Digital Innovation Dynamics On Organizational Adoption: The Case Of Cloud Computing Services

Guillermo B. Vazquez

Understanding the dynamics of innovative technologies is a continuing challenge for many organizations. One of these new technologies, cloud computing, offers a cost-effective mechanism for small and midsize enterprises (SMEs) to leverage the business value of information systems and technology.

SMEs have limited budgets, resources, and time to implement new technologies, so they need to ensure that their investments are trustworthy and the overall organization is prepared to fully appreciate the adoption and use of cloud computing without complexity.

Cloud computing services offer advantages to SMEs by lowering the cost of entry for new technology and providing immediate access to hardware and software. And these resources can provide a platform for innovation and scalability.

Advancement in the presentation layers of technology or handheld computing devices, such as tablets and smartphones, can accelerate the implementation of cloud computing solutions. This provides a unique opportunity for SMEs to further strengthen their collaborative networks and expand their operations into global markets with innovative information and communications technology (ICT) solutions.

Despite SMEs’ financial and resource limitations, their autonomy (compared with larger corporations) can be an advantage in facilitating the adoption of innovations to maintain the business agility needed to respond to changing environments and new market and competitive requirements.

Therefore, SMEs must be capable of adopting and adapting innovative technologies by continuously upgrading and staying ahead of change by learning. It is the responsibility of senior management as well as all people throughout the organization to deliver and maintain a successful cloud computing transformation.

The adoption of cloud computing by SMEs depends greatly on the ability to be open to innovation. Research indicates that there are six key variables in determining an organization’s readiness for adopting cloud computing:

  1. Perceived innovation
  2. Risks
  3. Information Technology (IT) innovation
  4. Driven technologies
  5. Organizational innovativeness
  6. Innovative IT capabilities

SMEs should address each of the variables listed in Table 1 in their cloud transformation business plans.

Variables Innovation Area Planning Considerations
Environmental Cloud computing is not yet mature enough to handle various issues including privacy, security, standardization, and legal concerns, as well as to establish required business models.
  • Select cloud vendors that have actual technical and functional experience in implementing and running proposed applications and systems
  • Choose cloud service providers with high service-level agreements and performance
  • Consider cloud applications providers that have the most experience, and business applications providers that serve the most companies in your industry


Perceived organizations risks could hinder the adoption of innovative technologies.
  • Establish a management of change plan led by key business stakeholders
Adoption of new innovative technologies within organizations could create a sense of uncertainty due to insufficient knowledge and understanding.
  • Mix your talent more experienced with using new technologies with the rest of your user groups
Technological Adoption of innovative technologies can help organizations respond to changes in the business environment, which have been mainly orchestrated by more demanding customers and suppliers, competitors, and new entrants. As a result, organizational adoption of innovative technologies can demonstrate competitiveness in new vibrant environments
  • Detail your cloud transformation program goals, objectives, and key performance indicators based on long- and mid-term business strategy and goals
  • Define key performance indicators for your cloud transformation innovation based on business goals and objectives
  • Include in legal contracts with cloud vendors and providers your relevant key performance indicators, based on the goals and key performance indicators of the cloud transformation program
IT capabilities refer to IT infrastructure resources, including budgeting and employee’s IT competencies. Employing innovative IT and data management capabilities can play a de facto role in SME success, while contributing to a sustainable competitive advantage.
  • Identify a new IT organization based on the new cloud platform
  • Blueprint your new organizational structure
  • Map your required skills for the new organization and produce a resource change plan based on your selection of internal candidates and training plan
  • Create a organizational restructure plan

Table 1: Considerations for an effective cloud innovation plan

The theory behind

According to the white paper, “Digital Innovation Dynamics on Organizational Adoption: The Case of Cloud Computing Services,” the three main areas to pay attention to for a successful cloud innovation path are environmental, organizational, and technological. Each has key evaluation and strategic planning factors.

For example, in the environmental area, perceived innovation barrier factors include capital and talent restrictions, organizational risks, and organizational capacity for innovation, and IT-driven competitiveness and capabilities.

So, what, when and how these factors need to be considered. What are the common believes that management has per each factor, and which believes are relevant for an effective innovation management?

The academic research based on the empirical survey approach, suggest some credible answers to guide you in the strategy formulation and decision-making.

Theory Belief Findings
Organizational innovativeness positively influences the adoption of cloud computing as an innovative technology. The lack of financial resources and talent prevents SMEs from adapting faster to new technological requirements. SMEs are often at the forefront of technology adoption due to their behavioral advantages (agility and efficiency) over large competitors.
IT innovation competitiveness positively impacts the adoption of innovative technologies in SMEs. Adopting innovative technologies in organizations can help demonstrate competitiveness. The impact of IT innovation-driven competitiveness appears to be insignificant, as it does not have a direct impact on the adoption process.
Perceived risks in IT innovation negatively influence the adoption of cloud computing as an innovative technology in SMEs. Limited capabilities for SMEs often lead to potentially high levels of failure rates for innovation. Perceived risks of IT (in particular on innovative technologies) are correlated with concerns related to ensuring systems are secured against complications.
Perceived barriers in IT innovation negatively influence the adoption of cloud computing as an innovative technology in SMEs Organizational readiness for cloud computing technologies is one of the main barriers affecting adoption. A positive unit change on organizational innovativeness and capabilities produces positive change in adoption.
Innovative IT capabilities positively influence the adoption of cloud computing in SMEs. Successful IT implementation could contribute positively towards building the required capacities in technical knowledge and associated skills. If SMEs don’t carefully evaluate before adopting innovative and disruptive technologies, their organizational dynamics could be affected severely.

Table 2: Comparing theory, common beliefs, and research findings

This study suggests things that SMEs should take into consideration when adopting innovative technologies such as cloud computing in order to gain and sustain a competitive advantage.

The internally perceived risks and opportunities of cloud adoption are not accurate for a business case for a cloud-based transformation. Instead, SMEs should consider strategic business goals. cloud transformation. Also, they must engage technology vendors that understand the organization’s requirements and work to ensure that they have the right environment for adopting cloud computing.

Learn how scenario integration is transformed into an automated workflow by registering for the Webinar on January 23rd.

Guillermo B. Vazquez

About Guillermo B. Vazquez

Guillermo B. Vazquez is a senior technology executive at SAP. He leads business and technical digital transformation initiatives that include multimillion-dollar SAP global programs with Fortune 500 companies. Guillermo has extensive experience in defining enterprise architecture strategy and solutions, advising more than 20 C-level executives on business intelligence requirements for the adoption of SAP HANA software as well as cloud, mobile and Big Data solutions. He participated in the SAP S/4 initial product release test team, working with the SAP Development Team in SAP Labs in Waldorf. Guillermo holds a master’s in science and engineering in technology management and business strategy from the University of Pennsylvania and the Wharton Business School. He is currently pursuing a doctorate in business administration with a specialization in management information systems at the Fox Business School at Temple University.