Identification of SME Readiness to Implement Cloud Computing Kridanto Surendro
Adiska Fardani
Information System & Technology Department School of Electrical Engineering & Informatics, ITB Bandung, Indonesia
[email protected]
Information System & Technology Department School of Electrical Engineering & Informatics, ITB Bandung, Indonesia
[email protected]
Abstract— Cloud Computing allows the use of information technology based on the on-demand utility. This technology can provide benefits to small and medium enterprises with limited capital, human resources, and access to marketing network. A survey conducted on SMEs in the district of Coblong Bandung to dig up the IT needs and analyze their readiness to adopt cloud computing technologies. The survey results stated that SMEs’ respondents are more suitable to implement Software as a Service with public cloud deployment method. SMEs are ready to implement this technology, but requires appropriate training and role models that can be used as an example because their technology adoption characteristics that are late majority. Keywords- cloud adoption, readiness, small & medium enterprise
I.
INTRODUCTION
Based on data from the Ministry of Cooperatives and SMEs, the number of Small & Medium Enterprise (SME) in Indonesia in 2009 has reached 587,808 or 1.12% of total businesses in Indonesia [1]. This makes SMEs as the laborintensive business to promote the economy of Indonesia. SMEs have absorbed 6,198,638 workers and growing each year as the number of SMEs are created [2]. The presence of information technology (IT) in the era of globalization well received by the industry because it can increase the efficiency and effectiveness of a company's business. But this technology has not been implemented uniformly in all layers of the industry, especially small and medium enterprises (SMEs). Study in Yogyakarta showed that the level of computer ownership to support new business processes in SMEs only reached 59.6%[3]. This indicates that many SMEs do not realize the important role of IT in facilitating the process of business, or has had the intention to implement but is still constrained in some aspects. Cloud Computing is an innovation that allows the use of information technology based on the on-demand utility. This technology can provide many benefits for small and medium enterprises that have limitations on capital, human resources, and access to marketing network. Although, the adoption of cloud computing promises various benefits to an organisation, a successful adoption of cloud computing in an organisation
requires an understanding of different dynamics and expertise in diverse domains [4]. Cloud computing will become a trend in the IT field which will provide brighter prospects for the industry. However, to obtain optimal performance, it is necessary to first identify the needs and readiness of SMEs in implementing cloud computing, especially considering the limited resources of the SMEs. Therefore, this paper will discuss about the identification of needs and assessment of the readiness of SMEs in Bandung city- Indonesia in implementing cloud computing. The goal is that SMEs can do the adoption of cloud computing appropriately that can transform SMEs business into a better direction. CLOUD COMPUTING REFERENCE MODEL Cloud modeling is the process of analyzing business, technical, and operational requirements against a set of established patterns or approaches, and then determining the optimal cloud pattern, architecture, deployment model, and appropriate cloud solutions to meet your target business needs. The Cloud Computing Reference Model develops the core cloud technology patterns that support major business drivers and challenges, thus enabling a tighter alignment of cloud solutions to business goals [5]. The Cloud Computing Reference Model is illustrated in Figure 1. The Cloud Computing Reference Model is comprised of four supporting models or elements, as described below: 1.
Cloud Enablement Model Describes types of cloud computing services required by users. In this case the user is free to determine components of cloud computing services that wanted and combine them according to the need as these services are not bound. The type of service according to CCRM are the following: a. Cloud virtualization tier b. Cloud operating system tier c. Cloud platform tier d. Cloud business tier
distinguished on the trade, haandicraft, services, fashion, and textiles. In this study, the SME sectoor is classified into 2 categories, namely product-oriented SME Es and service-oriented SMEs. Product-oriented SMEs are the SMEs which the main output is a product, namely the SME seector of handicraft, fashion and textiles. While service-oriented SMEs are SMEs that do not produce products, but brokeraage services selling for selling products from suppliers to coonsumers. Examples of serviceoriented SMEs are SMEs in the trade, particularly in this research is stationery selling.
Fig. 1 Cloud Computing Reference Model [5]
2.
Cloud Deployment Model c computing Describes how to implement cloud services. Deployment methods to be chosen are as follows: a. b. c. d.
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The number of human reesources in SMEs respondents averaged 2-20 people. In the orrganization of SMEs, there is no formal division of labor, which is only known to coordinator and staff. SME owners act as coordinator and he gave orders to the workers job. Often the ow wner is also directly involved in operational activities. Based on the survey, obtained the following results: 1.
Human Resources
2.
85% of respondents havee implemented IT and the rest has not implemented at alll and even tended towards antiIT. As many as 75% % of respondents that have implemented IT claimedd to take care of its own IT because it is still fairly sim mple. Most of the SMEs did not have its own IT division. This is because the employee is focused on main activvities such as the production division. Finance
Internal/private cloud External/public cloud Hybrid/integrated cloud Community/vertical/shared byy community of interest stakeholders
Cloud Governance Model Describes the regulations, seecurity, support, management, and supervision necesssary to enable the users to know the entire risk of the t application of cloud computing a. Governance, culture, and behaviior b. Security and privacy c. Management and monitoring d. Operations and support
In terms of funding, SM MEs have the willingness and sufficient ability to speend funds to finance in IT. Operational expenditure of o the majority of respondents is in the range of $1Millionn - Rp5million per year. Most of these funds are allocated to t internet subscription. 3.
Based on the survey founnd that 75% of SMEs have been using the internet to suppport its business processes. They have been using email, social s media, website, and even e-banking services to support s its business activities. Activities undertaken throough the internet are promotion of products via websites and social media, transactions via e-banking, and dealinng with customers via email. In addition SMEs using computers for administrative activities such as financiial accounting and making the letters.
Cloud Ecosystem Model ment needed to Describe the enabling environm implement cloud computing a. Cloud network/dial tone b. Cloud ecosystem enablement c. Cloud consumers and cloud provviders II.
DISCUSSION
In this paper the study population of SM MEs is that SMEs located at the Coblong District of Bandungg and listed on the Department of Cooperatives and SME & Inndustry and Trade of Bandung. From the 23 SMEs at the Cobblong District that listed at Department of Cooperatives and SM ME & Industry and Trade of Bandung, the 75% composition of o respondents are small enterprises (SEs) and 25% for Meedium Enterprises (MEs). The business done by SME resspondents can be
Supporting infrastructure
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Corporate strategy The results showed that 100% of respondents had been aware of IT as one of the main requirements to support the company's business. This indicates that SMEs have realized the importance of IT in supporting business activities.
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Readiness of the management Based on survey, the majority of SMEs do not have a formal mechanism for the IT training for employees.
Based on the analysis of survey results, the readiness of SMEs to adopt cloud computing is as follows: 1.
Human Resources SaaS solutions offered will be substituted for the old application, rather than complementary. So that the number of employees and the allocation of human resources remained the same (HR allocated to all the main parts), SMEs are ready with this technology. This is because of the results of the study, 87.5% of SMEs already have at least one human resources that can be allocated to the management of IT.
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Finance Although turnover is not as Large Enterprises (LEs), 50% of SME respondents did not hesitate to declare that they are prepared to pay every month for IT operations, noting it does provide benefits to the business activities of SMEs.
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Supporting infrastructure To use cloud computing services, the user must have a minimum of support infrastructure as follows: a. Computer with CPU specs (processor, RAM, hard drive, etc.) appropriate to the needs of the application (specifically for SaaS users) b. Compatible operating system, most require a minimum of Microsoft XP c. Browser compatible, most require at least Internet Explorer 7 d. Monitor screen with the specifications as needed e. Access to the internet with a bandwidth corresponding to the needs of cloud computing system which is used The fifth infrastructure above has been owned by 75% of SME respondents in this study, so it can be said the infrastructure own can support cloud computing.
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Corporate strategy 100% of SMEs have realized the importance of IT to support their business activities. This is very good, considering that this awareness is the key in decisionmaking of IT selection.
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Readiness of the management Most of the SME respondents, ie 67% claimed not to have formal mechanisms of IT training. Therefore we need a socialization mechanism and proper training. It also needs a company that could become a model for SMEs in adopting cloud computing by seeing thier trend isomorphism.
Adopting Cloud Computing Reference Model (CCRM), identification of the needs of SMEs surveyed are as follows: 1.
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Cloud Enablement Model This type of cloud computing services that best suit the characteristics and needs of SMEs is Software as a Service (SaaS). SaaS is selected with the following considerations: a. The needs of SE Products, ME Products and SE Services is still modest and limited to the level of ready-made applications, rather than a selfassembled offered by Platform as a Service (PaaS). b. Volume and frequency of the processed data is not classified as major because of the intensity of transactions, number of employees, number of goods, and the number of consumers who have served are not as much as big business. This makes the SME respondents did not require a server infrastructure that has a high scalability like the one offered by Infrastructure as a Service (IaaS). c. Operation of the visible physical SaaS will facilitate HR in SMEs to learn and use. Cloud Deployment Model Type of cloud computing deployment that best fits the characteristics and needs of SMEs is the Public Cloud. The selection of public cloud based on the following considerations: a. Public cloud provide ready-made services, so it is not difficult for SMEs to design its own cloud, such as those offered by private cloud. b. Features provided by SaaS that in-deploy in public cloud tends to still be able to accommodate the needs of small and medium scale enterprises. c. With the public cloud, SMEs who have limited funds can enjoy a secure cloud computing facility (which also offers private cloud but with a higher cost). Cloud Governance Model There are currently no standards or regulations on cloud computing services that needed to be met in Indonesia. The entire usage regulation is the policies of each vendor's service providers, including payment mechanisms and SLA. Cloud Ecosystem Model Implementation of cloud computing requires the support ecosystem of the hardware as a client (eg computers), access to the Internet, browsers that support, and people who can operate the service.
III.
CONCLUSIONS
SME respondents in Bandung is considered ready to implement a cloud computing-based Information Technology based on the fulfillment of 80% readiness aspects of the application of cloud computing as follows: a. 87.5% of respondents already have at least one human resources capable to operate computer b. 50% of respondents are willing to spend a monthly fee for IT c. 75% of respondents already have the supporting infrastructure for cloud computing d. 100% of the respondents was aware of IT as one of the major needs of the company's business and put it into a business strategy e. 67% of respondents do not have a formal mechanism for the IT training Cloud computing solutions that are suitable for the SME respondents in Bandung is a SaaS (Software as a Service) by the method of implementation of the public cloud with a consideration of the simple needs, ease of use, and ease of maintenance. It is considered in the mapping solution is the need of SMEs in each class, ease of operation, security, and technical support presence in Indonesia to be easy to get it and contact the vendor when the damage occurred. REFERENCES [1]
[2]
[3]
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Ministry of Cooperatives and SMEs. “Strategic Plan of the Ministry of Cooperatives and SMEs of the Republic of Indonesia Year 2010-2014.” 2010. (2010) Ministry of Cooperatives and SMEs website (online) Data Comparison of Micro, Small, Medium (SMEs) and Large enterprises Year 2008-2009.” SME’s Data. 2009. Available: http://depkop.go.id Wahid, F., & Iswari, L. Information Technology Adoption by Small and Medium Enterprises in Indonesia, National Seminar on Application of Information Technology, Yogyakarta – Indonesia, 2007. Simba, Faith. Cloud Computing:Strategies for Cloud Computing Adoption, Dublin Institue of Technology Dissertation, 2010. Marks, E. A., & Lozano, B. Executive's Guide to Cloud Computing. Canada: John Wiley & Sons, 2010.
