmajordisruptionstotheir
business),disasterrecoveryandbusinesscontinuationbecameahighlysalientissue.For
businessesthathavelimitedITexpertiseandresources,cloudcomputingprovidesahighly
cost-effectivemethodtoachieveremotebackup.
Asidefromdisasterrecovery,theotherfactorforcloud-basedpracticemanagementisthe
reductionincostandmaintenance.Becausesoftwareisupdatedperiodically,theuserhas
toincurcoststoobtainnewsoftwarelicensesandupgradetheserver’shardwarecapacity.
Inaddition,applyingthesoftwareupdatescreatesserverdowntimeanddisruptsthe
business’normaloperation.Theseactivitiescreatedadditionaladministrativeburdenfor
FirmC.Incomparison,cloud-basedsoftwaresimplifiesthisprocesssignificantly,assoftware
updatesarecompletedwithouttheneedforinterventionontheenduser’sside,andare
usuallyscheduledduringnon-businesshourstominimisedisruption.Cloud-based
applicationsalsorelieveusersfromupgradingtheirhardware,asthehardwarecapacityis
maintainedbythecloudproviders.
Forthemajorityofthefirms,flexibilitywasnotfoundtobeamajordriverofadoption.The
reasonisthatdatainthepracticemanagementsoftwarearenotusuallysharedwiththe
clients,andgenerallyrequirenorapidchangesincomputingresource.However,FirmAisa
notableexception.BecauseFirmAoutsourcestheirbookkeepingprocesstoathirdparty,
thiscreatesaneedfordataexchangebetweenthebookkeepersandtheaccountants.
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Similartothe“oneledger”systemcloudforclientservice,adoptingcloud-basedpractice
managementsystemimprovesinter-firmcommunicationandcollaboration.
Intermsofrisks,FirmsCandFidentifiedthenetworkaccesstobeamajorissue.Sincecloud
computingreliessolelyontheinternetfordatatransmission,theavailabilityandthequality
ofnetworkaccessiscritical.Theimplicationoflosinginternetaccessisparticularlysevere
forcloud-basedpracticemanagementsystems,astheaccountingfirmiseffectively
immobilisedwithoutaccesstoitspracticemanager.FirmCbelievedthatadoptingcloud
computinginvariablymakestheirfirmmorereliantonthetelecommunicationcompanyto
maintaintheinternetconnection.FirmF’sexperiencewasmorenegative,asthecloud-
basedpracticemanagementsystemdidnothavesufficientservercapacitytohandlethe
largevolumeofdatatransmission.
8.2.2 OrganisationalItappearsthatsmallerfirmstendtobemoreinterestedincloud-basedpractice
managementsystems.However,cloud-basedpracticemanagementsystemsface
competitionfromafirm’sexistingITinfrastructure,includinganyexistingoutsourcing
arrangements.Intheabsenceofstrongperceivedbenefits,itisunlikelythatcloud-based
practicemanagementsystemswouldimproveitspositioninthemarket.
FirmsA,CandFweretheonlyfirmsthathadconsideredandadoptedcloud-basedpractice
managementsystems.ThisisconsistentwithYaznetal.(2013),whosuggestedthatmicro
firmsarethemostlikelytoadoptcloudcomputingduetotheirflexibility.However,thefirm
sizeeffectisfoundtobedrivenbytwofactors.Thefirstfactoristhatlargerfirmshavemore
stringentrequirementsintermsofthecomplexityofthesystem.Inthiscase,thefirmsize
wouldnotbeafactorifthecloud-basedproductcannotcatertothefirm’sneedsinthefirst
place.FirmsBandDhadclearlystatedthatcloud-basedsoftwarewasrejectedbecausethey
lackedthefeatures,customisabilityorsophisticationthatisappropriatefortheirneeds.In
addition,FirmF’snegativeexperiencewithnetworkaccessandserverloadofcloud-based
softwaresuggeststhatcloud-basedofferingsare,infact,inadequateformostbutthe
smallestfirmsand/ornon-missioncriticalprocesses.
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Thesecondfactorrelatestothepresenceofexistinginformationsystems.Firmsaremore
likelytoswitchwhentheirexistinginformationsystemisnotfunctional.Inthiscase,
however,itwouldappearthatexistinginformationsystemmaybeusedasabenchmark,
againstwhichtheperceivedbenefitsandrisksofanewsystemisevaluatedbasedon.Inthe
caseofFirmF,becauseitsexistingserverwaslostduringtheearthquake,thebenefits
pertainingthelackofinitialinvestment(lowmigrationcost)andrapiddeploymentwere
particularlyrelevanttotheirsituation.TheintervieweeforFirmFalsoconfirmedthat,hadit
wasnotfortheearthquake,theywouldnothaveconsideredadoptingcloud.
Conversely,thepresenceofafunctionalinformationsystemcanbeanobstacletoadopting
cloud-basedpracticemanagementsystem.ThisisparticularlyrelevanttoFirmD,whohad
outsourceditsITinfrastructuretoalocalITprovider.Theoutsourcingarrangementprovided
nearlyallofthebenefitsthatacloud-basedpracticemanagerusuallyoffers,including
minimalsystemandsoftwaremaintenance,accessibleremotelyviatheinternet,and
physicalsafetyoftheassetswithoutanappreciableincreaseincost.Moreover,outsourcing
providedanadditionalbenefitofknowingthephysicallocationwheredataisstored.Also
knownasgeo-restriction,theknowledgeofdatalocationprovidesgreatercertaintytothe
usersregardingthephysicalsecurityofthedata,andeliminatesanypossiblelegaldisputes
relatingtothejurisdictionofdata(Yaznetal.,2013).
8.2.3 EnvironmentSoftwarevendoristhedominating,ifnottheexclusive,sourceofexternalinfluenceon
cloud-basedpracticemanagementsystem.Theinfluencetakesplaceaseitherpressure(as
withFirmC)orincentive(aswithFirmsAandF).
InFirmsAandF’scase,theadoptionofWorkflowMaxwasduetotheirrelationshipwith
Xero.WorkflowMaxandXerobelongedinthesameecosystem,asthetwoweredesignedto
integratewitheachotherseamlessly,andthatXerohadconsiderablestakeinWorkflowMax
(XeroandWorkflowMaxmergedin2013).SincebothFirmAandFirmFhadadoptedXero
relativelyearlyandhadpromotedittotheirclientsforarelativelylongperiodoftime,the
accountantshaddevelopedacloseworkingrelationshipwithXero.Thisadditionallayerof
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relationshipmadeiteasierforthevendortorecommendWorkflowMaxtotheaccountants,
andtointegrateitintotheirXero-orientedbusinessmodel.
Ontheotherhand,FirmC’sdecisiontoadoptwasprimarilyduetopressurefromthe
softwarevendors.MYOBexerteditspressurebythevendordroppingsupportfortheolder
versionsoftheirproduct,whichledtothenecessitytoreplacethesystem.Thelackof
feasibledesktop-basedpracticemanagementsystemleftFirmCwithnochoicebuttoadopt
acloud-basedsubstitute.BecauseFirmChadretrospectivelyevaluatedthebenefitsof
cloud-basedsoftwareanddeemeditworthwhile,itisdifficulttopostulatewhetherthe
intervieweeswouldhavechosencloud-basedsystemsatallifanon-cloudoptionexistedat
thetimeofdecision.
Thefirmsclientsandcompetitorsdidnotexertanypressureovertheadoptionofcloud-
basedpracticemanagementsystem,duetothefactthatsuchsystemisnotusuallyvisibleto
outsiders.However,FirmCmentionedthatmostofitslocalcompetitorshaveadopted
cloud-basedpracticemanagementsystemswithinthelast12months(2013-2014).Itis
possiblethattheadoptionofcloud-basedsoftwarealsopartiallyreflectedFirmC’sdesireto
actconsistentlywithitspeers,orthefactthatothers’actionsprovideareassurance
regardingthefeasibilityofcloud-basedsoftware.
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Theresultsindicatedastrongdistinctionintheadoptionpatternbetweencloud-based
softwareforclients’useandforaccountingfirm’sownuse.Whileallofthesixfirmsare
offeringsomeformofcloud-basedaccountingsoftwaretotheirclients,onlytwofirmshave
implementedtheirpracticemanagementoverthecloud.
Drawingonadditionaltheoreticalperspectives,thischapterevaluatesthefactorsthatledto
theadoptionofcloudcomputingbytheaccountingfirms.Thefirstsectionre-examinesthe
rolesthatcloudcomputingplayintheaccountingindustry.Thisisfollowedbyacomparison
ofthewaysthatcloud-basedsoftwarecontribute(orfailedtocontribute)tothefirms’core
competenciesagainsttherelevantliterature,throughgeneratingacompetitiveadvantage
orbetterefficiency.Finally,thefourthsectiondiscussesthelikelyimplicationsofcloud
computingforaccountantsinlightoftherecentpopularity.
TheRolesofCloudComputing
Although“cloudcomputing”canmeaneitheraccountingsoftwareofferedtoclientsor
accountants’ownpracticemanagementsystem,thetwotypesofcloud-basedsystemsare
intendedtoserveinverydifferentenvironmentsandpurposes.Client-orientedcloud
softwareisexternallyfocusedapplicationthatclientsinteractwithdirectly,andactsasakey
collaborationtoolbetweentheaccountantandtheclient.Practicemanagementsystems,
ontheotherhand,handleactivitiessuchastimesheetsandjobtracking.Theseactivities
relatetotheinternalprocessofanaccountingfirm,andarenotvisibletoclients.
ThisdifferenceisperhapsmoreclearlyillustratedbytheuseofPorter’sValueChain
Framework(Porter,1985).Forallcasefirmsinthisstudy,cloud-basedaccountingsoftware
likeXeroareapartoftheaccountants’primaryactivity,sincetheyimprovethequalityof
theaccountancyservicesprovidedtotheclients.Incomparison,thesystemofhow
accountantskeeptrackoftheirclients,managethestaffandmaintainITinfrastructurecan
beregardedassupportactivities,aspracticemanagementsystemsaredesignedtoimprove
theinternalefficiencyoftheaccountingfirm.
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9.1.1 InterorganisationalNatureofCloudComputingCloud-basedaccountingsoftwarelikeXerostronglyresemblesaninterorganisationalsystem.
SincetheIacovouetal.(1995)modelwasoriginallydevelopedtostudyEDI,whichwasa
subsetofinterorganisationalsystems,themodelexplicitlytakesintoaccounttheeffectsof
thefirm’stradingpartnershasonafirm’sdecisiontoadopt,andthesubsequentuseofthe
system.Whileservicefirmslikeaccountantsdonotnecessarilyhavethelevelofsupply
chaincomplexitycomparedtomanufacturers,itneverthelessprovidesanimportant
perspectiveinevaluatingwhycloud-basedsoftwareisaspopularastheyare,andwhat
effectitwouldhaveontheaccountingindustryasawhole.
Aninterorganisationalsystemisdefinedas“anautomatedinformationsystemsharedby
twoormorecompanies…thatfacilitatesthecreation,storage,transformationand
transmissionofinformation”(Johnston&Vitale,1988,p.154).Aninterorganisational
systemisdistinguishedfromconventionalformsofinformationsystems,inthatinformation
withinthesystemisintendedtobesharedwithoneormoreexternalorganisationsinthe
supplychain,andthatsuchsystemprovidesbenefitstoallparticipantsinthesupplychain.
Basedontheobservations,cloud-basedaccountingsoftwaredistributesbenefitsbetween
theadoptingaccountantanditsclientsinamannerthatisconsistentwithan
interorganisationalsystem.Akeydifferencebetweenthisstudyandthepreviousstudieson
theadoptionofcloudcomputingisthat,whilepreviousstudiestendtofocusonthe
benefitsrealisedbytheadopterfirm,thereasoningoftheintervieweesinthecurrentstudy
foradoptingcloud-basedaccountingsoftwareareclient-driven.Inotherwords,thecloud-
basedsoftwareareadoptedprimarilywiththeintentiontoprovidegreaterbenefitstothe
clients,eventhoughfactorslikeeasiertousehavelittlerelevancetotheaccountants(Firm
A).Similarly,communicationandcollaborationbenefitsbothaccountantsandtheclients,
andwasmostfrequentlyidentified.
9.1.2 PracticeManagementSystemsasERPThecharacteristicsofanaccountant’spracticemanagementsystemcanbecomparedto
thatofanenterpriseresourceplanning(ERP)system.ERPsystemsaredesignedtosupport
allprocesseswithinabusinessbyprovidingacomprehensivefunctionsetandorganisation-
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wideinformationsharing(Peng&Gala,2014).Examiningthemostpopularofferingsof
cloud-basedpracticemanagementsystems,itisevidentthatanaccountant’spractice
managementsystemsserveaverysimilarpurposeasanERP.Byexaminingpractice
managementsystemfromtheperspectiveofERPsystems,thisstudyfulfilsthecallfor
industry-specificresearchintothemeritsofcloud-basedERPbyGrubisic(2014).
Theroleofanenterpriseresourceplanning(ERP)systemistoestablishinformationlinks
betweenthevariousactivitiesofabusiness(suchashumanresource,finance,
manufacturing,clientrelationshipsandsupplychain),suchthatdecisionmakershaveaccess
tobetterandmorecompleteinformationtomakemoreinformeddecisions(Shukla,
Agarwal,&Shukla,2012).Likewise,forpracticemanagementsystems,asimilarsetof
comprehensivefunctionsisprovided.BasedontheobservationsfromXeroPractice
Manager,CCHiFirm,MYOBAccountants’OfficeandAPSAdvance,thetypicalfeaturesthat
areprovidedinpracticemanagementsysteminclude:documentmanagement,job
management,clientmanagement,timesheetmanagement,staffmanagement,and
integrationbetweenclients’accountingfileswiththeaccountant’s.Thelastaspecthad
alreadybeendiscussedintheprevioussectionasinterorganisationalsystems.
AsexistingliteraturehadhighlightedthepotentialforveryhighsynergybetweenERP
systemsandcloudcomputing,cloud-basedpracticemanagementsystemshavepotentialto
improveanaccountingfirm’soperation.ThedeliveryERPsystemviacloudrepresentsthe
bestofbothworlds:businessescanexploitthebenefitsofanERPsystemwithoutthe
burdenofinvestmentandcost.WhiletraditionalERPsystems(maintainedin-housebythe
businessusers)providedveryclearbenefitsintermsofreducedcosts,increasedrevenue
opportunitiesandefficiencyimprovements(Shuklaetal.,2012),thecostofacquiring,
implementingandmaintainingsuchsystemisburdensometolargebusinesses,and
prohibitivetosmallerones(Grubisic,2014).Cloudcomputing,ontheotherhand,allows
businessestouseITresourcesinamuchmoreflexiblemanner,withminimalinitial
investment,andpayforonlywhattheyuse(Armbrustetal.,2010).
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CompetitiveadvantageofCloudSoftware
Competitiveadvantagereferstothesituationwhenafirm“[implements]avaluecreating
strategy[thatis]notsimultaneouslybeingimplementedbyanycurrentorpotential
competitors”(Barney,1991,p.102).TheISliteraturehadrecognisedthatadoptingand
usinginformationsystemsmaycreatesignificantbenefitstotheadopterbusiness,suchas
efficiencyimprovements,strengtheningofbargainingpowerorproductdifferentiation
(Bakos&Treacy,1986;Clemons,1986;Zhang&Lado,2001).However,thesebenefitsoften
donottranslateintocompetitiveadvantages,anditisevendebatablewhetherinformation
systemcreatesanycompetitiveadvantageatall(Clemons,1986;Mata,Fuerst,&Barney,
1995;Zhang&Lado,2001).
Resourcebasedviewisausefultheorytounderstandhowinformationsystemscreate
competitiveadvantage,asitiscommonlyregardedasoneofthemostpowerfultheoriesin
explainingorganisationalrelationships(Barney,Ketchen,&Wright,2011).Theresource
basedviewpresumesthatabusinessisacollectionofresources,andtheresourcescan
createcompetitivedisadvantage,competitiveparity,temporarycompetitiveadvantageor
sustainedcompetitiveadvantageforthebusiness.Sustainedcompetitiveadvantageis
regardedasthemostadvantageouspositionforafirm,whereitpossessesresourcesthat
arevaluable,rare,inimitableandstrategicallynon-substitutable(Barney,1991;Mataetal.,
1995).
Thissectionattemptstoexplorehowcloud-basedaccountingsoftwareofferedtoclients
providescompetitiveadvantagesforaccountingfirms,andhowsuchcompetitiveadvantage
maydriveadoption.
9.2.1 ValueValueisanecessarybutinsufficientconditionforcreatingcompetitiveadvantage.A
resourceisdeemedvaluablewhenitiscapableofimprovingthebusiness’operational
efficiency,reducecostordifferentiateproducts(Bakos&Treacy,1986;Mataetal.,1995).
Adoptionofcloud-basedaccountingsoftwareforclients’useprovidesclearbenefitsin
termsofefficiency.Clients’accountingtransactionscanbeviewedasrawmaterialsfor
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accountants,asthehigher-leveladvisoryandconsultancyservicescriticallydependonthe
availabilityandqualityofaccountingdata.Adoptingsuchcloud-basedsoftwareallows
accountantsto“export”theworkofbookkeepinganddata-entrytotheirclients,asthe
softwareiseasyenoughforthelattertoperformtheirownbookkeepingwithverylittle
assistancefromaccountants(Johnston&Vitale,1988).This,inturnreducesthecostfor
accountantstoacquiretheirclients’financialrecords,andcanpotentiallyofferreducedfees
forclients,andlesstimespentontheselow-valueactivities.
Inaddition,theadoptionofcloud-basedsoftwarealsoprovidesefficiencyimprovementsto
theaccountantsthemselves.Asthecloud-basedsystemisdesignedtoprovideasingledata
storagethatcanbeaccessedonareal-timebasisbymultipleparties,accountantsare
providedwithbetterdatatoanalysetheirclients’financialperformance,andimproved
responsetoclients’specificneeds.Thisiscorroboratedbytheinterviewees,whohad
identifiedthebenefitsintermsoffasterend-of-yearaccountspreparationandbeingableto
checktheaccuracyoftheirclients’accountingentriesmoreeasily.
Similarly,cloud-basedaccountingsoftwareofferssomedegreeofproductdifferentiation,
whichgivesaccountantssignificantscopetoaddvalueintheirclient-accountant
relationship.Whilecloud-basedsystemsareinitiallyperceivedasterminatorsofaccounting,
allrespondentsinthisstudyrecognisedthatsoftwarelikeXeroarepowerfultoolsto
improvethequalityandscopeoftheirservice.Cloud-basedaccountingsoftwareallows
accountantstomonitortheclients’financialhealthandidentifyrisksmuchearlier.
AccountantscanalsoutilisethevastarrayofXeroaddonsthatareavailable,potentially
providingmorefeaturesfortheclientandfurtherimprovingtheaccountant’sown
efficiencybysubstitutingbusinessprocessesandtoolswithaddons.Accountantscanalso
usetheirknowledgeofclients’financialstatustorecommendandprovideservicesthat
bettermeettheclients’needsatanygiventime.
Insummary,basedontheresults,cloud-basedaccountingsoftwarethatareadoptedfor
clients’useproducesclearbenefitsfortheaccountantintermsofimprovedefficiency
throughinterorganisationalcommunicationandimprovedservicequality(likereal-time
reporting).
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9.2.2 RarityInorderforanycompetitiveadvantagetoarise,afirm’svaluableresourcemustbe
heterogeneous.Iftheresourceisavailabletothefirm’scompetitors,everyonewouldutilise
theresourceinthesamemannerandderivethesamelevelofbenefit,whichnegatesany
advantagethebusinessmayhaveagainstitspeers(Barney,1991;Mataetal.,1995).A
resourcebecomesrarewhennotallcompetitorsintheindustryhaveequalaccesstoit.
Theextentofresourceheterogeneityforcloud-basedaccountingsoftwareappearstobe
verylimited.Cloud-basedsoftwareisdevelopedandmarketedbyanindependentthird
party(suchasXero),whichmeansthatallaccountingfirmshaveequalaccesstothe
software,andanyaccountingfirmcanchoosetooffersoftwarelikeXerotoitsclients.
Moreover,sincecloudcomputingisdesignedtorequirelowinitialinvestmentand
maintenancecomparedtotraditionalsystems,thebarriersoffinancialresourceand
specialisedknowledgeisvirtuallynon-existent.ThisisillustratedbyFirmE’sexperience,
whowasabletoadoptXerothreeyearsafteritscompetitors,andnotsubstantially
disadvantagedintermsofaccessorbenefits.
Hence,accordingtotheresourcebasedview,cloud-basedaccountingsoftwareforclientsis
acompetitiveparity,whichexplainsthenear-ubiquitousadoptionratesofcloud-based
accountingsoftware.Duetothefactthattheresource(cloud-basedaccountingsystem)can
beadoptedandutilisedbyallfirmsinthesamemanner,allfirmsareabletoimprovetheir
efficiencyandeffectivenessinthesamemannerandtothesameextent(Barney,1991).In
otherwords,accountantswouldnotobtainanyadvantageoveritscompetitorsbyadopting
cloud-basedaccountingsoftware;butnotadoptingthecloudwouldresultinadisadvantage
comparedtoitspeers.Asaresult,itwouldbeineveryaccountingfirm’sbestinterestto
offercloud-basedaccountingsoftware,asitincreasesthefirm’schanceofeconomic
survival(Porter,1980,ascitedinBarney,1991).
Oncetheadoptionofcloud-basedaccountingsoftwarereachescriticalmass,theremaining
non-adopterswouldfaceinstitutionalpressure.Actionsundertakenbyotherorganisations
createsinstitutionalpressureforthefirmtoconform,especiallyduringperiodsof
uncertainty(Ang&Cummings,1997;Loh&Venkatraman,1992).Inthecontextofcloud
computing,thebenefitsderivedbyearlyadopterswouldlikelytomotivateotheraccounting
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firmstofollowsuit.Alternatively,thepromotionofcloud-basedaccountingsoftwarebythe
accountingfirmmaycontributepositivelytothefirm’simage,wheretheavailabilityofcloud
computingmaybeperceivedbyclientsasstate-of-art(Johnston&Vitale,1988).For
example,Mehrtensetal.(2001)notedthattheeffectsoffirmimageperceivedby
customerstowardsthefirm’sintentiontoadopttheinternetwassubstantial.
9.2.3 TheEarthquakeEffectTheChristchurchearthquakeisanimportantinterveningfactor,asitalterstheeconomic
structureconsiderably.TheChristchurchrebuildhadsignificantlyincreasedthedemandfor
construction-relatedactivities,whichsawanincreaseofboththenumberandthesizeof
constructionfirmsandcontractors.Thiswouldinevitablyleadstotheseconstructionfirms
comprisingalargerproportionoftheaccountants’totalclients.AsFirmFasserts,the
constructionsectorisparticularlysuitedtocloud-basedsoftware,duetothefactthat
constructionworkarefield-based(hence,datamobilitybecomingamajorconcern),and
thatmostconstructionclientslackIToraccountingknowledge(whichmakesXero’seaseof
useandlowmaintenanceparticularlyvaluable).Asaresult,inorderfortheaccountantsto
capturethesenewandexpandedbusinesses,thereisstrongmotivationforthemtoadopt
cloud-basedaccountingsoftware.
Implicationsofcloud“paradigm”forAccountants
CriticssuchasFulford(1999)expresseddisdaintowardstheword“paradigm”,fortheword
isgenerallyusedtogrosslyoverstatetheimportanceormisstatethenatureofa
phenomenon.Yet,cloudcomputinghadbeendescribedbycountlessauthorsasaparadigm-
shiftinginnovation(Grubisic,2014;Guptaetal.,2013;Lowetal.,2011;Marstonetal.,2011;
PwC,2011).Thequestionofwhethercloudcomputingreallyhasaprofoundimpactonthe
businessesthatwarrantsthelabelof“paradigm-shifting”variesconsiderablybetween
industries(Grubisic,2014).Thisstudyshowsthat,fortheaccountingindustry,cloud
computinghasaverystrongpotentialtobecomeaparadigm-shiftinginnovation.
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Whilesomeaccountantsmayperceivecloud-basedaccountingsoftwaretobeathreat,
accountingsoftwareisreallyredefiningthecorecompetenciesofanaccountingfirm.The
mainactivitiesofaccountingfirmstypicallyconsistofamixtureoftransactionalaccounting
(bookkeeping),compliance-relatedtasks(financialandtaxreporting)andadvisoryactivities
(taxadvice,businessdevelopment).Thestatusquoofaccountancyservicesbeforecloud
computing(theoldparadigm),asdescribedbyFirmD,isonewhereaccountantstypically
spendasubstantialportionoftheirtimeandeffortonthecomplianceactivities.
Wherecloudcomputingdoesshattertheparadigmistherapidde-emphasis(andtoa
certainextent,trivialise)thetransactionalaspect.Underthenewaccounting“paradigm”,
thebookkeepingisalmostentirelyperfomedbythebusinessclientsthemselves.Tothisend,
thecharacteristicsofcloudcomputinggreatlyassisttheaccountantsinprovidingtheir
specialisedknowledge.Thecollaborationbenefitsasaresultofone-ledgersystemallow
accountantstogainaccesstotheirclients’latestfinancialdata,andtoprovidemuchmore
timelyandrelevantadvice.TheeaseofuseandaccessallowsaccountantstodesignIT
workflowthatareofmuchbetterfitwiththeclients’requirements;anexampleisthehighly
mobilenatureofconstructionbusinesses.Nothavingtopreparetheaccountsfortheir
clientsalsoreducestheaccountants’workload,allowingthemtocompletetheirservices
muchmorequickly.
Althoughcloud-basedaccountingwouldvirtuallyeliminatetransactionalaccountingentirely,
whichcomprisedaconsiderableportionofanaccountant’sservicelineorrevenue,an
accountantcannotrealisticallyexpecttothriveonhandlingaccountingtransactionsalone.
Asdiscussedbefore,competitiveadvantagearisesonlywhenthefirm’sresourceisnon-
imitable;andresourcesthatareimitablecanonlyamounttoacompetitiveparity(Mataet
al.,1995).Transactionalaccountingworkisnota“competitiveadvantage”,duetothefact
thatknowledgeandskillsinbookkeepingandpreparingreportscanbeacquiredby(quite
literally)anyone,suchashighschoolanduniversitystudents(Krell,2011).Theemergenceof
accountingsoftware(cloud-basedorotherwise)makesnochangewhatsoevertothe
competitiveparitynatureofthework,exceptthataccountantsnowfaceanadditional
sourceofcompetitivepressure:thenewcloud-basedaccountingsoftwareissoeasytouse
thatnon-accountingprofessionalspreviouslywithsimplebookkeepingneedscanpotentially
bypasstheaccountant,andusesoftwarelikeXerodirectly.
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Whatcloudcomputingdoes,instead,ishighlightingtheaccountants’truecompetitive
advantagebyraisingthecompetitiveparity.Thevalueofaccountancyworkliesintheability
fortheaccountantstotranslatetheoriesandprinciplesintooutcomesandresults,whichis
auniqueresource.Forexample,professionaljudgementisacrucialskillforaccountantsand
auditors,but“good”professionaljudgementthatisfreefrombiasormisunderstandingcan
onlybedevelopedthroughacombinationoftalent,experience,learningandconscious
reflection(KPMGLLP,2013).Sufficetosay,advisory-basedservicesrequireskillsthatcannot
betaughteasily(suchasprofessionaljudgement),andthelevelofmasteryvaries
enormouslybetweenindividualswithdifferentlevelsofexperience,specialisedskills,
aptitudesandaccountant-clientrelationships.
Insummary,cloud-basedaccountingsoftwaredoesnotputanendtoaccounting;it
reshapeswhataccountingis.Cloud-basedsoftwarelikeXeroshouldnot“steal”workfrom
accountants,asitmerelyautomatesanactivitythatisalreadyhighlystructured,easily
obtainable,andoflittlestrategicvaluetoaccountants.Itdoes,however,placesubstantial
pressureforaccountantstodevelopontheirowncorecompetencybeyondrecording
accountsandpreparingreports.Cloudcomputingrewardsaccountantswithinnovative
waystoworkwiththeirclients,whileatthesametimepunishesthosethatresistthistrend
byreducedfeesandbusinessopportunities.
Cloud-basedERPforaccountants
InspiteofthesynergybetweencloudcomputingandERPsystemdescribedearlier,cloud-
basedpracticemanagementsystemsremainsahardsell.Moreimportantly,thedecisions
andoutcomesofadoptingacloud-basedpracticemanagementsystemvaryconsiderably
betweenthecasefirms.Thissectionattemptstoexplorethestateofcloud-basedpractice
managementsystemsbydrawingonsomecloud-basedERPresearch,andidentifythe
missinglinkbetweenthetheoryandpractice.
Intermsofcloud-basedpracticemanagementsystems,therelevantquestionsare:
• Whatarethedifferencesbetweenadoptersandnon-adoptersofcloud-based
practicemanagementsystem?
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• Whatdotheresultsindicateregardingthefeasibilityofcloud-basedpractice
managementsystem?
9.4.1 AdoptersReadyadoptersarecharacterisedbyhighlevelsofperceivedbenefits,organisational
readinessandenvironmentalpressure.Inthisstudy,FirmsAandChadbenefitedfromthe
reductionofresourcesspentonmaintainingtheirsoftwareandgainsinflexibility.Thecloud
systemsallowedtheittofreeuptheirresourcesinordertoinvestinmoreproductiveareas
atthesametime(Benlian&Hess,2011),whichwascrucialgiventheirshortageofresources.
Externalinfluencewastheotherprominentfactorthatledtotheadoptionofcloud-based
practicemanagementsystem.FirmChadexperiencedarguablythestrongestpressure,
sinceitwassomewhatcoercedintoadoptingthecloudsystemasaresultoflackofviable
non-cloudalternatives,andthelossofexistingpracticemanagementsystemduetovendor
droppingsupportforthatsystem.Ontheotherhand,theinfluenceofFirmAwassomewhat
morepositive,asthedecisiontoadoptarosefromthefirm’sexpertisegainedfrom
providingXeroandWorkflowMaxtotheirclients,andthecloserelationshipwiththevendor
asaresult.
Intheorganisationalreadinessdepartment,thetwofirmswerethesmallestinthecases
studied.Thisresultedinarelativelysimplemanagementstructure,whichallowedthemto
makedecisionsandimplementthenewmorequicklythantheirlargercounterparts.
Insummary,whilethesynergybetweencloudcomputingandERPsystemsarenot
universallyapplicable,theanecdotalevidenceprovidedbyFirmsAandCdoesindicatethat
thereispotentialforpracticemanagementsystemstobecomecloud-based.
9.4.2 Non-Adopter:ReasonsforNon-AdoptionThissectionexplainswhythesuccessfactorsdidnotapplytoFirmsB,DandF.FirmEis
excludedfromthisdiscussion,asitisunabletoadoptcloud-basedpracticemanagement
systemduetocircumstancesoutsideitscontrol.Inthisstudy,thenon-adoptingfirmsare
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largerinsize,motivatedbyadifferentsetofbenefitsandhaverelativelymoreopportunities
duetothefactthattheypossessrelativelymoreresources.
FirmsBandDrejectedcloud-basedpracticemanagementsystemsasaviableoption,since
theyperceivedcloud-basedalternativesweretoosimplisticintermsoffeaturesand
customisabilityfortheirneeds.FirmBcouldnotadoptthecloud-basedalternative,dueto
theneedformorecomplexfunctionstoservicecertainclients(suchasconsolidationof
overseassubsidiaries).FirmD,ontheotherhand,sawafundamentalmismatchintermsof
thefeatures,customisationandrobustnessthatthecloud-basedsystemsoffer,versusthe
levelthatisdeemedappropriatebythefirm.Similarly,thecloudserviceprovider’sserver
infrastructureandtheinternetcouldnothandlethevolumeofdatatransmissionforFirmF,
whichfurthersuggeststhattheexistingcloudsolutionsarenotexplicitlydesignedto
withstandtheaccessrequirementsofmediumtolargefirms.Theperceivedsimplicitymay,
infact,beduetothefactthatthecloudserviceprovidersareintentionallyfocusingon
capturingthesmalleraccountingfirms.
Alikelyexplanationforthelackofcloud-basedsolutionsforthelargefirmsisthe
competitivepressurefromtraditionaloutsourcing.Traditionaloutsourcingandcloud-based
outsourcingareextremelysimilar,saveforonetechnicaldetail.Cloud-basedoutsourcing
reliesonthe“cloud”ofserversacrosstheworld,whiletraditionalIToutsourcingproviders
keeptheirserversonpremise.Theonlydifferencesarethatcloud-basedoutsourcingcan
mobilisemuchmorecomputingresourcestoitsusersatanygiventime,thereforeallowing
forlargefluctuationsinresourceusagepattern;aswellasallowingbusinessestodeploy
theirITinfrastructurerapidlythroughtheuseofSaaSandPaaS(Armbrustetal.,2010;
Marstonetal.,2011).
Thenewlyestablishedcloud-basedsystemsmustcompetefiercelywiththemore
establishedtraditionaloutsourcingsolutionsinanareawhereseasonalityorvolatile
resourceusagedoesnotappeartobeamajorconcerntotheusers(indicatedbythelackof
mentioningbyaccountants).Effectively,traditionaloutsourcingactsasa“bestofboth
worlds”approachthatallowslargefirmstoenjoythesamebenefitsassmallfirmswith
cloud-basedalternativeswould.Inthisstudy,FirmDoutsourceditspracticemanagement
serversystemtoalocalITprovider.Thebenefitsoftheoutsourcingarrangementderivedby
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FirmDwereverysimilartothoseoftheadoptersofcloud-basedpracticemanagement
system,includingrelieffromtheeffortandexpenseofmaintaininganin-houseITsystem,
competitiveflat-ratecostforserverspacerental,andadditionalsafeguardsagainstdisasters.
Moreover,traditionaloutsourcingprovidesreassuranceoverthegeo-politicallocationin
whichthedatawasstored,whichpotentiallyavoidsjurisdictiondisputes(Yaznetal.,2013).
Muchofthegrowthofcloud-basedpracticemanagementsystemscanbeattributedtothe
Christchurchearthquake,whichgaverisetotheneedforbusinessestosafeguardtheirIT
systemsagainstnaturaldisasters.AsFirmFattests,theinterestincloud-basedsoftwarehad
risensignificantlyimmediatelyfollowingtheearthquake,duetofactthattheearthquake
renderedmostbusinessesinthecentralcityunabletoaccesstheirbusinessdata,and
createdsubstantialinterruptiontotheirbusinessforuptomonths.Incomparison,cloud
computingprovidesaneasysolution,ascloudserviceprovidercanprovidedataprotection
anddisasterrecoveryfunctionsreliablyandatamuchlowercostthaniftheinformation
systemismanagedinternally(KynetixTechnologyGroup,2009).Alternatively,theabilityto
deployrapidlywithminimalinitialinvestmentisalsoattractivetothebusinessesthatare
seekingtore-establishtheirITsystems.
FirmFistheonesuchexample:amainmotivatorforadoptingcloud-basedpractice
managementsystemwasduetothefactthattheexistingserverwaslosttotheearthquake.
ForthosefirmsthathavelosttheirITinfrastructuretotheearthquake,thedecisiontoadopt
cloudcomputingbecomesa“greenfieldadoption”oneasopposedtoareplacementone
(Benlian&Hess,2011).Thelowerinvestmentandcostofcloud-basedsystemscomparedto
traditionalsystemsareespeciallyappealingto“greenfield”businesses,duetotheir
immediateneedforITsystems.Also,sincetheytendtorelocatefrequentlybetween
temporaryofficelocations,havingtheirinformationsystemthatisnottetheredtoaserver
makesiteasierandlessexpensivetomovebetweenpremisesandkeepingthebusiness
processrunning.ThenotionofgreenfieldadoptionalsoappliestoFirmC,astheirexistingIT
systemisfacingtechnicalobsolescence.
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Usingamultiplecasestudydesign,thisstudyhasprovidedanexploratoryperspectiveofthe
roleofcloudcomputingintheaccountingindustry.Thisstudyhasdefinedcloudcomputing
intermsofthefunctionsoftheITconfiguration.Theresultsshowthatthenotionofcloud
computingactuallyconsistsoftwotypesofconfigurationsthatareusedfordifferent
purpose,andthetwotypesvarydrasticallyintermsofextentofadoption.
Thischapterconcludesthestudybyreferringbacktotheresearchquestionsthatwere
posedinthebeginningoftheresearch,followedbythecontributionstotheliterature.The
implicationsofthisresearchtopracticearediscussed,aswellasthepotentiallimitations.
Finally,thefuturedirectionsforresearchareoutlined.
ResearchQuestionRevisitedRQ1:whatroledoescloudcomputingplayintheprofessionalaccountingservicesindustry,
andinwhichwaysdotheydifferfromeachother?
Forprofessionalaccountingfirms,cloudcomputingisappliedtothefirms’information
systemintwoways.Asapieceofaccountingsoftware,cloudcomputingfacilitates
interorganisationalcommunicationbetweentheaccountantandtheclient,whichreinforces
therelationshipbetweenthem.Alternatively,asanERPsystem,cloudcomputingprovides
aninexpensiveyetdisaster-resilientsolutionforaccountingfirm’spracticemanagement.
However,thereisaremarkabledifferencebetweenthetwocloudimplementationsinterms
oftheaccountingfirms’willingnesstoadoptthem.
Theadoptionofcloudbasedaccountingsoftwarebyaccountingfirmsisalmostuniversal,
duetothesubstantialpotentialinsupportingthefirms’primaryoperations.Asan
information-basedindustry,accountantsrelyoncomplete,accurateandtimelyinformation
fromtheirclientsinordertoprovidetheappropriateadvisoryservicestothem.Cloud-based
accountingapplicationsstreamlinetheprocessofacquiringinformation.Becausethecloud-
basedaccountingapplicationsareeasiertouse,clientscanmaintaintheirownaccounting
recordsonanongoingbasis.Also,theflexibilityofaccessallowsaccountantstoaccessthe
mostrecentaccountingdatawithminimaleffortanddelay.Theresultingbenefitismutual.
104
Accountantsareabletothrivebyprovidingservicestotheirclientsthataremorerelevant,
andclientsbenefitfrombettertheinformationandadvicesfromtheiraccountants
regardingtheirgrowthstrategy.
Ontheotherhand,cloud-basedpracticemanagementsystems,whichareanadaptationof
cloud-basedERPsystemstailoredtoaccountants,arestillstrugglingtoestablishtheir
marketpresence.Thecurrentofferingsofcloud-basedpracticemanagementsystemsare
focusedonthesmallaccountingfirmdemographics,andarelaggingbehindintermsof
robustnessandfeaturescomparedtotheirdesktop-basedcounterparts.However,cloud-
basedERPsystemsarefarfrombeingmature.Thisstudysupportstheviewthatcloud
computingcan,infact,addsignificantvalueandmarketsharetothepracticemanagement
systems,andERPsystemsingeneral.
RQ2:Whydoaccountingfirmschoosetoadoptcloud-basedsoftwaresolutionsfortheir
business,andfortheirclients?Whatarethefactorsthatmotivatedordiscouragedthe
adoptionof“cloudcomputing”?
Accountantsadoptcloud-basedaccountingsoftwareapplicationsbecausetheyareeasierto
usebynon-accountingprofessionals(i.e.theirclients),andtheydrasticallyreducetimeand
effortrequiredforaccountantstoobtaintheirclients’financialdata.Asaresult,cloud
computingprovidesamoreefficientandeffectivemethodofcollaborationbetween
accountantsandtheirclients.Itisworthnotingthattheperceivedbenefitofthesoftwareis
ofaninterorganisationalnature.Inmanycases,accountantsadoptcloud-basedaccounting
softwarebecauseitprovidesbenefitstotheirclients.
Alternatively,fromthestrategicmanagementperspective,cloud-basedaccountingsoftware
representsacompetitiveparity.Inotherwords,cloud-basedaccountingsoftwareisa
necessitytomaintaincompetitivenesswithitscompetitors,whichcreatesagreaterurgency
fornon-adopterstocatchup.Thiscreatesastrongcompetitivepressureforaccountantsto
adoptthesoftware,asthenon-adopterswouldbedisadvantaged.Theaccountants’image
andperceivedtechnicalexpertisemayalsobeaffectedbyadoptingcloudsoftware,dueto
thefactthatsoftwarelikeXeromaybeconsideredstandard.
105
AccountingfirmsthatpossessahigherlevelofITexpertiseviaitsemployeesandpartners
arelikelytoadoptcloud-basedaccountingsoftwareearlierandexplorethefeaturesmore
thoroughlythanthosethatdonot.Activechampioningbythepartnerisparticularly
importantinacceleratingtheadoptionofcloud-basedaccountingsoftware,andthisisnot
necessarilylinkedwithfirmsize.
Ontheotherhand,intermsofpracticemanagementsystems,thecloud-basedalternatives
providelittlevaluetoanaccountingfirm,withperhapstheexceptionofcost.Small
accountingfirmsmayfindcloud-basedsolutionstobeanadequatesolution,duetothefact
thatcloud-basedsolutionsrequireslessfinancialandhumanresourcetoimplementand
maintain.However,thelackoffeaturesandlimitationsincapacityisacriticaldrawbackfor
largerfirms.
RQ3:Whataretheperceptionsofaccountantstowardsthecloudcomputingparadigm?
Whatarethelikelyimplicationsofcloudcomputingonaccountants?
Thecloud-basedaccountingsoftwareapplicationshaveimmensepotentialtoautomateand
exportworkthatisrelatedtotransactionalbookkeeping.Thismayalterthebusinessmodel
ofaccountingfirmsdrastically.Cloud-basedapplicationslikeXeromakeitmucheasierfor
thenon-accountingprofessionalstomaintaintheirownaccountingrecordsefficientlyand
autonomously.Asaresult,theseapplicationswouldcannibalisethedemandfor
bookkeeping,andpossiblyeliminateaconsiderableportionofworkforaccountants.Asa
result,accountantswouldbeforcedtodeveloptheircorecompetencyorcompetitive
advantageinordertocompensateforthelostincomesources.
Fromanindustry-wideperspective,cloud-basedaccountingsoftwaredoesnotnecessarily
changetheindustryitself.Transactionalaccountingisnotanaccountant’scorecompetency
orcompetitiveadvantage,whichmeansthatservicessuchasadvisory,auditingand
complianceconsultingareunaffectedbythecloud.However,asmoreaccountantsseekto
improvetheirnon-transactionalservices,theaccountingindustryisexpectedtobemuch
morecompetitive.
106
ContributionstoLiteratureThisstudyhadidentifiedanissueinthepriorcloudcomputingadoptionliterature,inthat
theconceptof“cloudcomputing”isnotfullyexplored.Thisissuearisesfrom(i)the
ambiguityandtheflexibilityofcloudcomputing“paradigm”itself,and(ii)thefactthat
businessenvironmentsgenerallyvarysignificantlyamongdifferentindustries.Thisstudy
contributestotheliteratureinthreeimportantways:anindustry-specificempirical
investigationintothecloudcomputingadoption;adefinitionofcloudcomputingintermsof
itspurporteduse;andanattempttosynthesiseISadoptionliteraturewiththestrategic
implicationsofinformationsystems.
Byfocusingontheaccountingindustryonly,thisstudyprovidesaclearerpictureregarding
thepresentstateofcloudcomputing,andtheunderlyingreasonbehinditsapparent
popularity.Asaserviceindustry,theaccountingindustrydoesnothaveasubstantialsupply
chain,andaccountancy-basedservicesarehighlyhomogeneous.Thesingle-industry
researchscopealsoactsasacontrol,whereeverycasefirmoffersasimilarsetofproducts,
structurestheirbusinessesinasimilarway,competesinasimilarway,andissusceptibleto
sameindustrypressureinsimilarways.Itisthisscopethatallowedthestudytofindthat
therationaleforaccountantstoadoptcloudcomputingdiffersconsiderablyfromtheother
industries.
Furthermore,thisstudygroundstheconceptofcloudcomputingintermsoftangible,
concreteinformationsystemsthatleveragethecharacteristicsof“cloud”tocontributeto
thefirm.Morespecifically,byutilisingthedefinitionsfromClemons(1986),thisstudyhad
differentiatedbetweenthetwobasictypesofcloud-basedinformationsystems:cloud-
basedsoftwarethatisprimarilyusedfortheclient’sbenefit,andtheonesthatareusedto
supporttheaccountants’operationalefficiency.Duetothedifferencesintherolesofcloud-
enabledinformationsystems,thecostandflexibilitybenefitsaffordedbycloudcomputing
haveverydifferentimpactsontheeffectivenessofthecloud-enabledsystems,andthe
adoptionofthecloud-basedsoftwarevarysignificantlyasaresult.
Finally,thisstudyincorporatesthestrategicmanagementtheoriestofurtherinvestigatethe
wider,industry-levelimplicationsofcloud-basedsoftwarefortheaccountants.Mostofthe
previousstudieshaveusedtheTOEframework,andoneofthecriticismswiththat
107
frameworkisthatitconstrainstheperspectiveontheadoptingfirmanditsimmediate
surroundings.CombiningIacovou’sEDIadoptionframeworkwiththeresource-basedview
viewstheaccountingfirminrelationtoitsclientsandcompetitors,andthestrategic
significanceofcloudcomputingisemphasised.
ImplicationstoPracticeFromanaccountingpractitioner’sperspective,thecloudcomputingphenomenon
representsarapidshiftintheroleandthebusinessmodelofaccountants.Itiscriticalforan
accountingfirmtohaveexpertisewithcloud-basedaccountingsoftware,asthecloud-based
softwareprovidessignificantbooststotheefficiencyandeffectivenessofanaccountant’s
services.Accountantsthatneglectcloud-basedsoftwaremayfinditdifficulttocompete
againsttheadoptersofthecloud.
Inaddition,thepresenceofcloud-basedaccountingsoftwarepushesaccountantsaway
fromtheroleofreportpreparersandbookkeepers,andtowardstheroleofproblemsolvers
andearlywarningfortheirclients.Thetransitionmaybeturbulent,andaskillgapmay
emerge.Sincetheproblemsolvingservicesarehighlytailoredtotheclientsandtheir
operatingenvironments,accountantsarerequiredtopossessafarbroaderskillsetinterms
ofproblemsolvingskillsandflexibilityinlearningabilitiesinordertobeabletoresolvea
largevarietyofproblems.
Inshort,accountantsinthecloudcomputingeraneedtojustifythepurposeofaccounting
foranorganisation,andhowaccountancyservicescontributetothewellbeingofthat
organisation.Althoughitisdifficulttospeculatethefutureoutlookforaccountants,cloud
computingisareminderthatbookkeepingisonlyasmallproportionofaccounting.
LimitationsofStudyItisimportanttonote,however,thatallresearchdesignsandmethodsinvolvetrade-offs
betweenthebreadthandvolumeofdata,andthedetailsthatcanbeextractedfromeach
case.Thelimitationsassociatedwiththemethodschosenforthisstudyshouldbetakeninto
accountwheninterpretingthefindingsofthisstudy.
108
Thisstudyiscontextspecific,inthattheresearchsubjectsaremostlyfromChristchurch,and
thisstudyexaminedprofessionalaccountingfirmsonly.Whilethegeneralizabilityofthis
studymaybelimited,theresultscanbeneverthelessbeappliedtootherprofessionalfirms
(suchaslawyersandmedicalpractices)andservicefirmsthatrelyonahighlevelofclient-
businessinteraction(suchasdesign,media,ITandadvertisingfirms).However,careshould
betakenwhengeneralisingtheresultsofthisstudyacrosstootherindustries,asthefactors
forthoseindustriesmayvary.Examplesofsuchfactorsinclude:typesofcloud-based
software,presenceofregulations,businessenvironment(SWOTwithintheindustry)and
natureofwork.
AnotherpotentiallimitationistheuniquebusinessenvironmentsurroundingChristchurch.
TheChristchurchearthquakesawadeclineofbusinessactivityacrossallindustries,except
fortheconstruction-basedbusinessesthatgrewduetotherebuild.Asaresult,the
compositionofbusinessinChristchurchisheavilyskewedtowardsconstruction-related
activitiescomparedtoothercitiesandgeographicalregionsinNewZealand(andtoa
certainextent,restoftheworld).
Finally,theinterviewmethodthatwasselectedfordatacollectionmayalsogiveriseto
somelimitations.Theinterviewprocessisinherentlysubjectiveduetothefactthatpeople’s
memoriesareimperfectandincomplete.Thelackofrigidstructureofasemi-structured
interviewmayleadtotheresearchermisinterpretingtheresponsesbasedonhis/her
preconceivedideas.However,theincompletenessofpeople’smemoryprovidesan
importantsourceofinformation.Theintervieweeswouldmostlikelytorememberthe
factorsthatwereperceivedasmoreimportant,andthisprovidesinsightsintotherelative
weightingsofthefactorstoadoptcloudcomputing.Moreover,measuresareundertakento
mitigatethesubjectivityininterpretation,including:voicerecordingtheinterviewwhenever
possible(andwiththepermissionoftheinterviewee)fortranscription,andproviding
intervieweeswiththeinterviewsummarytoidentifyanymaterialdeviationsfromtheir
intendedmeanings.
109
FutureResearchDirectionsBeinganunder-researchedarea,thisresearchhaduncoveredmanyopportunitiesof
integrationbetweencloudadoptionandtherelevantIStheories.Inlightofthefindings,the
futureopportunitiesforresearcharediscussedbelow:
i) Futureresearchcanfurtherestablish,identifyanddifferentiatebetweenthevarious
rolesofcloudcomputing.Theconceptsofinternally-andexternally-focused
applicationsareantiquated,sincethepaperauthoredbyClemons(1986)was
publishedin1986.Significantdevelopmentsinbothtechnology(suchasinternetand
socialmedia)andmanagementtheory(ResourceBasedView)hadtakenplacesince
thepaperwaspublished.
ii) Futureresearchcaninterprettheadoptionofcloudcomputingintermsofthe
relevanttheoriespertainingtoafirm’svaluecreationandstrategy.Iacovouetal.
(1995)wouldbeasuitablestartingpoint,asthenotionofperceivedbenefitcanbe
extendedtoincorporateinter-organisationalbenefitsandcompetitiveadvantages.
Similarly,outsourcingtheoriescanbeusedtoexaminefirms’reasonsforfavouring
(orrejecting)cloud-basedsolutionsforinternaluse.
iii) AsGrubisic(2014)hadnoted,studiesofcloudcomputingadoptionshouldbe
industry-specific.Futureresearchcanexaminetheextentofcloudcomputing
adoptioninotherindustries,andcomparethemagainsttheaccountingindustry.The
comparisonbetweentheaccountingindustryandanotherone(suchasadvertising
orconstruction)wouldprovideimportantinsightsintothefactorsthatmotivatedthe
growthofcloudcomputing.
iv) Thecontextuallimitationsidentifiedinthisstudycanbetestedbyconductingsimilar
studiesinothercitiesorcountries.Despitetheuniquebusinessenvironmentinpost-
earthquakeChristchurch,thegrowthofcloud-basedaccountingsoftwarelikeXerois
notconstrainedinNewZealand.Studiesinotherregionswouldreinforcethestateof
cloudcomputingforaccountants.
v) Futureresearchcanconsideradoptingamixedmethodsapproach,wherethedetails
ofaqualitativestudywouldbecomplementedbythebreadthofdataprovidedby
quantitativemethods.
110
vi) Alternatively,futurestudiescantakeamorequalitativeanddetailedapproachby
examiningthedynamicsbetweenthecloudprovider,theaccountantandthe
accountant’sclients.
111
1. Basicfirminformation:
a. Howbigisyourfirm,intermsofemployees?
b. Whatservicelinesdoesyourfirmprovide,andwhatdepartmentsdoyou
have?
c. Whatisyourroleinthisorganisation?
d. WhatisyourlevelofITproficiency?
e. Whatisyourunderstandingofthe“cloudcomputing”phenomenon?
2. ExternallyFocusedCloudComputing:Adoption
a. Whatcloud-basedsoftwaredoyouoffertoyourclients?
b. Whendidyoustartadoptingthesaidcloud-basedpackages?
c. Whydidyourfirmchosetoadoptcloudcomputing?Whatwouldbethemost
importantreasonsforyourfirmtoadoptcloud?
d. Doesthefirmofferanynon-cloudaccountingsoftware?Whatarethey?How
muchemphasisdoyouplacebetweencloudandnon-cloudsoftware?
e. Evaluation:
i. Whatarethebenefitsasaresultofadoptingcloud-basedaccounting
software?
ii. Werethereanyunexpectedrisksorsurprises?
iii. Withthebenefitofhindsight,wouldyouchoosecloud-basedsoftware
again?
3. InternallyFocusedCloudComputing:
a. Whatsoftwaredoyouuseforpracticemanagement?
b. IFUSINGCLOUD:
i. Whendidyoumaketheswitchtocloud-basedpracticemanagement
systems?
ii. Whatsystemshadyoubeenusingpriortomigratingtothecloud?
112
iii. Whydidyouchoosetoadoptcloud?
Whatotheralternativeshaveyouconsidered?
c. IFNOTUSINGCLOUD:
i. Doyouhaveanyintentionstomigratetothecloud?
ii. Why/whynot?
iii. Whatchangeswoulditbenecessaryforyourfirmtoadoptcloud-
basedpracticemanagement?
d. Evaluation:
i. Whatbenefitshaveyougainedfrommovingyourpractice
managementsystemsintothecloud?
ii. Haveyouencounteredanyunexpectedrisksorsurprises?
iii. Withthebenefitofhindsight,wouldyouchoosecloud-basedpractice
managementsystemsagain?
113
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