Queensland University of Technology CRICOS No J ON GOVERNANCE STRUCTURES FOR CLOUD RESOURCES AND ASSESSING THEIR EFFECTIVENESS Acklesh Prasad QUT Business School – Queensland University of Technology, Brisbane, Queensland, Australia Peter Green Jon Heales UQ Business School – University of Queensland Brisbane, Queensland, Australia

CRICOS No J a university for the world real R Presentation Outline Motivation/Introduction Research Question Theory Hypotheses Development Research Design Results Discussion Contributions and Limitations Conclusion

CRICOS No J a university for the world real R Introduction Cloud resources provide opportunities and challenges to businesses. However, acquiring IT resources as a utility from the cloud is gaining momentum. Cloud presents better and more economical ways to continue to embed modern IT resources in information systems (IS). Overall, organizations interest in cloud resources will continue to increase. –Gartner (2012)…. “Cloud computing to be a $206.6 billion business by 2016.” –Fratto (2012)… “Cloud computing is coming to your organization, like it or not.”

CRICOS No J a university for the world real R Introduction The resource is the same (IT), but nature of commitment, relationship management, and expectation from the resource is different. Marston et al., (2011) “CIOs and CTOs should proactively develop an overall “cloud strategy” in order to determine a time-based plan about which of their applications they can move to the cloud, and the timeframes associated with each of them.” Governance structures for IT resources require consideration. Fratto (2012) “A governance plan gives the cloud IT the proactive control needed to proceed safely” Eventually, it has to embed into organizations overall IT governance structures.

CRICOS No J a university for the world real R Introduction The current position on cloud governance: –Practice-based conceptual deliberations on the benefits of cloud services and the surrounding technologies (for example, KPMG and Gartner resources). –Academic contribution is starting to focus on business-related issues surrounding cloud computing (see for example, Brumec and Vrček, 2013; Marston et al., 2011; Misra and Mondal, 2011; Sultan, 2010). Our effort - to blend these thoughts and suggest appropriate IT governance structures for cloud resources.

CRICOS No J a university for the world real R Research Question What are the appropriate IT governance structures for managing cloud resources to achieve cloud- related business objectives?

CRICOS No J a university for the world real R Conceptually….. Cloud-based business objectives - achieving outcomes relating to improved agility, better creativity and innovation, and simplicity of IT systems Cloud-related financial objectives - better returns on investment in IT, improvement in total IT lifecycle costs, and better response to economic conditions.

CRICOS No J a university for the world real R What should be the Nature of Cloud Governance Structures? Cloud resources will be dynamic. To source “new” value: –Governance structures would need to be dynamic – Ability to build capacity to continue to leverage “new” value from the cloud resources. Resource-Centric View and Dynamic Capabilities Framework –New players with continuous commitment and engagement. Governance structures would have a relational component. Shared governance. Relational view of the firm

CRICOS No J a university for the world real R Research Design A Triangulation approach –Theoretical Underpinnings –Conceptual Deliberations Practice and Academic –Interpretive Field Investigation A set of possible IT governance structures for managing cloud resources. Subsequent – Validation of the (model) with a field survey.

CRICOS No J a university for the world real R The Model of Cloud Governance

CRICOS No J a university for the world real R The Model of Cloud Governance Chief Cloud Officer - expertise, initiator, the dynamic component, local expertise, proactive. Cloud Management Committee – overall cloud direction, strategy, steering role. Cloud Service Facilitation - issue resolution center, develop and administer performance monitoring, manage change facilitation, and consider tactical decisions relating to cloud services economics of cloud, (cloud provider risk assessment, and enterprise agreements.) Cloud Relationship Centre - relationship management, cloud service gateway, dynamic and continuous relationship between corporate IT and business units, communication of cloud related security, architecture standards, and integration requirements, and business unit compliance, security in cloud, the possibility of changing business models quickly.

CRICOS No J a university for the world real R Field Assessment A survey Approach Measurement Item Development and Validation Sampling Frame Construction Pilot test 136 valid responses –26 actual cloud adopters –110 from prospective cloud adopters Diagnostic Analysis –No issues identified

CRICOS No J a university for the world real R Survey Data Quality Table 4. Factor Loadings, Loading Descriptive, and Cross Loadings Factor Loading MeanStd DevT-StatCBOCCOCFOCMCCRCCSF CBO1  CBO CBO2  CBO CBO3  CBO CCO1  CCO CCO2  CCO CCO3  CCO CFO1  CFO CFO2  CFO CFO3  CFO CMC1  CMC CMC2  CMC CMC3  CMC CRC1  CRC CRC2  CRC CRC3  CRC CSF1  CSF CSF2  CSF CSF3  CSF Note: CCO – Chief Cloud Officer; CMC – Cloud Management Committee; CSF – Cloud Service Facilitation; CRC – Cloud Relationship Committee, CBO – Cloud-Related Business Objectives; CFO – Cloud-Related Financial Objectives

CRICOS No J a university for the world real R Survey Data Quality Table 5. Measurement Properties AVECA CBO CCO CFO CMC CRC CSF CBO CCO CFO CMC CRC CSF Note: CCO – Chief Cloud Officer; CMC – Cloud Management Committee; CSF – Cloud Service Facilitation; CRC – Cloud Relationship Committee, CBO – Cloud-Related Business Objectives; CFO – Cloud-Related Financial Objectives; AVE – Average Variance Extracted; CA – Cronbach’s Alpha

CRICOS No J a university for the world real R Cloud Governance Structures and Business Objectives Table 6. Cloud Governance Structures  Cloud-Related Business Objectives - Hypotheses 1-4 RelationshipPath Coefficientp-valuesig. Chief Cloud Officer  Cloud-Related Business Objectives * Cloud Management Committee  Cloud-Related Business Objectives *** Cloud Service Facilitation  Cloud-Related Business Objectives * Cloud Relationship Management  Cloud-Related Business Objectives *** Explained Variance (R 2 )0.609 * p<0.05, ** p<0.01, *** p<0.001

CRICOS No J a university for the world real R Cloud Governance Structures and Business Objectives Table 7. Cloud-Related Business Objectives  Cloud Related Financial Objectives - Hypothesis 5 Relationship Path Coefficie nt p- valu e sig. Cloud-Related Business Objectives  Cloud-Related Financial Objectives *** Explained Variance (R 2 ) * p<0.05, ** p<0.01, *** p<0.001

CRICOS No J a university for the world real R Discussion The impetus to seek cloud services is gaining momentum. A proactive approach to governance of cloud resources is desirable. We suggest four cloud governance structures that focus on initiation  decision making  fit  relationship management. Overall - continuous and careful thought, perceived good fit of the prospective cloud resources, and subsequent actual implementation of the services into the business processes. Value Trajectory - cloud-related business objectives  cloud-related financial objectives.

CRICOS No J a university for the world real R Contributions Formal thought on and validation of possible cloud governance structures. Consideration on the element of dynamics in cloud governance structures  possible with the suggested four structures. The importance of managing relations with key stakeholders yet, owning cloud governance. Ways to determine whether path to the cloud is still feasible.

CRICOS No J a university for the world real R Limitations Model validation –Response rate – Actual cloud adopters –Overall – 136 valid responses. A generic set of structures –Not specific on a particular business environment or a cloud provider Perceptive measures

CRICOS No J a university for the world real R Conclusion Cloud computing is gaining momentum, and is here to stay. Utility approach is not new, but the thought of sourcing IT resources as a utility is presenting excellent opportunities to organizations to manage their IT cost, and have modern IT resources to facilitate innovation. Organizations responsibility of appropriately managing their resources remain Our triangulation approach has suggested four possible IT governance structures for cloud computing. These structures relate to having a strategic thought on cloud resources, the importance of having a cloud expert, cloud service polices, and manage and integrate cloud in organizations. We hope our effort will increase understanding on ways to approach the adoption of cloud technologies by establishing procedures at the outset to ensure the acquired IT resources contribute to the strategic intent of organizations, and swiftly fit into their existing business processes.

Queensland University of Technology CRICOS No J Thank You Questions and Comments