the adoption of cloud computing for small and …

THE ADOPTION OF CLOUD COMPUTING FOR SMALL

AND MEDIUM ACCOUNTING FIRMS

A thesis submitted in partial fulfilment of the requirements for the Degree

of Master of Commerce in Accounting

in the University of Canterbury

by Xinding Ma

University of Canterbury

2015

Acknowledgements..................................................................................................................7

Abstract....................................................................................................................................8

Chapter1. Introduction......................................................................................................9

Chapter2. LiteratureReview:CloudComputing.............................................................11

DefinitionofCloudComputing...............................................................................11

TheBusinessCaseforCloudComputing................................................................13

2.2.1 RisksandUncertainties..................................................................................15

2.2.2 AttitudetowardsCloudComputing................................................................17

CloudComputingandAccounting..........................................................................18

Summary................................................................................................................19

Chapter3. LiteratureReviewonISAdoption...................................................................20

DiffusionofInnovationstheory..............................................................................20

Technological,OrganisationalandEnvironmental(TOE)Framework....................21

Iacovou’sEDIadoptionmodel................................................................................22

3.3.1 AnApplicationinNewZealandcontext:Mehrtensetal(2001)....................24

Chapter4. LiteratureReview:EmpiricalStudiesofCloudComputingAdoption.............27

BenefitsandDrawbacksofCloudComputing........................................................28

Organisational........................................................................................................30

ExternalEnvironment.............................................................................................31

Chapter5. ResearchGaps,QuestionsandModel............................................................33

ResearchGaps........................................................................................................33

ResearchTopicandQuestion.................................................................................34

ScopeofResearch..................................................................................................35

5.3.1 SmallBusinesses.............................................................................................35

5.3.2 CloudAdoption...............................................................................................37

ModelDevelopment...............................................................................................38

Chapter6. ResearchDesign.............................................................................................40

ResearchFramework..............................................................................................40

Methodology..........................................................................................................40

6.2.1 MultipleCaseStudy........................................................................................41

6.2.2 DataCollection...............................................................................................42

6.2.3 Semi-StructuredInterviews............................................................................43

Chapter7. Within-caseFindings......................................................................................44

FirmA.....................................................................................................................45

7.1.1 CloudComputingforClientService................................................................46

7.1.2 CloudComputingforPracticeManagement..................................................48

FirmB.....................................................................................................................49



FirmC.................................................................................................................................55



FirmD.....................................................................................................................60



FirmE......................................................................................................................64



FirmF......................................................................................................................68



ProviderOmicron...................................................................................................74



Chapter8. Cross-caseFindings.........................................................................................77

Summary:CloudComputingforClientService......................................................78

8.1.1 PerceivedBenefitsandRisks..........................................................................80

8.1.2 OrganisationalFactors....................................................................................82

8.1.3 ExternalEnvironment.....................................................................................83

Summary:CloudComputingforPracticeManagement.........................................85

8.2.1 PerceivedBenefitsandRisks..........................................................................87

8.2.2 Organisational................................................................................................88

8.2.3 Environment...................................................................................................89

Chapter9. Discussion.......................................................................................................91

TheRolesofCloudComputing...............................................................................91

9.1.1 InterorganisationalNatureofCloudComputing............................................92

9.1.2 PracticeManagementSystemsasERP...........................................................92

CompetitiveadvantageofCloudSoftware.............................................................94

9.2.1 Value...............................................................................................................94

9.2.2 Rarity..............................................................................................................96

9.2.3 TheEarthquakeEffect....................................................................................97

Implicationsofcloud“paradigm”forAccountants................................................97

Cloud-basedERPforaccountants..........................................................................99

9.4.1 Adopters.......................................................................................................100

9.4.2 Non-Adopter:ReasonsforNon-Adoption....................................................100

Chapter10. Conclusion....................................................................................................103

ResearchQuestionRevisited................................................................................103

ContributionstoLiterature...................................................................................106

ImplicationstoPractice........................................................................................107

LimitationsofStudy..............................................................................................107

FutureResearchDirections..................................................................................109

Appendix1: InterviewQuestionsandSchedule...............................................................111

Bibliography.........................................................................................................................113

TablesofFigures

Table2-1:empiricalstudiesregardingtheattitudetowardscloudcomputing.....................17

Table3-1:DiffusionofInnovation(DOI)theory.....................................................................21

Table3-2:Technological,OrganisationalandEnvironmental(TOE)Framework...................22

Table3-3:modelusedinMehrtensetal.(2001)BoldindicatesadditionsfromIacovouetal

(1995)model..........................................................................................................................26

Table4-1:cloudadoptionstudies..........................................................................................28

Table5-1:Summaryofgapsidentified...................................................................................34

Table5-2:Comparisonofthedefinitionofsmallbusinesswithothercountries..................36

Table7-1:SummaryofInterviewees.....................................................................................44

Table7-2:cloudadoptionforFirmA.....................................................................................46

Table7-3:cloudadoptionforFirmB......................................................................................50

Table7-4:cloudadoptionforFirmC......................................................................................56

Table7-5:cloudadoptionforFirmD.....................................................................................61

Table7-6:cloudadoptionforFirmE......................................................................................65

Table7-7:cloudadoptionforFirmF......................................................................................69

Table7-8:ProviderOmicron'sremarksaboutcloudaccounting...........................................74

Table8-1:Summarisedfindingsforcloudasclientservice.Italicindicatesafactorthat

inhibitedadoption..................................................................................................................79

Table8-2:Summarisedfindingsforcloudaspracticemanager.Italicindicatesafactorthat

inhibitedadoption..................................................................................................................86

Figure1:EDIAdoptionmodel,fromIacovouetal(1995)......................................................23

Figure2:Researchmodel.......................................................................................................38

7

Acknowledgements

Iwouldliketothankeveryonewhohasprovidedmewithsupport,guidanceandcarewhileI

amresearchingandwritingthisthesis.

Firstly,Iwouldliketoexpressmygratitudetowardsmysupervisors,MrTrevorNesbitand

AssociateProfessorRichardFisher,whohaveprovidedmewithinvaluableassistance

throughouttheproject.Thethesiswouldnothavebeenpossiblewithouttheirhelp.

Secondly,aspecialthank-youtotheintervieweesofthisstudy,whotooktheirvaluabletime

totalktomeandsharedwithmeinformationabouttheirfirms.

Finally,Iwouldliketothankmyparentsfortheiremotional(andlogistical)supportduring

mystudies,andforalwaysbeingthereformeduringgoodandbadtimes.Iwouldalsolike

tothankmyclassmates,whoprovidedmewithinspirationandsupportduringthestressful

times.

8

Abstract

Cloudcomputingisacontemporaryinformationtechnology(IT)conceptthathasattracted

overwhelmingattentionfromtheacademicsandpractitionersoftheITindustry.By

connectingalargenumberofserversaroundtheworldviatheinternetandpoolingthe

resourcesthattheygenerate,cloudcomputingisapromisinginnovationthatisexpectedto

deliversignificantcostsavingsandunprecedentedflexibilityonhowbusinessesconsumeIT

resources.Theaccountingindustry,inparticular,perceivescloudcomputingasapotent

threattoitself.However,priorstudiesthatexaminecloudcomputingfromthebusiness

perspectivearelimited.Moreover,despitetherapidgrowthofcloudcomputinginthe

accountingindustry,thereisnopriorstudythatfocusedontheaccountingindustry.

Thepurposeofthisstudyistoexplorethefactorsthatledtotherapidgrowthofcloud

computingspecificallyintheaccountingindustry,andtoexploretherolesthatcloud

computingplayedwithintheaccountingfirms.Theaccountingindustryischosenduetothe

highpopularityofcloudcomputingwithinit,andthehomogeneousnatureofthe

accountancyservices.Thisstudyusesamultiplecasestudydesign,andsemi-structured

interviewsarecarriedoutwiththedecisionmakersofsixaccountingfirms.

Theresultsrevealedthattheconceptofcloudcomputingreferstomanytypesof

applications.Foraccountingfirms,cloudcomputingconsistedofanexternal(client-oriented)

roleandaninternal(practicemanagement)role.Therapiddevelopmentofcloudcomputing

occursprimarilyintheexternalrole,wherecloudcomputingisusedasacompetitivetool.

Ontheotherhand,theusefulnessofcloud-basedpracticemanagementsystemsislimited

tothemicroaccountingfirmsonly.

Thisstudymakesanimportantcontributioninthefieldofcloudcomputingresearch.It

shouldberecognisedthattheroleofcloudcomputingextendsbeyonditstechnological

merits,andvariesdependingonthecharacteristicsoftheindustryandthestrategyofthe

business.Itisrecommendedthatfuturestudiestakeintoaccountthewaysfirms

incorporatecloud-enabledtechnologyintothefirm’sbusinessprocessandstrategy.

9

Cloudcomputinghadattractedconsiderableattentionfromtheinformationtechnology(IT)

industrysincethetermwascoinedin2008.Describedasaparadigm-shiftinginnovation,

cloudcomputingbringstogetherdifferentpiecesoftechnologyandcomputingresourcesto

createacoherentecosystemovertheinternet.Thisresultedinsignificantimprovementsto

theabilityforITserviceproviderstoaggregateandcoordinateresourcesforcomputing-

intensivetasks.Forbusinessesthatusecloudcomputing,cloudcomputingreducesthecost

ofpurchasingandmaintainingITinfrastructure,aswellasprovidingbetterflexibilityin

termsofhowcomputingresourcescanbeboughtandconsumed.

However,duetothecontemporarynatureofcloudcomputingtechnology,thedemandside

ofcloudcomputingisyettomature.Cloudcomputingisavagueconceptthattakesvarious

formsinpractice,andtherearemultipledefinitionsthatattempttodescribedifferent

characteristicsandformsofcloudcomputing(Marston,Li,Bandyopadhyay,Zhang,&

Ghalsasi,2011).Thetheoreticalbenefitsthatcloudcomputingprovideareyettobefully

realisedbyITprofessionals,asmanyoftheexistingcloudproductseitherdonotfullyutilise

thesebenefits,orsimplymarketinghype(Hoberg,Wollersheim,&Krcmar,2012).The

conceptalsoinducesconcernsanduncertaintiesregardingthesafety,privacyandreliability

ofcloudcomputing.

Inspiteofthetheoreticalbenefits,confusionandconcernsofcloudcomputing,the

accountingindustryisoneareathatcloudcomputingisflourishing.Cloud-basedaccounting

softwarelikeXerohadexperiencedexponentialgrowthintermsofpopularity,marketshare

andsharepricesince2008(Xero,2014).Cloud-basedaccountingapplicationshavebeen

perceivedbytheaccountingindustryaspotentthreatsagainstconventionalaccounting

practices,eventhoughtheirfeaturesarenotascomprehensiveasthedesktopcounterparts.

CloudserviceproviderslikeWorkflowMax(2013)andCCH(2013)positedthatthe

popularisationofcloudcomputingcoulddrasticallyalterthestateoftheaccounting

industry,buttheirinterestinthecloudcomputingmarketreducesthecredibilityoftheir

claims.

Themotivationofthisstudyprimarilystemsfromtherateofadoptionofcloudcomputing

withintheaccountingindustry,whichappearstohavefaroutpacedtheothers.Existing

10

cloudcomputingadoptionstudiesalsodonotprovideanadequateexplanation.The

majorityofexistingcloudcomputingliteraturetendstofocusonthetechnical,supply-side

issuesofcloudcomputing(whatisthemostefficientwaytogenerateanddistribute

computingresourcesthatmeettheusers’needs?),ratherthanthedemand-side(whydo

peopleandbusinessesusecloudcomputing?).Thedemand-sidestudiesofcloudcomputing

alsovaryconsiderablyintermsofthecontextualfactors.Thesefactors,suchascountryand

industry,generallyhaveastronginfluenceonhowbusinessesconducttheiroperationsand

achievetheirgoals.Moreover,theadoptionstudiesdonotexplicitlylinktheadoption

behaviourwiththebusiness’operatingenvironments,strategiesorprocesses.

Thisisanexploratorystudythatintendstoinvestigatethedemand-sideaspectsofcloud

computinginthecontextoftheaccountingindustry.Amultiplecasestudydesignisused.

Theunitofanalysisisaccountingfirms(firm-level),withanemphasisplacedonsmall

accountingfirms.Dataisgatheredbyconductingsemi-structuredinterviewswiththe

decisionmakersfromsixdifferentaccountingfirms.Thestudyfocusesonthedecision

makers’perceptiontowardsthenewcloudphenomenon,andthefactorsthatledtotheir

decisiontoadopt(orreject)cloudcomputing.

Theaccountants’usageofcloud-basedtechnologyisdividedintotwocategories:adopting

cloudcomputinginordertoimprovetheservicetotheirclients(asaninterorganisational

system),andusingcloud-basedpracticemanagementsystemsfortheirownuse.Thisisan

importantdistinction,aspriorstudiesofcloudcomputinghavenotclearlydefinedthescope

ofcloudcomputingintermsofthepurposeofthesystems.

Thisthesisisstructuredasfollows.Chapters2to4reviewtheexistingliteratureonthe

meaningandthesignificanceofcloudcomputingtothebusinesscommunity,followedbya

reviewofpreviouscloudcomputingadoptionstudies.Chapter5identifiesthegapsinthe

literature,andspecifiestheresearchquestionsandscopeofthisstudy.Chapter6discusses

andjustifiesthemethodsthatarechosentoundertakethestudy.Chapters7and8present

thefindingsfromtheresearchandanalysetheresultstoidentifypatterns.Chapter9

attemptstoexplaintheobservationsbyestablishingconnectionsbetweentheresultsand

therelevanttheories.Finally,Chapter10concludesthestudybydiscussingthe

contributions,potentialimplicationsandlimitationsofthisstudy.

11

Cloudcomputingiswidelyregardedasaparadigm-shiftinginnovationthatcansignificantly

alterthewayITresourcesareprovided,usedandpaidforbusinesses(Armbrustetal.,2010).

UnlikeotherITinnovations,cloudcomputingcombinespre-existingheterogeneous

technologiesintoacoherentecosystem,ratherthanestablishinganewsetofsystems

entirely(Avram,2014).Unfortunately,thismakesthedefinitionandthescopeofcloud

computingparticularlydifficulttoascertain.

Theliteraturereviewisseparatedintothreechapters.Thischapterexaminesthedefinition

ofcloudcomputing,theargumentsthatfavourandrejectthefeasibilityofcloudcomputing,

andtheclaimsofcloudcomputing’simpactontheaccountingindustry.Chapter3discusses

thefirm-levelinformationsystem(IS)adoptionmodels,whileChapter4reviewsthe

empiricalstudiesoncloudcomputingadoption.

DefinitionofCloudComputing

ThemostwidelyaccepteddefinitionofcloudcomputingisproposedbyNationalInstituteof

ScienceandTechnology(NIST).Thisdefinitioniscommonlyusedasafoundation,where

laterstudiesderivetheirinterpretationsofcloudcomputingbasedonthesefactors(Hoberg

etal.,2012).AccordingtoNIST,cloudcomputingisdefinedas“…amodelforenabling

ubiquitous,convenient,on-demandnetworkaccesstoasharedpoolofconfigurable

computingresources…thatcanberapidlyprovisionedandreleasedwithminimal

managementeffortorserviceproviderinteraction”(Mell&Grance,2011).Thisdefinition

outlinedfivecharacteristicsthatareessentialtoacloudcomputingmodel:

• on-demandself-service(computingresourcesareallocatedautomaticallybasedon

load),

• broadnetworkaccess(resourceisaccessibleviatheinternet,irrespectiveofclient’s

platform),

• resourcepooling(allcomputingresourcesaregeneratedandpooledtogetherbefore

allocatingthemtousers),

12

• rapidelasticity(abilitytoincreaseorshrinkcomputingresourcestomeet

fluctuationsinusers’resourcepattern),and

• measuredservice(users’resourceusecanbemonitoredandcontrolled).

SoftwareasaService(SaaS)isthemostcommonandmostmatureformofcloudcomputing.

UnderSaaS,thehardwareandsoftwareareprovidedbythecloudserviceprovider,and

usersaregrantedaccesstothesoftware(Gupta,Seetharaman,&Raj,2013;Sultan,2011).

Typically,theSaaSmodelrelievesusersfromtheexpertiseandeffortsrequiredtomaintain

theirownsoftware,butallowsverylimitedscopeforuserstocustomisethesystem(Mell&

Grance,2011).

SaaSisnottheonlyformofcloudcomputing,however.Itiscommonlyestablishedthat

cloudcomputingisavailableinthreeforms:SaaS,PlatformasaService(PaaS)and

InfrastructureasaService(IaaS)(Mell&Grance,2011).IncontrasttoSaaS,IaaSprovides

onlydatastorageandcomputingresourcehardwareinfrastructure,andusershaveto

deploytheirownoperatingsystemsandsoftware(Mell&Grance,2011).IaaSeliminatesthe

needtomaintainhardwarewhileallowingforahighdegreeofflexibilityandcustomisation

bytheuser,butdoesnottypicallyrelievetheuserfromhavingtomaintaintheirown

software.Forthisreason,IaaSismostfavouredbylargeinstitutionssuchaslarge

corporations(PwC,2011)anduniversities(Sarkar&Young,2011).PaaSoffersamiddle

ground,wherethecloudserviceprovidermaintainsaplatformofsystemsandtoolkits,and

usersmaydeploytheirownapplicationsthatarecompatible(Mell&Grance,2011).The

boundarybetweenIaaSandPaaSisnotwell-defined,asneitherofthemprovidesanout-of-

the-boxsolutionlikeSaaS(Armbrustetal.,2010).However,therearesubtledifferencesin

theirintendedmarkets:PaaSfocusesmoreonsupportingbusinessestodeveloptheirown

applications,ratherthanprovidingthehardware(Weinhardt,Anandasivam,Blau,&Stößer,

2009).

Effectively,thecoreprincipleofcloudcomputingisthecentralisingofcomputerresources

(intermsofhardwareandapplications)andprovidingthemtomanyusersasaservice

(Stanoevska-Slabeva&Wozniak,2010).Cloudcomputingdoesnotrefertoatangible

productorpieceoftechnology,butaparticulararrangementofcomputingresources.As

13

thepreviousdefinitionsuggests,cloudcomputingcanrefertoanyITinfrastructurethat

separatestheuserofcomputingresourcefromtheprovidersofsaidresources.

However,theconceptsincipientincloudcomputingisnotunique,ornew.Critics

questionedtheappropriatenessoflabellingcloudcomputingasanewparadigm,becauseof

itsresemblancetoexistentconceptssuchasgridcomputingandapplicationservice

providers(ASP)(Weinhardtetal.,2009).Thesimilaritycausedsignificantconfusionoverthe

substanceofcloudcomputinganditsimprovementsoverthepredecessors(Armbrustetal.,

2010).Evidently,earlierarticlesanddefinitionshadimplicitlyequatedSoftwareasaService

tocloudcomputing,eventhoughSaaSwasonlyapartofthelatter(Payton,2010;

Stanoevska-Slabeva&Wozniak,2010).Thisalsocreatedlabellingissues,asITproviders

misused“cloudcomputing”formarketingpurposes(Hobergetal.,2012).Forexample,web-

basedemailservices(suchasHotmail)satisfythedefinitionofcloudcomputing,yetit

existedwellbeforethetermcloudcomputingwasinvented(Du&Cong,2010).

Cloudcomputingdoesdistinguishitselffromgridcomputing,inthatitutilisesvirtualisation

muchmoreheavilythangridcomputing.Thisallowsthecomputingresourcestobe

accessedfromtheinternetratherthanaspecialisedinterface,andmakesitpossibleto

enforceservice-levelagreementsbetweenthecloudproviderandcustomers(Stanoevska-

Slabeva&Wozniak,2010;Weinhardtetal.,2009).However,adetaileddiscussionregarding

thetechnicaldifferencesbetweengridandcloudcomputingisoutsidethescopeofthis

study.

TheBusinessCaseforCloudComputing

Cloudcomputingisdescribedasanewparadigmintheformof“…convergencebetween…

ITefficiency…andbusinessagility”(Marstonetal.,2011,p.177).Effectively,theconceptof

cloudcomputingallowsbusinessestouseITservicesmoreflexiblythanconventionalin-

housesolutions,andoftenatamuchlowercost.

Cloudcomputingpermitsgreaterflexibilityinhowcomputingresourcesareusedby

businesses.Becausecloudcomputingconnectsawiderangeofcomputingdevicesviathe

internet,cloudcomputingcreatesanillusionofinfiniteresources(Armbrustetal.,2010).

14

Resourcesunderthecloudcomputingmodelarepooledandcanbeprovidedtoanyuserat

anygiventime,whichmeansthatcloudserviceproviderscansupplyavirtuallyunlimited

amountofcomputingresourcestotheirusersataveryshortnotice,aswellasreallocating

computingresourcesthatausernolongerneedstootherusers(referredtoasrapid

downscaling).

Inpractice,thisallowsbusinessuserstomakelast-minuteadjustmentstotheirITservicesto

matchtheiractualdemand.Thisrelievesbusinessesfromhavingtoforecastresourceusage

intothefuture,orcarryadditionalcapacitythatarenotneededduringthemajorityofthe

year(andpayingforthoseunusedcapacity)(Armbrustetal.,2010;Marstonetal.,2011).

Thisisparticularlybeneficialforbusinesseswhoseresourceusagepatternfluctuates

significantly,orthedemandforcomputingresourcesconsistsofirregularpeaksandtroughs

(Marstonetal.,2011).Additionally,cloudcomputingprovidestheabilitytospread

computation-intensivetasksoveralargeamountofserversaroundtheworld.Forprojects

thatwerepreviouslydeemedtobetooresource-consumingusingtraditionalIT

infrastructure,cloudcomputingcantapintoamuchlargerpoolofcomputingresourcesto

completethecomputing-intensivetasksmorequickly(Grossman,2009).

CloudcomputingalsoreducestheriskofinvestinginITinfrastructurebysubstitutingcapital

investmentwithoperatingexpenses.ITinfrastructureisahighlyriskyinvestment,because

whileITsystemsareoftenbelievedtoproducesignificantbenefitsandevencompetitive

advantages,thereisnoguaranteethatsuchbenefitswouldnecessarilyaccruetothefirm

(Clemons,1986;King,Grover,&Hufnagel,1989).Infact,therelationshipbetween

implementingnewITsystemsandthefirm’scompetitiveadvantageisanecdotalatbest,

andquestionableatworst(Zhang&Lado,2001).Inmorerecentyears,theGlobalFinancial

Crisishadseverelycutbackbusinesses’capitalinvestmentsanddiscouragedrisk-taking

behaviour(Grubisic,2014).

Thefactthatcloudcomputingrequirespracticallynoup-frontITinvestmentwasperceived

asaverydesirabletrait.Sincecloud-basedservicesarechargedbasedonusageor

subscription,businessesareabletoacquirenewITsystemswithoutincurringsignificant

costsinacquiringthenecessaryIThardware,softwarelicensesortheongoingmaintenance

cost(Du&Cong,2010;Grubisic,2014).Thisfeatureisparticularlyappealingtosmaller

15

businesses,astheygenerallylackthefinancialcapitalandexpertisenecessarytoacquire,

implementormanagesophisticatedITsystems(Iacovou,Benbasat,&Dexter,1995).The

eliminationofup-frontinvestmentbycloudcomputingmeansthatsmallbusinessesarealso

abletoadoptcutting-edgeITsystems,derivebenefitsfromthem,andmakethembetter

equippedintermsofinformationsystemstocompetewiththeirlargercounterparts

(Marstonetal.,2011).

Finally,bycentralisingcomputingresources,cloudcomputingoffersgreaterefficiencyand

lessmaintenanceontheuser’spart.In-houseITsolutionsareusuallyhighlyinefficient,as

mostcorporateservershaveanaverageutilisationrateofapproximately30%(Marstonet

al.,2011).Bycombiningandconsolidatingcomputingresources,cloudserviceproviderscan

takeadvantageofeconomiesofscaleandrealisecostsavingsuptoafactorofseven

(Armbrustetal.,2010).Thiscostsavingsmaybepassedontotheusers,whichultimately

lowerstheirtotalITcost.Moreover,sinceapplicationsandinfrastructureoverthecloud

residewiththecloudserviceprovider,thiseliminatestheneedontheuser’sendtoincur

additionalexpenditureortimetomanagetheITsystems.

2.2.1 RisksandUncertaintiesDespitetheapparentbenefitsofcloudcomputing,thecharacteristicsofcloudcomputing

embodyinherentrisksanduncertaintiesforitusers.Ascloudcomputingisprovidedbya

thirdpartyovertheinternet,dataisstoredinremoteservers,ratherthanonsite.Asaresult,

cloudcomputingrequiresbusinessestorelinquishtheirphysicalcontrolovertheirdata,and

maygiverisetoanxietiesregardingthesecurity,reliabilityandprivacyoftheusers’data

(Armbrustetal.,2010).

Thesecurityofcloud-basedstorageisaconcernparticularlyforCPAfirms(chartered

accountants),duetothefactthataccountantshandlesensitiveandconfidentialinformation

(Du&Cong,2010).Theanxietyoversecurityprimarilystemsfromthefactthatbusiness

usersthatadoptclouddonothavephysicalcontrolovertheirdata.Thedatamaybelostor

exposedtounauthorisedparties,andusersmustrelyontheserviceproviderstoimplement

propercontrolsandsecuritymeasures.However,therehadbeenanexpandingpoolof

literaturethatrefutesthisconcern.MolnarandSchechter(2010)suggestedthattheuser’s

16

dataareinfactsaferinthecloud,ascloudprovidershavebettereconomiesofscaleto

implementproperaccesscontrols.Incomparison,businessesthathosttheirIT

infrastructurein-housemaynotbeabletoimplementtheequivalentlevelofsecurity

measure,duetothelackofresources.Moreover,morerecentempiricalstudiessuggest

thatsmallerfirmsperceivedatasecuritylessimportantlythantheirlargercounterparts,and

smallbusinessesareinabetterpositiontonegotiateatrade-offbetweenthebenefitsof

cloudcomputingandperceiveddatasecurity(Guptaetal.,2013;Sobragi,Maçada,&

Oliveira,2014;Sultan,2011).

Privacyisanothermajorconcernforusersofcloudcomputing.Whilesecurityandprivacy

areoftenmentionedtogether,thesecuritymeasuresdiscussedabovedonotgenerally

resolveprivacyconcerns(Armbrustetal.,2010).Sinceusers’dataresidewithcloud

providers,thisgivesrisetotheperceptionandsuspicionthatcloudprovidersmayabuse

theirprivilegedaccesstotheusers’datafortheirowncommercialbenefitwithoutthe

knowledgeorconsentoftheuser(Du&Cong,2010;Guptaetal.,2013;Kingsford,2014).

Forsmallerbusinessesseekingtoadoptcloud-basedERPsystems,dataprivacyrepresents

oneofthemostsignificantobstaclestoitspopularityandreception(Grubisic,2014).Unlike

datasecurity,thesolutionstotheprivacyconcernslieinsocialtools(contractsand

enforceableagreements)ratherthantechnicalmeasures(Armbrustetal.,2010).

Finally,thedetachmentofphysicalcontrolgivesrisetotheissueofreliability,where

businessesfearlosingaccesstotheirbusinessprocessanddata.Onereliabilityconcernis

theavailabilityofcloud-basedservice,wherebusinessesareconcernedthatcloudservices

maybecomeunavailableatanygiventime,resultinginlostrevenueandhindranceto

businessefficacy(Sultan,2011).WhilereliabilityisaprobleminallITsystems,theuser’s

abilitytoinsulateormitigateagainstdatalossandwithdrawalofvendorservicesisseverely

morelimitedwhentheITsystemsarehostedinthecloud(Du&Cong,2010).

17

2.2.2 AttitudetowardsCloudComputingTheinterestandstrengthsofcloudcomputingdidnotnecessarilytranslateintointention,

however.Asthetwostudiesbelowshow,ITprofessionalswerescepticaltowardswhether

cloudcomputingisviableenoughtoreplacethetraditionalITmodel.

Author DataSource Factors

(Lin&Chen,2012) ITProfessionals,Taiwan Customerneeds,compatibility,

relativeadvantage,maintenance.

(PwC,2011) Seniorandmiddle

managersoflarge

businesses;andIT

outsourcers.

Security,relativeadvantage,workload

readiness.

Table2-1:empiricalstudiesregardingtheattitudetowardscloudcomputing

LinandChen(2012)investigatedtheunderstandingandconcernsofcloudcomputingbyIT

professionals.AnITprofessionalwasdefinedassomeonewithatleastthreeyearsof

workingexperienceinITcompaniesortheITdepartmentoflargecompanies.The

respondentsidentifiedcustomerneedsasamajordeterminantfortheircloudadoption

decision,asthebusinessesarereluctanttoadoptcloud-basedsolutionswithoutexplicit

requestfromtheircustomers.Thecompatibilityofcloud-basedsoftwarewiththe

company’sexistinginformationsystemsandpoliciesisanotherconcernthatimpedesthe

respondents’enthusiasmtowardscloudcomputing.Cloud-basedsystemsareconsideredto

bebeneficialforindividualstaffmembersandinformalteams,butadoptingcloud

computingfortheorganisationasawholelacksapparentbenefitindoingso.Theinterest

towardscloudcomputingwasfurtherdampenedbythepotentialriskssuchaslossof

controloverinformationsystems,hiddencostsandtheneedtoretrainstaffmembers.

AsimilarthemeisechoedinPwC(2011)study.Surveying489seniorandmiddlemanagers

inlargecompanies(ninetypercentofwhichexceeds$500millioninrevenue)and261IT

outsourcingproviders,therewasanoticeablegapbetweentheperceptionofcloud

computingandtheplansthatwereinplacetoensureadoption.Despitetherespondents’

apparentoptimismtowardsthetrendofcloudcomputing,mostofthemestimatedthatan

18

additionalworkloadofonly3%wouldbemigratedintothecloudinthenextthreeyears.

Theconcernforsecurity,especiallythelossofcontroloverdata,wasperceivedasamajor

issueby62%ofrespondents.Thelargecorporationsalsofacedsubstantialswitchingcosts,

duetothefactthattheirexistingdatabasemanagementsystemsandcertainapplications

wereoriginallywrittenforthetraditionalITservicemodel,andsignificantmodifications

werenecessarytotakeadvantageofthecloud-basedarchitecture.

Inshort,thestudiesindicateastrongreluctancebyITprofessionalstoadoptcloud

computing.Thissuggestthatthebenefitsofcloudcomputingaremostlytheoreticaland

unexplored.Sincetherewaslittletimeforcloudcomputingtoevolveandmature,thisresult

ishardlysurprising.However,theaccountingindustryisanotableexception.

CloudComputingandAccounting

Historically,accountingsystemsweretheprimarydrivingforcebehindthedemandsforIT

systems(Cragg&King,1993).Inrecentyears,theriseofnew,cloud-basedaccounting

softwarehadledtosombreforecastsintheaccountingsector.Itislittlesurprise,perhaps,

thataccountingfirmshavebecomeparticularlyinterestedintheadoptionofcloud

computing,andanincreasingnumberofaccountantsbegantoprovidecloud-based

accountingsolutionstotheirclients.Yet,despitetherateofdevelopment,academicstudies

thatexplicitlyexaminedtheimpactofcloudcomputingonaccountingindustrywasvirtually

non-existent.

AresearchreportconductedbyCCH(2013)hadindicatedanoverwhelminginterestin

cloud-basedaccounting.Thereportsurveyed1018ownersofsmalltomediumenterprises

(SMEs)and212accountantsacrossAustraliafortheirperceptionstowardscloudcomputing.

Accordingtothereport,65%oftheSMEsand60%oftheaccountantsindicatedthatthey

wouldconsideradoptingcloudcomputing.Theinterestismuchstrongeramongyounger

accountantsandbusinessowners(35yearsofageandyounger).

Moreover,thereportconcludedthatcloudaccountingmayprovetobeathreatfor

accountants’futuresurvival.Thestudyshowedthat53%ofSMEownersindicatedthatthey

wouldreplacetheiraccountantsiftheyfailtoadoptcloudcomputing.Thisisparticularly

19

disturbingnewstoaccountants,giventhat63%ofaccountants’workconsistsof

transactionalservices.Transactionalservicesincludefinancialreporting,taxreturnsand

simplefinancialanalysis,whichcanbeeasilyautomatedbycloud-basedsoftwareduetothe

highlystructuredandlowskilllevelrequirementnatureofthework.Inotherwords,

accountantsriskhavingtheir“cashcow”businessescutoutbycloudcomputingviatheloss

ofbusinessorreductioninrevenuepotentialduetoautomation.

Thisconcernisechoedbyotherprovidersofcloudaccountingsolutions,albeitlesssombre.

WorkflowMax(2013),forexample,suggeststhatcloudcomputingwouldtransform

accountants’jobsbyautomatingthe“mundane,number-crunchingtasks”,andsupporting

accountants’rolesasbusinessadvisors.Nonetheless,iftheargumentofCCH(2013)is

acceptedthatnumber-crunchingcomprisesoverhalfofaccountants’job,cloudcomputing

isexpectedtosignificantlychangetheformandwaysaccountingispracticed.

Althoughitisimprudenttodiscounttheirstatementsentirely,itshouldbenotedthatthat

theneutralityoftheviewpointsabovearequestionable.SincebothCCHandWorkflowMax

arecloudserviceprovidersintheaccountingindustry,thisgivesthemavestedinterestin

thefutureofcloud-basedaccountingsolutions.Theirviewpointsmaycontainmarketing

hype.Itisalsodifficulttoascertaintheextenttowhichtheirfindingsandcommentariesare

taintedwiththeirownvestedinterestsandbiases.

Summary

Insummary,cloudcomputingisrecognisedasanimportantinnovationthatcanpotentially

transformhowbusinessesuseITtoconducttheiroperations.Meanwhile,thereisa

considerabledisconnectionbetweenenthusiasmandaction,asITprofessionalsdonot

perceivethecloudproductstobestableandmatureenoughforadoption.Thesamecannot

besaidfortheaccountingindustry,whichappearstobeexperiencingsignificantchangesin

lightofthenewcloudcomputingtechnology.

20

ThischapterexaminestherelevanttheoriespertainingtoISadoption.Theadoptionof

informationtechnologysystemsistheprocessof“…usingcomputerhardwareandsoftware

applicationstosupportoperations,management,anddecisionmakinginthebusiness.”

(Thong,1999,p.192).AdoptionspecificallyprescribesthattheISisusedproductively,which

impliesthattheISmustbegeneratingsomeformofbenefit(Oliveira&Martins,2011;

Thong,1999).AnISadoptiontheoryprovidesaframework,basedonwhichthefactorsthat

affecttheadoptionofaninformationsystemarecategorised.

ThevastmajorityofstudiesonISadoptionutiliseoneofthefollowingmodels:Diffusionof

Innovations(DOI)theory,andTechnological,OrganisationalandEnvironment(TOE)

Framework.Thesemodelsarecombinedandrefinedbysubsequentstudies.Thissection

providesanoverviewofthesemodels.Alternativetheories,suchasTechnologyAcceptance

Model(TAM)andUnifiedTheoryofAcceptanceandUseofTechnology(UTAUT)arenot

examined,astheyrelatetoindividual-leveladoption.Hence,theyareoutsidethescopeof

thisstudy.

DiffusionofInnovationstheory

DOIatthefirmlevelproposesthatorganisationalinnovativenessisrelatedtothreefactors:

leadercharacteristics,organisationalstructureandorganisationalcharacteristics(Rogers

(1995),ascitedinOliveira&Martins,2011).Thefactorsareshowninthetablebelow.

Inthe“internalcharacteristicsoforganisationalstructure”categoryofthemodel,

centralisationreferstotheextentofwhichdecisionmakingauthoritywithinafirmrests

withtheminority.Complexityreferstotheknowledgeandexpertisethemembersinthat

businesspossess.Formalisationreferstohowrigidlyruleswithintheorganisationare

followed.Interconnectenessmeasurestheextentofsocialnetworkstheorganisationhas.

Organisationalslackreferstotheavailableresources(financialorotherwise)the

organisationcancallupon.Finally,firmsizeismeasuredbythenumberofemployees

(Oliveira&Martins,2011).

21

WhileDOIprovidesacomprehensivesetoffactorstoevaluatethetechnicalmeritsofanIS

innovation,theomissionoftheexternalenvironmentaspectisamajordrawback(Oliveira&

Martins,2011;Oliveira,Thomas,&Espadanal,2014;Yazn,Savvas,&Feng,2013).Forthis

reason,DOIismorecommonlyusedasacomplementaryperspective,ratherthanasa

standalonemodel.

Category Sub-category

Leadercharacteristics Attitudetowardschange

Internalcharacteristicsoforganisational

structure

Centralisation

Complexity

Formalisation

Interconnectedness

Organisationalslack

Size

Externalcharacteristics SystemopennessTable3-1:DiffusionofInnovation(DOI)theory

Technological,OrganisationalandEnvironmental(TOE)Framework

TheTOEmodeldescribestheprocessofinnovationbyanenterpriseintermsofthree

factors:technology,organisationandexternaltaskenvironment(TornatzkyandFleischer

(1990),ascitedinOliveira&Martins,2011).Thefactorsidentifiedarelistedasbelow:

22

Technological,OrganisationalandEnvironmentalframework

Technology Availability

Characteristics

Organisation Formalandinformallinkingstructures

Communicationprocess

Size

Slack

Externaltaskenvironment Industrycharacteristics,marketstructure

Technologysupportinfrastructure

GovernmentregulationTable3-2:Technological,OrganisationalandEnvironmental(TOE)Framework

ComparedtotheDOItheory,TOEfocusesmoreonthesurroundingenvironment,rather

thantheinnovationitselfortheorganisation.TheTOEFrameworkisnotexclusivetoany

specificinformationsystems,whichmakesitaversatileframeworksuitedtoawiderangeof

ITinnovations(Oliveira&Martins,2011).

Iacovou’sEDIadoptionmodel

Iacovou’smodelwasdevelopedbyIacovouetal.(1995),andwasoriginallyusedtostudy

thefactorsforsmallbusinessestoadoptElectronicDataInterchange(EDI)systems.EDIisa

standardthatfacilitateddirectcommunicationinterfacebetweenfirmswithinthesupply

chain.AdoptingEDIsystemseliminatedtheneedforbusinessestoprocessdocumentssuch

aspurchaseordersandinvoicesmanually,aswellasimprovementstothebusinesses’

responsetimeandoperatingefficiency("WhatisEDI?").OneoftheunusualfeaturesofEDI

isthatanEDIsystemismosteffectivewhen,andonlywhen,allofafirm’stradingpartners

areadoptingthesamesystem.ThiscreatesadditionalfactorswhenconsideringEDI

adoption.

Theauthorsproposedanalternativeversionoftheadoptionmodel,asshowninFigure1.

23

Figure1:EDIAdoptionmodel,fromIacovouetal(1995)

AsshowninFigure1,theauthorsestablishedEDIIntegrationasaseparateconcepttoEDI

Adoption.Accordingtotheauthors,EDIadoptionreferredtothebusiness’capabilityto

transactviaEDI,andintegrationreferredtotheextenttowhichEDIisembeddedwithinthe

businesspractices.ThisistorecognisethatsomefirmsoperatedEDI-capableequipmentsin

isolationtotherestofthebusiness.EDIintegrationcanbefurtherdividedintointernal

integration(interconnectionbetweenvariousbusinessapplications)andexternal

integration(linkagebetweenitselfandexternaltradingpartners).

Theperceivedbenefitsfactoremphasisedtheimportanceofcompetitiveadvantageinan

environmentwhereISaffectedmorethanonefirm.Thebenefitsmaycoverallofcost,

competitiveadvantageandperceptionaspectsofoutsourcingdecisions.Iacovouetal(1995)

foundthatbenefitsofEDIadoptionaccruedintwoforms:directbenefitsandindirect

benefits.Directbenefitsrefertocostreductionandefficiencyimprovements,whileindirect

benefitsincludeimprovedbusinessrelationshipsandcustomerservicequality.Itwasfound

that,byachievinghigherlevelofEDIintegration,thefirmderivedgreaterindirectbenefits

intermsofcompetitiveadvantage.

Organisationalreadinessreferstothefinancialandtechnologicalresourcesthatare

availabletothebusiness.Financialresourcesarenecessaryfortheinstallationcostand

24

operatingexpensesofEDIsystems.Inaddition,theefficacyofEDIsystemsdependsonthe

extentofintegrationintoexistingbusinesspractices,whichcanbecostly.Technological

resourcesrefertothelevelofsophisticationofITusagewithinthefirm,asfirmsthatare

morefamiliarwithITsystemscanadoptnewITsystemsmorequicklyandcomfortablythan

thosethatdon’t.ThisviewcanbeexpandedusingotherfactorsidentifiedinrelevantIS

adoptionliterature,suchasfirmsizeandmanagementattitude(discussedinsection4.2:

Organisational).

Animportantcontributionofthestudyistheidentificationoftradingpartnersasasourceof

pressure.BecauseEDIreliedonnetworkingbetweenfirms,theeffectivenessofEDIwas

optimisedonlywhenallofafirm’stradingpartnersadoptedthesametechnology.This

providedtheincentiveforbusinessestourgeitscustomersandsupplierstoadoptEDI,and

smallfirmswereparticularlyvulnerabletosuchpressureduetotheir(lackof)relative

powerandposition.

WhiletheIacovoumodelappearstobesimilartotheTOEframework,theformer

incorporatesconceptsandfactorsthatwerespecifictoEDI,suchasthenotionof

competitiveadvantageandpressurefromtradingpartners.

3.3.1 AnApplicationinNewZealandcontext:Mehrtensetal(2001)ThestudyconductedbyMehrtens,Cragg,andMills(2001)studiedthefactorsthat

promptedsmallfirmstoadoptinternet-relatedtechnology.Usingthesameadoptionmodel

andresearchmethodasIacovouetal.(1995),thisstudyprovidedsupportthattheIacovou

modelcanbegeneralisedintootherformsofISadoptionstudies.Thisstudyismoreclosely

alignedwiththecurrentstudy,duetothefactthatitwasconductedintheNewZealand

context,andthatthetechnologyexaminedbearssimilaritieswithcloudcomputing.

ComparedtoEDI,thefeaturesofinternetbetterresembledcloudcomputing.Thestudy

definedinternetasbusinesswebsiteandemailaccount,forwhichtheacquisitionand

ongoingmaintenancecostwasminimalcomparedtoEDI.Thisresembledthelowupfront

investmentandlowmaintenancefeaturesofcloudcomputing.Moreover,theinternetwas

lessindustry-specificcomparedtoEDI:EDIismorecommoninmanufacturingsectors

25

characterisedbylongandcomplexsupplychains.Theinternet-basedtechnologyisused

primarilyininformationsectors.

ThestudyundertakenbyMehrtensetal.(2001)alsoutilisedamultiplecasestudyresearch

design,andinheritedthethreecategoriesfromIacovou’smodel:perceivedbenefits,

organisationalreadinessandexternalpressure.Thefinalmodelofthestudyisshownin

Table3-3,withthefactorsthatwereadditionaltotheIacovou’smodelshowninbold.

Intermsofperceivedbenefits,threefactorswereobserved.Theinternethadarelative

advantageovertraditionalmethodsofcommunicationliketelephoneandfaxes,inthatthe

internetexpandedbusinesses’sourceofinformationtoaglobalscaleandallowedbetter

communication.Thewebsiteprovidedabetterchannelofadvertisingandcustomerservice.

Inaddition,adoptionoftheinternetalsosoughttoreinforcethebusiness’imageand

promotion.

Findingspertainingtoorganisationalreadinessrevealedthattheknowledgeofnon-

professionalsplayedamoresignificantrolethanprofessionals.Thisisprimarilyduetothe

businesses’lackofaccesstoexperts:commonly,adoptionofinternetischampionedby

owners,whodonotnecessarilyhaveprofessionalexpertiseintechnology.Sophisticationof

thebusiness’ITsystemwasanotherrelevantfactor.However,amajordeparturefromthe

Iacovoumodelisthatfinancialresourcesandfirmsizewerefoundtobeirrelevant.One

likelyexplanationforthefinancialresourceisthattheadoptionofinternetdidnotresultin

significantresourceexpenditure,forwhichthesamecanbesaidaboutcloudcomputing.

Whileexternalpressurewasalsoanimportantfactor,thesourceofpressurediffered

considerablyfromIacovouetal.(1995).Inthecaseofinternetadoption,themost

prominentsourceofexternalpressurewasfromcustomers,asopposedtotradingpartners.

Thisisduetothefactthatbusinessesthathadawebsiteandemailaccountwereperceived

tobemorecrediblecomparedtothosethatdidn’t.Asaresult,businesseswerefacedwith

theexpectationfromtheircustomers,whichmotivatedthemtoadopttheinternet.

26

Mehrtensetal

Perceivedbenefits Relativeadvantageintermsofefficiencyandcost.

Sourceofinformation.

Businesstool(firmimageandpromotion).

Organisationalreadiness Internetknowledgeamongnon-professionals.

Adequatecomputersystems.

ExternalPressure Pressurefromcustomers.

Pressurefromothergroups(suppliers,prospective

employees)

Table3-3:modelusedinMehrtensetal.(2001)BoldindicatesadditionsfromIacovouetal(1995)model

27

Thischapterreviewstheempiricalstudiesofcloudcomputingtoexaminetheirmethods

usedandtheirkeyfindings.AsummarytableofstudiesreviewedisshowninTable4-1.Due

tothedifferencesingeographicallocations,time,samplecharacteristicsandthescopeof

cloudcomputingofthestudies,careshouldbetakenwhencomparingthefindingsdirectly.

Nonetheless,thesestudiesprovidedempiricalevidencetowardsthefactorsthat

encouragedcloudcomputingadoption.

Authors Modelused SampleandMethod Prominentfindings

(Benlian&Hess,

2011)

Opportunityand

riskframework

(Theoryof

Reasoned

Action)

349responsesoutof

2,000German

companies.Survey

method.

Costadvantage,strategic

flexibilityandquality

improvementsarethe

mostsalientperceived

opportunity;whilesecurity

risksisthemostsalientrisk

belief.

(Benlian,Hess,&

Buxmann,2009)

374responsesfrom

297German

companies(from

randomsampleof

5,000).Survey

method.

SaaSwithlowspecificity,

strategicsignificanceand

uncertaintyaremostlikely

tobeadopted.Officeand

collaborationmost

adopted;ERPleast

adopted.

(Guptaetal.,

2013)

n/a(benefits

andriskfactors

only)

211smallandmicro

firmsinAPACregion.

Surveymethod.

Easeofuseand

conveniencemost

important;costnotmost

importantfactor;security

andprivacyofcloud

deemedacceptable.

28

(Low,Chen,&Wu,

2011)

TOE 111high-techfirms

fromTaiwan(outof

top500firms).Survey

method.

Environmentalfactor

significant;relative

advantagesignificantly

negative.

(Oliveiraetal.,

2014)

TOE+DOI 369firmsinPortugal

inmanufacturingand

servicesectors.

Surveymethod.

CombinedDOIandTOE

models;technology

readiness;environmental

notsignificant.

(Yaznetal.,2013) TOE 15SMEsinnortheast

England.Multiple

casestudymethod.

Geo-restrictionwas

importantfactor;top

managementcrucialto

adoptionsuccess.Table4-1:cloudadoptionstudies

BenefitsandDrawbacksofCloudComputing

Priorcloudcomputingadoptionstudieshavefoundthatthemostimportantfactorsthat

promptedbusinessestoadoptcloudcomputingarecostreduction,scalability,andeaseof

use.Ontheotherhand,themostprominentimpedimentstoadoptingcloudcomputingare

concernsregardingthesecurityandprivacyofcloudcomputing.

Costreductionisoftenviewedasthekeyfactorthatledtotheadoptionofcloudcomputing,

ifnotthedominantone.Sobragietal.(2014)foundcostsavingstobeadecisivefactorfor

firmstoadoptcloudcomputing,andMorganandConboy(2013)foundthatcostsavings

werestrongmotivatorstowardsadoptingthecloud.Smallbusinessstudies,suchasOliveira

etal.(2014)andCarcary,Doherty,Conway,andMcLaughlin(2014),alsofoundthatcost

reductionwasthemostcommonbenefitexperiencedbysmallbusinesses.

However,theimportanceofthecostbenefitwasnotsupportedbyallstudies.IntheAsia-

Pacificcontext,Guptaetal.(2013)foundthatcostwasthethirdmostimportantfactor,with

easeofuse,andprivacyandsecurityperceivedtobemoreimportantthancost.Likewise,

whileYaznetal.(2013)recognisedthatthelowcapitalexpenditureencouragedsmaller

firmstoadoptthecloud,particularlystart-upmicrobusinesses,thediscussionofthecost

29

aspectofcloudcomputingisverylimited.Apossibleexplanationforthisdifferencecouldbe

duetodifferentbusinessenvironments.Yaznetal.(2013)studiedfirmsininformation-

basedserviceindustries,suchasIT,businessservicesandeducation.TheAsia-Pacific

contextofGupta’s(2013)studyisalsolikelytogiverisetocontextualdifferencesinthe

operatingenvironment.

Scalabilityreferstotheabilitytoadjustcapacityaccordinglytoseasonaltrendsandbusiness

growth.Forsomefirms,itwasadecisivefactortoadoptcloudcomputing(Sobragietal.,

2014).Theabilitytochangetheamountofcomputingresourcesprovidedallowsfirmsto

controltheiroperationsandITinfrastructuremoreeffectively,andsignificantlyreducethe

developmenttimetoreleasenewproducts(Morgan&Conboy,2013;Yaznetal.,2013).

However,thebenefitofscalabilityappearstobedependentontheindustryandnatureof

thebusiness.Somebusinesses,suchasinformationbasedserviceindustries,didnot

perceivescalabilitytobeabenefit(Yaznetal.,2013).

Easeofusewasanotherimportantfactorthatcanpotentiallyassistorhindercloud

adoption.Itisbecominganexpectationthatcloudservicesareeasiertousethantheir

desktoppredecessors(Yaznetal.,2013).Guptaetal.(2013)foundthateaseofusewas

evenmoreimportantthancostreduction,althoughthedefinitionofeaseofuseinthat

studyincludedtheexperienceonmobiledevices.Softwareapplicationsthataremore

straightforwardandintuitivecaneasetheprocessoftransitioningemployeesontothenew,

cloud-basedservices(Morgan&Conboy,2013).

Concernsofcloudcomputingprimarilystemmedfromuncertaintyoverthesecurityofthe

data.Aconsiderableportionofsecurityofthecloudsystemrelatestothebusiness’lossof

ownershipoveritsdata,andtheassociatedprivacyconcerns.Thecloudcomputingmodel

inducesuncertaintyandconcernsfromusersduetothefactthattheusersmaynotbefully

awareofthesecurityimplicationsofcloud-basedsystems(Benlian&Hess,2011).Yaznetal.

(2013)foundthatthebusiness’trusttowardsthecloudprovideriscrucialinalleviatingthe

securityconcerns.Thistrustcanbebuiltbythesigningofconfidentialityagreements

betweentheclientandthecloudserviceprovider,aswellasgeo-restrictionconditionsthat

stipulatewheretheserversanddataarephysicallystored(Sobragietal.,2014;Yaznetal.,

2013).Some,however,perceivecloudtobesecureenough,andsmallerfirmswere

30

generallymorewillingtotradesecurityforconvenience(Guptaetal.,2013;Oliveiraetal.,

2014;Sultan,2011).

Organisational

InadditiontothemeritsofISitself,thecharacteristicsoftheadoptingfirmitselfarealso

highlyrelevanttothedecisiontoadoptnewinformationsystem.Basedonpriorliterature,

theprominentorganisationalfactorsincludetheowner’scharacteristicsandfirmsize.

Owners’characteristicshadbeenidentifiedbyThong(1999),whonotedthatsmallerfirms

tendtohaveamorecentraliseddecisionmakingstructure.Asaresult,theowners’attitude

andmanagementstyleexertsgreaterinfluenceonthefirm’sdecisions.Priorliteraturehad

consistentlyidentifiedtheowner’sITknowledgeasaprominentfactor.CraggandKing

(1993)foundthatsmallbusinessownersandmanagersthatweremoreenthusiastic

towardsITtechnologyweremorelikelytoadoptnewISfortheirbusinesses,while

businesseswhoseownershadlimitedITexpertiseandtimewerelesssupportivetowards

adoptingnewIS.Owner-managersgenerallyplaythecrucialroleofprovidingsupporttothe

adoptionofnewtechnologythroughactivechampioning(Mehrtensetal.,2001)and

allocatingthenecessaryresources(Yaznetal.,2013).

FirmsizehadbeenidentifiedbyaverylargenumberofISadoptionstudiesasarelevant

factor(forasummary,seeOliveiraandMartins(2011)orYaznetal.(2013)).Yet,empirical

observationshadnotbeenconsistent.Conventionally,largerfirmswerebelievedtobe

morelikelytoadoptnewIS,duetothefactthatlargerfirmshaveaccesstomoreresources

andexpertise,whichimprovesthequalityofsaidadoption(Thong,1999).Furthermore,the

resourcefulnessoflargerfirmsmakethemrelativelybetterequippedtohandlefailuresinIS

adoption(Sadowski,Maitland,&vanDongen,2002).Thisappearstobesupportedby

Oliveiraetal.(2014);andLowetal.(2011).However,Mehrtensetal.(2001)foundno

apparentrelationshipbetweeninternetadoptionandfirmsize,whileYaznetal.(2013)

foundthatsmallbusinesseswere,infact,morelikelytoadoptcloudcomputing.These

observationsarelikelytobeduetothefactthatsmallerbusinesseshavemoreflexible

organisationalstructuresthatallowthemtoadoptISmoreeasilyandrapidly(Sadowskiet

31

al.,2002),andthatbothinternet-basedservices(cloudcomputingincluded)lowerthe

barrierstoconductingbusiness.

ExternalEnvironment

Despitethedifferencesinthecharacteristicsthatexistbetweeninformationsystems,

competitivepressureandcustomerpressurewereconsistentlyidentifiedastheprimary

sourcesofexternalpressure.Inthemeantime,serviceprovidersandconsultantscanplayan

importantroleinsupportingbusinessestoadoptcloudcomputingproducts.

CompetitivepressurecanbeapowerfulsourceofmotivationforadoptingIS,butempirical

studiesthusfarreportinconsistentfindings.CraggandKing(1993)foundthatsmallfirms

considerITasacompetitivenecessitytomaintaintheirowncompetitiveposition.Mehrtens

etal.(2001)concursthatbusinessesmaybeexpectedtoadoptcertaininformationsystems

(suchastheinternet),sothattheyappearcompetentandup-to-date(Johnston&Vitale,

1988).Lowetal.(2011)foundcompetitivepressuretobeasignificantvariableincloud

computingadoption.Ontheotherhand,severalstudieshavefoundnorelationship

betweencompetitivepressureandadoptionbehaviour(Oliveiraetal.,2014;Thong,1999;

Yaznetal.,2013).

Alternatively,customersareanothermajorsourceofpressure.Thedemandsfromthe

customerscanbeapowerfulmotivatorforfirmstoadoptnewIS,andbusinessesareless

likelytoadoptnewinformationsystemswhennosuchneedsexist(Lin&Chen,2012).On

theotherhand,somecustomersmaybereluctanttousenewtechnology,whichmayhinder

theadoption.Inthecaseofcloudcomputing,therisksassociatedwithrelinquishingcontrol

canpotentiallycauseclientstodiscouragethefirmfromadoptingcloud-basedsoftware

(CCH,2013).

Finally,externalexpertsmayplayanimportantroleinsupportingfirms’decisiontoadopt

cloud-basedsystems.FrequentcontactwithexpertscanhelpthefirmtoutiliseitsIT

systemsmoreeffectively(Cragg&King,1993).Similarly,intermsofencouragingbusinesses

toadoptcloudsystems,cloudvendorsplayaveryimportantrolethroughpromotingtheir

productsandprovidingclarificationregardingthenatureoftheirservices.Yaznetal.(2013)

32

foundthatthelackofsuppliersupporthavemadeitmoredifficultforfirmstoevaluatethe

relativebenefitsofcloud-basedpackages,whichsubsequentlyhinderedtheirwillingnessto

adoptthecloud.

33

Basedonthereviewoftheliteratureoncloudcomputingandrelevantempiricalstudies,

thischapteridentifiesthegapswithinthebodyofliteraturereviewed,andposesthe

researchquestionsthatthisstudyseekstoanswer.Thissectionalsodefinestheparameters

andscopeofthisstudy,andspecifiesthemodelthatisusedtoguideresearchdirection.

ResearchGaps

Firstandforemost,researchintothebusinessperspectiveofcloudcomputingislimited.The

businessperspectiveisconcernedwiththewayscloudcomputingcanprovidevalueto

customers(Marstonetal.,2011).Untilrecently,fewstudieshadinvestigatedthefactors

thatmotivatedordiscouragedbusinessestoadoptcloudcomputing(Hobergetal.,2012).

Basedonthereviewofempiricalstudiesoncloudcomputingadoption,theexistingpoolof

literaturedoesnotprovideaconsistentbodyofevidence,fromwhichinferencescanbe

drawnreliably.Asthestudiesuseavarietyoftheoriesandperspectives,thestudiesretains

ahighlevelofautonomytopickspecificbenefits,limitationsandrisksofcloudcomputing.

ThisfeatureiscriticisedintheTOEframework(Yaznetal.,2013).Moreimportantly,the

studiestendtoquotethedefinitionofcloudcomputingdirectlyfromMellandGrance

(2011),whichishighlyabstractandisveryambiguousinscope.

Thelackofstudiesintheaccountingindustryisalsoamajorgap.Cloudcomputingin

accountingindustryisexperiencingmuchmorerapidgrowththanotherindustries.Yet,little

isknownaboutthereasonsorthefactorsthatfuelledthisgrowth,astherewerenostudies

oncloudphenomenoninaccountingfirms.Also,duetothedifferencesinbusiness

environmentbetweendifferentindustries,itisverylikelythattheaccountingindustry

differsconsiderablyfromtheotherindustries.

34

Gaps Implication

Lackofdemand-sidecloudcomputing

adoptionstudies.

Thereareinevitablyfewerstudiesofcloud

computingadoption,whichmeansthatthe

empiricalsupportforthepreviousfindingsis

weak.

Ambiguousscopeofcloudcomputing Cloudcomputingisanabstractconcept.

Withoutcarefullydefiningwhatcloud

computingdoesandhowitsupportsthe

business’process,theambiguityofcloud

computingbecomessolargethattheresults

havelittlecomparability.

Lackofstudiesthatarespecifictothe

accountingindustry,despitethepopularity.

Thebusinessenvironmentineachindustryis

unique,whichmeansthatfindingscannotbe

generalisedtootherindustriesreliably.

Asaresult,understandingofwhycloud

computingissopopularintheaccounting

industry(andnotothers)isnon-existent,

duetothelackofliterature.

Table5-1:Summaryofgapsidentified

ResearchTopicandQuestion

Thisstudyseekstoprovidesomeempiricalevidencetowardstheresearchgapsdiscussed

above.Thisisanexploratorystudythatinvestigatesthefactorsthatmotivatedsmall

accountingfirmstoadoptcloud-basedtechnology,andtheimplicationsfortheaccounting

sectorasaresultofthepopularisationofcloudcomputing.

Specifically,thisstudyaddressesthefollowingquestions:

1. Whataretherolesthatcloudcomputingplayintheprofessionalaccountingservices

industry,andhowdotherolesdifferfromeachother?

35

2. Whydoaccountingfirmschoosetoadoptcloud-basedsoftwaresolutionsfortheir

business,andfortheirclients?Whatarethefactorsthatmotivatedordiscouraged

theadoptionofcloudcomputing?

3. Whataretheaccountants’perceptionstowardsthecloudcomputingparadigm?

Whatarethelikelyimplicationsofcloudcomputingfortheaccountingindustry?

ScopeofResearch

5.3.1 SmallBusinessesThisstudyfocusesprimarilyonsmalleraccountingservicefirms,forthefollowingreasons:(i)

priorliteraturehadexplicitlyrecognisedthedifferentISadoptionbehaviourbetweensmall

firmsandlargefirms,(ii)largeraccountingfirmsareofteninfluencedbytheirparent

organisations,and(iii)cloudcomputingisexpectedtobemuchmorebeneficialtosmall

businessesthantheirlargercounterparts.

Thedistinctionof“small”businessesissignificantintheISadoptionliterature,asthe

adoptionmodelsforlargerfirmsarenottransferabletosmallbusinesses(Kuan&Chau,

2001;Sadowskietal.,2002;Thong,1999).Smallbusinessesfacedrasticallydifferent

circumstancesandchallengesfromtheirlargercounterparts.Generallyspeaking,small

businessesarecharacterisedbytheirinherentlymoreflexiblemanagementstructure

(Sadowskietal.,2002)andhighlycentraliseddecisionmakingauthority(Thong,1999).

ThesefeaturesallowthemtoadoptnewITinnovationsmorerapidlythantheirlarger

counterparts.Ontheotherhand,smallerbusinessesfacefiercercompetition,andtheir

accesstofinancialandhumanresourcesaremorelimited(Kuan&Chau,2001;Thong,1999).

ThismakesitmoreriskyforsmallbusinessestoadoptISinnovations,astheirlackof

resourcesmaypreventthemfromderivingthefullbenefitofnewtechnology(Iacovouetal.,

1995),aswellasplacingtheminamorevulnerablepositioniftheadoptionofthenew

systemfails(Sadowskietal.,2002).

BecausealmostallISadoptionstudiesareconductedoverseas,theterm“small”shouldbe

interpretedinlightofothercountries’standardsforsmallbusinesses.NewZealand

businessesthatemployfewerthan50peoplecomprise99%oftotalbusinesses,and

36

accountfor44%ofoverallemployment(MinistryofEconomicDevelopment,2011).

Moreover,at19employeesorfewer,NewZealand’sdefinitionofsmalltomedium

enterprises(SMEs)ismuchlowercomparedtootherjurisdictions.Forexample,European

Union(EU)definessmallbusinessesas50employeesorfewerandSMEsas250employees

orfewer(CentreforStrategy&EvaluationServices,2012),whileSingapore’sdefinitionof

SMEis200employeesorfewer(SpringSingapore,2014).

Country Employee Financial Source

NewZealand 20orfewer None (MinistryofEconomic

Development,2011)

European

Union

250orfewer EUR50millionorless

turnover,OR

EUR43morlessbalance

sheettotal

(CentreforStrategy&

EvaluationServices,

2012)

Australia Nostandarddefinition (D&BSmallBusiness,

n.d.)

Singapore 200orfewer S$100morlessannualsales (SpringSingapore,2014)

Table5-2:Comparisonofthedefinitionofsmallbusinesswithothercountries

Moreover,smallerbusinessesaremorelikelytoadoptcloudcomputingthantheirlarger

counterparts.LargefirmsgenerallyhavemoreorganisationalobstaclestoadoptingnewIS,

suchas:greaterretrenchmentandresistancetochangebystaff(Benlian&Hess,2011;

Marstonetal.,2011),existingITinvestmentsintheformofsunkcosts(PwC,2011)and

greaterconcernstowardsthesecurityandprivacyoftheirdata(Sobragietal.,2014).Since

theseobstaclesareorganisational-level,theyarelessrelevanttothetechnologybeing

adopted.

37

5.3.2 CloudAdoptionTheterm“cloudcomputing”encompassesconsiderableambiguity,ascloudcomputingcan

refertoalargenumberofapplicationsandforms.Forthepurposeofthisresearch,“cloud

computing”foraccountingfirmsiscategorisedintotworoles:cloudcomputingofferedas

clientservice;andcloudcomputingforpracticemanagement.

Thedistinctionofthetworolesisbasedontheinternallyandexternallyfocused

applicationsproposedbyClemons(1986).Externallyfocusedapplicationsaddvalueby

bringingrealbenefitstothefirm’scustomers,aswellasthefirmitself.Internallyfocused

applicationsareusuallyinvisibletothefirm’scustomers,andaddvaluebyproviding

benefitstothefirmonly.Thisdistinctionisimportantforanalysinghowinformationsystems

contributetoafirm’scompetitiveadvantage,asthepurpose,featuresandbenefitsofan

externallyfocusedapplicationdifferconsiderablyfromthatofaninternallyfocusedsystem.

Theclientserviceroleofcloudcomputingemphasisestheaccountants’capacityasbusiness

advisorsfortheirclients.Businessadvisoryrequiresextensiveinformationsharingbetween

theaccountantandtheclient,andaccountantsmaybedirectlyinvolvedinmanagingtheir

clients’accountinginformationsystem(CCH,2013;WorkflowMax,2013).Inthisrole,cloud

computingreferstothecloud-basedsoftwarepackagesthatsupporttheclient’saccounting

system,whichmaybemanagedbytheaccountingfirm.Thecloud-basedaccounting

softwareapplicationsareintendedtocreatevaluefortheclient,andtheaccountingfirm

doesnotderiveanybenefitfromadoptingthesystemotherthanfeesfromitsclients.Xero

isthemostfrequentlyusedcloud-basedaccountingsoftware.

Thepracticemanagementrolefocusesontheuseofcloudcomputingbytheaccountant

firmtomanageitsowninternalprocess.Thepracticemanagementsystemisinternally

focused,whichmeansitdoesnotinteractdirectlywiththeclients,andthattheaccounting

firmadoptsthepracticemanagementsystemasthefinaluser.

Thisdistinctionbetweenclientserviceandpracticemanagementisparticularlyimportant,

becausealthoughbothcanbecalled“cloudcomputing”,thedifferencesintheirintended

purposemeanthatthefactorsthatmotivatetheiradoptionarelikelytobeverydifferent.

Thisdistinctionisalsoacontributiontotheliterature,asexistingcloudcomputingadoption

studiesdonotappeartoexplicitlydifferentiatebetweenthetworoles.

38

ModelDevelopment

TheresearchmodelisdepictedinFigure2.Thedepictionprovidesavisualillustrationthat

differentiatesthetwoaspectsofadoptiondiscussedinthissection,andthetheoriesthat

areprimarilyusedtostudytheadoptionbehaviour.

CloudComputingAdoption

PerceivedBenefits

DirectBenefits

IndirectBenefits

OrganisationalReadiness

FirmSize

Non-professionalITKnowledge

EnvironmentalInfluence

Clientservice

PracticeManagement

CustomersCompetitors

CloudSystemVendors

Effectson:

Effectson:

Figure2:Researchmodel

ThisresearchmodelisbasedonIacovouetal.(1995)andMehrtensetal.(2001),which

featuredthesamethreebasecategories:perceivedbenefits,organisationalreadinessand

externalpressure.Inthisstudy,theexternalpressurefactorwasrenamedtoenvironmental

influence,torecognisethatnotallexternalinfluencesarenecessarilybad.Also,thisstudy

substitutedEDIIntegrationforeffectsonclientserviceandpracticemanagement.Thisisto

39

recognisethatcloudcomputingcomprisestworoles.Thetworolescorrespondtothe

discussionof“cloudadoption”inSection5.3.2.

Eachofthethreebasecategoriesissplitintotwosubcategories.ForPerceivedBenefit,

directbenefitsrefertotangible,explicitandeasilyquantifiablebenefitsasaresultof

adoptingcloudcomputing,suchasreducedcostandimprovedefficiency.Indirectbenefits

refertothemoresubtleyetprofoundeffectsthataredifficulttoquantify,suchasmarket

competitivenessandfirmimage.

InOrganisationalReadiness,thetwoobservedfactorsarefirmsizeandnon-professionalIT

knowledge.Theformerisincludedbecauseoftheinconclusivefindingsregardingthe

relationshipbetweenfirmsizeandITadoption.ThelatterisderivedfromMehrtensetal.

(2001),whofoundthat,withinthecontextofinternet-basedtechnology,non-IT

professionals(particularlytheowners)playedasignificantroleinitsadoption,whiletherole

ofITprofessionalswasnegligible.Duetothenatureofreducedmaintenance,thestaff’sand

partners’expertiseincomputersandtechnologyisevenmorecrucialinacceptingthecloud

concept.

Lastly,externalinfluencecoversboththepressuresfromexternalstakeholdersandthe

supportfromthem.Pressurefromcustomersandcompetitorsareinterrelated,astheyarise

fromthesamefear.Customerswouldleavetheaccountingfirminfavourofitscompetitors

iftheirneedsarenotmet(customerpressure),orifthecompetitoradoptsproductsthat

betterfitsthecustomers’needsandwants(competitivepressure).Alternatively,cloud

systemvendorsmayalsohaveconsiderableinfluenceonthefirm.Itshouldbenoted,

however,thattheinfluenceisnotnecessarilynegative.Cloudservicevendorsmayoffer

incentiveprogrammesandestablishcollaborativerelationshipswiththeaccountants.

40

Thischapterdetailsthemethodsthatareusedtocarryouttheresearch,andprovides

justificationsforthechosenmethods.AccordingtoMcKerchar(2010),atypicalresearch

designconsistsofthreeconsistentandcoherentcomponents:researchframework,

methodologyandmethods.Thethreecomponentsarediscussedinthesectionsbelow.

ResearchFramework

Researchframeworkisthefundamental,intuitionalbeliefsofrealitytheresearcherholds

towardsthephenomenon(McKerchar,2010).Thisstudyadoptsaresearchframeworkof

postpositivism,whichimpliestheontologicalpositionofcriticalrealism.Criticalrealismis

thebeliefthat,whileanexternalrealityexistsindependentlytothesubjectiveassessment

oftheobservers(researchers),theunderstandingofthatrealityisinfluencedbythe

observer’ssensoryexperienceandothermediums(Bisman,2010).Subsequently,the

purposeofpostpositivistresearchistoidentify“structuresthatgiverisetoactionsand

eventsthatcanbeexperiencedintheempiricaldomain”(Wollin,1996,ascitedinBisman,

2010).

Asthestudyisintendedtobeexploratoryinnature,thepostpositivismframeworkis

particularlysuitable.Thepurposeofthisstudycanbeviewedasdiscoveringanexternal

phenomenonthatisalreadyineffect(i.e.theadoptionofcloudcomputingbyaccounting

firms).Postpositivismisbettersuitedtothisstudycomparedtopositivismand

interpretivism,becausepositivism’snaïverealismontologicalperspectivecannot

accommodateformultipleorinconsistentfindings(hence,unnecessarilyrestrictingthe

findingsofthisstudyandlossofvaluableinformation).Interpretivism,ontheotherhand,is

toocontext-specific,whichwouldconstraintheexploratoryvalueofthisstudy.

Methodology

Methodologyistheintermediarybetweenphilosophicalbeliefsandspecificmethods

employed,anddeterminesthegeneraldirectionhowtheresearchisconducted(McKerchar,

2010).Whilemethodologyconventionallyreferstoquantitativeandqualitativeapproaches,

41

manyresearchers,includingBrymanandBell(2011),questionedtheextentofopposition

betweenthetwoapproaches,asthereisnodeterministicrelationshipbetween

quantitative/qualitativeapproachesandphilosophicalbeliefs.Furthermore,as

postpositivismisamiddle-groundbetweenpositivismandinterpretivism(Bisman,2010),

thesimpledistinctionbetweenquantitativeandqualitativeisnolongeruseful.Thisstudy

adoptsaprimarilyinductivemethodology,throughtheuseofqualitativemethods.

Inductiveapproachistheprocessofbuildingtheoriesfromempiricalobservations

(McKerchar,2010).Incontrasttodeduction,inductiveapproachfocusesongenerating

meaningfultheoriesandexplanationsthatarecontext-andpopulation-specific,ratherthan

universally-applicablerulesorlaws.Thisfeatureisconsistentwiththepurposeofthisstudy,

whichseekstogaindetailedinformation(i.e.howandwhyquestions)andcreatenew

theories,ratherthantestingexistingtheories.Deductiveapproach,ontheotherhand,

wouldbelesseffectiveinthisparticularstudy,becauseexistingempiricalstudiesisvery

limited,andadeductiveapproachwouldresultinverylittlegainsinnewinsights.

Thisstudyiscarriedoutusingthemultiplecasestudydesign,andsemi-structured

interviewsareusedastheprimarymethodofdatacollection.Thismethodologyisselected

duetoitseffectivenessinaddressingtheresearchquestionsandgapsinliterature.

6.2.1 MultipleCaseStudyCasestudyistypicallyusedto“…[understand]thedynamicspresentwithinasinglesetting”

(Eisenhardt,1989,p.534).Thefocusofcasestudyistomakeobservations,wherethe

researcherdoesnotseektoinfluencethebehaviourofsubjects(Yin,2009).Becausecase

studiesarelessreliantonpriorempiricalstudiescomparedtomethodssuchassurveysand

experiments,casestudiesareespeciallysuitablefordevelopingtheoriesonemerging

phenomenonthathavelimited,weakorinconsistenttheoreticalframework(Eisenhardt,

1989).Asdiscussedpreviously,empiricalstudiesoncloudcomputingadoptionarelimited

andtoodispersetoformasolidtheoreticalframework.Thefactthatcasestudydoesnot

dependonexistingempiricalevidenceandtheabilitytogeneratetheoriesmakescasestudy

particularlyappropriateforthisstudy.

42

Multiple-casestudymethodretainstheabilitytocollectandanalysedatathatisrichand

detailed,andprovidesgreaterexternalvalidityoversingle-casestudies.Thedifferentcases

inamultiplecasestudyprovidemultipleperspectivesthatcanbeusedeithertoreinforce

thetheorythroughreplicationlogic,orexaminecaseswithopposingcharacteristicsasrival

theories(Yin,2009).Multiple-casestudyalsoreducestheextenttowhichthecaseisoverly

narroworidiosyncraticduetospecificfactorsassociatedwithcertaincases(Eisenhardt,

1989).Giventhatpriorresearchontheareaofcloudcomputingforaccountingindustryis

virtuallynon-existent,themulti-perspectiveprovidedbythecasesisacrucialcontribution.

Theunitofanalysisforthisstudyisorganisationlevel,asitallowstheresearchtobe

focusedontheaccountingfirms.Acaseconsistsofasinglecharteredaccountingfirm.

Whenanaccountingfirmhasmultiplebranches,acaseconsistsofasinglebranchofthe

firm.However,careistakenthatonlyonebranchofanationalnetworkoffirmisselected.

Forthisresearch,studyingasingleindustryofaccountancycontributestotheinternal

validity,astheindustryprovidesacontrolthateliminatesthedifferencesduetoindustry

characteristics.Furthermore,becauseaccountingfirmsarehighlyhomogeneous,thefirms’

owncircumstancesarelesslikelytovarysignificantly,andthereisareducedlikelihoodof

“noise”thatmaybepresentinthefindings.

6.2.2 DataCollectionThesubjectfirmswereselectedonthebasisofreplicationapproach.Underthisapproach,

datacollectionanddatagatheringissimultaneous.Datafromeachfirmiscollected

individuallyandanalysed,thefindingsofwhichdetermineswhetherfurthercasesare

necessary,andthecharacteristicsthatareusefulinreinforcingorcontrastingwithexisting

evidence(Yin,2009).Sixcaseswereinvestigated,whichprovidedasuitablebalance

betweenprovidingarobustempiricalgrounding,andthecomplexityandresource

constraints(Eisenhardt,1989).

Thecaseswerechosenprimarilyfromthelistofaccountingfirmsthatarepartnerswith

XeroandMYOB.XeroandMYOBarecloudserviceprovidersthatestablishrelationships

withaccountingfirmstoprovidesupporttotheirproduct.Bothfirmspublishthelistoftheir

43

accountingfirmpartnersontheirrespectivewebsites.Existingcontactsarealsoutilised

whenevertheyareavailable.

6.2.3 Semi-StructuredInterviewsThedecisionmakersandtheITchampionswithineachaccountingfirmareidentified,anda

semi-structuredinterviewisundertakenwithuptotwoofthem.Interviewingtwopeople

ensuresthatinformationisgatheredfromboththeinternalpracticemanagement

perspectiveandtheexternalclientserviceperspectives.Itisexpectedthateachinterview

takesbetween30and45minutes.

Semi-structuredinterviewresultsinricherandmoredetailedinformationtobegathered

(Bryman&Bell,2011).Asemi-structuredinterviewconsistsofabasicplanoftopicsand

questionsthatguidestheinterviewingprocess,buttheprocessallowsforflexibilityasthe

interviewercandeviatefromprescribedtopicsinordertoseekgreaterdetail,perspectiveor

uncovernewinformation.Theflexibilityofsemi-structuredinterviewsisparticularlyuseful

forseekingexplanationanddetailsineachcase,withoutbeingtoorestrictive.

44

Thischapterprovidestheresultsforthesixcasefirms,andthefactorsthatweresignificant

inadoptingcloudtechnologiesareanalysed.Table7-1providestheprofilesofthe

interviewees.

Inadditiontotheaccountingfirms,amanagerfromacloud-basedsoftwareproviderisalso

interviewed.Acloudserviceproviderprovidesacomplementaryperspective,ashewould

beinabetterpositiontocommentontheindustryasawhole.

Firm Interviewees

A Partnerofthefirm,whoisresponsibleforofferingsoftwareproductsforclients

anddecidingtheinformationsystemstousewithinthebusiness.

B Businesssystemsspecialistwithinthefirm,whoisresponsiblefor

recommendinginformationsystemstothefirm’sclientsandthefinaldecision

makerswithinhisownfirm.

C Directorsofthefirm,whoareresponsiblefordecidinghowthefirm’s

informationsystemismanaged,andwhatproductsandservicestoofferto

theirclients.

D Directorofthefirm,whomakesthedecisiononhowthefirm’sinformation

systemismanaged,andwhatproductsandservicestooffertoclients.

E Seniormanagerofthebusinessadvisorydepartment,whoactivelychampioned

theuseofcloudcomputinginbusinessadvisoryservices.

F Directorofthefirm,whomakesthedecisiononhowthefirm’sinformation

systemismanaged,andwhatproductsandservicestooffertoclients.

n/a

(Provider

Omicron)

Accountsmanagerofamajorcloudsystemvendor,whocommunicateswith

accountingfirmsandpromotecloud-basedsolutionstothem.

Table7-1:SummaryofInterviewees

45

FirmA

FirmAisasmallaccountingfirmlocatedinChristchurch.Itsprimarybusinesslinesconsistof

transactionalaccountingservices(suchasbankreconciliations,receivables,payablesand

payroll)andinformationsystemconsulting(implementingappropriateITinfrastructurefor

clients’businessneeds).Businessadvisoryislimitedtooperationalissues,suchasbudgeting

varianceanalysisandcashflowplanning.Auditorassuranceservicesarenotoffered.Its

clientsarepredominantlyagriculturalandconstructionbusinessesaroundtheCanterbury

region.Thebusinessemploysapproximately10employeesintotal.

Thefirmhastwopartners,eachmanagingoneofthetwobusinesslines(bookkeepingand

ITconsulting).Theaccountingfunctionismanagedbyasinglepartner,whooverseesthe

strategicandbusinessprocesses,includingdeterminingwhatsoftwareandinformation

systemsareusedtoaddressclients’specificneedsandmanagethefirm’sownoperations.

TheITbusinesslineprovidesawiderrangeofIT-relatedconsultingandimplementationfor

clients,suchas:serversetup,emailandsystemsdevelopmentusingoff-the-shelfsoftware.

Theinterviewwasundertakenwiththeaccountingpartner,whoisbothachartered

accountantandhadexperienceworkingwithITprojects.

46

Enablers/Inhibitors Client PracticeManagement

Adoption Yes(Xero,WorkflowMax)

Since2008

Yes(cloud-basedSaaS)

Benefits Flexibilityw/services

Easytouse(forclients)

Communicationw/external

parties

Short-termcommitment

Flexibilityinsupportingbusiness

process

Limitations/risks LackofFeature None

Organisational Owner’sITexpertise

AccesstoITexpertise

Outsourcingofbookkeeping

Owner’sITexpertise

AccesstoITexpertise

PriorISarrangement

Firmsize

Firmsize <10employees

Environment Clientpressure

Softwareecosystem

Vendorsupport

Ecosystem(linkagew/clients’

products)

Table7-2:cloudadoptionforFirmA

7.1.1 CloudComputingforClientServiceFirmAoffersXeroandWorkflowMaxtoitsclientsforaccountingsolutionsandworkflow

management,respectively.ClientsaregivenaccesstotheirownXeroandWorkflowMax

accounts,andtheycaninputday-to-daytransactionsintothesystems.Examplesinclude:

inputtingtimesheets,recordingsalesandpurchaseinvoices,andperformbank

reconciliations.FirmA,however,retainsfullcontrolovertheclients’accounts.

ForFirmA,anoverwhelmingmotivationtooffercloud-basedaccountingsoftwaretoits

clientsistheperceivedbusinessopportunity.Cloud-basedpackagesprovideopportunities

foraccountantstoprovidegreatervaluetotheirclients:

47

“Traditionally,accountantshavebeenfocusinginwardly,andassuchhavebeen

promotingtheuseofsoftwarethathelpsthemattheirendbutnottakinginto

accounttheneedsonadaytodaybasisoftheclient.Manyofthenewproductsto

markethavebeendevelopedwiththeclientinmindsoifyoucanhelpimplement

thesetypesofsolutionstheclientisgettingfargreatervalueanditdemonstratesthe

valueyouareabletobring–ultimatelybringingclientscloser.”

Cloud-basedsoftwarehasallowedthefirmtobecomemoreflexible.Flexibilityis

interpretedastheabilityforthecloud-basedsoftwaretomatchtoclients’needs:

“Thebusinessoutsourcessomeofourdata-entryworktoexternalparties,sowewere

lookingforproductsthathadthebestfunctionalityandprovidedthemaximum

efficiency/productivitygains…Xerosuitedourbusinessmodelwell[asanaccount

managerandbookkeeper]…[Also,]therangeofadd-onsmakesitveryvaluablefor

[our]clientsacrosstheirentirebusiness”

ForFirmA’sclients,theeaseofuseandintuitivenesswasanimportantconsideration,and

onemajorfactorthatledtothechoiceofXero.AnexampleofXero’seaseofuseisthebank

reconciliationprocess,aprocessthatisessentialtomanagingthecashflowofabusiness,

yetacomplexconceptinaccounting:

“WithXero,all[theclients]needtodoisclick‘match’,anditwilldoalltheworkfor

you.Thetick-and-matchprocessisveryintuitive,andtheclientdoesn’tneedtoknow

anythingabouthowtoprepareabankreconciliationstatement.”

Whenaskedaboutthesecurityofcloud-basedsoftware,theintervieweedoesnotperceive

ittobeamajorrisk,astheydidnotaffectonlinebankingservicesfrombecomingpopular,

despitethesensitivenatureoftransferringmoney:

48

“Onlinebankinghadbeenaroundforyears,andeveryoneusesit…Peopledon’tfeel

thatit’sunsafetotransfermoneyovertheinternetanymore…Andthesamethingwill

probablyhappentoXeroonceitgainscriticalmass.Xero’sagoodplacetostartfor

those[clients]whowanttogettheirfeetwetwiththewholecloudthing.”

WhileexternalpressurewasnotaprominentthreatforFirmA,theintervieweeidentified

thatclientsmayexertconsiderablepressureonaccountantsthatareunwillingtoadopt

cloud.Thebenefitsofcloud-basedaccountingsoftwareareintendedtoappealtonon-

accountingprofessionals,ratherthanaccountantsthemselves:

“Xeroisdesignedwithnon-professionalsinmind,notaccountants.Xeroisdesignedin

suchawaythathidestheuglyaccountingbehinditsintuitiveinterface.Accountants,

ontheotherhand,don’tnecessarilyfindXerotobeanyeasiertousethanwhat

they’reusedto…Inaway,someaccountantsare‘forced’toadoptcloud-based

softwarebecausethat’swhattheirclientswant”.

Also,thesoftwareecosystemplayedasignificantroleinconvincingthemtostaywithXero.

AsXerohadbeenaroundforlongerthanitscompetitors,itwasabletoestablishastronger

softwareecosystem:

“WecurrentlyhavenointentiontoreplaceXerowithanyalternatives.Wewereusing

Xeroforalongtime,andsowehavebecomeexpertsinitsuse…Alsotherangeof

add-onsmakesitveryvaluableforclientsacrosstheirentirebusiness.”

7.1.2 CloudComputingforPracticeManagementFirmAalsoutilisedcloud-basedpackagesformanagingitsownpractice.Xeroand

WorkflowMaxareusedtomanagethebusinessaccountsandprocesses,respectively.The

firmalsousesDropboxforfilesharingandMicrosoftSharePointforcollaboration.

49

FirmAenjoysaconvenientaccesstoITexpertise,duetothefactthattheaccounting

partnerhaspreviousexperienceinITprojectsandthefirm’scloseproximitywiththeIT

consultingdivision.Theexpertisealsoallowedthefirmtooperateanin-houseremote

access-basedsysteminasimilarmannertocloudcomputing:

“Priortocloudcomputingwehadaserverin-housethatkeptourclients’accounting

dataandaMicrosoftExchangeemailsystem.Wecanaccessthefilesviatheterminal

server…Sowhenthecloudcomputingconceptgainedtraction,it’sreallyalogicalstep

forustomake.”

Thedecisiontoadoptcloud-basedsoftwaresystemsforinternalbusinessmanagement

followedthebusiness’desiretobeflexible:

“Wehaveateamoverseasthatdoesallourbookkeepingforus,andwehavetobe

highlyflexibletoensurethatweprovideourclientswithalltherightservices…Cloud

systemsaresomucheasier,intherespectthatwecangetwhateversoftwarewe

needatamoment’snotice,withouthavingtoinvestalotofmoneyinhardware”.

FirmB

FirmBisamedium-sizedcharteredaccountingfirmlocatedincentralChristchurch.It

employsapproximately50staffmembers.Asafull-fledgedaccountingfirm,itsaccounting

servicesinclude:compliance(preparationoffinancialstatementsandtaxreturns),tax

consulting,businessplanningandgrowth,managementconsultingandaccounting,and

auditing.Inaddition,FirmBalsooffersinformationtechnologyservices,whichassistclients

withselectingandimplementingnewsoftwareformanagingtheirbusinesses,aswellas

providingtraining.Thefirmservicesadiverseportfolioofclients,bothfor-profitandnotfor

profitentities.

FirmBhadnobranchesinotherlocations,whichallowedittooperateinalargely

autonomousfashion.Despitethefactthatthefirmisaffiliatedwithaninternational

50

accountinggroup,inter-firmcollaborationislimited.FirmBismanagedbyseveralpartners

thatspecialiseindifferentbusinesslines.Moreover,whilethefirmhasanin-house

informationsystemdepartment,theroleofthedepartmentisemphasisedonthebusiness

potentialofITinnovations,insteadofroutinemaintenance.

Theinterviewiscarriedoutwiththesystemsmanager,whoisresponsibleforparticipating

inthelatestdevelopmentsofaccountinginformationsysteminnovationsand

recommendingthemtothefinaldecisionmakers.

Client PracticeManagement

Adoption Yes(Xero)

Since2011

No(in-houseserver)

Benefits Strategicallybeneficial


Easytomaintain

Flexible(clients)

Security(internalcontrol)

None(noincrementalbenefit)

Limitations/risks Lackoffeatures

Perceiveddatasafety

Lackoffeatures

Organisational ITexpertise

Firmsize

Firmsizeistoolarge

FirmSize Approx.50employees

Environment Competitivepressure NoneTable7-3:cloudadoptionforFirmB

7.2.1 CloudComputingforClientServiceFirmBheavilyfocusesoncloud-basedaccountingpackages,notablyXero.Thisisevident

fromthefactthatXerowaslistedasaseparateservicelineonthefirm’swebsite.BothFirm

Banditsclientshaveaccesstotheaccountingfile.Theclientswouldinputtheirday-to-day

transactionsintoXero,andFirmBwouldusetheinformationtopreparereportsand

51

provideadvisoryservicesbasedontheinformation.Cloud-basedsolutionsarealsousedto

assistclientswiththeirbudgetingandreportingneeds.

ThereasonthatFirmBwassoproactiveinpromotingcloud-basedaccountingsoftwareto

itsclientsisduetothere-evaluationofthefundamentalpurposeofaccountants.Notably,

accountants’valueslieinhelpingbusinessescreatevalue,ratherthanmanipulating

numbers:

“We[theaccountants]arenotjustthesemysteriouspeoplewhositbehindtheirdesks

allday,crunchingnumbersandcompletelyunawareofwhat’sgoingonouttherein

the[business]world.”

Theintervieweewentonfurthertostatethatoneofthekeybenefitsofcloud-based

accountingpackagesistheabilitytomonitorclients’accountingrecordsandcompile

reportsinrealtime:

“Accountantshavetraditionallybeentheambulanceatthebottomofthecliff.

Accountantscreatereportsusingtheirclient’shistoricaldata,andbythetimethe

accountantsgotholdofthereport,theissueswouldhavebecomeworse…”

“Cloudcomputingallowsaccountantstobethefenceatthetopofthecliff,rather

thantheambulanceatthebottom.[Cloud-basedaccountingsystems]provide

accountantsreal-timeaccesstoclients’file,whichallowsustopickupandacton

businessproblemsimmediatelyratherthanafewmonthsdownthetrack.”

Moreover,cloud-basedaccountingsystemsalsohavetheaddedbenefitofloweringthe

levelofmaintenanceofclients’accounts.Itisworthnotingthat“maintenance”inthiscase

referstomaintainingtheaccuracyoftheclient’saccountingfilesratherthanIT

infrastructure.Thelackofcustomisationandeaseofusemakecloud-basedaccounting

softwarearelesspronetoclutter,andallowaccountantstorectifyanyproblemsmore

easily:

52

“Somepeople[accountants]sayXeroistoosimplified,butthat’sjustoldaccountant

thinking.People[non-accountingprofessionals]canbesurprisinglyrecklesswhenit

comestostuffingupaccountingrecords,andit’seasiertofixproblemsinasimple

systemthanacomplexone…Plus,withcloud-basedsoftware,youcandoitremotely.”

Whileeaseofuseisgenerallybelievedtobeabenefitfornon-professionals,FirmB

reportedthatXero’seaseofuseaccruesbenefitsintermsofreductionsinnon-value-adding

activities:

“It’smucheasiertosetupabusiness[account]inXerothanMYOB…Whenallwe

needtodoistoprepareasetofreportsfortheclient,MYOBasksalotofquestions

[whensettingupthecompanyaccount];Xeroismoreusable‘outofthebox’…With

Xerowe’respendinglesstimesettingupacompanyaccount…[Our]clientswant

reports,andXeroprovidesthesereportsquicker.”

Forclients,cloud-basedaccountingpackagesprovidevalueintheformofgreaterflexibility.

Forexample,cloud-basedsystemsallowbetterconcurrentaccess:

“Oneofourclientswasahusband-and-wifeshop,andpreviouslyusedadesktop-

basedaccountingsoftwaretomanagetheiraccounts.Thehusbandenteredinvoices,

andthewifedidthebanking.Sinceeverythinggetsenteredintothesamesystem,

theywouldalwaysfightoverthecomputeraccess…WithXero,theydon’thavethe

problemanymore:theycanbothbeputtingdataintotheirXeroaccountingfileatthe

sametime,andtheydon’thavetousethatonecomputertodoso.”

Likewise,theabilityforcloud-basedsoftwaretointerfacewithotherdatasourcesprovide

usersgreaterflexibilityintermsofperformingtheirtasks,

“Whatgenerallyhappens[withtraditionalaccountingsystem]isthatattheendof

eachmonth,theownerhastospenddaystofindeveryinvoiceandreceipt,andcheck

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themoffagainsttheirbankstatement.Thismakesitdifficultfortheownerstodo

anythingelseduringthosedays…BecauseXeroretrievesbanktransactiondata

automaticallyonareal-timebasis,theycanreconcilebankaccountastheycomein;

effectivelyspreading[theworkload]outthroughoutthemonth.”

Despitethenumerousbenefitsthatcloud-basedsoftwareoffer,theintervieweedidnot

perceivecloudcomputingasathreattotheaccountingindustry.Theprofessional

capabilitiesofaccountantsarenotsubstitutablebyautomation:

“Cloud[-basedaccountingpackages]won’treplaceaccountants’hardknowledge…If

Xeroreallycanreplaceaccountants,itwouldhavehappenedalongtimeagowith

desktop-basedaccountingsoftware…We[theaccountants]aretheexperts,andwe’re

theretoprovideprofessionalhelpwhenthey[theclients]arenotsurewhattodo…

Cloud-basedaccountingsoftwareisactuallyhelpingustoextractbetterinformation

fromourclientswithlesstime.”

Inrespectofthesecurityofdatastoredinthecloud,theintervieweebelievedthatthe

problemisonetodowithpeople’sperceptionsofsecurity,ratherthanactualsecurity:

“Whenpeopletalkaboutthe‘security’ofthecloud,theyarereallyreferringtothe

physicalcontrol[oftheirdata].Theyfeelsaferwhentheirdataisstoredonahard

drive,becauseitissomethingtheycanholdintheirhands…Buteventhen,harddrives

canfail,andUSBdrivescangetlost.”

Cloud-basedsoftwareasaservicemay,infact,beevensaferthananon-cloudoneinterms

ofinternalcontrol,astheusers’abilitytomanipulatethesystem:

“It’shardertoconcealstuffinacloud-basedsystem.[Fordesktop-basedsystems,]the

auditorsmaybeconcernedthattheusershavemodifiedtheiraccountingsoftwareto

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concealsometransactions…Thisissimplynotpossibletodoincloudsoftwarelike

Xero.”

Intermsofexternalpressure,competitionwasaconsiderablemotivatorforcloudadoption:

“WedecidedtoadoptXerobecausewe’reafraidthatwemightloseclientsifwe

don’t…”

7.2.2 CloudComputingforPracticeManagementFirmBhadalreadyimplementedapaperlessofficepriortotheintroductionofcloud

computing.Theserveriskeptonpremise,whichsupportsthedesktop-basedpractice

managementsystemanddocumentmanagement.Documentsandrelevantbusiness

processesarekeptinthefirm’sintranet,andsharingofdocumentswithexternalparties

(suchasauditors)isachievedbyprovidingcontrolledaccesstotheparties.

Whenthepracticemanagementsystemwasfirstimplemented,itwaschosenduetothe

featuresandcost:

“Whenwewerelookingatpracticemanagers,MYOBAEwasthe‘best’onewecould

find.Ithadallthefeaturesweneed,andwasthebestvalueformoneytoo.”

Additionally,thepracticemanagementsystemfillsanimportantvoidthatXerodidnotfulfil:

additionalfeaturesthatXerodidnotprovide.

“NotallofourclientsareonXero;westillkeepalotofourclients’filesonMYOB…

Thedecisionreallydependsonhowcomplextheclient’saccountsare,andhowmuch

customisationtheyneed…Forexample,oneofourclientshassomesubsidiaries

overseas,soweusedXerofortheoverseassubsandMYOBAOfortheNewZealand

headquarters…Consolidatingtheaccountsaresimplytoocomplicated[forXero].”

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FirmC

FirmCisasmallcharteredaccountingfirmlocatedinWhangareiofNorthIsland,New

Zealand.Itemploysapproximately10staffmembers.Itprovidesthebasicaccountancy

servicesthatmostotheraccountantsdo:assurance,businesscoachingandturnaround

management;andcompliancewithtaxationrequirements.Itdoesnotappeartoprovide

anyIT-relatedservices,however.

FirmC’sclientsareprimarilysmallbusinessesandnot-for-profitentitieswithinthelocal

community.ThemarketforaccountancyinWhangareiappearstobehighlycompetitive,

withmanysmallcharteredaccountingfirmsservicingthelocalbusinessesandentities.

TheinterviewisundertakenwiththepartnersofFirmC.Thefirmhaddecidedtoimplement

acloud-basedpracticemanagementsystem,andtheinterviewfocusedonexploringthe

decisionmaker’smotivationsandperceptionsbehindthisdecision.


Adoption Partial(Xero)

Since2012

Yes(cloud-basedSaaS)

Benefits Improvementinservicequality Disasterrecovery

Reducedmaintenance

Security

Cost(noadditionalITinvestment)

Limitations/risks None Dependencyoninternetaccess

Locationofcloudserver

Organisational LackofITexpertise Firmsize

FirmSize Approx.10staff

Environment None(insufficientclientdemand) Vendorpressure(changing

productoffering)

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Category Non-adopter Readyadopter

Table7-4:cloudadoptionforFirmC

7.2.3 CloudComputingforClientServiceFirmCdoesnotexplicitlypursueacloud-basedstrategy.WhilethefirmoffersXeroasan

optionforclients,itdoesnotadvertiseXeroonitswebsite,orhaveanypreferencebetween

cloud-basedanddesktop-basedsoftware.

“Wedon’trecommendourclienttochangeovertocloudsystem;wewaituntilthe

conversationemerges.XeroandMYOBarethemostreliable;theyarethetwomajor

ones[cloud-basedaccountingsoftware]inthesmallbusinessspace.”

Thatbeingsaid,theintervieweesdidrecognisethatcloud-basedaccountingsoftwarecan

potentiallyprovideabetterqualityofservicetotheclients:

“Fromaclient’sperspective,usingcloudgetstheiraccountsfinishedalotfaster,

becauseit’seasiertogetthedata.Theyalsoreceivebetterservicefromourfirm

throughouttheyear,becauseifthey’restuckonwhatever,theycanringusupand

solvetheproblemimmediately.”

7.2.4 CloudComputingforPracticeManagementFirmCoutsourcestheirITmaintenancefunction.AnexternalITfirmensuresthesmooth

operationofthefirm’sownserversandnetworks,whileFirmC’sadministrativestaff

membersetsuptheinternalcontrolstothesystemandperformsthenecessarysoftware

upgradeswhenrequired.

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VendorpressureisthemainreasonforFirmCtoadoptcloud-basedpracticemanagement

system.Acombinationofvendorsdroppingsupportfortheexistingsystemandthelackof

non-cloudalternativesleftFirmCwithnochoicebuttoadoptcloud:

“Mostofthepracticemanagementsoftwareonlyofferedcloud-basedsystem,so

actuallywedidn’thaveachoice.Wecanstayonthesystemwe’recurrentlyon,but

ultimatelyitwouldbecomeobsoletewithin12months.We’veaskedoneofthe

providers,andthebestsolutionwasonthecloud.”

“Intermsofpracticemanagementsystem,therewasonedesktopprovider,butthey

wereaverynichefirmanddidn’tholdmuchmarketinNewZealandatallprobably.

SincehalfofNewZealand’saccountingfirmswereoursizeorsmaller…theprovider’s

effectivelytellingus‘ifyouwanttobewithus,it’sgoingtobethecloud.Takeitor

leaveit.’”

Competitorsareanotherlikelysourceofexternalinfluence,asmostotherlocalaccountants

haveadoptedcloud-basedsystems.However,thiscanbeinterpretedintwoways:either

FirmCfeltpressuredtoconformtoitspeers,orthechoicesmadebyothersprovided

confidenceregardingtheviabilityofthecloud:

“[For]theotherthreepracticemanagementsystem,weconsideredcloudsystemas

well.Thereareabout30accountingpractices,andonlyonehadaunique,in-house

systemthatnooneuses…Atleasthalfofthose[accountingfirmswhoadoptedthe

cloud]migratedtothecloudinthelast12months.”

ForFirmC,thereductioninmaintenanceisthemostsignificantbenefit.Thisisunsurprising

giventhelackofresources,andthefactthattheITroleissharedwithadministration:

“Therearesomeefficiencybenefitstohavingthesoftwareontheprovider’sserver.

They[theproviders]performalltheupgrades,ensureallsoftwareisrunning,manage

theaccessissues…Wedon’thavethesamerequirements.It’saspeedimprovement

fromourpointofview.”

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“Forexample,MYOBputoutanewrelease,orapatch,whateveryoucallit…Wehad

toinstallthoseourselvesonourserver,andontoeachofourdesktop.Ittakesabout

halfanhourtoanhourtoinstalloneachcomputer,anditalwaystakethe

administratoradaytodojustthat.Whereaswithcloud[-basedsoftware],theupdate

takesplaceat2inthemorningandcostsusnotimeatall.”

“Thevendorthatsuppliedthesoftwaretouswouldgivesomeprotectionover

securityandunauthorisedaccess…Theadministratorthatcomesinduringthe

weekendstodoupgradeswouldcertainlylikeitwhenwemigratetothecloud”.

Whilethedirectcostofcloud-basedsolutionissimilarwithadesktop-basedone,the

intervieweesnotedthatthehardwareupgradecostsassociatedwithdesktop-basedsystem

canaccruerapidly:

“Fromthecostpointofview,[thelicensefeeis]aboutthesame.[But]forsomeclients,

theirserversanddesktopshadtobemorepowerfultohandlethecomputationson

theirowncomputers[hencenecessitatingthepurchaseofnewhardware].Butwith

cloud,thehardwarerequirement’slower.Theoldercomputerscanbeusedas

‘dummyterminals’,andavoidhardwareupgradecosts.”

Flexibility,theoften-toutedbenefitofcloudcomputing,wasnotamajorconsiderationfor

FirmC:

“Remoteaccessisone[oftheadvantagesofcloudcomputing],butnotthemainone

forus;wedon’tgenerallydoworkawayfromtheoffice.Apotentialbenefitmaybeto

shareinformationtotheclients,butcurrentlywedon’tdothat[sharinginformation

fromthepracticemanagementwiththeclientsdirectly].”

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Intermsofpotentialweaknessesofthecloud,networkaccesswasidentifiedasthemost

prominentthreattocloudcomputing.However,theintervieweesacknowledgedthat

networkaccessisapartofunavoidablebusinessrisk:

“Oneofthemajordownsideisthatiftheinternetisslowordown,yourwholepractice

grindstoahalt;whereasyoucancontrolyourin-housepracticemanagertoalarge

extentintermsofaccessandreliability.Onceyougoonthecloud,you’remoreopen

[vulnerable]tothetelecommunicationcompanieswhentheyhaveasystemproblem.

That’sreallytheonlynegativeIcanthinkof.”

Ontheotherhand,securitywasnotperceivedtobeamajorissue.Thisispartiallydueto

thefactthatotherservicesthatsharethesameunderlyingcharacteristicswithcloud

computingwerealreadywidelyused:

“Toalargeextent,we’reusingcloudsystem[Skype]totalkrightnow,andpotentially

millionsofotherpeoplecouldtapintothisconversation.Yetwe’requitecomfortable

withthat…BecausethelargecloudprovidersuseUNIXsystemstomanagethetraffic

andlogins,thelevelofriskisnodifferenttocrackingtheloginsonyourownserver.

Anybodythatlogsintotheirbankaccountisusingacloud-basedsystemtoseewhat

theirbalancesareandpaystheirbills,andnearlyeveryoneinNewZealanddoesthat…

Iguesswe’reallusingcloudinsomeway,anyway.”

Furthermore,cloud-basedsolutionsarelikelytobesaferintermsofrepellingunauthorised

access:

“Evenifwe’renotonthecloud,peoplecouldbreakdownourfirewallsandgainaccess

tothesameamountofinformationasifwe’reonthecloud.We’rerelyingonthe

serviceproviders’securityprotocols,andthecontractswehavewiththeservice

providers”.

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Salientdisasters,suchastheChristchurchearthquake,playedaroleinraisingpeople’s

awarenessofcertaindisasterrecoveryneeds,inwhichcloudcomputingwasanappropriate

choicefor.DespitethefactthatFirmCwasnotaffectedbytheearthquake,itnevertheless

providedapositivemotivationtoadoptcloudcomputing:

“IhadafriendwhosebusinesswasintheRedZone.Theywerelockedoutoftheir

businessesbythecivildefence.Theycouldn’tgetaccessandhadtosetup[their

temporarybusiness]insomeone’shouse,[butthey]stillcouldn’tgetaccesstotheir

server.Therewerebackups,buttheywereinanotherbuildingintheRedZone,so

theycouldn’tgettheirbackupseither.Effectivelytheyweredownforaquitealong

time.Hadtheygoneforthecloud,theywouldhavebeenabletoaccessatleastsome

oftheirdocumentsintheoffice.It’squiteagoodreason.”

Oneimportantcriterionforcloud-basedservices,however,isthephysicallocationofwhich

theserversreside:

“IknewquiteafewpeopleinChristchurchhadmigratedtocloudcomputing,because

theydon’twanttoexposetheirbusinessestothatrisk.Theyactuallywantedtoknow

wheretheirserversarelocated,sotheirdataisnotsittinginChristchurch.”

FirmD

FirmDisamedium-sizedaccountingfirmlocatedincentralChristchurch,andemploys

approximately50staffmembers.Itoffersawiderangeofservices,includingcompliance,

assurance,businessmanagement,strategicadvice,accountingfornot-for-profitentitiesand

trusts.Thefirmoffersinformationservicesintermsofmatchingbusinessrequirementswith

appropriateITsystems,butdoesnotexplicitlyadvertiseitorcloud-basedcomputing.

FirmDisapartofanationalnetworkofindependentfirms,butitoperatesindependentlyin

termsofresourcesandbusinessstrategy.TheChristchurchbranchismanagedbyseveral

partnersthatspecialisesinoneormoreservicelines.Theinterviewwasundertakenwith

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thepartnerthatspecialisesinbusinessadvisory,whowasinvolvedinprovidingcloud-based

accountingsoftwaretoclients.


Adoption Yes(Xero,MYOB)

Since2012

No(non-cloudoutsourcing)

Benefits Strategicbenefit

Datasharingwithclients

Cost

Reductionofmaintenance

Flexibility(remoteaccess)

Security/Disasterrecovery

Physicallocationofcloudserver

Limitations/risks Lackoffeaturesandcustomisation

Organisational Nofactors. Firmsize.

ExistingIToutsourcing.

FirmSize Approx.50staff

Environment Threattobusiness/competitive

pressure

Clients’resistancetowardscloud

None.

Category Unmotivated Non-adopterTable7-5:cloudadoptionforFirmD

7.3.1 CloudComputingforClientServiceTheprincipalmotivationtooffercloud-basedaccountingsystemsforclientsisthepotential

forautomation,andthesubsequentlossofrevenue:

“Currently,number-crunchingandcompliance-basedworktakesupabout80%ofan

accountant’sjob;andcloud-basedaccountingsoftwarewillsignificantlychangehow

theaccountingindustryworks,whichiscurrentlyheavilycompliance-based…”

“[Ithink]Cloudcomputingwillbeessentialtoeveryaccountingfirminfiveyears’

time…Learningnewskillsandadaptabilitywillbeessentialforaccountantstokeepin

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business,ortheywillrisklosingbusinesses[tocloud-basedaccountingsoftware]…

clientswilldemandaccountantstoprovidemoreservicesforalowercost,andthose

[accountants]whousecloudsoftwarewillbeinabetterpositiontoundercutthe

traditionalaccountants[thatdonotadoptcloudcomputing]”

Intermsofperceivedbenefits,easeofusewasperceivedtobethebiggestbenefitofcloud

computing,followedbytheeasierdataaccessbetweentheclientandtheaccountant:

“Cloud-basedaccountingsoftwareprovidesaccountantsreal-timeaccesstoclients’

financialdata,whichgivesaccountantshugeopportunitytoprovideaccounting-

relatedservicesthathavehigherqualityandintegrity…Serviceslikereal-time

reportingareturningaccountantsintoteachersandadvisorsforbusinesses…”

“…Priortocloudcomputing,boxesofaccountingfilesandUSBdrivesaremoved

betweentheclient’spremiseandtheaccountant’s…Sometimesthedatagetslost,

whichisincrediblyfrustrating,andtheclienthadtorecreatethosetransactions…”

ForFirmD,lackoffeatureshadbeen,andiscontinuingtobe,amajorobstacleinofferingit

toallbusinesses:

“Welookedatcloud-basedsoftwareaboutsevenyearsago,andconcludedthatthey

werestillveryimmature…Theirfunctionsweresolimitedthattheywereonlysuitable

formicrobusinesses…Whentheirfunctionsbecamemorecomprehensiveandmet

ourneeds,wemigratedtothecloud.”

ItisalsoevidentthatclientsareanimportantsourceofinfluenceforFirmD’sadoptionof

cloudcomputing,intermsoftheirneedsandtheirattitudestowardscloudcomputing.

“Notallofourclientsarecurrentlycloud-based.Themainissueisthelackoffeatures

inXero;forexample,Xerodoesn’tallowustocustomisehowreportslooklike…Also

someclientsaremoreresistanttowardsthecloudidea,astheywereconcernedthat

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theywouldnolongerhavecontrolovertheirdataoncetheiraccountingsystemgoes

inthecloud…”

Consistentwiththeothers,therespondentdidnotperceivesecurityasanissue.Hebelieves

thatitisinthecloudserviceproviders’bestinterestsandabilitytoprovidetherobust

securityandhighlyreliablefortheusers’data:

“We’renottooconcernedaboutXero’ssafety,becausetheir[cloudserviceproviders’]

wholebusinessmodelisbasedonkeepingclients’datasafe.Ifasafetyfailuredoes

happen,itwouldgooutofbusinessinstantly…SoXerowilldoeverythinginitspower

tokeepclients’datasafe”

7.3.2 CloudComputingforPracticeManagementFirmDhadoutsourceditspracticemanagementsystemtoexternalITproviders.Theservers

arelocatedwithinChristchurch,whichindicatesthatcloudsystemisnotusedbyeitherthe

IToutsourcingproviderorFirmD.

ThefirmhadrejectedadoptingSaaS,duetothefactthattheydidnotprovidethecapacity

forlargerfirms:

“WelookedatthelikesofWorkflowMaxanddecidedthatcloudsoftwarelike

WorkflowMaxdidn’tofferenoughfunctionalityorcustomisabilitytomakethem

usableforus…Theywereclearlydesignedforsmallfirms,sotheydidn’tfitthebillfor

us.”

Outsourcingtheserverwasmotivatedbyreductionincostandmaintenance,and

improvementsinreliability:

“Weusedtokeeptheserversinouroffice,andtheywereverynoisyandcostalotof

electricitytorun…Thecostofrentingtheserverspacewasroughlythesametothe

amountwepaidfortheserver’selectricity…”

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“Theoutsourceprovidertakescareofmaintainingtheserverforus…Ifweneedany

software,allweneedtodoisgivethe[IToutsourcingprovider]acall,andthey’lltake

careofeverythingforus…Wecanaccessthesoftwareinstalledontheserver

anywhereviainternet.”

“The[rented]serversarekeptinreinforced-concretebunkersdownonDurham

Street,andthey[thevendorsoftheservers]havetwobackupdieselgeneratorsas

wellasredundancies…Thedatawillbeverysafeincasethere’sanearthquake,and

weknowexactlywheretheserveris.”

FirmDhasnointentiontoincorporatecloudtechnologyintheirpracticemanagement

system,duetotheapparentlackofbenefitsofdoingso:

“We’rehappywiththearrangement,andwecan’treallyseewhatbenefitswewould

gainbymovingtothecloud.We’realreadypayingaflatratefortheservers,wecan

retrievedataweneedfromanywhereanyway,andourITproviderisalreadytaking

careofmaintenanceandsoftware…Therehastobeaverystrongcaseforusto

considermovingourpracticetothecloud.”

FirmE

FirmEistheChristchurchbranchofalargecharteredaccountingfirm.FirmE’sITsystem,as

wellasthemanyregionalbranchesofthesameaccountingfirm,areprovidedcentrallyby

theheadquarterofficeinAuckland.FirmEoffersawiderangeofservices,including

assurance,privatebusiness,taxandmanagementaccounting.Eachservicelinebelongstoa

department;andduetothesizeofthefirm,eachdepartmentoperatesautonomouslyand

largelyindependentfromeachother.

Thisstudyexaminedtheprivatebusinessdivision,whichprovidesbookkeepingservicesand

businessgrowthadvicetoclientsofvaryingsizesandindustries.Theprivatebusiness

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divisionhadrecentlybegunadoptingcloud-basedaccountingsoftwareasapartofthe

servicesitprovidestotheclient.

Theinterviewisheldwithtwopeople:amanagerwithintheprivatebusiness,anda

frontlinestaff.Themanagerchampionedtheadoptionofcloudcomputing,whilethestaff

hadfirst-handexperiencewithusingitforbusinessoperation.


Adoption Yes(Xero)

Since2013

No(ITviaHQ)

Benefits Betterservicetoclients

Flexibility

Dataconsolidation

Ecosystemviaadd-ons

n/a

Limitations/risks n/a

Organisational Firmsize Firmsize

OrganisationalStructure

FirmSize Large(>50)

Environment Competitivepressure

Perceptionfromclients

Otherbranches

Category Unmotivated Non-adopter

Table7-6:cloudadoptionforFirmE

7.4.1 CloudComputingforClientServiceDespite(orperhapsbecauseof)thebusinesssize,FirmEdidnotbeginadoptingcloud

computinguntil18monthsago.

TheprimaryreasonforadoptingXeroisduetopressurefromtheindustry:

“Cloud-basedaccountingsoftwarehadpreviouslybeenneglectedbyourfirm…The

customersarepressuringustoofferaccountingproductsthathavefeweroptions

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[easiertouse]andaremoreflexible…That’swhenthepartnerdirectedmeto

investigateXeroforourfirm.”

Xeroisusedasthedefaultsoftwarepackagefornewclients,butthereisnointentionto

migrateallclientstoXero:

“We’renotpromotersofXero,andwedon’tseektopushXerotoallofourclients…The

decisionwhethertoprovidecloudtoclientsismadeonacase-by-casebasis.Iftheclient’s

existingaccountingsystemisworkingnormally,wewouldleaveitasitis…However,ifthe

clientdoesn’thaveaproperaccountingsystem,orneedsanewaccountingsystem,Xerois

ourfirstrecommendation”.

Therespondentbelievesthatcloud-basedsoftwarelikeXeroismutuallybeneficial,inthat

boththeaccountantandtheclientcanbenefitfromthehigherdegreeofflexibilitythe

cloud-basedsolutionoffers.Forinstance,theoneledgersystemhadgreatlysimplifiedthe

sharingoffinancialinformationbetweentheaccountantandtheclient:

“With[cloud-basedaccountingsystem],allofclient’saccountinginformationisstored

inasingleplacethatcanbeaccessedfromtheweb[e.g.withinXero].Soaccountants

constantlyhavethelatest,up-to-dateaccountinginformationtoworkwith,andany

changesmadebytheclientareinstantlyreflected.Thiseliminatestheproblemwith

differentversionsbackandforth.”

Xeroisalsomoremobile-friendlythanitscompetitors,offeringappsforiOSandAndroid.

This,combinedwiththeone-ledgerproperty,allowsaccountantstoprovideassistancewith

minimaldelay:

“IfaclientisunsurewhetheratransactioniscodedcorrectlyinXero,allI[the

accountant]needtodoissignintotheclient’saccountingrecordsonmyphoneand

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checkiftheywerecodedcorrectly.Itwouldonlytakeme10secondstocheck,andI

candoitanywhere;including10pmathome.”

Sincetheprivatebusinessdivisionalsopreparesend-of-yearfinancialreportsforclients,the

flexibilitytricklesdownthroughouttheyear:

“Becausewe’recheckingourclient’sentriesaswegothroughouttheyear,wedon’t

needto‘cleanup’ourclients’accountingrecordsasmuchattheendoftheyear,

whenweneedtoprepareend-of-yearaccountsforthem.Thismeanslessworkforus

attheendoftheyear,andtheirreportsgetdonefaster.”

Usingcloud-basedsoftwarealsohastheadditionalbenefitofperceivedvalueofthe

accountants’service:

“WhenweuseXero,there’slessmechanical[non-value-added]worktodo…This

allowsustobetterfocusonprovidingadvisoryservicestoourclients,ratherthan

keyinginnumbers…Ultimately,advisoryworkiswhatcreatesthemostvalueforour

clients,andourclientswillalsoperceiveourservicestobeofbettervalueformoney.”

Xero’srichecosystemofadd-onsalsomeantthatclientsthatadoptedXerocouldobtain

greaterbenefitsbyusingtheassociatedaddons:

“OneoftheXeroaddonsweuseanalysesthefinancialstatement…Itcreatesgraphs

andmodelsautomaticallybasedonfinancialdatainXero,andalertanythingthat

requiresourattention…PriortoXerowecreatedthemodelsourselvesusing

spreadsheets,buttheywereverycomplextocreateandunderstand…ThatXero

addonsavedusalotofheadaches.”

DespitethebenefitsthatXeroprovides,however,theefficiencygainsfromadoptingXero

areperceivedasabonus,ratherthanadecisivefactor.

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7.4.2 CloudComputingforPracticeManagementFirmE’sITsystemislinkedwithotherregionalbranchesandprovidedcentrallybythe

headquarterofficeinAuckland.IT-relateddecisionsaremadeatanenterpriselevel,and

FirmEhasnoauthorityovertheoutsourcingdecision.Nonetheless,theintervieweedoes

notconsideroutsourcingtobelikely:

“Idon’tthinktheITsystemwillbeoutsourcedanytimesoon…Ourpractice

managementsystemiscustom-built,andislinkedwiththenationalgrid…Theproject

tomigratethewholecountry’sITsystemissimplytoolarge.”

FirmF

FirmFisasmalltomediumaccountingfirmlocatedinChristchurch.Itismanagedbya

singledirectorandemploysabout20staffmembers.Thebusinessconsistsofthreemain

servicelines:businessadviceforassistingclientstogrowtheirbusinessandovercome

hardships;theaccountingservicethatkeepsaccountingrecordsandfulfilstaxandreporting

obligations;andaseparatebusinesslinethatspecialisesinassistingfirmsinthe

constructionsectortoimplementasystematicsetofITtoolstomanagetheiraccounting

andoperations.Additionally,thefirmhasitsownin-houseITdepartmentandstaffwithIT

background.

TheinterviewisundertakenwiththegeneralmanagerofFirmF.Theinterviewee’srole

primarilyprovidesadvisoryservicetoclientsintheconstructionindustry,andhasahigh

levelofdecisionmakingauthoritywithinthefirm.Theinterviewfocusedontwoaspects:

thedecisiontoprovidecloud-basedsoftwaresystemstoclientsintheconstructionsector,

andtheexperiencesregardingthecloud-basedpracticemanagementsystem.

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Adoption Yes(Xero)

Since2011

No(abandonedcloud-basedSaaS)

Benefits Flexibility(forclients)

Reducedmaintenance(forclients)

Cost(forclients;nocommitment)


Dataconsolidation

Real-timereporting

Disasterrecovery

Limitations/risks PerceptionofPrivacy Under-deliveryoffeatures(hype)

Networkaccess

Organisational ITexpertise(onpremise)

Clientportfolio

DestructionofexistingIT

infrastructure

Migrationcosts

FirmSize Approx.20

Environment None Relationshipwithvendor

Table7-7:cloudadoptionforFirmF

7.5.1 CloudComputingforClientServiceCloudcomputinghasasignificantpresenceinthefirm’sservicelines.FirmFhadadopted

cloud-basedsoftwaresince2008,andhadestablishedstrategicallianceswithanumberof

cloud-basedsoftwaresystems.Thekeycloud-basedsoftwarebeingofferedincludesXero,

WorkflowMaxandAdvancedBusinessManager(ABM).

Themotivationforofferingcloud-basedsystemsisduetothebenefitsthecloudprovides,

andwhetherasoftwarepackageiscloud-basedornotisoflittlerelevance:

“Wedon’tmarketthecloud;wemarketthefunctionalityofthesoftware…Cloudis

notoneofthecornerstonesweoffer;it’sjustawayoffacilitatingwhatweoffer.”

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Theabilityforclientstoaccesstheircloud-basedsystemsanywhereviatheinternet,aswell

asthereducedneedformaintenance,aretwoparticularlyimportantadvantageforthe

constructionsector:

“Ithinkit’sgotitsbase,andit’sgood.It’sgoodforbusinessessuchastradesand

construction,wherethey’refield-basedsotheyandtheirworkforcecanhaveaccess

tocentralisedsoftwaresystemfromanywhere…Theyalsodon’thavetoworryabout

upgrades,serversorofficessincealotofthemworkfromhome…”

“Althoughdesktop-basedsoftwarecanalsobeaccessedremotely,there’sstillthe

hassleofsettingupremoteaccess.Alotofthestufftheclientsaredoingisdriven

fromsite[awayfromtheiroffices],sopeoplewouldputinelectronictimesheets,and

purchaseordersstraightfromthesite.Withcloudtechnologytheycanaccessallof

themontheirmobiledevices”.

Cloud-basedsystemsareparticularlysuitedtotheconstructionsector,duetothehighly

mobilenatureofthework,andthelackofaccountingandITknowledgebymost

constructionclients:

“They[thesmallconstructionfirms]areperfectforcloudsoftwarebecausethey

generallydon’thaveanoffice,theybecamequiteswitched-onaboutsmartphones

andtablets,and[thecloud-basedsoftware]aregenerallycheapsincetheygenerally

don’tneedaserver.Forsomeoftheclients[e.g.plasterers],alltheyhavearetheir

materiallists,whichwereverysimple.Theydon’tholdstock,andtheythey’veonly

got4-5taskstoeachwork.Whereasforbuildersthey’vegotalotmorejobsandeach

taskismorecomplicated.”

Consequently,easeofusewasmuchmoreimportantfornon-accountingprofessionals:

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“WeofferbothXeroandMYOBAccountRight.Wewouldsuggestclientstoadopt

AccountRightbecausethey’remorefamiliarwiththat.ButwegenerallypushXero.

Eventhoughit’smoreexpensive[thanMYOBAccountRight],it’sjustsoeasytouse…

It’sintuitive,justlikeaniPhone,soclientscanfindtheirwayaroundontheirown.”

FirmF’sexperiencesuggeststhatthefirm’sclientsfavourcloud-basedsoftware,evenwhen

othernon-cloudsolutionsareavailable.Thisisprimarilyduetotheeaseandlowcostof

settingupcloud-basedsystems:

“ABM,theydoserver,hostedorcloud.Prettymucheveryonewe’vetalkedtotookthe

cloudoption.It’scheaper,it’seasierandtheydon’thavetoworryabout

[maintenance]…It’sprobablycostmorelong-termbutit’smorecost-effectiveinthe

shortterm…Withupto$50,000paidtogeteverythingconfiguredanduserlicenses

sortedout,thelastthingwe’dbedoingiscoughingupforanewserver.”

Anaddedbenefitofcloud-basedsoftwareistheenhancedcommunicationbetweenthe

constructionfirmsandtheirownclients.Forexample,improvedprogressreportingand

monitoring:

“Theworkflowismanagedbycloud-basedsoftware;thatis,milestonestothejob,

peoplecantickthemoffastheycomplete,andtheclientcanchecktheprogressin

realtimeaswell.”

Intermsoftheprivacyandsecurityofthedata,theintervieweedismissedtheplausibilityof

lossofprivacy,citingthataccountingrecordsforsmallbusinessesarenotlikelytobetargets

ofattacks:

“…Acoupleofpeoplesaidtheywouldn’twanttheirsolutionsinWFMorXero,

becauseofaccesstotheirdata[accountingrecords].Theywereworriedthatthey

didn’townthedata,andsomebodywouldhackintoit…Thereweresomeconcerns

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aroundconfidentialityandsharingofdata;Xerohasamassiveamountofdata,and

theymightbesellingsomeofthem.”

“Realisticallythey’resmall-timebusinesses,andnoone’sinterestedintheirdata

anyway.Besides,Xerocan’taccessthebankaccountsdirectlyviabankfeeds…”

Intermsofperceptiontowardsthecloud,theintervieweedidnotviewcloudasathreat,

butatoolthatcanbeleveragedtoprovidebetterqualityofservice:

“[Cloud-basedsoftware]isnotasthreattomethough.It’sjustanothertoolwecan

offertotheclientinprovidingbusinessmanagementandaccountingsolutionstoa

levelthatcouldneverbereachedbeforehand.Forme,theabilitytogetclients’

accountinginformationandsummaryrightnowbeforeImeettheclient,itprovidesa

wholedifferentlevelofbusinessadvisory…It’sgoingtohaveitsownspace.It’snot

goingtobethebe-allortheend-all.”

7.5.2 CloudComputingforPracticeManagementFirmF’sexperiencewithcloud-basedpracticemanagementsystemwaspredominantly

negative.FollowingtheChristchurchearthquake,FirmFhadadoptedWorkflowMaxfor

eighteenmonthsbeforereturningtodesktop-basedsystems.

Themainreasonforadoptingcloud-basedpracticemanagementsysteminthefirstplace

wasacombinationofconcernsoverdisasterrecovery,lossofexistingsystem,andvendor

relationship:

“WegotturfedoutofourbuildingonFebruaryandwecouldn’tgetourserver…

Peoplebecameveryconsciousaboutdisasterrecovery,andhavingacloud-based

systemmeantyoucanworkanywhere.It’smoreaboutthepracticalitiesofworkingin

adisasterzone.”

73

Duringtheaftermathofadisaster,itisevidentthattheperceivedimportanceofremote

backupandsystemscontinuityhadbeenincreasedsignificantly:

“Itwasacombinationbetweenmarketingandrelationship,sincewewerealarge

providerofXeroinCanterbury…Andwehadtofindanewpremisewithoutaserver…

Ifithadn’tbeenthroughanearthquakeweprobablywouldn’thavemovedtoit

[cloud-basedpracticemanagementsystem]”

However,thesub-parperformanceofWorkflowMax,andthelowqualityofnetworkaccess,

forcedFirmFtodismissthecloudandre-implementdesktop-basedsystems.

“WorkflowMaxoversolditsinternalworkflowsystem…Itsaiditdidalotoffunctions

whereitdidn’treallydo[primarilyrevolvedaroundtheresponserateofthe

WorkflowMaxservers].Alsowehadasignificantconnectionspeed[issue],aswecan

onlygetADSLhere.Thedatatransferwasreallyslow…Ifyouhaven’tgotafibre

connectionoryou’rehandlingalotofdata,thecloud’snotagoodoption.Some

clientsthathavehugeamountsofdatatransactionornotagoodconnectionwere

alsoproblematic[withcloud-basedsystems]”.

Thisalsoillustratesthatevenifcloud-basedsoftwarehasnoinitialcost,thecostoffailed

implementationcanalsobeconsiderable:

“Itwascostly.Wehadtoconfigureeverything,putourledgersinWorkflowMax.But

intheendIdrewalineandsaid,‘that’sit,we’repurchasinganewserver’andundid

everythingwehavedone…Onedaywemighthaveanotherlookatit,butnotfor

another5years.”

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ProviderOmicron

Theinterviewwasheldwiththeaccountsmanagerofamajorproviderofcloud-based

practicemanagementsystem.Priortohisposition,theintervieweewastheformerowner

ofacloudsystemproviderintheaccountingindustry,andjoinedOmicronwhenhisown

businesswasmerged.

Thepurposeofthisinterviewistogaincontextualinformationonthemarketforcloud-

basedaccountingsoftware,andobtainanalternativeviewpointonthefeasibilityofcloud-

basedsoftwareforaccountants.

Client Outsourcing

Benefits Dataconsolidation

Betterservicetoclients

Cost(eliminatesneedfor

hardwareupgrade)

Lowermaintenance

Disasterrecovery

Security

Limitations/risks Privacy(SLA;client-side

encryption)

Organisational Outsourcingofbookkeeping

function

Flexibleworkofemployees

Firmsize

Environment VendorsupportTable7-8:ProviderOmicron'sremarksaboutcloudaccounting

7.6.1 CloudComputingforClientServiceAhigherlevelofflexibilityofaccountingsoftwarewasnecessary,duetothepressuresfrom

offshorebookkeepingandrequirementsforremoteworking:

“AccountantsareoffshoringmoreandmoreoftheirbookkeepingworktoAsia,where

thetransactionscanbeprocessedforcheaper,andthere’salotofdatatransferring

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backandforthbetweentheaccountantandthebookkeeper…Inthemeantime,the

staffmembersarebecomingmore‘transy’,astheydemandmoreflexibleworking

arrangements.”

“The‘one-ledger’conceptofcloud-basedaccountingsoftwaresolvestheproblem.

Accountants,bookkeepersandclientsworkonthesamedatafile,andanychangesare

updatedinstantaneously.Accountantsarekeptmoreup-to-datewithwhat’s

happeningintheirclients’accounts…Cloudcomputingalsoeliminatestheneedto

carryfileseverywhere,aseverything’sontheinternet.”

Intermsofprivacyofcloud-baseddata,theintervieweedidnotbelieveittobeamajor

issue,giventhataccountantsarestartingtooutsourcetheirdataentryworkanyway.

However,Omicrondoeshavemeasuresinplacetosafeguardagainstdataownershipissues:

“Wesignservice-levelagreements(SLA)withourclients,andtheagreement

reiteratesthatthatourcustomersretaintheownershipoftheirdata…Alsowedon’t

haveaccesstoourclients’actualdata;they’reallstoredonourserversasencrypted

[bytheclientside].”

7.6.2 CloudComputingforPracticeManagementThemarketforpracticemanagementsystemwaspreviouslydominatedbyMYOB.However,

technologicalobsolescenceledtoopportunitiesforalternativeofferings:

“MYOBAccountants’Office(AO)usedtobethede-factopackageforpractice

management,eventhoughtheydidn’tlookaftertheaccountantswell…Thenthe

programminglanguageinwhichAOwaswritteninbecameobsolete,whichforced

MYOBtouptheirgames.Thenewversion,calledAccountants’Enterprise(AE),had

significantlyhigherhardwarerequirements,becauseit’sinadifferentlanguage,and

thisforcedaccountantstoupgradetheirservers.”

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Thegapofupgradingprovidedopportunitiesforemergingcloud-basedpractice

managementproviders,whoadvertisedlowersupportfeesandupfrontinvestment.

Likewise,theintervieweealsoobservedthattheChristchurchearthquakeplayedamajor

roleinpromotingthepopularityofcloud-basedsystem.

“TheChristchurchearthquakemademanyaccountants[andbusinessownersalike]

realisethat,ifsomethinghappenstotheirofficeandtheycan’tgetinanymore,it’s

veryhardforthemtokeepcarryingonwiththeirbusinesses.Cloudcomputingislikea

remotebackup[oftheirbusinesses’informationsystems].”

Intermsofthesecurityofcloudsystem,theintervieweebelievesthatclients’dataare,in

fact,betterprotectedincloud-basedsystems:

“CloudcomputinginfrastructureislookedafterbyITprofessionals,whohavemore

expertiseandresourcesovercontrollingforunauthorisedaccess…Youcanexpect

mostcloudproviders’serverstobeverysafe;otherwisetheywouldbeoutof

business”.

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Thetwotypesofcloudcomputingsystemsarediscussedinseparatesectionsbelow.Table

8-1showsthesummaryforfactorsrelatingtoprovidingservicetoclients,andTable8-2

showssummaryforfactorsofusingcloudasameansofoutsourcing.

Basedontheresults,itisclearthatallcasestudyfirmshaveadoptedcloud-based

accountingsoftwareinsomeform(Xerotobemoreprecise).However,notallfirmsare

utilisingthecloudsoftwaretothesameextent.Forexample,FirmBandDrecognisedcloud-

basedaccountingsoftwarehavestrategicimplicationsfortheirbusiness;whilethedesire

foradoptingthesoftwareisweakerforfirmsCandE.

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Summary:CloudComputingforClientService

Firm

(FirmSize)

Adopted? Benefits Limitations/risks Organisational Environment

A

(Small)

Yes

(Xero,

WorkflowMax)

Flexibilityw/services


Communicationwith

externalparties

Lackofcommitment

LackofFeatures Owner’sITexpertise

AccesstoITexpertise

Outsourcingof

bookkeeping

Clientpressure

B

(Medium)

Yes

(Xero)

Strategicallybeneficial


Easytomaintain

Flexible(clients)

Security(internalcontrol)

Lackoffeatures

Perceiveddatasafety

ITexpertise

Firmsize(large)

Competitivepressure

C

(Small)

Partial

(Xero)

Improvementinservice

quality

Privacyandsecurity LackofITexpertise None(insufficientclient

demand)

D

(Medium)

Yes

(Xero,MYOB)

Strategicbenefit

Dataconsolidation

Lackoffeaturesand

customisation

Firmsize(large) Threatto

business/competitive

pressure

Clients’resistancetowards

cloud

79

E

(Large)

Yes

(Xero)


Flexibility

Dataconsolidation

Ecosystemviaadd-ons

Firmsize(large) Competitivepressure

Perceptionfromclients

F

(Small)

Yes

(Xero)

Flexibility(forclients)

Reducedmaintenance(for

clients)

Cost(forclients;no

commitment)


Dataconsolidation

PerceptionofPrivacy ITexpertise(on

premise)

Clientportfolio

Omicron

(n/a)

n/a Dataconsolidation


Privacy(SLA;client-

sideencryption)

Outsourcingof

bookkeepingfunction

Flexibleworkof

employees

Table8-1:Summarisedfindingsforcloudasclientservice.Italicindicatesafactorthatinhibitedadoption.

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8.1.1 PerceivedBenefitsandRisksIntermsofperceivedbenefits,allfirmshaveidentifiedsomeformofbenefitsinadopting

cloud-basedaccountingpackagesfortheirclients.Eventhoughcloud-basedsoftwareis

initiallytargetedatclients,accountantsnonethelessrecognisedthebenefitsthatare

realisedwhencollaboratingwiththeirclients.

Theflexibilityofcloudtechnologyprovidessignificantpotentialforimprovingthe

operationalefficiencyandstrategiceffectiveness.Nearlyallfirmshavefoundthatcloud-

basedsoftwarehadincreasedtheircommunicationefficiencywiththeirclients.Effectively,

cloud-basedaccountingsoftwaremadeitpossibletomaintainasinglecopyofafirm’s

accountingrecordsthatisaccessibletomultipleparties,andanychangesareupdated

instantaneously.Thisisreferredtobysomeasa“oneledger”system.Efficiencyisincreased

asaresultoftheoneledgersystem,whereauditors,bookkeepersanddifferentuserswithin

theclientbusinesscanaccesstheaccountingfilesimultaneouslywithoutissuesinvolving

mergingchanges.

Flexibilityofcloud-basedsoftwarealsoreferstothedegreeofintegrationbetweendifferent

software.The“ecosystem”ofcloudsoftwarereferstotheextenttheycanintegrate

seamlesslywithothersoftware.Cloud-basedsoftwaretakesadvantageofapplication

programinterface(API)forseamlessdatatransmissionbetweendifferentcloud-based

servicesinreal-time,whichprovidesahigherlevelofintegrationthandesktop-based

software.Inthiscase,Xero’secosystemofawiderangeofadd-onshadbeenanimportant

considerationforaccountingfirmstoadoptXero,asopposedtoitscompetitors.Inaddition

toXero,firmsA,BandEalsoadoptedotheradd-onsthatprovidedadditionalfeaturesto

Xero,suchasbudgetingandreporting.

Thisimprovedstrategicsignificanceiscoupledwiththereductionofnon-valueadding

services.SoftwarelikeXeroisreportedtobeeasiertouseforclients,especiallythosethat

lackaccountingknowledge.Moreexplicitly,thisallowsclientstocompletetransactional

bookkeepingwork(likebankreconciliation)moreeasily,andbeabletousefeatureswithin

thesoftwarewithoutextensiveknowledgeinaccounting.Providingclientswithsoftware

thatiseasiertouseincreasesthevalueoftheaccountant’sservices,bydecreasingthe

amountoflow-valuework(suchasdataentrybookkeeping)accountantshavetoperform

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priortothemorevaluableadvisoryandconsultancywork.Alternatively,theeasytouse

natureofthesoftwarealsodecreasesthelikelihoodandseverityoferrorsthatarecaused

bytheclientduetounfamiliaritywiththeaccountingconcepts.

Thecombinationofeaseofuseandflexibilityprovidessignificantpotentialforcollaboration

improvementsontheaccountant’send.Sinceaccountantscanobtainfinancialdatafrom

clientsmoreeasily,andwithlesslow-valuemanualwork,thispermitsaccountantsto

providevaluableassistancetotheirclientsfromahigherlevel.Forexample,accountants

canmonitortheirclients’financialhealthonareal-timebasis,andalerttheirclientsofany

potentialopportunitiesbeforetheyelapseandanyrisksbeforetheygrowintomore

significantthreats.Alternatively,accountantshaveconsiderablymorescopeto“farmout”

thelow-valuebookkeepingworktotheirclients,astheflexiblenatureofthesoftware

allowsaccountantstoprovideassistanceon-demand,andonlywhereassistanceis

necessary.

Costwasanotherimportantconsideration,butitisananalogousconcepttotrialability.

Becausecloud-basedsoftwarepackagesarechargedonasubscriptionfeemodel,this

relievesclientsandaccountantsfrommakinghighinitialinvestments.Also,accountantsare

freetoexperimentthecloudsoftwareingreaterdetail,astheyarenolongerheldcaptive

byanysunkcostsofinitialinvestment,orlong-termservicecontracts.Asaresult,whenever

accountantsareinvolvedwithrecommendingnewinformationsystemsandaccounting

systemsfortheclient(asinthecasesforFirmB,D,EandF),theywouldbemoreinformed

oftheavailablealternatives,andproposesolutionsthatbetterfitstheclient’sneeds.The

lackofinvestmentbarrieralsomakesclientsmorereceptivetowardsnewsoftware,asin

thecaseofFirmF.

Despitethefactthatcloudcomputingwasinitiallyviewedwithscepticismduetothe

potentialsecurityandprivacyissues,therespondentsdidnotsharethesameconcern.The

intervieweesbelievedthattheirinterestofkeepingtheclients’datasafefromunauthorised

accessisfundamentallyalignedwiththecloudprovider’sdesireofmaintainingapositive

reputationfordatasecurity,whichmotivatesthecloudproviderstodevelopadvanced

securityandencryptionmeasures.SincecloudprovidersaremorespecialisedinITservices

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thanaccountants,theywouldbeabletoprovideahigherstandardofprotectionthanif

accountantsstoredthedataontheirownservers.

Ontheotherhand,theissueofperceivedprivacywithcloud-basedsoftwareisamore

salientconcern,inthatanagencyissuemayarisewhenthecloudprovidermayprofitfrom

spyingonorsellingtheirclients’data,especiallywhencloudprovidershavefullaccessover

thestoragefacilitiesthathousedthedata.Theperceptionproblemislikelytodiminishover

time,ascloud-basedservicesbecomemoreubiquitous(suchasonlinebanking).Theclients’

doubtscanalsobemitigatedpartiallythroughservice-levelagreementsbetweentheusers

andthecloudprovider,andtechnicalsafeguardslikeclient-levelencryption(which

theoreticallyeliminatesthepossibilityforcloudproviderstoviewclients’data).Insome

cases(suchasFirmD),however,theclients’concernovertheprivacyoftheirdataonthe

cloudhadpreventedaccountantsfromprovidingcloud-basedservicestothem.Likewise,

theinformationonFirmC’swebsitesuggeststhatthefirmdidnotactivelypromotecloud-

basedaccountingsoftwareduetoprivacyandsecurityconcerns.

Currently,thebiggestimpedimenttocloudadoptionisthelackoffeatures.Duetothefact

thatsoftware-as-a-serviceisnotintendedforextensivemodificationbytheuser,

accountantsfinditdifficulttouseitformorespecialisedpurposes.Forexample,Xerodoes

notyetprovidecustomisedreportsandadvancedconsolidationfunctions.Nonetheless,the

currentstateofcloud-basedaccountingsoftwarecomplementsdesktop-basedsystems

ratherthanreplacingthem.

8.1.2 OrganisationalFactorsTheresultsindicatethatallfirmsoffercloud-basedsoftwareforclients.Thecharacteristics

oftheaccountingfirmarelinkedtotheiradoptionofcloud-basedsoftwareintermsofthe

organisation’sITexpertise,eitherthroughtheowner’sexpertiseinITorwhetherthe

accountingfirmprovidesanyIT-relatedservices.FirmsBandDprovidedITconsulting

services,wheretheyassesstheirclients’requirementsandmaderecommendationsbased

ontheirneeds.ThepartnerfromFirmAhadexperienceinITprojects,aswellasthefact

thattheyhadclosepartnershipwithanITconsultancyfirm.FirmFemployedstaffwithIT

background.

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Ontheotherhand,FirmCdoesnotapparentlyofferanyIT-relatedservices.Incidentally,

whiletherespondentsofFirmCindicatedthattheirfirmdidofferXero,itdoesnotpromote

itasmuchastheothers.Also,whileFirmEdoesprovideITconsultancyservices,thefirm

wastoolarge,whichmeantthatthebusinessadvisorydepartmentwassomewhatmore

distantfromITconsultancy.Thatbeingsaid,FirmEwasquicktorealiseandcapitalisethe

potentialofcloud-basedaccountingsoftware,despitebeingarelativelylateentranttothe

cloudaccountingarena.

Intermsoffirmsize,TheresultsappeartobeconsistentwithMehrtensetal.(2001).The

firmsizedoesnotappeartomateriallyinfluencetheextentofcloudadoption.Forexample,

FirmsB,DandEwerenoticeablylargerthanFirmsA,BandF,yetFirmFhadestablished

partnershipwithcloud-basedsoftwarevendorsthatwereequivalenttothelargefirms.This

findingwascontrarytotheonesfromOliveiraetal.(2014).Ontheotherhand,beingthe

biggestfirmoutofthesixcases,FirmEstartedofferingcloud-basedsoftwareatamuch

latertimethanitspeers.WhilethisappearstobeconsistentwiththefindingsinYaznetal.

(2013),FirmBandFirmFadoptedcloudcomputingaroundthesimilartime.Inaddition,

FirmCusescloud-basedsoftwareinamorelimitedextentthanallotherfirms.Inlightof

thisresult,itisplausiblethattherelationshipbetweenfirmsizeandadoptionofaparticular

informationsystemisshapedbyarangeoffactorsthataffectlargeandsmallfirms

differently,andarespecifictotheinformationsysteminquestion.

8.1.3 ExternalEnvironmentIntermsofadoptingcloudcomputingforclients,theanticipatedpressurefromclientsand

thecompetitionweremajorsourcesofexternalpressureformostfirms.Meetingclients’

needswasasignificantfactorforFirmA,whileFirmBfearedthelossofclientsasaresultof

notadoptingcloudaccounting.ForFirmD,theadoptionofcloudcomputingwasmotivated

bytheprospectsofintensifyingcompetition(andthelossofmarketandrevenueasaresult),

whileFirmEadoptedcloudaccountinginanefforttocatchupwiththesmalleraccountants.

Incomparison,FirmsCandFexperiencedsomewhatlowercompetitivepressure,although

fordifferentreasons.FirmFhaveofferedcloud-basedsoftwarepackagesrelativelyearly,

andtheyaremorefocusedintheconstructionsector,whichallowedthemtoavoidthe

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competitivepressure.Ontheotherhand,demandforcloud-basedsoftwarefromFirmC’s

clientsisverylow,whichprovidednourgencyforFirmCtoadvertisecloud-basedsoftware

ontheirwebsiteatall.

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Summary:CloudComputingforPracticeManagement

Firm

(Firm

Size)

Adopted? Benefits Limitations/risks Organisational Environment

A

(Small)

Yes

(cloud-basedSaaS)

Flexibility(support

businessprocess)

Owner’sITexpertise

AccesstoITexpertise

PriorISarrangement

Firmsize

Vendorsupport

Ecosystem(linkage

w/clients’products)

B

(Medium)

No(in-houseserver) None(noincremental

features)

Lackoffeatures Firmsize(toolarge) None

C

(Small)

Yes

(cloud-basedSaaS)

Disasterrecovery

Reducedmaintenance

Security

Cost(noadditional

investmentinIT

infrastructure)

Dependencyoninternet

access

Firmsize Vendorpressure

(changingproduct

offering)

D

(Medium)

No

(non-cloud

Cost

Reductionofmaintenance

Firmsize(toolarge)

ExistingIToutsource

None.

86

outsourcing) Flexibility(remoteaccess)

Security/Disaster

recovery

Physicallocationofcloud

server

arrangement

E

(Large)

No

(ITviaHQ)

n/a n/a Firmsize(toolarge)

OrganisationalStructure

Otherbranches

F

(Small)

No

(abandonedcloud-

basedSaaS)

Disasterrecovery Under-deliveryoffeatures

(hype)

Networkaccess

Destructionofexisting

ITinfrastructure

Migrationcosts

Relationshipwith

vendor

Omicron

(n/a)

Cost(eliminatesneedfor

hardwareupgrade)

Lowermaintenance

Disasterrecovery

Security

Firmsize Vendorsupport

Table8-2:Summarisedfindingsforcloudaspracticemanager.Italicindicatesafactorthatinhibitedadoption.

87

8.2.1 PerceivedBenefitsandRisksIntermsofcloud-basedsystems,theChristchurchearthquakeplayedacrucialrolein

supportingcloudcomputing,byraisingtheawarenessforremotebackupanddisaster

recovery.Otherwise,thereductionofcostandmaintenanceisanimportantfactorfor

accountingfirmstomigratepracticemanagementsystemsintothecloud.However,the

qualityofinternetaccessrepresentsamajorobstacletocloud-basedpracticemanagement

systemsbeforeitcouldwarrantanyproperattentionfromthefirms.

ThestrongestmotivationformigratingcloudistheChristchurchearthquakethatoccurred

between2010and2011.FirmsC,D,FandProviderOmicronexpressedthatdisaster

recoverywasanimportantconsiderationwhenafirmselectshowitspracticemanagement

systemistobehosted.AsmanyChristchurchbusinesseswerelockedoutoftheirofficefor

extendedperiodoftimeaftertheearthquake(hence,causingmajordisruptionstotheir

business),disasterrecoveryandbusinesscontinuationbecameahighlysalientissue.For

businessesthathavelimitedITexpertiseandresources,cloudcomputingprovidesahighly

cost-effectivemethodtoachieveremotebackup.

Asidefromdisasterrecovery,theotherfactorforcloud-basedpracticemanagementisthe

reductionincostandmaintenance.Becausesoftwareisupdatedperiodically,theuserhas

toincurcoststoobtainnewsoftwarelicensesandupgradetheserver’shardwarecapacity.

Inaddition,applyingthesoftwareupdatescreatesserverdowntimeanddisruptsthe

business’normaloperation.Theseactivitiescreatedadditionaladministrativeburdenfor

FirmC.Incomparison,cloud-basedsoftwaresimplifiesthisprocesssignificantly,assoftware

updatesarecompletedwithouttheneedforinterventionontheenduser’sside,andare

usuallyscheduledduringnon-businesshourstominimisedisruption.Cloud-based

applicationsalsorelieveusersfromupgradingtheirhardware,asthehardwarecapacityis

maintainedbythecloudproviders.

Forthemajorityofthefirms,flexibilitywasnotfoundtobeamajordriverofadoption.The

reasonisthatdatainthepracticemanagementsoftwarearenotusuallysharedwiththe

clients,andgenerallyrequirenorapidchangesincomputingresource.However,FirmAisa

notableexception.BecauseFirmAoutsourcestheirbookkeepingprocesstoathirdparty,

thiscreatesaneedfordataexchangebetweenthebookkeepersandtheaccountants.

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Similartothe“oneledger”systemcloudforclientservice,adoptingcloud-basedpractice

managementsystemimprovesinter-firmcommunicationandcollaboration.

Intermsofrisks,FirmsCandFidentifiedthenetworkaccesstobeamajorissue.Sincecloud

computingreliessolelyontheinternetfordatatransmission,theavailabilityandthequality

ofnetworkaccessiscritical.Theimplicationoflosinginternetaccessisparticularlysevere

forcloud-basedpracticemanagementsystems,astheaccountingfirmiseffectively

immobilisedwithoutaccesstoitspracticemanager.FirmCbelievedthatadoptingcloud

computinginvariablymakestheirfirmmorereliantonthetelecommunicationcompanyto

maintaintheinternetconnection.FirmF’sexperiencewasmorenegative,asthecloud-

basedpracticemanagementsystemdidnothavesufficientservercapacitytohandlethe

largevolumeofdatatransmission.

8.2.2 OrganisationalItappearsthatsmallerfirmstendtobemoreinterestedincloud-basedpractice

managementsystems.However,cloud-basedpracticemanagementsystemsface

competitionfromafirm’sexistingITinfrastructure,includinganyexistingoutsourcing

arrangements.Intheabsenceofstrongperceivedbenefits,itisunlikelythatcloud-based

practicemanagementsystemswouldimproveitspositioninthemarket.

FirmsA,CandFweretheonlyfirmsthathadconsideredandadoptedcloud-basedpractice

managementsystems.ThisisconsistentwithYaznetal.(2013),whosuggestedthatmicro

firmsarethemostlikelytoadoptcloudcomputingduetotheirflexibility.However,thefirm

sizeeffectisfoundtobedrivenbytwofactors.Thefirstfactoristhatlargerfirmshavemore

stringentrequirementsintermsofthecomplexityofthesystem.Inthiscase,thefirmsize

wouldnotbeafactorifthecloud-basedproductcannotcatertothefirm’sneedsinthefirst

place.FirmsBandDhadclearlystatedthatcloud-basedsoftwarewasrejectedbecausethey

lackedthefeatures,customisabilityorsophisticationthatisappropriatefortheirneeds.In

addition,FirmF’snegativeexperiencewithnetworkaccessandserverloadofcloud-based

softwaresuggeststhatcloud-basedofferingsare,infact,inadequateformostbutthe

smallestfirmsand/ornon-missioncriticalprocesses.

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Thesecondfactorrelatestothepresenceofexistinginformationsystems.Firmsaremore

likelytoswitchwhentheirexistinginformationsystemisnotfunctional.Inthiscase,

however,itwouldappearthatexistinginformationsystemmaybeusedasabenchmark,

againstwhichtheperceivedbenefitsandrisksofanewsystemisevaluatedbasedon.Inthe

caseofFirmF,becauseitsexistingserverwaslostduringtheearthquake,thebenefits

pertainingthelackofinitialinvestment(lowmigrationcost)andrapiddeploymentwere

particularlyrelevanttotheirsituation.TheintervieweeforFirmFalsoconfirmedthat,hadit

wasnotfortheearthquake,theywouldnothaveconsideredadoptingcloud.

Conversely,thepresenceofafunctionalinformationsystemcanbeanobstacletoadopting

cloud-basedpracticemanagementsystem.ThisisparticularlyrelevanttoFirmD,whohad

outsourceditsITinfrastructuretoalocalITprovider.Theoutsourcingarrangementprovided

nearlyallofthebenefitsthatacloud-basedpracticemanagerusuallyoffers,including

minimalsystemandsoftwaremaintenance,accessibleremotelyviatheinternet,and

physicalsafetyoftheassetswithoutanappreciableincreaseincost.Moreover,outsourcing

providedanadditionalbenefitofknowingthephysicallocationwheredataisstored.Also

knownasgeo-restriction,theknowledgeofdatalocationprovidesgreatercertaintytothe

usersregardingthephysicalsecurityofthedata,andeliminatesanypossiblelegaldisputes

relatingtothejurisdictionofdata(Yaznetal.,2013).

8.2.3 EnvironmentSoftwarevendoristhedominating,ifnottheexclusive,sourceofexternalinfluenceon

cloud-basedpracticemanagementsystem.Theinfluencetakesplaceaseitherpressure(as

withFirmC)orincentive(aswithFirmsAandF).

InFirmsAandF’scase,theadoptionofWorkflowMaxwasduetotheirrelationshipwith

Xero.WorkflowMaxandXerobelongedinthesameecosystem,asthetwoweredesignedto

integratewitheachotherseamlessly,andthatXerohadconsiderablestakeinWorkflowMax

(XeroandWorkflowMaxmergedin2013).SincebothFirmAandFirmFhadadoptedXero

relativelyearlyandhadpromotedittotheirclientsforarelativelylongperiodoftime,the

accountantshaddevelopedacloseworkingrelationshipwithXero.Thisadditionallayerof

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relationshipmadeiteasierforthevendortorecommendWorkflowMaxtotheaccountants,

andtointegrateitintotheirXero-orientedbusinessmodel.

Ontheotherhand,FirmC’sdecisiontoadoptwasprimarilyduetopressurefromthe

softwarevendors.MYOBexerteditspressurebythevendordroppingsupportfortheolder

versionsoftheirproduct,whichledtothenecessitytoreplacethesystem.Thelackof

feasibledesktop-basedpracticemanagementsystemleftFirmCwithnochoicebuttoadopt

acloud-basedsubstitute.BecauseFirmChadretrospectivelyevaluatedthebenefitsof

cloud-basedsoftwareanddeemeditworthwhile,itisdifficulttopostulatewhetherthe

intervieweeswouldhavechosencloud-basedsystemsatallifanon-cloudoptionexistedat

thetimeofdecision.

Thefirmsclientsandcompetitorsdidnotexertanypressureovertheadoptionofcloud-

basedpracticemanagementsystem,duetothefactthatsuchsystemisnotusuallyvisibleto

outsiders.However,FirmCmentionedthatmostofitslocalcompetitorshaveadopted

cloud-basedpracticemanagementsystemswithinthelast12months(2013-2014).Itis

possiblethattheadoptionofcloud-basedsoftwarealsopartiallyreflectedFirmC’sdesireto

actconsistentlywithitspeers,orthefactthatothers’actionsprovideareassurance

regardingthefeasibilityofcloud-basedsoftware.

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Theresultsindicatedastrongdistinctionintheadoptionpatternbetweencloud-based

softwareforclients’useandforaccountingfirm’sownuse.Whileallofthesixfirmsare

offeringsomeformofcloud-basedaccountingsoftwaretotheirclients,onlytwofirmshave

implementedtheirpracticemanagementoverthecloud.

Drawingonadditionaltheoreticalperspectives,thischapterevaluatesthefactorsthatledto

theadoptionofcloudcomputingbytheaccountingfirms.Thefirstsectionre-examinesthe

rolesthatcloudcomputingplayintheaccountingindustry.Thisisfollowedbyacomparison

ofthewaysthatcloud-basedsoftwarecontribute(orfailedtocontribute)tothefirms’core

competenciesagainsttherelevantliterature,throughgeneratingacompetitiveadvantage

orbetterefficiency.Finally,thefourthsectiondiscussesthelikelyimplicationsofcloud

computingforaccountantsinlightoftherecentpopularity.

TheRolesofCloudComputing

Although“cloudcomputing”canmeaneitheraccountingsoftwareofferedtoclientsor

accountants’ownpracticemanagementsystem,thetwotypesofcloud-basedsystemsare

intendedtoserveinverydifferentenvironmentsandpurposes.Client-orientedcloud

softwareisexternallyfocusedapplicationthatclientsinteractwithdirectly,andactsasakey

collaborationtoolbetweentheaccountantandtheclient.Practicemanagementsystems,

ontheotherhand,handleactivitiessuchastimesheetsandjobtracking.Theseactivities

relatetotheinternalprocessofanaccountingfirm,andarenotvisibletoclients.

ThisdifferenceisperhapsmoreclearlyillustratedbytheuseofPorter’sValueChain

Framework(Porter,1985).Forallcasefirmsinthisstudy,cloud-basedaccountingsoftware

likeXeroareapartoftheaccountants’primaryactivity,sincetheyimprovethequalityof

theaccountancyservicesprovidedtotheclients.Incomparison,thesystemofhow

accountantskeeptrackoftheirclients,managethestaffandmaintainITinfrastructurecan

beregardedassupportactivities,aspracticemanagementsystemsaredesignedtoimprove

theinternalefficiencyoftheaccountingfirm.

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9.1.1 InterorganisationalNatureofCloudComputingCloud-basedaccountingsoftwarelikeXerostronglyresemblesaninterorganisationalsystem.

SincetheIacovouetal.(1995)modelwasoriginallydevelopedtostudyEDI,whichwasa

subsetofinterorganisationalsystems,themodelexplicitlytakesintoaccounttheeffectsof

thefirm’stradingpartnershasonafirm’sdecisiontoadopt,andthesubsequentuseofthe

system.Whileservicefirmslikeaccountantsdonotnecessarilyhavethelevelofsupply

chaincomplexitycomparedtomanufacturers,itneverthelessprovidesanimportant

perspectiveinevaluatingwhycloud-basedsoftwareisaspopularastheyare,andwhat

effectitwouldhaveontheaccountingindustryasawhole.

Aninterorganisationalsystemisdefinedas“anautomatedinformationsystemsharedby

twoormorecompanies…thatfacilitatesthecreation,storage,transformationand

transmissionofinformation”(Johnston&Vitale,1988,p.154).Aninterorganisational

systemisdistinguishedfromconventionalformsofinformationsystems,inthatinformation

withinthesystemisintendedtobesharedwithoneormoreexternalorganisationsinthe

supplychain,andthatsuchsystemprovidesbenefitstoallparticipantsinthesupplychain.

Basedontheobservations,cloud-basedaccountingsoftwaredistributesbenefitsbetween

theadoptingaccountantanditsclientsinamannerthatisconsistentwithan

interorganisationalsystem.Akeydifferencebetweenthisstudyandthepreviousstudieson

theadoptionofcloudcomputingisthat,whilepreviousstudiestendtofocusonthe

benefitsrealisedbytheadopterfirm,thereasoningoftheintervieweesinthecurrentstudy

foradoptingcloud-basedaccountingsoftwareareclient-driven.Inotherwords,thecloud-

basedsoftwareareadoptedprimarilywiththeintentiontoprovidegreaterbenefitstothe

clients,eventhoughfactorslikeeasiertousehavelittlerelevancetotheaccountants(Firm

A).Similarly,communicationandcollaborationbenefitsbothaccountantsandtheclients,

andwasmostfrequentlyidentified.

9.1.2 PracticeManagementSystemsasERPThecharacteristicsofanaccountant’spracticemanagementsystemcanbecomparedto

thatofanenterpriseresourceplanning(ERP)system.ERPsystemsaredesignedtosupport

allprocesseswithinabusinessbyprovidingacomprehensivefunctionsetandorganisation-

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wideinformationsharing(Peng&Gala,2014).Examiningthemostpopularofferingsof

cloud-basedpracticemanagementsystems,itisevidentthatanaccountant’spractice

managementsystemsserveaverysimilarpurposeasanERP.Byexaminingpractice

managementsystemfromtheperspectiveofERPsystems,thisstudyfulfilsthecallfor

industry-specificresearchintothemeritsofcloud-basedERPbyGrubisic(2014).

Theroleofanenterpriseresourceplanning(ERP)systemistoestablishinformationlinks

betweenthevariousactivitiesofabusiness(suchashumanresource,finance,

manufacturing,clientrelationshipsandsupplychain),suchthatdecisionmakershaveaccess

tobetterandmorecompleteinformationtomakemoreinformeddecisions(Shukla,

Agarwal,&Shukla,2012).Likewise,forpracticemanagementsystems,asimilarsetof

comprehensivefunctionsisprovided.BasedontheobservationsfromXeroPractice

Manager,CCHiFirm,MYOBAccountants’OfficeandAPSAdvance,thetypicalfeaturesthat

areprovidedinpracticemanagementsysteminclude:documentmanagement,job

management,clientmanagement,timesheetmanagement,staffmanagement,and

integrationbetweenclients’accountingfileswiththeaccountant’s.Thelastaspecthad

alreadybeendiscussedintheprevioussectionasinterorganisationalsystems.

AsexistingliteraturehadhighlightedthepotentialforveryhighsynergybetweenERP

systemsandcloudcomputing,cloud-basedpracticemanagementsystemshavepotentialto

improveanaccountingfirm’soperation.ThedeliveryERPsystemviacloudrepresentsthe

bestofbothworlds:businessescanexploitthebenefitsofanERPsystemwithoutthe

burdenofinvestmentandcost.WhiletraditionalERPsystems(maintainedin-housebythe

businessusers)providedveryclearbenefitsintermsofreducedcosts,increasedrevenue

opportunitiesandefficiencyimprovements(Shuklaetal.,2012),thecostofacquiring,

implementingandmaintainingsuchsystemisburdensometolargebusinesses,and

prohibitivetosmallerones(Grubisic,2014).Cloudcomputing,ontheotherhand,allows

businessestouseITresourcesinamuchmoreflexiblemanner,withminimalinitial

investment,andpayforonlywhattheyuse(Armbrustetal.,2010).

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CompetitiveadvantageofCloudSoftware

Competitiveadvantagereferstothesituationwhenafirm“[implements]avaluecreating

strategy[thatis]notsimultaneouslybeingimplementedbyanycurrentorpotential

competitors”(Barney,1991,p.102).TheISliteraturehadrecognisedthatadoptingand

usinginformationsystemsmaycreatesignificantbenefitstotheadopterbusiness,suchas

efficiencyimprovements,strengtheningofbargainingpowerorproductdifferentiation

(Bakos&Treacy,1986;Clemons,1986;Zhang&Lado,2001).However,thesebenefitsoften

donottranslateintocompetitiveadvantages,anditisevendebatablewhetherinformation

systemcreatesanycompetitiveadvantageatall(Clemons,1986;Mata,Fuerst,&Barney,

1995;Zhang&Lado,2001).

Resourcebasedviewisausefultheorytounderstandhowinformationsystemscreate

competitiveadvantage,asitiscommonlyregardedasoneofthemostpowerfultheoriesin

explainingorganisationalrelationships(Barney,Ketchen,&Wright,2011).Theresource

basedviewpresumesthatabusinessisacollectionofresources,andtheresourcescan

createcompetitivedisadvantage,competitiveparity,temporarycompetitiveadvantageor

sustainedcompetitiveadvantageforthebusiness.Sustainedcompetitiveadvantageis

regardedasthemostadvantageouspositionforafirm,whereitpossessesresourcesthat

arevaluable,rare,inimitableandstrategicallynon-substitutable(Barney,1991;Mataetal.,

1995).

Thissectionattemptstoexplorehowcloud-basedaccountingsoftwareofferedtoclients

providescompetitiveadvantagesforaccountingfirms,andhowsuchcompetitiveadvantage

maydriveadoption.

9.2.1 ValueValueisanecessarybutinsufficientconditionforcreatingcompetitiveadvantage.A

resourceisdeemedvaluablewhenitiscapableofimprovingthebusiness’operational

efficiency,reducecostordifferentiateproducts(Bakos&Treacy,1986;Mataetal.,1995).

Adoptionofcloud-basedaccountingsoftwareforclients’useprovidesclearbenefitsin

termsofefficiency.Clients’accountingtransactionscanbeviewedasrawmaterialsfor

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accountants,asthehigher-leveladvisoryandconsultancyservicescriticallydependonthe

availabilityandqualityofaccountingdata.Adoptingsuchcloud-basedsoftwareallows

accountantsto“export”theworkofbookkeepinganddata-entrytotheirclients,asthe

softwareiseasyenoughforthelattertoperformtheirownbookkeepingwithverylittle

assistancefromaccountants(Johnston&Vitale,1988).This,inturnreducesthecostfor

accountantstoacquiretheirclients’financialrecords,andcanpotentiallyofferreducedfees

forclients,andlesstimespentontheselow-valueactivities.

Inaddition,theadoptionofcloud-basedsoftwarealsoprovidesefficiencyimprovementsto

theaccountantsthemselves.Asthecloud-basedsystemisdesignedtoprovideasingledata

storagethatcanbeaccessedonareal-timebasisbymultipleparties,accountantsare

providedwithbetterdatatoanalysetheirclients’financialperformance,andimproved

responsetoclients’specificneeds.Thisiscorroboratedbytheinterviewees,whohad

identifiedthebenefitsintermsoffasterend-of-yearaccountspreparationandbeingableto

checktheaccuracyoftheirclients’accountingentriesmoreeasily.

Similarly,cloud-basedaccountingsoftwareofferssomedegreeofproductdifferentiation,

whichgivesaccountantssignificantscopetoaddvalueintheirclient-accountant

relationship.Whilecloud-basedsystemsareinitiallyperceivedasterminatorsofaccounting,

allrespondentsinthisstudyrecognisedthatsoftwarelikeXeroarepowerfultoolsto

improvethequalityandscopeoftheirservice.Cloud-basedaccountingsoftwareallows

accountantstomonitortheclients’financialhealthandidentifyrisksmuchearlier.

AccountantscanalsoutilisethevastarrayofXeroaddonsthatareavailable,potentially

providingmorefeaturesfortheclientandfurtherimprovingtheaccountant’sown

efficiencybysubstitutingbusinessprocessesandtoolswithaddons.Accountantscanalso

usetheirknowledgeofclients’financialstatustorecommendandprovideservicesthat

bettermeettheclients’needsatanygiventime.

Insummary,basedontheresults,cloud-basedaccountingsoftwarethatareadoptedfor

clients’useproducesclearbenefitsfortheaccountantintermsofimprovedefficiency

throughinterorganisationalcommunicationandimprovedservicequality(likereal-time

reporting).

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9.2.2 RarityInorderforanycompetitiveadvantagetoarise,afirm’svaluableresourcemustbe

heterogeneous.Iftheresourceisavailabletothefirm’scompetitors,everyonewouldutilise

theresourceinthesamemannerandderivethesamelevelofbenefit,whichnegatesany

advantagethebusinessmayhaveagainstitspeers(Barney,1991;Mataetal.,1995).A

resourcebecomesrarewhennotallcompetitorsintheindustryhaveequalaccesstoit.

Theextentofresourceheterogeneityforcloud-basedaccountingsoftwareappearstobe

verylimited.Cloud-basedsoftwareisdevelopedandmarketedbyanindependentthird

party(suchasXero),whichmeansthatallaccountingfirmshaveequalaccesstothe

software,andanyaccountingfirmcanchoosetooffersoftwarelikeXerotoitsclients.

Moreover,sincecloudcomputingisdesignedtorequirelowinitialinvestmentand

maintenancecomparedtotraditionalsystems,thebarriersoffinancialresourceand

specialisedknowledgeisvirtuallynon-existent.ThisisillustratedbyFirmE’sexperience,

whowasabletoadoptXerothreeyearsafteritscompetitors,andnotsubstantially

disadvantagedintermsofaccessorbenefits.

Hence,accordingtotheresourcebasedview,cloud-basedaccountingsoftwareforclientsis

acompetitiveparity,whichexplainsthenear-ubiquitousadoptionratesofcloud-based

accountingsoftware.Duetothefactthattheresource(cloud-basedaccountingsystem)can

beadoptedandutilisedbyallfirmsinthesamemanner,allfirmsareabletoimprovetheir

efficiencyandeffectivenessinthesamemannerandtothesameextent(Barney,1991).In

otherwords,accountantswouldnotobtainanyadvantageoveritscompetitorsbyadopting

cloud-basedaccountingsoftware;butnotadoptingthecloudwouldresultinadisadvantage

comparedtoitspeers.Asaresult,itwouldbeineveryaccountingfirm’sbestinterestto

offercloud-basedaccountingsoftware,asitincreasesthefirm’schanceofeconomic

survival(Porter,1980,ascitedinBarney,1991).

Oncetheadoptionofcloud-basedaccountingsoftwarereachescriticalmass,theremaining

non-adopterswouldfaceinstitutionalpressure.Actionsundertakenbyotherorganisations

createsinstitutionalpressureforthefirmtoconform,especiallyduringperiodsof

uncertainty(Ang&Cummings,1997;Loh&Venkatraman,1992).Inthecontextofcloud

computing,thebenefitsderivedbyearlyadopterswouldlikelytomotivateotheraccounting

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firmstofollowsuit.Alternatively,thepromotionofcloud-basedaccountingsoftwarebythe

accountingfirmmaycontributepositivelytothefirm’simage,wheretheavailabilityofcloud

computingmaybeperceivedbyclientsasstate-of-art(Johnston&Vitale,1988).For

example,Mehrtensetal.(2001)notedthattheeffectsoffirmimageperceivedby

customerstowardsthefirm’sintentiontoadopttheinternetwassubstantial.

9.2.3 TheEarthquakeEffectTheChristchurchearthquakeisanimportantinterveningfactor,asitalterstheeconomic

structureconsiderably.TheChristchurchrebuildhadsignificantlyincreasedthedemandfor

construction-relatedactivities,whichsawanincreaseofboththenumberandthesizeof

constructionfirmsandcontractors.Thiswouldinevitablyleadstotheseconstructionfirms

comprisingalargerproportionoftheaccountants’totalclients.AsFirmFasserts,the

constructionsectorisparticularlysuitedtocloud-basedsoftware,duetothefactthat

constructionworkarefield-based(hence,datamobilitybecomingamajorconcern),and

thatmostconstructionclientslackIToraccountingknowledge(whichmakesXero’seaseof

useandlowmaintenanceparticularlyvaluable).Asaresult,inorderfortheaccountantsto

capturethesenewandexpandedbusinesses,thereisstrongmotivationforthemtoadopt

cloud-basedaccountingsoftware.

Implicationsofcloud“paradigm”forAccountants

CriticssuchasFulford(1999)expresseddisdaintowardstheword“paradigm”,fortheword

isgenerallyusedtogrosslyoverstatetheimportanceormisstatethenatureofa

phenomenon.Yet,cloudcomputinghadbeendescribedbycountlessauthorsasaparadigm-

shiftinginnovation(Grubisic,2014;Guptaetal.,2013;Lowetal.,2011;Marstonetal.,2011;

PwC,2011).Thequestionofwhethercloudcomputingreallyhasaprofoundimpactonthe

businessesthatwarrantsthelabelof“paradigm-shifting”variesconsiderablybetween

industries(Grubisic,2014).Thisstudyshowsthat,fortheaccountingindustry,cloud

computinghasaverystrongpotentialtobecomeaparadigm-shiftinginnovation.

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Whilesomeaccountantsmayperceivecloud-basedaccountingsoftwaretobeathreat,

accountingsoftwareisreallyredefiningthecorecompetenciesofanaccountingfirm.The

mainactivitiesofaccountingfirmstypicallyconsistofamixtureoftransactionalaccounting

(bookkeeping),compliance-relatedtasks(financialandtaxreporting)andadvisoryactivities

(taxadvice,businessdevelopment).Thestatusquoofaccountancyservicesbeforecloud

computing(theoldparadigm),asdescribedbyFirmD,isonewhereaccountantstypically

spendasubstantialportionoftheirtimeandeffortonthecomplianceactivities.

Wherecloudcomputingdoesshattertheparadigmistherapidde-emphasis(andtoa

certainextent,trivialise)thetransactionalaspect.Underthenewaccounting“paradigm”,

thebookkeepingisalmostentirelyperfomedbythebusinessclientsthemselves.Tothisend,

thecharacteristicsofcloudcomputinggreatlyassisttheaccountantsinprovidingtheir

specialisedknowledge.Thecollaborationbenefitsasaresultofone-ledgersystemallow

accountantstogainaccesstotheirclients’latestfinancialdata,andtoprovidemuchmore

timelyandrelevantadvice.TheeaseofuseandaccessallowsaccountantstodesignIT

workflowthatareofmuchbetterfitwiththeclients’requirements;anexampleisthehighly

mobilenatureofconstructionbusinesses.Nothavingtopreparetheaccountsfortheir

clientsalsoreducestheaccountants’workload,allowingthemtocompletetheirservices

muchmorequickly.

Althoughcloud-basedaccountingwouldvirtuallyeliminatetransactionalaccountingentirely,

whichcomprisedaconsiderableportionofanaccountant’sservicelineorrevenue,an

accountantcannotrealisticallyexpecttothriveonhandlingaccountingtransactionsalone.

Asdiscussedbefore,competitiveadvantagearisesonlywhenthefirm’sresourceisnon-

imitable;andresourcesthatareimitablecanonlyamounttoacompetitiveparity(Mataet

al.,1995).Transactionalaccountingworkisnota“competitiveadvantage”,duetothefact

thatknowledgeandskillsinbookkeepingandpreparingreportscanbeacquiredby(quite

literally)anyone,suchashighschoolanduniversitystudents(Krell,2011).Theemergenceof

accountingsoftware(cloud-basedorotherwise)makesnochangewhatsoevertothe

competitiveparitynatureofthework,exceptthataccountantsnowfaceanadditional

sourceofcompetitivepressure:thenewcloud-basedaccountingsoftwareissoeasytouse

thatnon-accountingprofessionalspreviouslywithsimplebookkeepingneedscanpotentially

bypasstheaccountant,andusesoftwarelikeXerodirectly.

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Whatcloudcomputingdoes,instead,ishighlightingtheaccountants’truecompetitive

advantagebyraisingthecompetitiveparity.Thevalueofaccountancyworkliesintheability

fortheaccountantstotranslatetheoriesandprinciplesintooutcomesandresults,whichis

auniqueresource.Forexample,professionaljudgementisacrucialskillforaccountantsand

auditors,but“good”professionaljudgementthatisfreefrombiasormisunderstandingcan

onlybedevelopedthroughacombinationoftalent,experience,learningandconscious

reflection(KPMGLLP,2013).Sufficetosay,advisory-basedservicesrequireskillsthatcannot

betaughteasily(suchasprofessionaljudgement),andthelevelofmasteryvaries

enormouslybetweenindividualswithdifferentlevelsofexperience,specialisedskills,

aptitudesandaccountant-clientrelationships.

Insummary,cloud-basedaccountingsoftwaredoesnotputanendtoaccounting;it

reshapeswhataccountingis.Cloud-basedsoftwarelikeXeroshouldnot“steal”workfrom

accountants,asitmerelyautomatesanactivitythatisalreadyhighlystructured,easily

obtainable,andoflittlestrategicvaluetoaccountants.Itdoes,however,placesubstantial

pressureforaccountantstodevelopontheirowncorecompetencybeyondrecording

accountsandpreparingreports.Cloudcomputingrewardsaccountantswithinnovative

waystoworkwiththeirclients,whileatthesametimepunishesthosethatresistthistrend

byreducedfeesandbusinessopportunities.

Cloud-basedERPforaccountants

InspiteofthesynergybetweencloudcomputingandERPsystemdescribedearlier,cloud-

basedpracticemanagementsystemsremainsahardsell.Moreimportantly,thedecisions

andoutcomesofadoptingacloud-basedpracticemanagementsystemvaryconsiderably

betweenthecasefirms.Thissectionattemptstoexplorethestateofcloud-basedpractice

managementsystemsbydrawingonsomecloud-basedERPresearch,andidentifythe

missinglinkbetweenthetheoryandpractice.

Intermsofcloud-basedpracticemanagementsystems,therelevantquestionsare:

• Whatarethedifferencesbetweenadoptersandnon-adoptersofcloud-based

practicemanagementsystem?

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• Whatdotheresultsindicateregardingthefeasibilityofcloud-basedpractice

managementsystem?

9.4.1 AdoptersReadyadoptersarecharacterisedbyhighlevelsofperceivedbenefits,organisational

readinessandenvironmentalpressure.Inthisstudy,FirmsAandChadbenefitedfromthe

reductionofresourcesspentonmaintainingtheirsoftwareandgainsinflexibility.Thecloud

systemsallowedtheittofreeuptheirresourcesinordertoinvestinmoreproductiveareas

atthesametime(Benlian&Hess,2011),whichwascrucialgiventheirshortageofresources.

Externalinfluencewastheotherprominentfactorthatledtotheadoptionofcloud-based

practicemanagementsystem.FirmChadexperiencedarguablythestrongestpressure,

sinceitwassomewhatcoercedintoadoptingthecloudsystemasaresultoflackofviable

non-cloudalternatives,andthelossofexistingpracticemanagementsystemduetovendor

droppingsupportforthatsystem.Ontheotherhand,theinfluenceofFirmAwassomewhat

morepositive,asthedecisiontoadoptarosefromthefirm’sexpertisegainedfrom

providingXeroandWorkflowMaxtotheirclients,andthecloserelationshipwiththevendor

asaresult.

Intheorganisationalreadinessdepartment,thetwofirmswerethesmallestinthecases

studied.Thisresultedinarelativelysimplemanagementstructure,whichallowedthemto

makedecisionsandimplementthenewmorequicklythantheirlargercounterparts.

Insummary,whilethesynergybetweencloudcomputingandERPsystemsarenot

universallyapplicable,theanecdotalevidenceprovidedbyFirmsAandCdoesindicatethat

thereispotentialforpracticemanagementsystemstobecomecloud-based.

9.4.2 Non-Adopter:ReasonsforNon-AdoptionThissectionexplainswhythesuccessfactorsdidnotapplytoFirmsB,DandF.FirmEis

excludedfromthisdiscussion,asitisunabletoadoptcloud-basedpracticemanagement

systemduetocircumstancesoutsideitscontrol.Inthisstudy,thenon-adoptingfirmsare

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largerinsize,motivatedbyadifferentsetofbenefitsandhaverelativelymoreopportunities

duetothefactthattheypossessrelativelymoreresources.

FirmsBandDrejectedcloud-basedpracticemanagementsystemsasaviableoption,since

theyperceivedcloud-basedalternativesweretoosimplisticintermsoffeaturesand

customisabilityfortheirneeds.FirmBcouldnotadoptthecloud-basedalternative,dueto

theneedformorecomplexfunctionstoservicecertainclients(suchasconsolidationof

overseassubsidiaries).FirmD,ontheotherhand,sawafundamentalmismatchintermsof

thefeatures,customisationandrobustnessthatthecloud-basedsystemsoffer,versusthe

levelthatisdeemedappropriatebythefirm.Similarly,thecloudserviceprovider’sserver

infrastructureandtheinternetcouldnothandlethevolumeofdatatransmissionforFirmF,

whichfurthersuggeststhattheexistingcloudsolutionsarenotexplicitlydesignedto

withstandtheaccessrequirementsofmediumtolargefirms.Theperceivedsimplicitymay,

infact,beduetothefactthatthecloudserviceprovidersareintentionallyfocusingon

capturingthesmalleraccountingfirms.

Alikelyexplanationforthelackofcloud-basedsolutionsforthelargefirmsisthe

competitivepressurefromtraditionaloutsourcing.Traditionaloutsourcingandcloud-based

outsourcingareextremelysimilar,saveforonetechnicaldetail.Cloud-basedoutsourcing

reliesonthe“cloud”ofserversacrosstheworld,whiletraditionalIToutsourcingproviders

keeptheirserversonpremise.Theonlydifferencesarethatcloud-basedoutsourcingcan

mobilisemuchmorecomputingresourcestoitsusersatanygiventime,thereforeallowing

forlargefluctuationsinresourceusagepattern;aswellasallowingbusinessestodeploy

theirITinfrastructurerapidlythroughtheuseofSaaSandPaaS(Armbrustetal.,2010;

Marstonetal.,2011).

Thenewlyestablishedcloud-basedsystemsmustcompetefiercelywiththemore

establishedtraditionaloutsourcingsolutionsinanareawhereseasonalityorvolatile

resourceusagedoesnotappeartobeamajorconcerntotheusers(indicatedbythelackof

mentioningbyaccountants).Effectively,traditionaloutsourcingactsasa“bestofboth

worlds”approachthatallowslargefirmstoenjoythesamebenefitsassmallfirmswith

cloud-basedalternativeswould.Inthisstudy,FirmDoutsourceditspracticemanagement

serversystemtoalocalITprovider.Thebenefitsoftheoutsourcingarrangementderivedby

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FirmDwereverysimilartothoseoftheadoptersofcloud-basedpracticemanagement

system,includingrelieffromtheeffortandexpenseofmaintaininganin-houseITsystem,

competitiveflat-ratecostforserverspacerental,andadditionalsafeguardsagainstdisasters.

Moreover,traditionaloutsourcingprovidesreassuranceoverthegeo-politicallocationin

whichthedatawasstored,whichpotentiallyavoidsjurisdictiondisputes(Yaznetal.,2013).

Muchofthegrowthofcloud-basedpracticemanagementsystemscanbeattributedtothe

Christchurchearthquake,whichgaverisetotheneedforbusinessestosafeguardtheirIT

systemsagainstnaturaldisasters.AsFirmFattests,theinterestincloud-basedsoftwarehad

risensignificantlyimmediatelyfollowingtheearthquake,duetofactthattheearthquake

renderedmostbusinessesinthecentralcityunabletoaccesstheirbusinessdata,and

createdsubstantialinterruptiontotheirbusinessforuptomonths.Incomparison,cloud

computingprovidesaneasysolution,ascloudserviceprovidercanprovidedataprotection

anddisasterrecoveryfunctionsreliablyandatamuchlowercostthaniftheinformation

systemismanagedinternally(KynetixTechnologyGroup,2009).Alternatively,theabilityto

deployrapidlywithminimalinitialinvestmentisalsoattractivetothebusinessesthatare

seekingtore-establishtheirITsystems.

FirmFistheonesuchexample:amainmotivatorforadoptingcloud-basedpractice

managementsystemwasduetothefactthattheexistingserverwaslosttotheearthquake.

ForthosefirmsthathavelosttheirITinfrastructuretotheearthquake,thedecisiontoadopt

cloudcomputingbecomesa“greenfieldadoption”oneasopposedtoareplacementone

(Benlian&Hess,2011).Thelowerinvestmentandcostofcloud-basedsystemscomparedto

traditionalsystemsareespeciallyappealingto“greenfield”businesses,duetotheir

immediateneedforITsystems.Also,sincetheytendtorelocatefrequentlybetween

temporaryofficelocations,havingtheirinformationsystemthatisnottetheredtoaserver

makesiteasierandlessexpensivetomovebetweenpremisesandkeepingthebusiness

processrunning.ThenotionofgreenfieldadoptionalsoappliestoFirmC,astheirexistingIT

systemisfacingtechnicalobsolescence.

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Usingamultiplecasestudydesign,thisstudyhasprovidedanexploratoryperspectiveofthe

roleofcloudcomputingintheaccountingindustry.Thisstudyhasdefinedcloudcomputing

intermsofthefunctionsoftheITconfiguration.Theresultsshowthatthenotionofcloud

computingactuallyconsistsoftwotypesofconfigurationsthatareusedfordifferent

purpose,andthetwotypesvarydrasticallyintermsofextentofadoption.

Thischapterconcludesthestudybyreferringbacktotheresearchquestionsthatwere

posedinthebeginningoftheresearch,followedbythecontributionstotheliterature.The

implicationsofthisresearchtopracticearediscussed,aswellasthepotentiallimitations.

Finally,thefuturedirectionsforresearchareoutlined.

ResearchQuestionRevisitedRQ1:whatroledoescloudcomputingplayintheprofessionalaccountingservicesindustry,

andinwhichwaysdotheydifferfromeachother?

Forprofessionalaccountingfirms,cloudcomputingisappliedtothefirms’information

systemintwoways.Asapieceofaccountingsoftware,cloudcomputingfacilitates

interorganisationalcommunicationbetweentheaccountantandtheclient,whichreinforces

therelationshipbetweenthem.Alternatively,asanERPsystem,cloudcomputingprovides

aninexpensiveyetdisaster-resilientsolutionforaccountingfirm’spracticemanagement.

However,thereisaremarkabledifferencebetweenthetwocloudimplementationsinterms

oftheaccountingfirms’willingnesstoadoptthem.

Theadoptionofcloudbasedaccountingsoftwarebyaccountingfirmsisalmostuniversal,

duetothesubstantialpotentialinsupportingthefirms’primaryoperations.Asan

information-basedindustry,accountantsrelyoncomplete,accurateandtimelyinformation

fromtheirclientsinordertoprovidetheappropriateadvisoryservicestothem.Cloud-based

accountingapplicationsstreamlinetheprocessofacquiringinformation.Becausethecloud-

basedaccountingapplicationsareeasiertouse,clientscanmaintaintheirownaccounting

recordsonanongoingbasis.Also,theflexibilityofaccessallowsaccountantstoaccessthe

mostrecentaccountingdatawithminimaleffortanddelay.Theresultingbenefitismutual.

104

Accountantsareabletothrivebyprovidingservicestotheirclientsthataremorerelevant,

andclientsbenefitfrombettertheinformationandadvicesfromtheiraccountants

regardingtheirgrowthstrategy.

Ontheotherhand,cloud-basedpracticemanagementsystems,whichareanadaptationof

cloud-basedERPsystemstailoredtoaccountants,arestillstrugglingtoestablishtheir

marketpresence.Thecurrentofferingsofcloud-basedpracticemanagementsystemsare

focusedonthesmallaccountingfirmdemographics,andarelaggingbehindintermsof

robustnessandfeaturescomparedtotheirdesktop-basedcounterparts.However,cloud-

basedERPsystemsarefarfrombeingmature.Thisstudysupportstheviewthatcloud

computingcan,infact,addsignificantvalueandmarketsharetothepracticemanagement

systems,andERPsystemsingeneral.

RQ2:Whydoaccountingfirmschoosetoadoptcloud-basedsoftwaresolutionsfortheir

business,andfortheirclients?Whatarethefactorsthatmotivatedordiscouragedthe

adoptionof“cloudcomputing”?

Accountantsadoptcloud-basedaccountingsoftwareapplicationsbecausetheyareeasierto

usebynon-accountingprofessionals(i.e.theirclients),andtheydrasticallyreducetimeand

effortrequiredforaccountantstoobtaintheirclients’financialdata.Asaresult,cloud

computingprovidesamoreefficientandeffectivemethodofcollaborationbetween

accountantsandtheirclients.Itisworthnotingthattheperceivedbenefitofthesoftwareis

ofaninterorganisationalnature.Inmanycases,accountantsadoptcloud-basedaccounting

softwarebecauseitprovidesbenefitstotheirclients.

Alternatively,fromthestrategicmanagementperspective,cloud-basedaccountingsoftware

representsacompetitiveparity.Inotherwords,cloud-basedaccountingsoftwareisa

necessitytomaintaincompetitivenesswithitscompetitors,whichcreatesagreaterurgency

fornon-adopterstocatchup.Thiscreatesastrongcompetitivepressureforaccountantsto

adoptthesoftware,asthenon-adopterswouldbedisadvantaged.Theaccountants’image

andperceivedtechnicalexpertisemayalsobeaffectedbyadoptingcloudsoftware,dueto

thefactthatsoftwarelikeXeromaybeconsideredstandard.

105

AccountingfirmsthatpossessahigherlevelofITexpertiseviaitsemployeesandpartners

arelikelytoadoptcloud-basedaccountingsoftwareearlierandexplorethefeaturesmore

thoroughlythanthosethatdonot.Activechampioningbythepartnerisparticularly

importantinacceleratingtheadoptionofcloud-basedaccountingsoftware,andthisisnot

necessarilylinkedwithfirmsize.

Ontheotherhand,intermsofpracticemanagementsystems,thecloud-basedalternatives

providelittlevaluetoanaccountingfirm,withperhapstheexceptionofcost.Small

accountingfirmsmayfindcloud-basedsolutionstobeanadequatesolution,duetothefact

thatcloud-basedsolutionsrequireslessfinancialandhumanresourcetoimplementand

maintain.However,thelackoffeaturesandlimitationsincapacityisacriticaldrawbackfor

largerfirms.

RQ3:Whataretheperceptionsofaccountantstowardsthecloudcomputingparadigm?

Whatarethelikelyimplicationsofcloudcomputingonaccountants?

Thecloud-basedaccountingsoftwareapplicationshaveimmensepotentialtoautomateand

exportworkthatisrelatedtotransactionalbookkeeping.Thismayalterthebusinessmodel

ofaccountingfirmsdrastically.Cloud-basedapplicationslikeXeromakeitmucheasierfor

thenon-accountingprofessionalstomaintaintheirownaccountingrecordsefficientlyand

autonomously.Asaresult,theseapplicationswouldcannibalisethedemandfor

bookkeeping,andpossiblyeliminateaconsiderableportionofworkforaccountants.Asa

result,accountantswouldbeforcedtodeveloptheircorecompetencyorcompetitive

advantageinordertocompensateforthelostincomesources.

Fromanindustry-wideperspective,cloud-basedaccountingsoftwaredoesnotnecessarily

changetheindustryitself.Transactionalaccountingisnotanaccountant’scorecompetency

orcompetitiveadvantage,whichmeansthatservicessuchasadvisory,auditingand

complianceconsultingareunaffectedbythecloud.However,asmoreaccountantsseekto

improvetheirnon-transactionalservices,theaccountingindustryisexpectedtobemuch

morecompetitive.

106

ContributionstoLiteratureThisstudyhadidentifiedanissueinthepriorcloudcomputingadoptionliterature,inthat

theconceptof“cloudcomputing”isnotfullyexplored.Thisissuearisesfrom(i)the

ambiguityandtheflexibilityofcloudcomputing“paradigm”itself,and(ii)thefactthat

businessenvironmentsgenerallyvarysignificantlyamongdifferentindustries.Thisstudy

contributestotheliteratureinthreeimportantways:anindustry-specificempirical

investigationintothecloudcomputingadoption;adefinitionofcloudcomputingintermsof

itspurporteduse;andanattempttosynthesiseISadoptionliteraturewiththestrategic

implicationsofinformationsystems.

Byfocusingontheaccountingindustryonly,thisstudyprovidesaclearerpictureregarding

thepresentstateofcloudcomputing,andtheunderlyingreasonbehinditsapparent

popularity.Asaserviceindustry,theaccountingindustrydoesnothaveasubstantialsupply

chain,andaccountancy-basedservicesarehighlyhomogeneous.Thesingle-industry

researchscopealsoactsasacontrol,whereeverycasefirmoffersasimilarsetofproducts,

structurestheirbusinessesinasimilarway,competesinasimilarway,andissusceptibleto

sameindustrypressureinsimilarways.Itisthisscopethatallowedthestudytofindthat

therationaleforaccountantstoadoptcloudcomputingdiffersconsiderablyfromtheother

industries.

Furthermore,thisstudygroundstheconceptofcloudcomputingintermsoftangible,

concreteinformationsystemsthatleveragethecharacteristicsof“cloud”tocontributeto

thefirm.Morespecifically,byutilisingthedefinitionsfromClemons(1986),thisstudyhad

differentiatedbetweenthetwobasictypesofcloud-basedinformationsystems:cloud-

basedsoftwarethatisprimarilyusedfortheclient’sbenefit,andtheonesthatareusedto

supporttheaccountants’operationalefficiency.Duetothedifferencesintherolesofcloud-

enabledinformationsystems,thecostandflexibilitybenefitsaffordedbycloudcomputing

haveverydifferentimpactsontheeffectivenessofthecloud-enabledsystems,andthe

adoptionofthecloud-basedsoftwarevarysignificantlyasaresult.

Finally,thisstudyincorporatesthestrategicmanagementtheoriestofurtherinvestigatethe

wider,industry-levelimplicationsofcloud-basedsoftwarefortheaccountants.Mostofthe

previousstudieshaveusedtheTOEframework,andoneofthecriticismswiththat

107

frameworkisthatitconstrainstheperspectiveontheadoptingfirmanditsimmediate

surroundings.CombiningIacovou’sEDIadoptionframeworkwiththeresource-basedview

viewstheaccountingfirminrelationtoitsclientsandcompetitors,andthestrategic

significanceofcloudcomputingisemphasised.

ImplicationstoPracticeFromanaccountingpractitioner’sperspective,thecloudcomputingphenomenon

representsarapidshiftintheroleandthebusinessmodelofaccountants.Itiscriticalforan

accountingfirmtohaveexpertisewithcloud-basedaccountingsoftware,asthecloud-based

softwareprovidessignificantbooststotheefficiencyandeffectivenessofanaccountant’s

services.Accountantsthatneglectcloud-basedsoftwaremayfinditdifficulttocompete

againsttheadoptersofthecloud.

Inaddition,thepresenceofcloud-basedaccountingsoftwarepushesaccountantsaway

fromtheroleofreportpreparersandbookkeepers,andtowardstheroleofproblemsolvers

andearlywarningfortheirclients.Thetransitionmaybeturbulent,andaskillgapmay

emerge.Sincetheproblemsolvingservicesarehighlytailoredtotheclientsandtheir

operatingenvironments,accountantsarerequiredtopossessafarbroaderskillsetinterms

ofproblemsolvingskillsandflexibilityinlearningabilitiesinordertobeabletoresolvea

largevarietyofproblems.

Inshort,accountantsinthecloudcomputingeraneedtojustifythepurposeofaccounting

foranorganisation,andhowaccountancyservicescontributetothewellbeingofthat

organisation.Althoughitisdifficulttospeculatethefutureoutlookforaccountants,cloud

computingisareminderthatbookkeepingisonlyasmallproportionofaccounting.

LimitationsofStudyItisimportanttonote,however,thatallresearchdesignsandmethodsinvolvetrade-offs

betweenthebreadthandvolumeofdata,andthedetailsthatcanbeextractedfromeach

case.Thelimitationsassociatedwiththemethodschosenforthisstudyshouldbetakeninto

accountwheninterpretingthefindingsofthisstudy.

108

Thisstudyiscontextspecific,inthattheresearchsubjectsaremostlyfromChristchurch,and

thisstudyexaminedprofessionalaccountingfirmsonly.Whilethegeneralizabilityofthis

studymaybelimited,theresultscanbeneverthelessbeappliedtootherprofessionalfirms

(suchaslawyersandmedicalpractices)andservicefirmsthatrelyonahighlevelofclient-

businessinteraction(suchasdesign,media,ITandadvertisingfirms).However,careshould

betakenwhengeneralisingtheresultsofthisstudyacrosstootherindustries,asthefactors

forthoseindustriesmayvary.Examplesofsuchfactorsinclude:typesofcloud-based

software,presenceofregulations,businessenvironment(SWOTwithintheindustry)and

natureofwork.

AnotherpotentiallimitationistheuniquebusinessenvironmentsurroundingChristchurch.

TheChristchurchearthquakesawadeclineofbusinessactivityacrossallindustries,except

fortheconstruction-basedbusinessesthatgrewduetotherebuild.Asaresult,the

compositionofbusinessinChristchurchisheavilyskewedtowardsconstruction-related

activitiescomparedtoothercitiesandgeographicalregionsinNewZealand(andtoa

certainextent,restoftheworld).

Finally,theinterviewmethodthatwasselectedfordatacollectionmayalsogiveriseto

somelimitations.Theinterviewprocessisinherentlysubjectiveduetothefactthatpeople’s

memoriesareimperfectandincomplete.Thelackofrigidstructureofasemi-structured

interviewmayleadtotheresearchermisinterpretingtheresponsesbasedonhis/her

preconceivedideas.However,theincompletenessofpeople’smemoryprovidesan

importantsourceofinformation.Theintervieweeswouldmostlikelytorememberthe

factorsthatwereperceivedasmoreimportant,andthisprovidesinsightsintotherelative

weightingsofthefactorstoadoptcloudcomputing.Moreover,measuresareundertakento

mitigatethesubjectivityininterpretation,including:voicerecordingtheinterviewwhenever

possible(andwiththepermissionoftheinterviewee)fortranscription,andproviding

intervieweeswiththeinterviewsummarytoidentifyanymaterialdeviationsfromtheir

intendedmeanings.

109

FutureResearchDirectionsBeinganunder-researchedarea,thisresearchhaduncoveredmanyopportunitiesof

integrationbetweencloudadoptionandtherelevantIStheories.Inlightofthefindings,the

futureopportunitiesforresearcharediscussedbelow:

i) Futureresearchcanfurtherestablish,identifyanddifferentiatebetweenthevarious

rolesofcloudcomputing.Theconceptsofinternally-andexternally-focused

applicationsareantiquated,sincethepaperauthoredbyClemons(1986)was

publishedin1986.Significantdevelopmentsinbothtechnology(suchasinternetand

socialmedia)andmanagementtheory(ResourceBasedView)hadtakenplacesince

thepaperwaspublished.

ii) Futureresearchcaninterprettheadoptionofcloudcomputingintermsofthe

relevanttheoriespertainingtoafirm’svaluecreationandstrategy.Iacovouetal.

(1995)wouldbeasuitablestartingpoint,asthenotionofperceivedbenefitcanbe

extendedtoincorporateinter-organisationalbenefitsandcompetitiveadvantages.

Similarly,outsourcingtheoriescanbeusedtoexaminefirms’reasonsforfavouring

(orrejecting)cloud-basedsolutionsforinternaluse.

iii) AsGrubisic(2014)hadnoted,studiesofcloudcomputingadoptionshouldbe

industry-specific.Futureresearchcanexaminetheextentofcloudcomputing

adoptioninotherindustries,andcomparethemagainsttheaccountingindustry.The

comparisonbetweentheaccountingindustryandanotherone(suchasadvertising

orconstruction)wouldprovideimportantinsightsintothefactorsthatmotivatedthe

growthofcloudcomputing.

iv) Thecontextuallimitationsidentifiedinthisstudycanbetestedbyconductingsimilar

studiesinothercitiesorcountries.Despitetheuniquebusinessenvironmentinpost-

earthquakeChristchurch,thegrowthofcloud-basedaccountingsoftwarelikeXerois

notconstrainedinNewZealand.Studiesinotherregionswouldreinforcethestateof

cloudcomputingforaccountants.

v) Futureresearchcanconsideradoptingamixedmethodsapproach,wherethedetails

ofaqualitativestudywouldbecomplementedbythebreadthofdataprovidedby

quantitativemethods.

110

vi) Alternatively,futurestudiescantakeamorequalitativeanddetailedapproachby

examiningthedynamicsbetweenthecloudprovider,theaccountantandthe

accountant’sclients.

111

1. Basicfirminformation:

a. Howbigisyourfirm,intermsofemployees?

b. Whatservicelinesdoesyourfirmprovide,andwhatdepartmentsdoyou

have?

c. Whatisyourroleinthisorganisation?

d. WhatisyourlevelofITproficiency?

e. Whatisyourunderstandingofthe“cloudcomputing”phenomenon?

2. ExternallyFocusedCloudComputing:Adoption

a. Whatcloud-basedsoftwaredoyouoffertoyourclients?

b. Whendidyoustartadoptingthesaidcloud-basedpackages?

c. Whydidyourfirmchosetoadoptcloudcomputing?Whatwouldbethemost

importantreasonsforyourfirmtoadoptcloud?

d. Doesthefirmofferanynon-cloudaccountingsoftware?Whatarethey?How

muchemphasisdoyouplacebetweencloudandnon-cloudsoftware?

e. Evaluation:

i. Whatarethebenefitsasaresultofadoptingcloud-basedaccounting

software?

ii. Werethereanyunexpectedrisksorsurprises?

iii. Withthebenefitofhindsight,wouldyouchoosecloud-basedsoftware

again?

3. InternallyFocusedCloudComputing:

a. Whatsoftwaredoyouuseforpracticemanagement?

b. IFUSINGCLOUD:

i. Whendidyoumaketheswitchtocloud-basedpracticemanagement

systems?

ii. Whatsystemshadyoubeenusingpriortomigratingtothecloud?

112

iii. Whydidyouchoosetoadoptcloud?

Whatotheralternativeshaveyouconsidered?

c. IFNOTUSINGCLOUD:

i. Doyouhaveanyintentionstomigratetothecloud?

ii. Why/whynot?

iii. Whatchangeswoulditbenecessaryforyourfirmtoadoptcloud-

basedpracticemanagement?

d. Evaluation:

i. Whatbenefitshaveyougainedfrommovingyourpractice

managementsystemsintothecloud?

ii. Haveyouencounteredanyunexpectedrisksorsurprises?

iii. Withthebenefitofhindsight,wouldyouchoosecloud-basedpractice

managementsystemsagain?

113

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