Analysis of Cloud HR Solutions for SMEs in Hong Kong - Dissertation Example

Analysis of Cloud HR Solutions for SMEs in Hong Kong s Submitted by s: Introduction Generally, SMEs are considered to be drivers of development while significantly influencing socio-economic development. Job opportunities, reduction in poverty, earnings, development of rural areas as well as exports and entrepreneurship are affected positively by SME and global leaders such as China and the US have developed bureaus and created policies with the aim of ensuring that SMEs become successful. Technology has had a considerable effect on different areas of life while changing the manner in which businesses operate. Nonetheless, SMEs have been noted to face progressive reception in regards to adoption of ICT, and therefore, cloud computing, which is a new aspect in technology is considered as a solution to dealing with this challenge (Rio-Belver et. al, 2012). Cloud computing allows companies to have simple and scalable technological solutions while simultaneously giving access to the technologies that are used by bigger companies without having to incur high risks and costs. Cloud computing is cost effective and thus creates efficacy and efficiency while reducing costs of bandwidth, operations, electricity as well as hardware. Additionally, it is not dependent on in-house proficiency, functional employees, electricity, space or setup for it to function properly (Susanto, Almunawar & Kang, 2012). Cloud computing customers merely pay for the computing assets they utilize as the services are offered when demanded in the same manner utility provider provide services. As a consequence of the numerous benefits, cloud computing services are progressively being recommended and adopted by small businesses resulting in quick development of this cloud ideology. Cloud computing providers encourage employees to outsource their operations like emailing and collaboration, applications, servers and storage as well as security to them. However, the adopting of cloud services in the SME sector has been discouragingly slow. When studies that have focused on the adopting cloud computing are reviewed, they have indicated that a great proportion of the published studies have been conducted in the industrialized and developed nations (Sahandi, Alkhalil and Opara-Martins, 2013). Therefore, there is some significant amount of literature concerning adoption of cloud computing as far as industrialized nations are concerned. Nonetheless, majority of the studies have concentrated on the acceptance of the ideology, deployment models as well as services associated with cloud computing and aspects of concerns and dynamics that influence or hinder the adoption. Background of the research Cloud solutions have brought significant changes in the manner in which organizations run their applications and store their data from the conventional desktop network into servers which can be accessed remotely through the internet. Currently, cloud solutions are technological revolutions which have a considerable effect on all the areas of IT industry as they allow companies to access applications and information at any time from any location all over the globe. Based on this dramatic change of technology, the present research seeks to investigate the aspects that impact the adoption of solutions based on cloud services by SMEs in Hong Kong. It has been noted that numerous studies or empirical researches have focused on the global market, bigger enterprise as well as industrial leaders; however, this paper will concentrate on SME instead of bigger organizations since the constraints they face differ from those of bigger businesses and ultimately the approaches to making decisions and influential factors are not the same. Approximately 320,000 SME exist in Hong Kong and they have employed more than one million people accounting for forty seven percent of the total employment when civil servants are not considered. In the globalized and competitive world, this study seeks to provide a platform for HR practitioners as well as business owners to appreciate the manner in which their companies achieve their HR goals, hire and motivate their workers along with how they manage staff performance, training and organizational changes through the HR solutions already in existence to embrace cloud technologies so that the companies can be more competitive. Additionally, the small and medium companies experience numerous issues such as competing for talent with the bigger companies, globalization, social media, technology as well as changing expectations at the workplace and diminishing half-life of skills which affect initiative to engage and retain employees. This research further seeks to provide practical information to those who provide cloud HR solutions that will allow them to appreciate the challenges and hurdles that the local SMEs in Hong Kong experience. Therefore, they will be able to market their solutions as strategic and foundational HCM offerings that will assist in modernizing HR firms, tailor-made to satisfy the increasing HR strategic demands and materialize to become practical opportunities in the demand-side so that they can maintain an innovative edge while defending the market share from the competition. Literature Review Currently, cloud computing is among the most adopted business and technological trends which are universal and therefore offer an opportunity for various businesses all over the globe. Cloud computing has become popular and its possibilities have resulted in discussions and literature all over the world. Various topics associated with cloud computing have been studied by various researchers but there literature that deals with specific areas such as Hong Kong has been limited (Sultan, 2011). Various delineations of cloud services have been suggested by scholars as well as firms but most of them are almost similar and identical to the one is provided by the National Institute of Standards and Technology. Information technology has developed into a utility such as water and electricity and has ceased to be considered as a want, as it now a need; therefore, contemplations should be made prior to any decisions on implementation. Zhang, Cheng, and Boutaba (2010) demonstrate that regardless of the fact that cloud computing provides compelling and attractive features; it also has unique challenges that may discourage companies from adopting it. This makes it important to understand and identify the drivers and obstacles that affect its adoption. Cloud computing drivers In most cases, information technology is used as a tactical instrument for attaining reasonable advantage and strategic, economic and technical advantages of cloud services continue to influence its acceptance (Rio-Belver et. al., 2012). Since control of costs as well as funding are some of the biggest challenges to SMEs, the obvious benefits in regards to costs and operational expenses is a crucial reason for cloud computing to be adopted (Marston et. al., 2011). Additionally, costs linked to purchase of hardware, software, data storage, upgrading of systems, licensing and maintenance are reduced, therefore, capital and other company resources can be directed towards innovation of the core business instead of the rarely utilized systems. IT services may be modified through cloud computing services founded on the changing needs of the client and the business as the allocated resources and capacity are on the basis of demand. Zabalza et. al., (2012) stated that the structure of cloud systems is created with the aim of dealing with hardware failures as well as recovery from disasters. Additionally, those who provide cloud services depend heavily on robust, scalable and distributed infrastructure with the capacity to stockpile information in numerous physical sites. The services can be accessed and available from any gadget that can access the internet regardless of its location. This emboldens as closer collaboration along with data sharing among the workers while allowing the customers and suppliers to interact with each other (Aljabre, 2012). The large-scale data centers associated with cloud computing enables a reduction in costs of electricity and hardware through efficient management of assets, utilization and optimization of servers, reduced energy usage and economies of scale (Armbrust et. al., 2010). Cloud computing barriers Regardless of the numerous benefits associated with cloud computing, the ideology has also been faced with outright rejection with various people openly criticizing and raising concerns against the phenomenon (Sultan, 2011). Policy, technical and organizational hurdles may prevent organizations from embracing cloud computing services, but security is the main hurdle that hinders the effective provision and deployment of cloud computing services. Those who use cloud services never have full control of the substructures provided and this may be a source of concerns like breaches in security as well as hacker-attacks and violations. Trust between the provider and the consumer is also a vital aspect in the deployment of cloud services as sensitive data and information held in the cloud may be misused, stolen or used illegally since the providers are fully responsible for them (Kloch, Petersen and Madsen, 2011). There is limited compliance and standard requirements all over the globe as far as cloud computing is concerned as the idea is still in its formative stages. Cloud computing regulatory regimes along with their enforcement continue to be uncertain in numerous nations especially developing countries. This lack of criteria results in challenges to incorporation of additional applications or deal with various providers at the same time forcing companies to stick to a single vendor (Vaquero et. al., 2008). This makes a customer become reliant on a specific vendor for services as a consequence of the high costs of switching along with a lack of inter-operability. Additionally, cloud computing relies on a continuous supply of electricity and a dependable internet connection, however, regrettably this is not the case in most of the businesses that have slow and unstable connections or those that experience frequent power outages. This is the key issue that affects businesses with attempt to access remote applications in remote areas leading to interruptions to cloud services affecting the business economically in the event of prolonged downtime which dissatisfies customers (Sultan, 2011). Cloud computing in Human resource The advantages associated with cloud computing are clear, but for professionals in human resource management, its applications may be especially meaningful. In bigger corporations, human resource teams cover different areas of buildings or nations and may be operating in different time zones. This may lead to poor communication where the people in charge of recruiting may not easily communicate with the ones in benefits or payroll. Additionally, the workers in the human resource department may not always have immediate access to information that is updated and monitored by a different department. Since it is linked to a naturally multi-functional area of human resource, having cloud applications becomes instrumental since in some companies numerous areas of human resource are usually separated from each other. Accessing them in one place through the cloud allows the different areas to communicate with each other easily. This is critical to increasing the communication quality and ultimately results in desirable changes in the firm. Good cloud computing systems can monitor applications, search for resumes, create reports, monitor performance as well as maintain data on workers and calculate payrolls. Employing cloud services for HR creates a mobile workforce while at the same time allowing flexibility and reducing costs, compared to the conventional software. Human resource professional in the twenty-first century assume management roles and paly critical parts in the company; therefore, they engage in majority of the activities of the company while at the same time interacting with all the employees. Nevertheless, numerous small and medium size enterprises have not been willing to purchase human resource software, mainly as a result of concerns about costs. Cloud computing has made it cost effective for businesses of any size, as in house IT technicians, expensive software, server space and site licenses are not needed; any expert with access to the internet is able to access the cloud. Additionally, providers of Software as a Service, which is a cloud computing model, continue to provide inexpensive solutions for HR. Furthermore, cloud computing also makes sure that firms have immediate and consistent access to legal issues and advances since they may also have an impact on issues linked to human resource. Through cloud services, all the information is updated automatically and this means that members of human resource teams can be assured that they their information is up-to date. Another aspect that human resource professionals are concerned with is security; in this case, cloud services provide the most advanced systems for security and assures HR and the rest of the employees, piece of mind. Moreover, access to information of a sensitive nature can easily be restricted to particular people in the company. Therefore, cloud services provide numerous advantages and are not associated with any clear disadvantages making it a beneficial solution for business especially SMEs in Hong Kong. Adoption of technology Adoption of technology is among the key challenges that organizations are faced with and Marston et, al., (2011) suggested comprehensive research as special attention on the adopting and implementing technology. Since the phenomenon is in its early phases of diffusion, organizations are still trying to identify the best dynamics when making decisions concerning the adoption of cloud computing (Son and Lee, 2011). There are numerous models to the adoption of technology but in most of the cases, researchers usually use more than one model in studies. Small and medium Enterprises There are various descriptions of SMEs and they face the problem of a uniform definition that is globally accepted as the dissimilarities in the size and measure used make it challenging to embrace one definition (Kayanula and Quartey, 2000). Various nations, regions and economic organizations use different definitions and criteria, and majority of criteria consider the number of workers, assets or turnovers (Yeboah-Boateng, 2013). Usually, SMEs have a comparatively small number of employees and lower turnover in comparison to the bigger organization and their structure allows them to effortlessly make changes and maximize on the shifting inclinations in their operation (Tan, 2010). A key challenge that numerous SMEs face is financing and in the case of emerging communities, they have to contend with difficulties in key strategic areas (Pandya, 2012). A number of empirical researches have indicated that SMEs are subject to various dynamics when embracing specific forms of technology (Das and Das, 2012). Industries gain significant benefits from information technology and innovations in this area allows companies to compete while offering socio-economic growths. Nonetheless, the degree of adoption and usage of IT is especially small for SMEs in various nations since as a result of limited financial support; SMEs favor cost-effective technological approaches which satisfy their requirements (Achimugu et, al., 2009). In essence, SMEs have not exploited fully the advantages offered by information technology as they do not consider it as being innovative. Methodology Area of study and sample This research focused in SMEs in Hong Kong that are associated with the advent of numerous information technology opportunities that are supposed to have an effect on their overall revenues (Yeboah-Boateng, 2013). The advent of internet solutions like cloud computing are considered to positively affect majority of the economies and Hong Kong as the area of concerned for this research has adopted solutions provided by information technology while at the same time having numerous SMEs which are spread in diverse industries and sectors. The study population for this research is comprised of business owners, HR practitioners and IT managers of SMEs in Hong Kong, and the sample is considered to have sufficient responsibility and authority over business decisions such as in hiring and firing of employees, funding various operations, and the capacity to understand emerging information technology concepts and other functional processes. Additionally, the sample population can be linked to the theoretical constructs that this research aims to investigate which include the support of top management as well as custodians and end-users of corporate culture. Random and purposive sampling was the approach used in order to address any bias that would have come up as a result of sample selection. Design of the questionnaire Since the targeted population comprises of people who are tech-savvy, the study utilized an online survey to collect data. The questionnaire was structured in a manner that allowed it to capture the profile of the SMEs, what drives the cloud computing as well as the dynamics that have an effect on cloud computing acceptance. Prior to induction the online assessment, the questionnaire was evaluated by experts and pilot tested to make sure that the structure and formatting had been done appropriately. In order to increase chance of response, two reminders were sent to the respondents as a means of following up during the survey. The respondents who took part in the survey did participated on their volition and were assured that their identities would not be divulged to the public, furthermore, measures were instigated to make sure that the collected data would be valid and dependable. The data that collected as subjected to analysis and presentation using simple statistical tools after which the variables’ indices were ranked based in their relevance. Only the items that were ranked highly to indicate high performance were considered as being significant to the study and were subjected to analysis and discussion. Findings The study found a total of five drivers and four barriers that enable and inhibit cloud computing adoption in the SMEs that operate in Hong Kong. It was realized that decreased costs was the highest driver and also demonstrated the manner in which some SME understand communication and interactions that are shared with customers as they enhance satisfaction and relationships with the customers, minimizes maintenance costs, accessibility to information and professionals in the industry and business stability using data reserves as the other main dynamics that influence adoption of cloud computing. Decrease in costs was a driver that was ranked highest as far as adoption of cloud services among SMEs was concerned and this was consistent with previous studies (Rath et, al. 2012). Further, the study was not consistent with other studies that revealed that scalability was highly considered. In regards to barriers, a lacking in expertise and internal knowledge was considered as the main barrier to adoption of cloud computing as far as SMEs are concerned and inadequate IT skillsets as well as knowledge is among the key challenges that affect majority of SMEs (Duan et al., 2002). Additionally, the organizations with less comprehension and awareness of ICT rarely recognize the value of ICT. Poor connectivity and access to the internet is also a challenge that has been identified as affecting SME adoption cloud computing. As expected from the review of literature, trust and security are the other concerns that largely affect businesses that seek to adopt cloud computing. Conversely, cloud services awareness and usage in developed nations has typically made trust and security the key hurdles in regards to adoption of cloud services. The final aspect is compatibility and inter-operability with the already existing systems after adoption and implementation of cloud services. The research identified seven factors within organizations that affect the degree to which cloud services are adopted by SMEs in Hong Kong. From the data collected, it was revealed that top management was the most vital aspect in regards to effective adoption of cloud services. This was justified by Ifinedo, (2011) in their study in which the part played by top management in adopting ad implementing innovative technologies was considered supportive. Furthermore, the aptitude of the providers, support services after clients have adopted cloud computing, resistance to newer technology and existing technological infrastructure are among the other core dynamics that have an impact the manner in which SMEs adopt cloud computing services. Majority of the decision makers do not usually support the use of technology, but this research particularly suggests the effect of business owners and SME managers on its acceptance and effectiveness in companies. Policy formulators are supposed to come up with strategies of procuring and deploying exceptional cloud systems to make sure that IT resources are used optimally while at the same time dealing with any form of resistance that may be experiences from the workers. SMEs were also identified for implementation of complicated information technology solutions; however, if a company is already using a conventional system, then it is practical for any new solutions based on cloud services to operate together with the existing systems after they have been customized. Recommendation and conclusion Recommendations This study gives recommendations for the providers as well as clients that may eventually increase the adoption rate in an important sector in any nation regardless of whether it is developed or developing. Cloud computing may be integrated in universal nationwide ICT policies for growth and can influence the growth of practical structures through decision makers as well as technological agencies that may escalate acceptance rates as well as usage of cloud computing in SMEs. Endeavors are also supposed to be increased so that access to internet and broadband coverage may improve at practical costs for small businesses. Further, SMEs should be encouraged to make investments in cloud services as far as their operations are concerned so that they can continue being competitive, provide better services and make sure of efficient access and delivery in various markets. SMEs should emphasize on providing training facilities in information technology for their workers in order to grow awareness as well as knowledge. Providers of cloud services should also be customer driven so that they can react to particular SME requirements in the current technologically advanced economy and the cloud services must be incorporated effortlessly with the information technology systems that are already in existence. Conclusion Activities associated with SMEs continue to show great promise in various economies but are continually facing challenges as far as technological adoption is concerned. Recognizing the aspects linked to the adoption of cloud computing may assist the industry to become more efficient. This research examined the main dynamics that largely influence the decision to adopt this enterprises and gathered data from the SME sector after which it went through analysis efficaciously to determine the particular dynamics. Key influencers showed decreases in costs for various business operations, better internal and external communication, and access to expertise as well as business continuity. Conversely, the key hurdles included a lacking in knowledge and skills, unreliable connection to the internet, privacy of data, challenges in in integration with in-house systems and lack of trust. The study further revealed that the support of top management, resistance to new technologies, aptitude of the cloud providers, vendor support and compatibility with cloud services were the most influential dynamics that were utilized by SMEs when making decisions to adopt the phenomenon. This study provides some valuable additions to the increasing collection of information on the dynamics that affect cloud acceptance in SMEs all over the world while offering benefits to policy makers, providers of cloud services, HR managers as well as IT professionals of SMEs in various areas. 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