Investigating preconditions for a financially advantageous cloud usage
International Journal of Accounting & Information Management
ISSN: 1834-7649
Article publication date: 3 May 2016
Abstract
Purpose
Information technology (IT) expenses constitute an important factor when choosing efficient IT systems. Especially with regard to cloud computing (CC), decision-makers tend to associate cost benefits. In this context, cloud providers present often undifferentiated sample calculations which aim to verify the financial favorability of their IT solutions. However, the scientific literature tries to encounter this by means of various total costs of ownership approaches. But science mostly neglects essential factors and does not provide an integrated approach involving factors, such as cost of capital, taxation effects, use intensity or duration of use. Hence, the purpose of this study is to involve these factors accordingly.
Design/methodology/approach
The paper uses a multi-method approach. First, existing literature is analyzed by a systematic literature review. Afterwards, the initial model is developed by means of a formal notation. Finally, the suitability of the formal model is evaluated by a real-life case study, where simulation software is used for investigating various scenarios.
Findings
The underlying paper discusses a formal model which integrates the four stated factors and enables decision-makers to compare cloud-based IT services on a comprehensive financial basis. Thus, the rational cost comparisons with traditional IT systems such as on-premise (OP) increase the transparency of the CC field significantly.
Originality/value
This paper shows impressively the importance of the four mentioned factors and their influence on the decision whether to implement cloud services or OP services. Herein, to the best of our knowledge and for the first time, a cash-flow-based comparison model is created for comparing cloud services and OP solutions.
Keywords
Acknowledgements
The author would like to thank the anonymous reviewers as well as Ms Marita Imhorst who provided valuable help and substantive feedback. This work is part of the project “Sustainable Consumption of Information and Communication Technologies in the Digital Society – Dialogue and Transformation through open innovation”. The project is funded by the Ministry for Science and Culture of the Land of Lower Saxony and the Volkswagen Foundation (VolkswagenStiftung) within the grant program “Niedersächsisches Vorab” (grant number VWZN3037).
Citation
Jede, A. and Teuteberg, F. (2016), "Investigating preconditions for a financially advantageous cloud usage", International Journal of Accounting & Information Management, Vol. 24 No. 2, pp. 116-134. https://doi.org/10.1108/IJAIM-04-2015-0018
Publisher
:Emerald Group Publishing Limited
Copyright © 2016, Emerald Group Publishing Limited