benefits and barriers of migrating erp systems to the...

Benefits and Barriers of migrating ERP systems to the cloud

A study submitted in partial fulfillment

of the requirements for the degree of

Masters in Information Systems

at

THE UNIVERSITY OF SHEFFIELD

by

Chirag Jayantilal Gala

September 2012

Benefits and Barriers of migrating ERP systems to the cloud 2012

2 Information School, The University of Sheffield

Acknowledgement

My gratitude is to my project supervisor Dr. Alex Peng for his wonderful guidance and

continuous mentorship given to me throughout the study at “The University of Sheffield”.

Without your support and continual encouragement, this project could not to be completed

successfully.

I would also like to thank my parents and all friends for providing assistance and moral

support during the study at The University of Sheffield.

And finally, I would like to thank all the experts who had given their valuable time from their

busy schedules for the interviews in this research.

Thank You



Abstract

Enterprises have been following the traditional way of implementing their ERP

systems onto internal servers using Client-Server architecture. With the emergence of

Cloud computing, this traditional approach of implementing ERP systems is

confronted by Cloud providers who also provide storage space for enterprise

applications and claiming to provide enormous noticeable benefits to the enterprises

by helping them in decreasing their expenses on the IT infrastructure and give them

opportunity to concentrate on their core-business instead of the IT and infrastructure

issues. SMEs are a part of this new contribution from the Cloud service providers but

the big enterprises in the ERP sectors are slightly hesitant in implementing their ERP

systems to the cloud.

The focus of this study, therefore, lies in identifying the benefits and barriers in

migrating ERP systems to the cloud. To identify these benefits and barriers, the basic

concepts about ERP and Cloud computing were studied. The aims and objectives

defined earlier during the research study formed the basis of creating an ontology

framework which further was used to create questionnaire which helped in collecting

the perception of IT professionals. And finally all the information gathered from the

literature review and the interviews were analysed using quantitative approach.



Table of Contents 1. Introduction ..................................................................................................................... 7

1.1 Background .............................................................................................................. 7

1.2 Problem Statement .................................................................................................. 8

1.3 Research Aim and Objectives ................................................................................... 9

1.4 Project Justification ................................................................................................ 10

1.5 Research Methodology .......................................................................................... 10

1.6 Structure of Dissertation ........................................................................................ 10

2. An overview of ERP systems on the cloud ..................................................................... 12

2.1 ERP systems ........................................................................................................... 12

2.1.1 Definition of ERP Systems .............................................................................. 12

2.1.2 Current ERP Deployment methods ................................................................ 12

2.1.3 Disadvantages of installing ERP systems on local server ............................... 14

2.2 Cloud computing .................................................................................................... 15

2.2.1 Emergence of Cloud computing ..................................................................... 15

2.2.2 Difference between Stand-alone, Client-server and Cloud Architecture ...... 16

2.3 ERP and Cloud computing ...................................................................................... 17

2.3.1 Introduction ................................................................................................... 17

2.4 Green IT and Cloud Computing .............................................................................. 18

2.5 Benefits of migrating ERP system to the cloud ...................................................... 20

2.6 Barriers of migrating ERP systems to Cloud ........................................................... 24

2.7 Traditional ERP versus ERP on cloud ...................................................................... 28

3. The Ontology Framework .............................................................................................. 29

3.1 What is Ontology? .................................................................................................. 29

3.2 The Ontology Framework for benefits ................................................................... 30

3.3 The Ontology Framework for barriers ................................................................... 32

3.4 Summary ................................................................................................................ 34

4. Methodology .................................................................................................................. 34

4.1 Introduction ........................................................................................................... 34

4.2 Research approach................................................................................................. 34

4.3 Research Method ................................................................................................... 36

4.3.1 Research design ............................................................................................. 36

4.4 Participants ............................................................................................................ 37

4.5 Questionnaire Design ............................................................................................. 38



4.6 Data collection ....................................................................................................... 39

4.6.1 Questionnaires Supervision ........................................................................... 40

4.7 Data Analysis .......................................................................................................... 40

4.7.1 Consolidation of Data..................................................................................... 40

4.7.2 Tools and Techniques ..................................................................................... 40

4.8 Summary ................................................................................................................ 40

5. Findings of the questionnaire survey ............................................................................. 41

5.1 Survey Participant’s Demographics ....................................................................... 41

5.2 Survey Participant’s Company Size ........................................................................ 41

5.3 Analysis of Benefits of migrating ERP systems to the cloud .................................. 43

5.3.1 Benefits of migrating ERP systems to the cloud: Univariate analysis ............ 43

5.3.2 Barriers of migrating ERP systems to the cloud: Univariate analysis............. 50

5.4 Summary ................................................................................................................ 57

6. Conclusions and Recommendations .............................................................................. 57

6.1 Conclusions ............................................................................................................ 57

6.2 Limitations of the research .................................................................................... 59

6.3 Recommendations ................................................................................................. 60

6.4 Scope of further research ...................................................................................... 61

Bibliography ........................................................................................................................... 62

Appendix A: Questionnaire .................................................................................................... 67

Appendix B Ethics Application Form ..................................................................................... 81

Appendix C Information Sheet ............................................................................................... 86

Access to Dissertation form ................................................................................................... 91

Employment Destination form .............................................................................................. 92

Confirmation of Address form ............................................................................................... 93

Index of Tables

Table 1: Difference between Stand-alone, Client-server and Cloud Architecture

Table 2: Comparison between Traditional ERP and Cloud ERP

Table 3: Frequency table for Technical benefits

Table 4: Frequency table for Operational benefits



Table 5: Frequency table for Strategic benefits

Table 6: Mean and Standard deviation for benefits

Table 7: Rankings of the benefits

Table 8: Frequency table for technical barriers

Table 9: Frequency table for operational barriers

Table 10: Frequency table for strategic barriers

Table 11: Mean and standard deviation for barriers

Table 12: Ranking of barriers

Index of Figures

Fig 1: Theoretical ontology framework for benefits.

Fig 2: Theoretical ontology framework for barriers.

Fig 3: Survey Participant’s IT Experience

Fig 4: Roles of the Survey Participant’s

Fig 5: Comparison of people agreeing and not-agreeing with technical benefits

Fig 6: Comparison of people agreeing and not-agreeing with Operational benefits

Fig 7: Comparison of people agreeing and not-agreeing with strategic benefits

Fig 8: Comparison of people agreeing and not-agreeing with technical barriers

Fig 9: Comparison of people agreeing and not-agreeing with operational barriers

Fig 10: Comparison of people agreeing and not-agreeing with strategic barriers



1. Introduction

1.1 Background

Today, computing has evolved from only hardware system to a model comprising of

services. These services are productised and supplied like traditional utilities such as

gas, electricity and telephone. In such type of model, how the services are delivered

or how the services are hosted doesn’t matter and users have access to services as per

their requirements. There are many computing models which have assured such kind

of utility computing idea such as Grid, Cluster and in recent times Cloud computing.

Cloud computing enables the businesses and end users to access the applications on-

demand from any place in the world. Therefore, world of computing is quickly

changing towards building software systems for masses and then publish them as a

service using network or internet, rather than to using individual computers to run

them (Buyyaa, et al., 2008). Nevertheless, the cloud computing has exceeded in

terms of acceptance and growth and it continues to grow across the industry.

According to study of (Pettey, 2010) , Cloud computing is at the top of strategic

technologies in 2011 which can change the IT industry.

Business problems are becoming more and more complex demanding more effort

and money. Every organization is trying to beat their competitors in customer

satisfaction by making sure that they provide much better facilities thorough their

services and products in as low price as possible. Most organizations achieve this by

using the software systems which specializes in performing all tasks and

responsibilities like planning, manufacturing, supplying product, etc. (Maguire, et al.,

2009). Organizations have to be very creative and proactive and technologically



advanced in this market so that they can be ahead among their competitors. So a

number of software systems and tools have been developed which can help

organizations to compete with their peers. One of such systems is Enterprise

Resource Planning (ERP) systems.

In today’s age of web 2.0, companies have the potential to grow from beginning to a

very large scale at very high rate. But to achieve this growth rate, companies must

address crucial decisions of their businesses associated with delivery of service and

its infrastructure. The evolving cloud computing architecture is a platform to host

and deploy web-based services. This approach relieves the providers from the

accountability of provisioning the computing resources required to support the

services. Individual or companies who have domain expertise of market can run a

SaaS (Software-as-a-service) company without having to maintain IT infrastructure

(Hardware and Software). This approach reduces the complexity of software, costs,

accelerates time to reach the market and boost the access to services. Infrastructure

resources can be supplied to companies on-demand with the use of cloud computing.

Companies need to follow pay-as-you-go model for billing means they will be

paying for the resources user per unit of time (Rochwerger, et al., 2009).

Moving ERP systems to cloud offer the benefit of continuously running on present

software as the provider has the responsibility of keeping software up to date.

Although, cloud offers many benefits to ERP systems the barriers should not be

underestimated. The barriers include difficulty caused while moving from one cloud

provider to another or moving back to a self-hosted ERP solution (Oracle, 2011) .

The benefits that cloud provide attracts more companies to migrate their ERP

systems to the cloud however the risks in the cloud computing has put companies

into a dilemma. (Mohan, 2011).

Conversely, enterprises confront the restriction in using cloud computing for

mission-critical and high-performance software systems like ERP. Unfortunately, the

limits of cloud computing are frequently hidden by all the hysteria (Hoffman, 2010).

1.2 Problem Statement



Although Cloud computing has its wide range of benefits, it lacks maturity when it

comes of adoption at Enterprise level. The advantages and benefits of migrating ERP

system to the cloud is often questioned by the barriers of adopting this model.

The complex technical architecture and non-transparent nature of cloud models has

resulted in increased focus on the security feature of the cloud computing. There has

been very little research done on other aspects of cloud which are of same

importance. Migrating ERP system on cloud is a big concern for enterprises among

the cloud providers as they try to enter this competitive market by marketing the

offering in cloud services. However organizations who wish to extract most from the

cloud services would require more unbiased and liberated studies through which all

the issues related to the cloud computing are addressed by the researchers (Khajeh-

Hosseini, et al., 2011) .

As researchers we should aim to provide appropriate information that would help

organization to take decision to whether or not move their ERP systems to the cloud.

1.3 Research Aim and Objectives

The main aim of this research is to identify the various benefits that an organization

can get when they move their ERP systems to cloud environment and also the

barriers that come across while moving ERP systems to the cloud. The scope of this

research is on the organizations which already have some ERP systems and IT

infrastructure in place and wish to migrate to cloud environment.

Primary Research Question

“What the benefits and barriers of migrating ERP systems to the Cloud?”

Following objectives would help in answering the questions, both primary and

secondary.

1. Understanding the concepts of ERP systems and cloud computing through

literature review.

2. Identifying potential benefits and barriers of cloud storage using the literature

review.



3. Framing a questionnaire based survey to identify the major benefits and

barriers in migrating ERP systems to the cloud.

4. To recommend based on findings of benefits and barriers whether it is

practical for organizations to move their ERP systems to the cloud.

1.4 Project Justification

The prime motive behind this research was to carry out a research that provides

enough information which will help organizations to decide whether or not move

their ERP systems to the cloud. Although there has been a lot of research done on

cloud computing and ERP systems, but very little research is done on migrating ERP

Systems on cloud. It is a very interesting but challenging research as it talks about

benefits and barriers on migrating ERP systems on cloud.

1.5 Research Methodology

An extensive literature review on ERP Systems, Cloud computing, features of Cloud

computing and ERP systems, benefits and barriers of migrating ERP systems to

cloud were used to develop the preliminary ontology framework. Academic Journals,

papers, reports, Industrial periodicals and other online sources were used for

conduction the literature review. Since cloud computing is a comparatively new

technology, very less research has been done in the field of migrating ERP systems

to the cloud. Hence, both direct literature and indirect literature were used to identify

benefits and barriers in migrating ERP Systems to the cloud.

Online questionnaire based survey was circulated among the IT professional across

the globe which helped in collecting data for the research. The questions were

designed to gather their perception towards benefits and barriers on migrating ERP

systems on cloud. The questions were divided into two sections, benefits and

barriers, which will help the participants to understand questions easily. The main

participants of this survey were technical analyst, project managers, tech leads,

business heads, and managers.

1.6 Structure of Dissertation



The dissertation has been structured into following chapters:

Chapter 1: Introduction

This chapter has general introduction about the dissertation, problem statement,

research aims and objectives, project justification and research methodology.

Chapter 2: Literature Review

This chapter contains the literature review on the concepts of ERP systems and cloud

computing. The benefits and barriers of migrating ERP systems to the cloud are also

highlighted in this chapter.

Chapter 3: The Ontology Framework

This chapter discusses the classifications of the benefits and barriers of migrating

ERP systems to the cloud from the organizations perspective. This chapter includes

the theory based ontology framework

Chapter 4: Research Methodology

This chapter contains the general framework and the research methodology

implemented for this research. The questionnaire’s structure and design is discussed.

Data collection and data analysis method is also mentioned in this chapter.

Chapter 5: Findings

This chapter contains the findings of the survey. All the data is analysed in this

chapter. The scores for each benefit and barrier are calculated. Conclusion is drawn

on the basis of findings of this chapter.

Chapter 6: Conclusions and Recommendations

In this final chapter, the entire research is summarized along with a conclusion. It

also discusses the recommendations for the future.



2. An overview of ERP systems on the cloud

2.1 ERP systems

2.1.1 Definition of ERP Systems

There are many way in which ERP system can be defined:

1. According to (Dezdar & Sulaiman, 2009), An ERP system is a package of

business oriented software system which facilitates an enterprise to efficiently

manage the different resources like Finance and accounting, human resources,

supply chain, material management, etc. by offering a complete integrated

solution for the processing of information requested by enterprise, over a process

based view which is constant across the enterprise.

2. As per (Ehie & Madsen, 2005), an Enterprise resource planning is a unified

software package that extents the wide range of business in the enterprise which

also empowers the enterprise to gain complete vision of the business. The main

advantage of ERP system is that it ensures single database and application along

with an integrated interface throughout the whole enterprise.

2.1.2 Current ERP Deployment methods

On-premise or traditional ERP system implementation is always expensive and

challenging task for an organization. It also involves a huge risk as it consumes more

time. Traditional implementation of ERP requires deployment of new IT

infrastructure, buying new servers, buying hardware and software which makes it

always a costly thing. It also includes price of installation, cot of setup and

configuration for the purchased ERP package (Mangiuc, 2011).

Earlier ERP systems were run on mainframes, which were later replaced by standard

client-server ERP whose adaptations were based on company’s specifications. In

typical ERP systems, databases and business applications are run on back-end

servers and PC’s contains user interface.

Mostly, customer downloads the ERP package from the vendor website or vendor

provides some installation file in movable storage like CD, DVD, etc. The setup and

installation is carried out by the customer. The ERP package is typically installed



throughout the customer’s network which comprises hardware and operating system

which is installed

Generally the ERP deployment method has following ways (Salleh, et al., 2012):

1. Traditional approach

According to (Mangiuc, 2011) in this approach, the ERP is deployed on personal

computer or laptop locally and is licenced on time or continuous basis. (Goel, et al.,

2011) Different ERP modules such as HRM, inventory, billing, feedback system are

implemented in an Adhoc way even without taking into consideration the general

objective of implementing ERP. Modules are, mostly, developed at not the same time

and also there is no communication or integration between these modules. Service

architecture concept is completely absent in this type of implementations.

2. On-campus or On-premise implementations

This approach is the current trend wherein in-house infrastructure is used for

implementing ERP and there is no dependency on outside vendors or suppliers.

(Goel, et al., 2011).

3. SaaS or On Demand

In this approach, the ERP is neither licences nor owned by the user. Here, software is

delivered as a service to the user where user pays the subscription fees. The service is

accessible from any computer having browser and internet connection. (Mangiuc,

2011).

4. Hosted services or Managed Services

In this approach, the ERP applications are licenced and then hosted by third-party.

There may be a separate instance or hardware or an isolated virtual machine for the

deployment of application on hardware which is mutual to more than one company

(Mangiuc, 2011). As per studied by (Goel, et al., 2011), additionally, the host looks

after implementation of virtualisation environment, server side scripting and tools,

storage systems and networking architecture. This approach has advantage of less

hardware cost for the organization whereas data storage systems and applications are

still managed and run within the premise of the organization. Even though this

approach takes some benefits of universal computing and Service-Oriented

architecture, there are still bottle necks present.



5. Pre-configured

In this approach, the software which is licenced is preconfigured and preinstalled on

computer. Pre-configuration might be according to specification of industry and

includes workflow templates and definitions (Mangiuc, 2011). .

2.1.3 Disadvantages of installing ERP systems on local server

1. In some cases, the customer will but the licence of the software which will allow

him to install the software on a computer and use it for certain no. of users.

Although, software can be used for an indefinite period, but it can be used only

on single machine (Mangiuc, 2011) .

2. Since ERP packages are installed across the customer’s network it has to face

challenge in terms of hardware configuration and be able to operate in any

environment with any pool of parameters. Achieving this target is extremely

expensive for the development team (Mangiuc, 2011).

3. One major disadvantage is “cross-platform” support for the ERP. It has to

facilitate support on more than one operating system. For a company who intends

to get a substantial share of market for their product has to develop ERP

packages for each of the major operating systems (Mangiuc, 2011).

4. Even for the most flawless ERP packages, which usually go through full testing

and provide proper documentation, the network team had to take the most

important risks of installing and updating the software (Mangiuc, 2011)

5. In this approach, the company has to purchase extra hardware, more internet

bandwidth, software licences, need to pay for maintenance and upgrades and also

needs specialized IT team (Bajenaru, 2010).

6. This approach is very costly affair as there are lot of cost components associated

with it like the cost of licencing of software, support, maintenance, upgrade of

software, server and database cost, application server, implementation, internal

support and training (Coupa, 2011).



2.2 Cloud computing

2.2.1 Emergence of Cloud computing

The term “Cloud Computing”, which is relatively new, has been built on long years

of research in distributed and utility computing, virtualisation and lately networking,

web 2.0 and software as services. It involves a SOA i.e. Service Oriented

Architecture, decreased overhead of IT infrastructure for the user, greater flexibility,

less cost of ownership, services on-demand (Vouk, 2008). At a quick glance, clouds

seem to be grouping of Clusters and Grids but it is not. Clouds are undoubtedly

generation next data centers in which “nodes” are virtualised over hypervisor

technologies like Virtual Machines, delivered on-demand as a personal resource or

collection, to adhere a definite SLA i.e. Service Level Agreement, which is formed

through a discussion and is accessible as a web service with use of Web 2.0

(Rajkumar Buyya, 2008).

Technologies behind cloud computing:

1. Virtualization

Virtualization provides flexibility and scalability in computing platform by

partitioning hardware and thus form the base of cloud computing. Concept of virtual

machines, such as VMware, offer on-demand virtualized IT infrastructure. The

virtual networking concepts such as VPN provide support access to cloud computing

resources along with networking environment which is customized as per their needs

(Wang, et al., 2010).

2. Transposition of service and work flow

A group of service templates is offered by Cloud computing on demand which may

well be comprised by services within the cloud. Hence, cloud computing must be

able to transport services from more than one and different types of sources to shape

into a service flow or a work flow dynamically and transparently for the users

(Wang, et al., 2010).

3. Service-oriented architecture and Web-service

Cloud services are generally exposed in the form of Web services. The grouping and

transportation within the cloud can be managed using SOA or service-oriented



architecture. These set of cloud computing services can be further used in

environment based on SOA application, hence enabling these services on numerous

distributed platforms and also on internet (Wang, et al., 2010).

4. Web 2.0

Web 2.0 is evolving technology which combines the inventive tendency of the use of

WWW or World Wide Web and web design with an objective of enhancing

creativity, sharing of information, association and functionality of the web. Web 2.0

is mainly created with the idea of improving interactivity and interconnectivity of the

web sites or web applications. Web applications, these days, are made with the

motive of allowing users to access the World Wide Web effortlessly and

competently. Cloud computing services are actually the web applications which

provide desired computing environment and services on-demand (Wang, et al.,

2010).

5. Network based and Distributed storage system

A network based storage system backed by virtualised data centers or distributed

storage provider tenders storage capacity to the users which can be leased. This data

storage can be combined, migrated and managed clearly to the users in almost all

possible data formats. Cloud computing should also be able to foresee a distributed

storage system which can provide sources of data in a semantic manner. Logical

names of data sources must be used instead of physical names to find data sources

(Wang, et al., 2010).

2.2.2 Difference between Stand-alone, Client-server and Cloud Architecture

According to (NORDOFF, 2010)

Stand-Alone Client-Server Cloud Architecture

In this architecture, the all

the resources such as user-

interface, business logic,

and the database are

entirely present in a single

end-users computer.

In client-server model, all

the components are

present in different

machines.

Cloud computing is,

basically, an idea of old-

style solution where the

servers are hosted.

This is a solitary execution This is logical partition of Cloud architecture is



environment all the modules, services

and resources.

hosting concept.

Here single machine is

used for execution and

storing.

Here, user interfaces are

executed locally called as

“Clients” and business

logic and data stores are

executed in remote

machines called as

“Servers”

Here, as many machines

and servers can be used as

this is an hosting

environment and not

execution environment.

Table 1: Difference between Stand-alone, Client-server and Cloud

Architecture

2.3 ERP and Cloud computing

2.3.1 Introduction

According to the study of (Saini, et al., 2011), Enterprise Resource Applications can

use Software-as-a-Service (SaaS) which is technically known as hosted or on-

demand applications which will turn out to be very useful for it. SaaS is capable of

adaptation to implement ERP systems if moulded correctly. As and how computing

is becoming more widespread in the enterprises, it is becoming difficult to manage

the complete infrastructure of distinct information architecture and distributed data

storage. This has made computing a costlier component for an enterprise. Cloud

computing has potential to reduce the costs of computing and delivering all the

existing functionality of IT services. As per, (Marston, et al., 2011) ERP system

based on web can be the next step for ERP implementation. According to (Raihana,

2012) ERP system deployed on cloud is termed as “Cloud ERP”. Since most of the

cloud environment are built with the use of virtualisation technology and load

balancing concepts, it allows ERP systems to be deployed through numerous servers

and database storage systems. This type of approach is considered as a revolutionary

method to deploy an ERP system. As stated by (Marston, et al., 2011), Cloud

computing, as an inventive distributed computing, can provide the dynamic buffering

of resources, virtualisation techniques and very advanced enterprise data center.



Cloud computing can be a very cheap alternative to buying and maintaining IT

infrastructure in-house. Further, cloud computing has potential to remove many

issues related to support as there will be no physical IT infrastructure to support and

maintain.

As per the study of (Marston, et al., 2011), Cloud computing has a deep influence on

the whole IT industry as a new modelling paradigm for business. If properly

integrated into all areas of business applications, it will give higher return on

investment. High performance ICT services can be made accessible to enterprises at

a very lower cost with the help of cloud computing. Cloud computing is conducive to

both SMEs and large enterprises. As stated by (Wei & Blake, 2010), using cloud

computing enterprises can develop huge software system by bringing together basic

services in a dynamic way. According to (Mvelase, et al., 2011), one of the main

advantages of using cloud computing is to make enterprise better equipped to

respond and react to unexpected and unpredicted changes, or to add new services and

functionality to the ERP system. Enterprise can gain competitive advantage and

production with the development in data storage, processing power and technology

obtainable by cloud computing which also allows inventions that were not

conceivable before. Cloud computing will provide the agility and controlling power

that is not possible with traditional approach. It will also allow enterprises to get

connected digitally with their customers and associates and provides new business

opportunities as well as competitive advantage.

There is no doubt that using cloud computing for ERP system is a revolutionary

technology that will continue to unleash new inventions and bring about new

effectiveness and benefits to business. It eliminates infrastructure and initial capital

expense as an obstacle to enter and enables start-ups to gauge up quickly and

economically (Hofmann, 2010).

2.4 Green IT and Cloud Computing

With the emergence of cloud computing, the ownership-based approach has been

changed to subscription-based approach which provides access to on-demand

services and scalable infrastructure. In addition, clouds also provide vast amount of



computing power to the organisations which generate huge amount of data almost

every day demanding lots of processing power (Moreno & Xu , 2011) and (Buyya &

Garg, 2011). Clouds are generally comprised of data-centers which are designed to

provide elasticity and scalability desired by the customers and clouds also require a

lot of power of day-to-day operations (Buyya & Garg, 2011). Hence, for clouds, the

cost of energy is a substantial operating component and up-front expense. According

to , (Moreno & Xu , 2011), the concept of Green IT concentrates on the design,

development and management of computing resources and infrastructure with an

objective of having effective processes and suitable mechanisms to reduce resource

wastage and also bearing in mind the environmental consequences of its usage and

disposal. It was named as “Green IT” as its main aim was to minimize the damaging

impacts of IT infrastructure on the environment while using the computing resources.

It main objective is to strike a proper balance between quality levels of service and

its reducing impact on environment and to end up in computing environment which

is sustainable and eco-friendly. According to the study of (Moreno & Xu , 2011),

cloud computing has the capability of making traditional datacenters much more

energy efficient with the use of technologies like workload consolidation and

resource virtualization. As (Buyya & Garg, 2011) explains web applications running

on traditional datacenters are often capable of handling irregular peak loads which

can lead to low utilization of resources and energy wastage. On the other hand,

Cloud datacenter can minimize the use the technique of server consolidation wherein

one physical host is shared by multiple workloads and the servers which are not

being used can be turned off. This type of design is referred to as “Green Cloud”. As

explained by (Bouvry, et al., 2010) , the “GreenCloud” presents the users in depth

fine-grained modelling of energy that is used up by the elements of the datacenter

like servers, links and switches. Thus, “GreenCloud” can be considered as a step

forward for analysing, identifying and implementing complete saving of energy in a

system to achieve actually “Green IT” or Green computing services (Berl, et al.,

2010).



2.5 Benefits of migrating ERP system to the cloud

o Lower costs

On premise deployment of ERP contains the cost of setting up an infrastructure i.e.

hardware cost and software cost, cost of implementation of ERP, the cost of

knowledge and resource (Makkar & Bist, 2012). Using cloud computing to

implement ERP systems, companies can minimize these costs (Shukla, et al., 2012).

(Makkar & Bist, 2012) Also no separate resources are required for deployment of the

ERP system. Cost of maintenance is also low as, mostly, the vendor offer technical

support at minimal cost (Raihana, 2012) (Saini, et al., 2011).

o Less runtime and responding time

Cloud computing makes it very easy for ERP systems that make use of cloud

computing for performing the batch jobs. For e.g. “1000 servers to accomplish a task

in 1/1000 that a single server would require” (Shukla, et al., 2012)

o Minimal implementation time

When compared to on-premise ERP implementation, which takes several months to

implement, implementing ERP on cloud takes a few or few days (Makkar & Bist,

2012).

o Less dependence on internal IT team

According to (Makkar & Bist, 2012) , (Raihana, 2012) Since the host provider

manages the infrastructure and network, ERP systems deployed on cloud requires

less technical resources when compared to on-premise ERP installation which

reduces the organizations burden.

o Easy to use

Since ERP system on cloud will be delivered as web site or web application, it makes

it very easy to use. This factor helps in user acceptance and system is used for which

is meant for (Makkar & Bist, 2012).

o Advanced Functionality



Sometimes, ERP system bought or implemented by a company needs to be added

some additional functionalities which are missing in it. Hence, it adds to the extra

cost which is on the company. When ERP system implemented on cloud, it enables

company to use the third vendor software to accomplish their business needs and

more advanced functionality (Makkar & Bist, 2012).

o Mobile computing

According to (Makkar & Bist, 2012) and (Raihana, 2012) Since the prime computing

platform is located in cloud, the facility of mobile computing and mobile support is

very easy. This allows access to the system residing in the cloud to be accessible

from any device via internet.

o Interoperability

When ERP system is implemented on cloud, it uses Service Oriented Architecture

(SOA) for integration. This makes it easier to achieve interoperability with other

vendors whose systems are also residing on the cloud (Makkar & Bist, 2012).

o Scalability and Flexibility

According to (Makkar & Bist, 2012) and (Raihana, 2012), the expansion and

contraction of the on-premise ERP is a big challenge. In order for expansion or to

manage the new process load requirements, company needs to buy new computing

resources and it also requires to redesign the working of the system. On the other

side, cloud computing makes it easier to expand as well as contract the resources of

the system as per the business requirements. It’s possible in cloud computing to get

extra computing resources to meet the peak load process at very nominal price.

Cloud computing allows the companies to have, virtually, infinite computing

resources. Also, company only pays for what computing resources they use.

o Fast recovery and restoring capabilities

For a company using an ERP system also means to have a backup and recovery

system in place. In case of any hardware failure, company doesn’t wait for the

hardware to be repaired to start working again as it will affect their business.



Restoring and restoring is much easier in cloud computing as it is taken care by the

service provide which helps in flexibility of business (Makkar & Bist, 2012).

o Ability to extent the user group

In cloud computing, ERP systems have the potentially much more reach to connect

clients and customers due to the presence of internet (Makkar & Bist, 2012).

o Computing as a utility

The advantages that cloud computing offers are that large number of software are

available, accessibility to enormous processing power, large amount of storage, and

power of effortless information sharing and processing. Only browser and internet is

required to access all this information anytime. This means computing resource can

be used as a commodity like gas, water and electricity and at a cheap cost (Saini, et

al., 2011) (Zhang , et al., 2010)

o Measured service

In cloud computing, it is very easy to keep watch on the usage of computing

resources. The use of computing resources can be optimized through automatic

allocation of resources, automatic load balancing process and measuring the use of

tools. This gives, both the cloud service provider and consumer whose ERP is

deployed on cloud, transparent view of service utilization (Savolainen, 2010).

o Centralised control

Instead of managing all the tasks from multiple locations or individual’s location,

cloud computing allows all the management from the centralised or single location.

All the troubleshooting tasks and modifications in ERP systems can be handled by

the cloud service provider which lightens the burden on organization of upgrades and

patches of ERP system which, otherwise, have to done by themselves for each and

every user (Bhardwaj, et al., 2010).

o Pay as per usage

Since the ERP systems on cloud are network or internet based, the users are free to

access the service from absolutely any geographical location with virtually any type



of device having web browser and internet connection. Both the owner of ERP and

the ERP users can pay as per their usage. This allows both of them to calculate the

budget for the usage of ERP as per the needs of business (Bhardwaj, et al., 2010).

o Large scale computing power

Cloud is very large in terms of size and processing power. The cloud owned by

Google has more than a million servers running in it. Other big players like IBM,

Amazon, Yahoo, and Microsoft also have large number for application and storage

servers running in their cloud. Even for large enterprises there are lots servers

running in the clouds. Hence it proves that cloud computing has large potential for

ERP to provide a very high scale of computing power (Zhang , et al., 2010).

o High level of reliability

The fault tolerance used by cloud is multi-transcript. It also uses “computation node

isomorphism exchangeable”, and other methods to ensure that it provides highly

reliable services as compared to normal computer or local network (Zhang , et al.,

2010).

o Data protection

In cloud computing, organization can depend on cloud provider for safe and secured

data storage center for their ERP systems. Organizations do not need to worry about

the concerns related to data loss and virus in the network or system as this thing is

responsibility of the cloud provider (Zhang , et al., 2010).

o Parallel Batch processing

Cloud computing has a huge potential to perform tasks that processes a huge amount

of data and is very time consuming like data analytics and batch-processing. Cloud

computing’s new concept called as “Cost Associativity”, i.e. “the cost of using

hundred computers for a short period of time is equivalent to using a few computers

for a long period of time”, can help to perform multiple jobs simultaneously at a

same time if the ERP system allows sufficient data parallelism (Armbrust, et al.,

2009).

o Guarantee of good service by cloud provider



Cloud computing environment assures a good service for the organizations for their

ERP systems. These services like performance of hardware for e.g. CPU speed,

bandwidth, and memory. The good service is assured by the Service level agreement

(SLA) which is made between the cloud provider and the organization whose ERP

system is hosted on cloud (Wang, et al., 2010).

o Autonomous Infrastructure system

Cloud computing is always promoted as an automatic infrastructure system which is

managed in a transparent way for the users. The hardware system, software system

and the data that is present inside the clouds can be reconfigured, arranged and

merged to give a “single” view of platform to the users and organizations which

indirectly simplify the look and feel of the ERP systems (Wang, et al., 2010).

2.6 Barriers of migrating ERP systems to Cloud

o Data protection

One of the major challenges of migrating ERP systems to the cloud is security.

Protecting the data of customers, trading secrets, confidential information, or

exclusive information is one of major need for the survival of organization and for

such organizations protection becomes a challenge as cloud service providers are not

able to do so (Hoffman, 2010).

o Data Control

In on-premise ERP, the data and system is protected by firewall and an enterprise

poses the control over data and system. But when ERP system are migrated to the

cloud, they have no other choice but to trust their cloud service provider for safety of

data and system as the providers have control (Hoffman, 2010).

o Interoperability

As cloud computing services flourishes, there will also be constant challenges for

ERP systems in portability, migration and interoperability of the data as well as the

system itself. Different cloud service providers speak different set of languages. All

the major cloud providers have their own unique and mostly exclusive, way of



storing data. Scalable storage of data is not yet a product and there is very little

chance that it will be for a very long time because there is no easy generalised

solution for storing data in a distributed way (Hoffman, 2010).

o Lock-In

According to (Hoffman, 2010) and (Bamiah & Brohi, 2010) In an on-premise ERP,

Enterprises have control over their infrastructure and platforms at any point of time

but in Cloud-ERP model, they are locked-in to a cloud service provider and they

have no longer control over their IT infrastructure.

o Lack of SLA’s ( Service Level Agreements )

One more issue is the absence of well-defined and well-structured Service Level

Agreements (SLAs) by cloud service providers. Who is to blame if the cloud

provider is not able to provide quality service? Who will be responsible if there is

any loss of data in ERP systems? (Hoffman, 2010)

o Performance variability

The cloud computing is repeatedly hyped as a solution for enterprises who have huge

variations in computing infrastructure demands. The infrastructure needs of ERP

systems always keeps on changing as the ERP system itself keeps on changing. It

concludes that cloud environment is suitable for ERP system. But the variations in

performance of cloud variation are not as much familiar which acts as a barrier in

migrating ERP system to the cloud. For e.g. Stress test was conducted in Australia to

prove that Google, Microsoft and Amazon had performance variations and

availability issues because of excessive load. This also supported that debate that

Cloud providers are not able to give electricity-like performance yet (Hoffman,

2010).

o Latency and Network Restrictions

Organizations will be restricted by the speed of network till they are using the fibre-

optic cable. As and how the amount of data in ERP systems keeps increasing to large

volumes, data migration and transferring will always act as a blockage and will also

be an costly affair.. (Hoffman, 2010) “For example, University of California,



Berkeley, computer scientists calculated the cost of shipping 10 Tbytes of data from

the Bay area to Amazon in Seattle. Given the average bandwidth, sending this data

would take 45 days and costs US$1000 in network transfer fees. In contrast, shipping

10 1-Tbyte disks overnight cost only $400. ” (Hoffman, 2010)

o Scalability issue in storage

Cloud computing isn’t only about adding a vast number of application and database

servers. There are some tasks in ERP systems which can’t be addressed by adding

servers or nodes; they involve different solutions related to data processing, memory

and data storage. Most ERP systems depend on constant transactions supported by

Relational Database Management Systems, which unluckily cannot be scaled in

cloud computing. The Cloud computing does not have storage which can be scaled

and also the support of API’s as advanced as SQL. (Hoffman, 2010)

o Suppressed Creativity and Innovation

Maybe the main limitation is that it can damage creativity and innovation. ERP is a

main aspect of competitive advantage for any organization if it is implemented

accurately. What if ERP converts into a commodity, i.e. the main foundation of cloud

model, it limits the organizations capability to be creative and innovate. (Hoffman,

2010)

o Malicious attacks from within

According to the study of (Bamiah & Brohi, 2010) , (Mangiuc, 2011) When ERP

systems are migrated to the cloud, the employees of the cloud provider has complete

access to the ERP system and its servers. Those employees can damage the ERP

system by launching the malicious attack or injecting a virus into the system. Same

employees can also steal the data from the ERP system. This threat can not only

damage the trust of the organizations towards the Cloud service providers, but also

makes organizations unsure of putting their ERP systems to the cloud.

o Loss or Leakage of data

Loss of data can take place due to failures in day-to-day operations and functioning

of the company, undependable data storage systems, and uneven usage of encryption



keys for security. ERP systems cannot afford this loss of data as it contains the

crucial data which, if used in unethical ways, can cause a lot of damage to the

company. In case of ERP systems, the loss of data can damage the brand image and

reputation of both the cloud provider and the organizations using the cloud service.

Loss or damage to the knowledgeable property might have consequences in both

financial as well as competitive terms alongside damages top agreement and might

also give rise to legal consequences. (Bamiah & Brohi, 2010)

o Account/Service Hijacking

ERP systems are often secured by login credentials, which authenticate and authorize

the user, and provide access to the system for the valid users only. Attackers gaining

unauthorized access to control the account of the users with the help of the hacking

techniques such as phishing, exploiting the vulnerabilities of the software are

referred as “Account or Service Hijacking”. “For example if an attacker gains access

to users credentials, they can spy on their activities/transactions, manipulate their

data, return falsified information and redirect them to illegitimate sites.” The

reputation of the cloud provider can be damaged by attackers by attacking the user’s

account and instances of service. The crucial parts of cloud computing services and

its deployment can be accessed with the use of stolen credentials which can allow the

user to damage the integrity, confidentiality and availability of ERP systems

deployed and its data. This vulnerability can deter the organization from moving

their ERP systems to the cloud. (Bamiah & Brohi, 2010)

o Unfamiliar risk profile

Organizations, deploying their ERP systems to the cloud, should be aware of the

version of the software, security practises followed, the updates related to codes and

patches, and the attempts of the intrusion. While agreeing to move their ERP systems

to the cloud, all these features and the functionality about the cloud provider may be

very well presented but they should also know about the details of the internal

security measures, configuration toughening, auditing, logging and patching

organizations must be explained whereabouts of the ERP data stored an what are the

logging procedures. Though, there isn’t any clear solution that may relieve



organizations from the threat caused by unknown risk profile (Bamiah & Brohi,

2010).

o Data Protection and Data Portability

Even though there is a legal contract signed between the organization and cloud

provider, what will organization do when the contract is terminated and the

organization doesn’t wish to use the cloud services anymore? The question arises,

what will happen to the sensitive data of organization, will it be deleted by the client

or will it be misused? Furthermore, what if the cloud provider isn’t willing to

continue his business? What will be the status of organizations services and data?

Another issue is whether the cloud provider gives the data to other cloud provider

and, if yes, can the other provider be trusted? All these questions may discourage

from migrating ERP system to the cloud. (Bamiah & Brohi, 2010).

o Dependency on Internet

Cloud computing is a technology which is dependent on internet where the user

needs to access the services via the web browser. This dependency will create a huge

shutdown of the cloud services when the internet is down or not available. This is

always create a huge loss for the organizations when their system and operations,

which are required to be running 24 hours like banking systems and health care

systems, shuts down. Also internet is all throughout the globe for e.g. in some

underdeveloped countries such as Africa, internet is not considered to be reliable

enough, so it would be difficult for organizations in these countries to use cloud

services for their ERP systems (Bamiah & Brohi, 2010).

2.7 Traditional ERP versus ERP on cloud

After studying benefits and barriers in the previous chapter following comparison

was developed which was also supported by (Mozammel-Bin-Motalab & Shohag,

2011) and (Makkar & Bist, 2012)



Traditional ERP ERP on Cloud

Deployment model Done on local server Clouds or cloud server

Business flow definition ERP system development

team defines the business

flow.

Specific to business and

organization

Defined by both ERP

development team and

business organization.

Flow specific

Cost of implementation High cost Low cost

Current cost Comparatively high Low

Controlling power Can be controlled easily Since, ERP is in the cloud

it is comparatively tough

to control

Customization Not open for business

organizations

Open for business

organization

Cost of support Comparatively high Low

Integration Vendor dependent Vendor dependent but, it

can support centrally

many other business

organization.

Cost of licencing High Low

Updating and

modification

Costly affair Low cost

Internet dependency No Yes

Audit and trial Easy Complex

Version controlling Complex Easy

Table 2: Comparison between Traditional ERP and Cloud ERP

3. The Ontology Framework

3.1 What is Ontology?



The classification of cloud computing domain, its modules and their associations i.e.

ontology is essential for research community in order to understand cloud

computing in a better way (Youseff & Da Silva, 2008). The strategy and organization

of this ontology was implemented from the risk ontology design implementation

risks by Peng and Nunes (2007).

3.2 The Ontology Framework for benefits

The first level of ontology framework for benefits consists of four major categories-

Strategic Benefits (SB), Operational Benefits (OB), and Technical Benefits (TB).

The second level of this ontology consists of the subcategories which are based on

the aspects of ERP and cloud computing affected by the benefits. The actual benefits

identified through the literature review have been mentioned in the third level of the

framework. All the benefits in the ontology framework have their source as literature

review done in chapter 2.5 of literature review.



Fig 1: Theoretical ontology framework for benefits.



3.3 The Ontology Framework for barriers

The first level of ontology framework for barriers consists of four major categories-

Strategic Barriers (SBR), Operational Barriers (OBR) and Technical Barriers (TB).

The second level of this ontology consists of the subcategories which are based on

the aspects of ERP and cloud computing affected by the barriers. The actual barriers

identified through the literature review have been mentioned in the third level

framework. All the benefits in the ontology framework have their source as literature

review done in chapter 2.6 of literature review.



Fig 2: Theoretical ontology framework for barriers.



3.4 Summary

This chapter recognized all the potential benefits and barriers in migrating ERP

systems to the cloud. The benefits and barriers were divided into three main

categories viz. Strategic, Operational and Technical on the basis of areas of industry

that they affect. These benefits and barriers were framed into a theoretical ontology

framework with a specific code for each benefit and barrier. These benefits and

barriers pointed out in this ontology would be useful for recommending the

organization whether it is feasible to deploy their ERP systems to the cloud.

4. Methodology

4.1 Introduction

The chapters prior to this have presented the concepts of Enterprise Resource

Planning, Cloud computing. The research revolves around identifying the benefits

and barriers in migrating ERP systems to the cloud, from the perspective of IT

professionals as they are the best ones to decide these factors. This first section of the

chapter elaborates the approach and methods used for data collection. The second

section of the chapter discusses about how the participants were identified, selected

and approached for the research. The final section of the chapter discusses the

techniques used for data analysis.

4.2 Research approach

Choosing a suitable research approach for the project helps in framing and

configuring the design of the research, considering the limits and constraints though

focusing on the goals and research objective (Easterby-Smith, et al., 2008).

According to (Saunders, et al., 2012), there are two major methods for research –

quantitative and qualitative. One technique to differentiate between quantitative and

qualitative research is to decide amid numeric data such as numbers and non-numeric

data such as images, words, etc. (Saunders et al., 2009d) have identified research



approaches as Deductive and Inductive. Deductive research is scientific approach

which is controlled by hypothesis where hypothesis and theory developed is analysed

and tested using suitable strategies. In Inductive method, data analysis is used to

develop hypothesis and theory. Mostly deductive research approach uses quantitative

method for data collection and inductive approach uses qualitative method for

collection of data.

a) Quantitative approach using Deductive method

Quantitative approach is generally linked with deductive method wherein the main

focus in the use of data to test the theory. In this method, statistical techniques are

used to examine the relations between the variables by measuring in numeric terms.

Properly structured and designed questionnaires or surveys are the best ways for data

collection (Saunders, et al., 2012).

b) Qualitative approach using Inductive method

In this approach, data is given prime importance as it is used to develop hypothesis

and theory and therefore it requires further subjective data which can be put to severe

assessment involving the attitude, behaviour and opinion. Therefor for qualitative

approach, personal interviews and group discussions are the best method to collect

data (Kothari, 2004).

c) Mixed methodologies

There is one more method called as “mixed methodologies” which combines both

the inductive approach and deductive approach. Although this method is beneficial in

using the strength of both Inductive and Deductive it is not recommended to use this

approach if there is restriction in using time and resources (Saunders, 2009d).

For this research, deductive approach using questionnaires was most favourable and

hence was adopted. Since there is not a lot of research carried out in this topic and

also the lack of expert knowledge in this subject, inductive approach was not

favourable (Saunders, et al., 2009b) . There was high amount of risk in using

qualitative approach for data collection as the research topic is still in developing

stage.



4.3 Research Method

The main aim of this research is to identify the benefits and barriers in migrating

ERP systems to the cloud. Therefore, a lot of research was done to create an ontology

form both the primary and secondary sources of literature. Although there is lot of

research done on ERP systems and Cloud computing individually, there is not a lot

of research carried out on ERP systems on cloud. Also, cloud computing being a

very new technology it isn’t enough to depend only on academic literature for the

research. Therefore, a quantitative approach was adopted for research to identify the

major benefits and barriers in migrating ERP system to the cloud.

To understand the overall perception on migrating ERP system to the cloud, a

questionnaire based survey was conducted among IT professionals across the globe.

These questionnaires were based on the benefits and barriers that were identified

through the literature review. As the main aim of the research is to get the general

perception or opinion related to benefits and barriers of migrating ERP system to the

cloud which were based on literature review, the most appropriate method identified

for data collection was a questionnaire based survey. (Saunders, et al., 2012), also,

recommends the use of questionnaires based survey for data collection which is

opinion based.

4.3.1 Research design

Following are the various stages of the research design and also their outcomes:

4.3.1.1 Research Orientation

Extensive study was conducted on ERP Systems and Cloud computing which was

the base of formulating research question and objectives. The first three sections of

literature review emphasised on concepts of ERP, Cloud computing, their features.

These sections helped in developing a platform for carrying out a rigorous research

and critical review on benefits and barriers of migrating ERP system to the cloud.



4.3.1.2 Research and critical review on benefits and barriers of migrating ERP

system to the cloud

The other sections (2.5, 2.6) focussed on identifying Benefits and barriers of

migrating ERP systems to the cloud based on the literature review done using all

academic sources. Since the cloud computing being a very new concept and a very

few research carried out on ERP systems and cloud computing together, both direct

and indirect sources were used in the topic of ERP an cloud to find out benefits and

barriers of migrating ERP systems to the cloud.

4.3.1.3 Developing a theoretical ontology framework

4.3.1.4 Collection of Data

According to (Saunders, et al., 2012), questionnaires works best when the questions

are standardised and for the research where researcher is confident that they will be

understood in the similar way by all the respondents. Hence, a survey based on

questionnaire will lead the researcher to conclusion to prioritize the benefits and

barriers of migrating ERP systems to the cloud.

4.3.1.5 Data Analysis

The aim of study was to collect perception for the benefits and barriers of migrating

ERP system to the cloud. This data would aid in more critical analysis of benefits

and barriers and also contribute for any further research in the field of Cloud ERP.

4.4 Participants Since Cloud computing is relatively new as compared to the other technologies and

ERP on cloud is yet to be implemented in full-fledge manner, getting a large number

of participants with working experience and practical knowledge in this field was

quite a challenge. These factors restricted the participant’s profile that will be

targeted. Hence, as mentioned earlier, the questionnaires which were designed on the

base of literature review were framed so as they would ask for an opinion rather that

and answer. The opinion would be based on their prior experience and knowledge

about ERP and cloud computing and also the questions were self-explanatory as well

which helped them to answer. Also, to identify the potential participants professional

social networking websites were used. Project manager and analysts who were



Researcher’s ex-colleagues were the first line of contacts. They were sent invitation

to participate in the survey via email. This helped the researcher to distribute the

questionnaires to 100 participants through email. In addition to direct, indirect,

personal and professional contacts, some social networking sites like LinkedIn

(www.lnikedin.com) were used to reach the potential participants. Also the

researcher being a member of many ERP and cloud computing groups and forums on

LinkedIn and other sites, the link to the questionnaire was posted on these sites.

4.5 Questionnaire Design

The questionnaire comprised of 3 sections. Every section explained in detail the aims

and research objective and confirmed that the respondents and researcher had the

similar thought of the questions (Saunders, (2009). Since the data collected has to be

creditable and reliable, the questionnaire was designed carefully with complete focus

on the research objective.

The online questionnaire survey was build using Google docs. Invitation to

participate in the survey was sent through email to the participants along with the

link to the questionnaire. The link to the questionnaire was also posted on online

forums and professional social networking sites.

The questionnaires were divided into following three sections.

a) General questions

This section was aimed to gather the general details about respondents like Name,

email address, no. of years of work experience. Two questions in this section were

text based while one question was option based. This section was important as it

gave more authenticity to the response collected.

b) Benefits of migrating ERP system to the cloud

This section was aimed to collect opinion related to benefits of migrating ERP

systems to the cloud. The 2.4 section of chapter 2 resulted in these questions. All the

questions were choice based. All the questions in this section were option based

where respondent has to select any one option of 5.



c) Barriers of migrating ERP system to the cloud

This section was aimed to collect opinion related to barriers of migrating ERP

systems to the cloud. The 2.5 section of chapter 2 resulted in these questions. All the

questions in this section were option based where respondent has to select any one

option of 5.

4.5.1 Pilot testing

The online questionnaire was sent to 5 of the colleague along with the supervisor via

email to get their feedback on following aspects related to the questionnaire.

1. Questionnaire Design

2. Questionnaire usability

3. Questionnaire suitability

4. Time take to complete the survey

As per the feedback collected from the Pilot testing, the design of the questionnaire

was rated good by most of the participants. The usability of the questionnaire was

rated very-good by most of the participant. As far as suitability of the questionnaire

is concerned, it was rated well by most of the participants. Although most of the

questions, being self-explanatory, were easily understood by the respondents there

were few questions which needed to be reframed and rephrased for more

clarification. The average time taken to finish the survey was 2030 minutes

approximately by the respondents. As per the feedback, all the required changes were

done.

4.6 Data collection

The respondents provided the raw data through questionnaires which needs to be

converted to “Usable and presentable information” through cleaning, formatting,

encoding and combining the data. Microsoft Excel was used as spread-sheets to do

the quantitative analysis.

Responses from the questionnaires were collected in the Google spread-sheets

present in the Google docs. This result was imported to Microsoft Excel where they

were encoded on the basis of responses.



4.6.1 Questionnaires Supervision

The questionnaire survey was started in first week of August, 2011. The

questionnaires were sent to approximately 200 personal and professional contacts

across the globe which resulted in 120 responses. Thus the response rate was 60%.

4.7 Data Analysis (Vose, 2008) Spread-sheets like Microsoft excel are the easiest way to do the

quantitative analysis as they are very fast and easy to use. As the main aim of survey

based on questionnaire was the collecting quantitative data and analysing it,

Microsoft Excel 2010 was used for processing of data and analysis. The responses,

after encoding and consolidating, was processed with the use of statistics tools

present in Microsoft Excel.

4.7.1 Consolidation of Data

The variables from each questionnaire were copied in a different Microsoft Excel

2010 sheet to perform data consolidation and data analysis. The summary was also

calculated for the response collected using the Excel.

4.7.2 Tools and Techniques

Microsoft Excel 2010 facilitates the advanced mathematical functions and

calculations to be performed on data. This facility was used to perform statistical

functions on data. The data analysis add-in which is an additional utility provided by

Excel was enabled and used for statistical calculation like mean and standard

deviation.

Data analysis for the section 2 and 3 has been shown using graphical notations like

pie charts and bar graphs already provided by Excel 2010.

“Mean” is used to calculate the average score for each question. This was calculated

by calculating the mean score for each question by all the responses. “Standard

deviation” is used to show the deviation occurred from the mean value calculated

4.8 Summary In this chapter, the research strategy and research methodology has been discussed in

detail. The research approach adopted was Quantitative and Deductive to prioritize

each benefit and barrier based on the responses from the survey. The approach used

to identify the participants has also been mentioned in details. Google spread-sheet



has been used to collect data from questionnaire based survey. Microsoft excel 2010

has been used to calculation and data analysis and to perform statistics functions on

encoded data.

5. Findings of the questionnaire survey

5.1 Survey Participant’s Demographics

In this chapter, the respondent profile is discussed based on the questions asked in

section one of the questionnaire. In this section, their company size and their total no.

of work experience is gathered. This section helps in authenticity and credibility of

the collected data.

5.2 Survey Participant’s Company Size

The graph below shows the no of respondents in the company size groups

Fig 3: Survey Participant’s IT Experience

8, 7%

21, 17%

91, 76%

Respondants Company Size

Small-sized

Medium-sized

Big Enterprise



The graph below shows the total no. of respondents in the experience group

Fig 4: Roles of the Survey Participant’s

IT professional across the globe having wide range of experience participated in this

survey. Thus the view point of people from almost all the hierarchy of IT industry

was gathered during this survey. This will make sure that there would be less biasing

in the result. It will also help in generalizing the perception of IT professionals.

The following list of roles of the survey participants was approached.

1. Lead developer

2. Database administrator

3. System Analyst

4. Business Analyst

5. Delivery Manager

6. Deliver Head

7. Test Analyst

8. Technical Consultant

9. Project Manager

10. Project Leader

24, 20%

70, 58%

26, 22%

Experience in ERP/Cloud Computing

0 Years to 4 Years

4 to 8 Years

More tha 8 years



5.3 Analysis of Benefits of migrating ERP systems to the cloud

In this section, the findings from the univariate and bivariate analysis of the benefits

of migrating ERP systems to the cloud surveyed in the questionnaire. Also, a detailed

discussion and interpretation of findings are done in relative to the literature review

done in previous chapters.

5.3.1 Benefits of migrating ERP systems to the cloud: Univariate analysis

Univariate analysis of benefits states the descriptive analysis of the benefits of

migrating ERP systems to the cloud examined. In order to present the analysis

frequency table is used. This will show how many respondents have agreed or

disagreed with the benefit and to what level. Of all the benefits that were identified

using the literature review, overall 20 benefits were used in the questionnaire survey.

5.3.1.1 Technical Benefits

From the literature review 7 technical benefits were found out. Table 3 summarizes

the findings of the questionnaires associated with these technical benefits

F=Frequency, N=Total no of responses.

Table 3: Frequency table for Technical benefits

The following graph illustrates the percentage of respondents that have agreed with

the benefits that found during the literature review. This comprises of respondents

who have chosen “Strongly Agree” and “Agree” together and others who have

chosen “Strongly Disagree” and “Disagree” together.

Code Technical Benefits N=120 Strongly Agree Agree Neutral Disagree Strongly Disagree

F % F % F % F % F %

TB1 Dynamic scalability 17 14.16 74 61.66 10 8.33 10 8.33 9 7.5

TB2 Authorization of users 17 14.16 66 55 16 13.3 14 11.66 7 5.83

TB3 Easy to deploy 18 15 84 70 3 2.5 10 8.33 5 4.16

TB4 Seamless Upgrades 21 17.5 74 61.66 9 7.5 10 8.33 6 6

TB5 Rapid recovery and restoration 16 13.33 83 69.16 8 6.66 6 5 7 5.83

TB6 Less software maintenance 19 15.83 74 61.66 9 7.5 9 7.5 9 7.5

TB7 Version control and upgrading 11 9.16 77 64.16 15 12.5 8 6.66 9 7.5



Fig 5: Comparison of people agreeing and not-agreeing with technical benefits

As shown in the above graph (fig 5), most of the respondents agree to the benefits as

compared to people who disagree. Also the difference between percentage of people

that agree to people disagree is higher. This shows that most of the organizations do

agree that cloud computing has the capability to provide lot of technical benefits

when used for deploying ERP systems. This is also supported by (Bisong & Rahman,

2011) stating that although technology has its reasonable part of drawbacks, it also

has a lots of potential benefits which is turning a lot of doubters into supporters.

According to (Khajeh-Hosseini, et al., 2011) , technology start-ups are presently

taking advantage of cloud computing because of its advantages in reliability, cost-

effectiveness and scalability. Even the larger enterprises are now starting to show

attention towards cloud computing because of these guaranteed benefits. As stated by

(Khajeh-Hosseini, et al., 2010) cloud computing has generated a lot of interest in the

Information technology industry. As suggested by IDC firm which is a market

researcher and analyst company, cloud computing services market is $16 billion in

the year 2008 and is expected to rise to $42 billion per year by 2012. The technical

benefits are supported by (Zhang, et al., 2010), saying that technologies that are

mostly used by cloud computing like Virtualisation and pricing based on usage

already existed in the market. As an alternative, cloud computing influences these

prevailing technologies to meet the economic and technological requirements of

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current demands of IT. Since, the charges of cloud computing providers are very less

and the advancement in IT removes the technical barriers like network bandwidth,

simulation and virtualisation, cloud computing has become the mainstream of IT

technology (Singh & Jangwal, 2012).

5.3.1.2 Operational Benefits

From the literature review 7 operational benefits were found out. Table 4 summarizes

the findings of the questionnaires associated with these Operational benefits.

Table 4: Frequency table for Operational benefits

Fig 6: Comparison of people agreeing and not-agreeing with Operational benefits

As shown in the graph above (fig 6), higher number of the respondents agrees to the

operational benefits as compared to respondents who disagree. Also, the difference

Code Operational Benefits N=120 Strongly Agree Agree Neutral Disagree Strongly Disagree

F % F % F % F % F %

OB1 Price Model 23 19.16 47 39 31 26 12 10 7 5.83

OB2 Low capital expenditure 25 20.83 66 55 13 11 7 5.83 9 7.5

OB3 Less burden on IT department 13 10.83 20 17 17 14 9 7.5 4 3.33

OB4 Easy to manage 22 18.33 70 58 14 12 7 5.83 7 5.83

OB5 no up-front commitment 17 14.16 81 68 10 8.3 9 7.5 3 2.5

OB6 No need of expertise 10 8.33 74 62 15 13 12 10 9 7.5

OB7 Unlimited storage 13 10.83 73 61 19 16 5 4.16 10 8.33

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OB1 OB2 OB3 OB4 OB5 OB6 OB7

Agree

Disagree



between the numbers of people that agree to the number of people who disagree

proves that most of the organization perceives that cloud computing has a lot of

operational benefits that will help them to reduce their expenses incurred by IT

infrastructure. As also stated by (Bisong & Rahman, 2011), that organisations look

upon to cloud computing as a tool to reduce cost and increase the profit. He also says

that most CIOs are under constant pressure to cut the capital assets, man power,

maintenance costs, and support costs; and cloud computing is a way to achieve all

this. According to (Zhang, et al., 2010) , various different perceptions exists for

cloud computing is that it is not new technology instead it is a new operations model

that combines group of technologies to manage business. As stated by (Abadi,

2009), one oft-cited advantage of cloud computing is its elasticity during changing

conditions. As per (Saini, et al., 2011), the SaaS-software design has repaired the

operational and financial advantages over others when compared to on-premise

models of software. The cost of operation is very less and the cost of subscription is

also decreased as the cloud service provider operates the ERP systems which have

the ability to provide services. Cloud computing saves a lot of money, reduces the

usage of IT resources and time spent from developing to implementing ERP systems.

Latest research points out that the use of SaaS of Cloud-ERP has increased and the

demand will keep on increasing and it is predicted by the researchers that SaaS will

overtake other traditional IT substitutes as a result of current crisis in economy and

will also help recover economies. The list of benefits for this model is increasing and

will go past costly effective software delivery causes, enabling enterprises to

renovate their business processes.

5.3.1.3 Strategic Benefits

From the literature review 6 strategic benefits were found out. Table 5 summarizes

the findings of the questionnaires associated with these strategic benefits.



Table 5: Frequency table for Strategic benefits

Fig 7: Comparison of people agreeing and not-agreeing with strategic benefits

The graph above (fig 7) shows that businesses are more and more accepting Cloud-

ERP model to strategize their businesses. As stated by (Saini, et al., 2011), with the

proper use of IT technologies, restructuring the business processes and reengineering

the workflows, a huge number of customers can be attained and existing customers

can be stopped refrained from leaving the business. With reducing IT burden,

enterprises can concentrate of core areas of its business. The optimization of process

based on cloud computing can accomplish all over the large-scale reconstruction of

the sector, and improve the complete IT values and competiveness. As per the study

of (Marston, et al., 2011) Cloud computing symbolizes a merging of two main

developments in information technology – a) efficiency of IT wherein the muscle of

modern day computers is used more effectively with the use of hardware and

Code Strategic Benefits N=120Strongly AgreeAgree Neutral Disagree Strongly Disagree

F % F % F % F % F %

SB1 Dependable security 25 20.83 63 53 16 13 8 6.66 8 6.66

SB2 Strict policies 12 10 73 61 15 13 7 5.83 12 10

SB3 Mobility 10 8.33 76 63 17 14 10 8.33 7 5.83

SB4 Advanced functionality 15 12.5 77 64 13 11 6 5 9 7.5

SB5 Better usage of resources 15 12.5 87 73 9 7.5 5 4.16 4 3.33

SB6 Internet presence 9 7.5 81 68 14 12 9 7.5 7 5.83

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software with high scalability b) business responsiveness, wherein information

technology can be used as an aggressive tool through quick deployment, parallel

batch processing, usage of compute-concentrated business analytics and interactive

applications which are mobile that reply in real time to the requirement of the user.

On the other hand, when the term business agility applies, cloud computing is not

only about cheaper computing, it is also regarding the businesses being capable of

using computational tools which can be deployed and scaled quickly, even as it

decreases the need for huge direct investments that portray enterprise information

technology setup today. As per the findings and according to (Marston, et al., 2011),

it is proven that CTOs and CIOs are proactively developing an complete “cloud

strategy” so as to determine a plan based on time about choosing which applications

to move to the cloud, and the timeframes linked with each one of them.

5.3.1.4 Discussion on findings and ranking of benefits

In the above sections, the results drawn from the questionnaire survey for the

benefits have been discussed and presented for each type of barrier. This section

provides a general discussion on the findings altogether for the barriers so far. The

mean method was used to summarize the responses about the benefits for migrating

ERP systems to the cloud.

Table 6: Mean and Standard deviation for benefits

Category Benefit Mean SD

TB1 Dynamic scalability 2.66 1.059

TB2 Authorization of users 2.6 1.051

TB3 Easy to deploy 2.83 0.924

TB4 Seamless Upgrades 2.78 0.993

TB5 Rapid recovery and restoration 2.83 0.938

TB6 Less software maintenance 2.95 0.845

TB7 Version control and upgrading 2.6 1.002

OB1 Price Model 2.58 1.086

OB2 Low capital expenditure 2.75 1.08

OB3 Less burden on IT department 2.46 1.152

OB4 Easy to manage 2.83 0.924

OB5 No up-front commitment 2.83 0.849

OB6 No need of expertise 2.53 1.032

OB7 Unlimited storage 2.61 1.018

SB1 Dependable security 2.74 1.068

SB2 Strict policies 2.56 1.068

SB3 Mobility 2.6 0.96

SB4 Advanced functionality 2.69 1.006

SB5 Better usage of resources 2.86 0.805

SB6 Internet presence 2.8 0.781

Technical Benefit

Operational

Benefits

Strategic Benefits



Therefore, the means of benefits variables were calculated using by Microsoft Excel

2010, as presented in table above. The standard deviation for each benefit was also

shown in the above table to reflect the level to which the values of each benefit

differed from the mean.

In the table 7, all the benefits have been ranked by rearranging and prioritising each

benefit item on their respective means. It must be seen that 7 out of top 10 benefits

are non-technical i.e. Operational and Strategic. Therefore, it is clear that the

respondents identified that organisational and strategic benefits are more important

when compared to technical.

Table 7: Rankings of the benefits

As shown in the table, “Less burden on IT department” is perceived as the most

important benefit according to the respondents which mainly aims at saving costs

and resources for the company. A possible explanation to this finding is given by

(Raihana, 2012), SaaS vendor or cloud provider takes the responsibility for the

deployment and management of the IT infrastructure which includes application

servers, operating system, data storage system, datacenters, network accessibility,

Rank Benefit N=120 Mean Type

1 OB3 Less burden on IT department 2.95 Organisational

2 SB5 better usage of resources 2.86 Strategic

3 TB5 Rapid recovery and restoration 2.83 Technical

4 OB4 Easy to manage 2.83 Organisational

5 OB5 no up-front commitment 2.83 Organisational

6 TB3 Easy to deploy 2.83 Technical

7 SB6 Internet presence 2.8 Strategic

8 TB4 seamless upgrades 2.78 Technical

9 OB2 Low capital expenditure 2.75 Organisational

10 SB1 dependable security 2.74 Strategic

11 SB4 Advanced functionality 2.69 Strategic

12 TB1 Dynamic scalability 2.66 Technical

13 OB7 Unlimited storage 2.61 Organisational

14 TB4 Authorization of users 2.6 Technical

15 TB7 Version control and upgrading 2.6 Technical

16 SB3 Mobility 2.6 Strategic

17 OB1 Price Model 2.58 Organisational

18 SB2 Strict policies 2.56 Strategic

19 OB6 No need of expertise 2.53 Organisational

20 TB6 less software maintenance 2.46 Technical



cooling and power and tasks/processes which includes patching and upgrading of

infrastructure, patching and upgrading of software, backup and restoration tasks that

are needed to manage and run the entire solution. This takes a lot of load of

organization of installation and operation of applications on the computer network. It

also eradicates the huge load of maintaining software; continuation of operation,

protection and support. The “better usage of resources” has been explained by

(Bhardwaj, et al., 2010) and (Bhaskar, et al., 2011) stating that cloud computing,

through its centralised computing model, allows the administration of all the IT

resources and tasks from single location. Tasks like load competency and maximum

usage of servers can be achieved from a single location. As explained by (Mangiuc,

2011), the online recovery and storage services offered by cloud computing are

faster. Due to higher competition providers are required to keep the prices low to

sustain profitability. ERP systems on cloud are very easy to control and manage

because the 24/7 support is provided by the most of the providers (Mangiuc, 2011).

Since cloud computing has the facility to provide the entire IT infrastructure and it’s

components as a service with the use of internet, organizations are not required to

buy or won the infrastructure or the computing resources which relieves them from

the ownership or commitment in terms of computing resources (Hofmann & Woods,

2010). Cloud computing takes out lot of effort and time required for deployment of

ERP systems as it is mainly carried out by the cloud providers (Makkar & Bist,

2012). Overall, it was quite possible that the technical benefits that were studied in

the survey might have been low-key due to lack of practical knowledge and

implementation experience

5.3.2 Barriers of migrating ERP systems to the cloud: Univariate analysis

Univariate analysis of barriers expresses the descriptive analysis of the barriers of

migrating ERP systems to the cloud examined. In order to present the analysis

frequency table is used. This will show how many respondents have agreed or

disagreed with the barriers and to what level. Of all the barriers that were identified

using the literature review, overall 20 barriers were used in the questionnaire survey.

5.3.2.1 Technical Barriers

From the literature review and the ontology framework discussed in the above

chapters only 3 technical barriers were found out and used in the survey. The lesser



no. of technical barriers suggests that technically it is quite possible to implement


Table 8: Frequency table for technical barriers

According to (Saini, et al., 2011), limited source of energy and limited bandwidth are

one of the main reasons organisations are sceptical to move to the cloud. According

to (Dillon, et al., 2010), each and every cloud providers and application have their

own way in which they interact with loud and within themselves. This strictly

hampers the development of a single system of cloud and organizations are tied up to

their service provider. It becomes difficult for organisations to choose from the

providers. According to (Feuerlicht, et al., 2011), one of the important cause of

misperception is the absence of accuracy in the explanation of cloud computing that

generally covers a range of numerous kinds of services, extending from easy data

storage services to very complex multitenant SaaS applications.

Code Technical Barriers N=120 Strongly Agree Agree Neutral Disagree Strongly Disagree

F % F % F % F % F %

TBR1 no simple solution for data storage 18 15 78 65 13 10.83 4 3.33 7 5.83

TBR2 failures of mechanics 18 15 81 67.5 7 5.83 6 5 8 6.66

TBR3 network limits 20 16.67 82 68.33 6 5 6 5 6 5



Fig 8: Comparison of people agreeing and not-agreeing with technical barriers

5.3.2.2 Operational Barriers


chapters only 7 operational barriers were found out and used in the survey. It is quite

clear from the numbers that organizations see that there are lot of operational barriers

in moving ERP systems to the cloud

Table 9: Frequency table for operational barriers

According to cloud computing promotes serious concerns particularly related to

security level. Completely relying on cloud provider for own data and task execution

which might reside in different country having different governing surroundings is a

barrier for a company to move their ERP systems to the cloud. Despite being a

strong need for in-detail discussion of operational issues in cloud computing, the

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Code Operational Barriers N=120 Strongly Agree Agree Neutral Disagree Strongly Disagree

F % F % F % F % F %

OBR1 Control over infrastructure 10 8.33 87 72.5 9 7.5 8 6.67 6 5

OBR2 Lack of SLA 16 13.33 82 68.33 10 8.33 4 3.33 8 6.66

OBR3 Security Issues 19 15.83 74 61.67 9 7.5 9 7.5 9 7.5

OBR4 Data handling practices 11 9.16 80 66.67 13 10.83 8 6.66 8 6.66

OBR5 Trust on cloud provider 15 12.5 84 70 10 8.33 7 5.83 4 3.33

OBR6 Internet dependency 12 10 83 69.17 12 10 6 5 7 5.83

OBR7 level of Quality of Service 13 10.83 83 69.17 10 8.33 6 5 8 6.66



present fear of organisation is mainly focused mainly on confidentiality,safety and

privacy of data and examine mostly organisational ways to handle this barriers.

Fig 9: Comparison of people agreeing and not-agreeing with operational barriers

5.3.2.3 Strategic Barriers


chapters only 10 strategic barriers were found out and used in the survey. This group

forms the most number of barriers indicating that moving to the cloud computing is

more a tactical challenge than technical.

Table 10: Frequency table for strategic barriers

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Series 1

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Code Strategic Barriers N=120 Strongly Agree Agree Neutral Disagree Strongly Disagree

F % F % F % F % F %

SBR1 Customer risk 16 13.33 78 65 13 10.83 7 5.83 6 5

SBR2 Damage through insider 18 15 85 70.83 7 5.833 7 5.83 3 2.5

SBR3 laws of jurisdiction 25 20.83 52 43.33 17 14.17 13 10.83 13 10.83

SBR4 law enforcement 14 11.67 80 66.67 15 12.5 9 7.5 2 1.66

SBR5 Control of data 27 22.5 69 57.5 11 9.16 8 6.66 5 4.16

SBR6 Audibility 8 6.66 80 66.67 11 9.16 15 12.5 6 5

SBR7 Interoperability 9 7.5 81 67.5 14 11.67 9 7.5 7 5.83

SBR8 performance variation in cloud 16 13.33 77 64.17 11 9.16 9 7.5 7 5.83

SBR9 lack of innovation 15 12.5 79 65.83 15 12.5 6 5 5 4.16

SBR10 migration 21 17.5 78 65 10 8.33 7 5.83 4 3.33



Fig 10: Comparison of people agreeing and not-agreeing with strategic barriers

5.3.2.4 Discussion on findings and ranking of barriers

In the above sections, the results drawn from the questionnaire survey for the

benefits have been discussed and presented for each type of barrier. This section

provides a general discussion on the findings altogether for the barriers so far. The

mean method was used to summarize the responses about the benefits for migrating


0

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SBR1 SBR2 SBR3 SBR4 SBR5 SBR6 SBR7 SBR8 SBR9 SBR10

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Table 11: Mean and standard deviation for barriers

Therefore, the means of barriers variables were calculated using by Microsoft Excel

2010, as presented in table above. The standard deviation for each barrier was also

shown in the above table to reflect the level to which the values of each benefit

differed from the mean.

In the table below, all the barriers have been ranked by rearranging and prioritising

each barrier item on their respective means.

Category Barriers Mean Standard Deviation

TBR1 No simple solution for data storage 2.8 0.936

TBR2 Failures of mechanics 2.791 0.982

TBR3 Network limits 2.866 0.921

OBR1 Control over infrastructure 2.725 0.894

OBR2 Lack of SLA 2.783 0.95

OBR3 Security issues 2.708 1.059

OBR4 Data handling practices 2.65 0.971

OBR5 Trust on cloud provider 2.825 0.843

OBR6 Internet dependency 2.725 0.921

OBR7 level of QoS 2.725 0.957

SBR1 Customer risk 2.758 0.93

SBR2 Damage through insider 2.9 0.81

SBR3 Laws of jurisdiction 2.525 1.238

SBR4 law enforcement 2.791 0.805

SBR5 Control of data 2.616 1.018

SBR6 Audibility 2.575 0.963

SBR7 Interoperability 2.633 0.939

SBR8 Performance variation in cloud 2.716 0.984

SBR9 Lack of innovation 2.775 0.879

SBR10 Migration 2.875 0.88

Strategic

Barriers

Technical Barrier

Operational

Barriers



Table 12: Ranking of barriers

As per the rankings, security from within the organization or cloud provider is rated

as the most important barrier. This may be because of human intervention which is

difficult to avoid when compared to technological barrier (Marston, et al., 2011). As

also supported by (Mangiuc, 2011), the destruction that is caused due to mischievous

insider is a lot far bigger. The architectures of the clouds require specific roles which

are very dangerous. Roles such as system administrator are very sensitive for

security. As per the study of (Mohan, 2011),It is difficult for organisations to move

to other cloud provider or even move back to the in0house environment as there

aren’t many tools and applications available for portability. The cloud computing is

all dependent on internet connectivity which might restrict the speed and

performance for the ERP depending upon the network and bandwidth. This is also

supported by (Saeed, et al., 2011), stating that the slow speed of internet connection

and down time of cloud can affect the performance and might cause losses. Since the

data and system reside in the remote machine located at the cloud provider,

organisations have to trust their cloud provider for their data and system. This is also

supported by (Mangiuc, 2011) that organisations have to agree to the control of the

Rank Barrier Mean

1 SBR2 Damage through insider 2.9

2 SBR10 Migration 2.875

3 TBR3 Network limits 2.866

4 OBR5 Trust on cloud provider 2.825

5 TBR1 No simple solution for data storage 2.8

6 TBR2 Failures of mechanics 2.791

7 SBR4 Law enforcement 2.791

8 NBR2 Lack of SLA 2.783

9 OBR2 Lack of innovation 2.775

10 SBR1 Customer risk 2.758

11 OBR7 Level of QoS 2.725

12 OBR6 Internet dependency 2.725

13 OBR1 Control over infrastructure 2.725

14 SBR8 Performance variation in cloud 2.716

15 OBR3 Security issues 2.708

16 OBR4 Data handling practices 2.65

17 SBR7 Interoperability 2.633

18 SBR5 Control of data 2.616

19 SBR6 Audibility 2.575

20 SBR3 Laws of jurisdiction 2.525



service provider on a lot of areas and issues of business areas. Since, there is no easy

and general solution for data storage and also every cloud provider has a different

way of storing data there may be some issues with acceptance of cloud computing as

a one point solution for deploying which is also supported by (Walloschek &

Stocker, 2011). The failure of isolation i.e. the risks which covers the mechanisms

failure storage separation, memory, network routing is also a barrier (Mangiuc,

2011). Overall, the barriers are more concentrated towards the operations and

security related to the cloud computing which is the main reason for organisations

hesitating in moving to the cloud.

5.4 Summary

This chapter discussed about the findings of the questionnaire survey conducted

among the IT professionals. The profile of the respondents helped in maintaining the

credibility and authenticity in terms of their total IT experience and knowledge and

specifically in the areas of ERP and Cloud computing. This was followed by the

findings related to benefits and barriers of moving ERP systems to the cloud.

6. Conclusions and Recommendations In this chapter, the conclusions and recommendations that can be taken out from this

research are discussed. This chapter also discusses the scope, limitations and

suggestions for the organisations and cloud service providers. This will also

recommend an organisation whether or not it is feasible for them to migrate their

ERP systems to cloud.

6.1 Conclusions

The benefits provided by the adoption of cloud computing for ERP systems are often

doubted by the barriers that organisations face in migrating ERP systems to the

cloud. As and how organisations are considering or already having migrated their

ERP systems to the cloud, new barriers are revealed. Also, this further suspects the

ability of the organizations to do a proactive study of practicality and feasibility of

migrating their ERP systems to the cloud. Although, the cloud computing provides

many benefits for ERP systems like scalability, less cost of infrastructure,



organisations must not ignore the barriers or issues before making their decision to

adopt cloud computing.

The prime objective of this research was to find, rank the benefits and barriers of

migrating ERP system to the cloud. The study aimed at providing user and

organisations some dependable information which can help them make decision of

whether or not to adopt cloud for their ERP systems. An in-depth literature review

was carried out on ERP, cloud computing concepts and Enterprise Cloud computing.

The study also included the benefits and barriers for adopting cloud environment for

ERP systems. The possible deployment models for adopting cloud computing for

ERP systems were also discussed. These theories laid the basis for moving ahead on

this research towards the benefits and barriers of cloud computing adoption for ERP

systems. The various benefits and barriers were recognized from both direct and

indirect literature sources and were grouped based on their fields of existence and

influence. Overall, 20 benefits and 20 barriers were found out which were further

organised into three major categories. In this categorization, the benefits and barriers

amongst technical, operational and strategic were revealed. This assisted in

developing a ontology framework for benefit and barrier which was applied in

completing the objectives of the research.

The questionnaire survey was constructed based on the ontology framework and

literature review. A comprehensive assessment was carried out from the perspective

of IT professionals across the areas of expertise in the field of ERP and cloud

computing. People from various levels and positions ranging from developers to

delivery managers were aimed for this survey.

The findings of the questionnaire survey added to the adoption of cloud computing

for ERP systems for organisations. It also encapsulated the perception of IT

professionals on the benefits and barriers of cloud computing and ERP systems that

can take advantage of cloud computing. The questions on observed barriers exposed

complexity, privacy and security and integration with legacy applications as the

highest barriers. These findings can further create a roadmap for further research into

these particular areas of adoption of cloud computing for ERP systems. As a part of

data analysis, mean and standard deviation for each benefit and barrier were carried

out as a part of bivariate analysis. The mean was calculated on the basis of the



frequency of each response from the respondents. Then on the base of their mean

value, the benefits and barriers were ranked. During this, less burden on IT

department, better usage of resources, rapid recovery and restoration capabilities

were rated as top benefits by the respondents. Similarly, damage through malicious

insider, migration to different cloud vendors, and network limits were ranked as top

barriers by the respondents.

Overall the findings of the survey showed that cloud computing adoption has more

operational and strategic reasons than technical in both the benefits and barriers.

Organisations are more concerned about the impact on their day-to-day operations

and their overall business strategy in adopting cloud computing for ERP.

This could be because of the targeted spectators of this survey as they viewed the

benefits and barriers from the managerial perspective and hence, the technical

aspects were given less important.

Summing up the following conclusions are drawn from this research:

There is high level of uncertainty in terms of operational and strategic

characteristics of cloud computing mostly due to possibility of easily solving

the technical issues related to cloud adoption for cloud computing.

The results of this research can be applicable in practical areas of ERP systems and

cloud computing. The theoretical benefits and barriers ontology model can be used

by organisations, cloud service providers as a basis of identifying potential barriers

and benefits of cloud computing adoption for ERP systems.

6.2 Limitations of the research

The build-up of cloud computing is increasing at a very faster rate in media than the

practice being recorded in applicable academic literature (Bannerman, 2010). Thus

the discovery of possible benefits and barriers in migrating ERP systems to the cloud

may be restricted to when compared to what would really happen in the practicality.

In addition, since cloud computing being a relatively new concept in terms of

adoption for ERP systems, it was very challenging to capture the view of the IT

professional that have practically implemented ERP systems on the cloud. Hence, the



data aimed for the research was limited to the opinion of IT professionals who have

either experience or knowledge or both in ERP systems and cloud computing.

Deficiency of coverage to projects based on migrating ERP systems to the cloud has

limited the possibility of the research contributors to identify more concrete benefits

and barriers in migrating ERP systems to the cloud. Additionally, because of limited

time for this research and availability issues of the IT professionals, it was not

possible to gather responses of larger group of IT professionals and so was limited

only to benefits and barriers. Continued interviews and a qualitative study would

have further extended the details of the research findings into the benefits and

barriers and their priorities.

6.3 Recommendations

Most organisations have their own requirements and resources for their ERP

systems, so it is difficult to give single view or recommendation for cloud computing

adoption for ERP systems. However, a thorough analysis of the requirement and

ability to spend in terms of capital must be carried out before considering the

adoption of cloud computing for ERP systems. Built on the findings of the research

the following recommendations for organisations adopting and implementing cloud:

a) Organisations should consider their current ERP systems and its volume in

terms of both the no. of applications and users which affect the cost and time

for cloud adoption.

b) Organisations should consider all the categories of benefits and barriers i.e.

technical, operational, and strategic before taking the decision of migrating


c) The ontology framework developed for benefits and barriers would be helpful

to for the practicality and feasibility study.

The findings of this research can also be referred to recommends the cloud providers

and organisations:

a) Technical experts and functional experts or managers should work in unison

to remove the barriers of migrating ERP systems to the cloud. These steps

should be replicated in the business processes and strategies of organisations,



and also in the cloud services and service providers including the cloud

models.

b) To build a trust between organisation and cloud provider and also to increase

the rate at which the cloud adoption occurs, the cloud services models and the

policies should be clear in technical, operational and strategic terms.

6.4 Scope of further research

The adoption of cloud computing for ERP systems is still new and undeveloped,

especially when it comes to analysing the benefits and barriers. Hence there is a very

high scope for further research.

a) A qualitative study on benefits and barriers can further concrete the

perception on benefits and barriers of migrating ERP systems and their

priorities.

b) This study can be further boosted by qualitative approaches to identify and

rank the benefits and barriers for migrating ERP systems to the cloud.

c) This study can also be used to develop a strategy on how to migrate ERP

system to the cloud.

d) This research was very generic and simple in terms of cloud adoption in the

type of industry. With increase in adoption of cloud, the strategies can be

more focused on specific type of industry based on their size and mode of

operation.

e) The growth in cloud adoption for ERP over the period of time must provide

the scope of more insulated and industry specific assessment of benefits and

barriers. This kind of study can develop a very strong literature source on

Enterprise cloud computing by identifying new benefits and barriers and

framing a strategy for migrating ERP systems to the cloud.

(Total word count :13660)



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Appendix A: Questionnaire



Appendix B Ethics Application Form



Appendix C Information Sheet

benefits and barriers of migrating erp systems to the...

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