Cloud Computing and Information Systems Strategy in Multi-National Companies

Cloud Computing and Information Systems Strategy in Multi-National Companies

Christian Weber
DOI: 10.4018/978-1-7998-7712-7.ch009
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This chapter explores how information systems (IS) strategy is developed and implemented in multi-subsidiary international groups, and how this has been influenced by the advent of cloud computing and the solutions offered by the major cloud providers. Using an inductive, qualitative research approach, the chapter assesses learnings to date from cloud adoption, reports on individual expert interviews, and discusses future challenges for those companies embarking upon cloud projects. Key issues distilled from the literature and the in-depth interviews with practitioners are identified and discussed. The chapter concludes that cloud has significantly impacted IS strategy within multi-national organizations, allowing flexibility in various scenarios like, for example, moving from monolithic enterprise resource planning applications to a micro-service based architecture. There are nevertheless a range of strategic and operational issues that must be carefully managed and planned for, including multiple aspects of compliance and security.
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According to Whitten (2004), an information system (IS) is an integrated web of people, processes, data, software, hardware and procedures that interact with each other in order to analyze and distribute collected and processed information, to create value and support the systems inside and outside an organization. This definition also concurs with Beynon-Davies (2009a) who sees IS as the source of information distribution in an organization. Furthermore, IS is holistically defined by Ward and Peppard (2002) as a means of purposeful use of information technology (IT) through interrelated components, interacting with each other in an organized structure. On the premise constructed by the above three definitions, IS is further elaborated with variations in its dimensions and scope in different industries.

In multi-national organizations, the scope of IS is much wider than in smaller enterprises, and hence it encapsulates a greater range of system components. Kraemer and Dedrick (2001) and Jalava and Pohjola (2002) viewed IS as the enabler of integrated marketing infrastructure and enhanced product development, as well as supporting corporate expansion to geographically diverse locations, and facilitating decentralized decision making in subsidiaries, resulting in better returns on IT investments. However, Agarwal and Dhar (2014) noted that IS had transitioned rapidly over the previous years, mainly due to a decrease in the cost of technology, with improved processing capabilities such as those available in cloud solutions, which has enabled IS to be a major source of value creation in an organization.

This chapter consists of six sections. After this introduction, the following two sections examine the background to IS strategy and the research methodology for the study. Based on semi-structured interviews with IT managers and industry experts, the findings are then set out and key issues discussed. Finally, the concluding section draws together the main themes discussed in the chapter and assesses some of the key future issues for using a cloud approach in IS strategy development and implementation.

Key Terms in this Chapter

Enterprise Resource Planning (ERP): Company-wide system for planning, controlling, and managing resources such as machines and staff, materials, and information in the sense of the corporate purpose in a timely and needs-based manner. Oracle and SAP are leading ERP vendors.

Infrastructure as a Service (IaaS): Provides virtualized computer resources such as servers, networks, and storage.

Multi-Cloud: A multi-cloud environment is a combination of at least two cloud variations such as private, public or hybrid.

Software as a Service (SaaS): Provides applications over the internet as a service based on a vendor specific distribution and licensing model.

Identity Access Management (IAM): This provides user and role-based access control to various applications and systems managed from a central service.

Platform as a Service (PaaS): Provides a complete development and hosting environment in the cloud on which the users can provide various solutions. From simple cloud-based applications up to enterprise solutions.

General Data Protection Regulation (GDPR): This regulation was put into effect in 2018 and is often regarded as the toughest privacy and security law in the world.

Application Programming Interface (API): This is an intermediary software which allows two or more applications to talk to each other.

Private Cloud: Virtualized computing services and infrastructure are hosted in company-owned data centers or dedicated cloud providers which provides such an isolated environment.

Public Could: Shared IT environments are partitioned and distributed across multiple tenants.

Hybrid Cloud: A hybrid cloud is a single IT environment built from multiple environments connected through various internal and external networks and APIs.

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