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 Introduction

            Cloud computing is an emerging trend in the technology world. Cloud computing is linked to the transfer of data and information among individuals and organizations. This concept has eased the way people communicate and share ideas over long and short distances. In particular, contemporary business organizations have widely utilized cloud computing to enhance effective communication both within and outside the company. This research proposal seeks to present factors influencing cloud computing adoption as well as usage by SMEs in Saudi Arabia, whose needs requirements are very different from large enterprises (Sultan, 2011). As such, the study unravels eight factors including commercial expectations, risk management, cost reduction, security and data privacy, usability, top management support, firm size, and shortage of qualified IT skills. These are essentially the most significant factors that will be scrutinized to explicate how they influence the use and adoption of cloud computing especially in the Kingdom of Saudi Arabia.

  1. Preliminary Literature Review
            2.1 Cloud computing

            According to NIST, cloud computing is a model for enabling ubiquitous, convenient, and on-demand network access to a shared pool of configurable computing resources such as networks, servers, storage, applications, and services, which can be rapidly provisioned and released with minimal management effort or service provider interaction. According to Leimeister et al.(2010), various researchers point out to cloud computing as a new paradigm and emerging technology, while others believe it is not really a new concept, as it uses traditional computing technologies, as cited by (Alshamaila & Papagiannidis, 2012). Cloud computing service models are classified based on the computing requirements of the clients and represent different layers of the cloud architecture:

 (1)       Infrastructure as a Service (IaaS): This allows the use of computer hardware and system software, including operation systems and communication networks in which the cloud provider is responsible for hardware installation, system configuration, and maintenance.

(2)        Platform as a Service (Paas): This layer provides a computing platform to support building of web applications and services completely residing on the Internet.

  • Software as a Service (SaaS): This allows users to run a variety of software applications on the Internet without necessarily having possession or managing application (Alali & Yeh, 2012).

            Cloud deployment models are classified according to the type of exclusive and non-exclusive method of providing cloud services to the clients as follows:

  • Public cloud: Which is available to the public or a large industry group and is owned by an organization selling cloud services.
  • Private cloud: is a cloud operated solely for an organization. It can be managed by the organization or a third party and can exist on or off premises of the organization.
  • Hybrid cloud: is composition of two or more cloud services such as private, public, and community.
  • Community clouds: is a cloud that is shared by several organizations and supports a specific community purpose, such as security requirement (Alali & Yeh, 2012).

            Cloud computing is a dynamic system that demands constant monitoring through the use of various relevant management tools and techniques that are malleable, protractile, and able to be customized as well as flexibility in adoption (Stolowy & Lebas, 2006). This helps to minimize challenges that come arise from the use and adoption of cloud computing such as lack of direct control, pricing, capacity management, and other management challenges. The global business environment is of a dynamic nature. As such, cloud computing is under constant threat because of unpredictable changes that are of great concern to the future of cloud computing (Nuseibeh, 2011). Therefore, most emerging issues are constantly addressed to allow businesses enjoy the potency and aptitude to fully exploit commercial opportunities. Experts and relevant stakeholders are doing everything they can to improve the efficiency of cloud computing and allow businesses to maximize the benefits derived from cloud computing. In other words, cloud computing is moving towards the productive stage to increase its effectiveness and reliability for businesses to realize its effectiveness in helping them achieve their goals and objectives. 

2.2. Cloud computing adoption by Small and Medium enterprises (SMEs)

            Small and medium enterprises (SMEs) are described by making use of number of employees employed within the enterprise. National Small Business Act defines SMEs by making use of three parameters: number of employees, annual turnover and gross assets. Also, National Small Business Act defines small enterprise with the number of employees less than 50 and medium enterprises with the number of employee between 100and 200 (Mohlameane & Ruxwana, 2014).

            According to AMI partners, small and medium businesses are expected to spend over $100 billion on cloud computing by 2014, (Marston et al., 2011). For SMEs, cloud computing promises to deliver tangible business benefits, often at much lower cost as they only pay for the resources needed, offering them good return on investment of their limited resources. In turn, they can focus on what truly delivers value to their customers and results in a competitive advantage (Kuyucu, 2011; Alshamaila & Papagiannidis, 2012). Cloud computing is indeed the most cost effective technological use among businesses yet its returns on investment is significantly huge. This is because, a company will only incur expense to the extent of their usage and there is no reserve capacity desecrated and it is more flexible in terms of its use and adoption. This allows businesses to adopt cloud computing when commercial activities are at their peak to maximize on the returns.

            The use of cloud computing allows businesses to access a wide array of IT services at an affordable cost. This helps businesses to avoid the huge costs and expenses incurred in developing their individual IT infrastructures. As far as installation and configuration of traditional solutions is concerned, businesses can enjoy high speed installation and configuration of their solutions through the use of cloud computing.

            Additionally, because cloud computing saves time and money to develop own IT infrastructures, SMEs can then maximize this benefit by shifting their focus on the core business activities in order to maximize their profits. The business environment is constantly engaged in erratic changes that affect significantly affect the position of a business. Cloud computing allows businesses meet growing and dynamic needs in the business environment enabling them to survive through unfavorable conditions. Most small and medium enterprises fear the adoption and use cloud computing because they are doubtful of lack of enough skilled personnel to help in the effective management of the system.

            However, cloud computing actually allows businesses to gain easy access to either remote or field expertise who have a vast knowledge about almost all systems. At an affordable cost, experienced and well-skilled IT consultants and managers can be relied upon for any problem regarding the use or adoption of cloud computing without necessarily wasting a lot of money to invest in traditional systems that are indeed a waste of time and money. This is because of their low efficiency compared to cloud computing, which is under constant improvement.

 

Fig. 1: Research framework
  1. Significant of the study

            The Kingdom of Saudi Arabia is undoubtedly growing at a tremendous pace more than any other regional countries to become the hub for digital innovation of cloud computing. There is a huge potential and opportunities for this country to gain technologically than any other neighboring country. Additionally, the country has been identified to have a robust traction of SMEs, which constitute approximately 90 percent of all business in the country. These SMEs experience different types of growth in terms of technological advancement. As far as the use and adoption of cloud computing is concerned, several of such business models have tried to implement cloud computing as a measure to improve communication efficiency as well as to foster easy data management. However, the adoption and usage of cloud computing vary from one business enterprise to the other depending on the aforementioned factors. This research will act as an important source and reference for many SMEs to enable efficient choice in the use and/or adoption of cloud computing.

            Limited research or literature has been found yet on this research topic in any developed country (Gupta et al, 2013; Alshamaila&Papagiannidis, 2012) as well as in Gulf Cooperation Council (GCC) region. Therefore, the research study reveals the perceptions as well as the intentions of the SMEs toward factors like (commercial expectations, risk management, cost reduction, security and data privacy, usability, top management support, firm size and shortage of qualified IT skills) in quantitative manner, which are quite different as perceived by the worldwide cloud community. The research will captured the actual decisions taken by the respondents rather than merely the eagerness and intention to adopt cloud computing.

            The major contribution of the research is to identify new factors as well as to develop a sense of the relative weight of existing factors. These will include factors such as commercial expectations, risk management, cost reduction, security and data privacy, usability, top management support, firm size, and shortage of qualified IT skills on SMEs approach toward usage and adoption of cloud computing for their businesses. A closer look into each individual factor could identify the inherent benefits that this research will have to most if not all managers and directors of small and medium enterprises. When there is high anticipation among SMEs that commercial activities will plummet in the near future, they usage and adoption of cloud computing will go up because of the fact that they will benefit from the venture due to improved efficiency. The research will provide a clear and concise overview of the commercial trends in Saudi Arabia, which SMEs can rely on to make effective decision regarding the use and adoption of cloud computing in their business operation to enhance efficiency in their operations (Pratt, 2009). SMEs are aggressive businesses that take risks in order to get returns. However, they are constantly engaged in hedging against various risks by taking precautions that effectively manage risks. This research will provide these business with a variety of accruing benefits when using cloud computing, which undoubtedly help to mitigate risk.

            The need for data security and privacy among SMEs is rising because of the fear that critical information may end up in the wrong hands of their competitors. The research will however demystify how cloud computing can help to reduce this and still allow sharing and transfer of critical files and information without necessarily exposing them to dangers of security breach for their data. Because of their size, SMEs constantly desire to reduce costs while maximizing their benefits including the labor and material costs. This makes them fear to use or adopt emerging technological trends such as cloud computing to improve efficiency and productivity of their businesses due to fear of lacking enough personnel with the skills and expertise. However, this research will indeed unravel how the incorporation of cloud computing will be beneficial and help to reduce costs as well as improve the productivity of these businesses in the long run (Janssen & Joha, 2011).

            According to Capitas Group International, Saudi Arabia is the largest economy in the GCC. SMEs have a strong footing within the Kingdom of Saudi Arabia in that they currently make up 90% of all businesses (C. G. I, 2012). Therefore, Small and medium enterprises (SMEs) are the key to unlocking the vast potential of the Saudi Arabian economy. In fact, within the GCC, Saudi Arabia has the largest number of public and private sector SME support programs. International Data Corporation (IDC) show the combined of the Saudi outsourcing market growing 16.3% year on year in 2014, for the IT services market as a whole. IDC (2014) expected to increase the spending on cloud computing 52.9% over the same period (IDC, 2014).

            According to Saudi Arabia Information Technology Report (2010), the value of Saudi Arabia’s information technology market, the biggest in the Gulf region at an estimated $ 3.3 billion in 2010, is expected to rise to $ 4.6 billion by 2014, (Saudi Gazzette, 2010). This research by studying existing factors like (commercial expectations, risk management, cost reduction, security and data privacy, usability, top management support, firm size and shortage of qualified IT skills), and identify new factors effect on the process of the cloud computing adoption by small and medium sized enterprise.

            The research finding will have important implications and great value to the research community, managers and cloud providers, in terms of formulating better strategies for cloud computing usage and adoption (Bhattacharyya, 2006). Using the finding of this research study by cloud providers will assist increasing their understanding of why and why not some SEMs choose to adopt cloud computing.

  1. Purpose of the Study

            The purpose of the research is to contribute to a growing body of research on cloud computing usage and adoption, by studying existing factors such as commercial expectations, risk management, cost reduction, security and data privacy, usability, top management support, firm size, and shortage of qualified IT skills. Additionally, the study will seek to identify new other factors affecting the process of the cloud computing adoption and usage by small and medium sized enterprise (SMEs). The Kingdom of Saudi Arabia have been selected for this study because of the fact that it is a region that has incredible potential to become home of digital innovation of cloud computing, SMEs have a strong footing within the Kingdom of Saudi Arabia in that they currently make up 90% of all businesses (S. A. T, 2010). This paper’s main research objective is to contribute to a growing body of research on cloud computing, by studying the SME adoption process. The Kingdom of Saudi Arabia was selected for this study, as it is one of most growing country in the region of GCC. For the purpose of this research proposal, small businesses will be defined as those businesses having 11-99 employees, and medium businesses are defined as having 100-200 employees, (Gupta et al, 2013).

  1. Research objectives and Questions

            The research will seek to identify existing factors that affect the usage and adoption of cloud computing among small and medium enterprises in the Kingdom of Saudi Arabia. In addition, the research will examine how each of the identified factors affect the usage and adoption of cloud computing. Specifically, the research will aim at finding out how commercial expectations, risk management, cost reduction, security and data privacy, usability, top management support, firm size, and shortage of qualified IT skills affect the usability and adoption of cloud computing among small and medium enterprises in Saudi Arabia. In the research, the following research questions shall then be asked:

  1. How does commercial expectation affect the usage and adoption of cloud computing?
  2. Does risk management strategies influence the usage and adoption of cloud computing?
  3. Does the need to reduce relevant costs in communication and file sharing arouse the need for use and adoption of cloud computing among SMEs?
  4. Is it the need for enhanced data security and privacy the trigger SMEs to want to use or adopt cloud computing?
  5. Do SMEs require top management support in order to use or adopt cloud computing?
  6. Is it the small or the big firms that use or adopt cloud computing?
  7. Does the shortage of qualified IT skills among SMEs affect the usage and adoption of cloud computing?
  8. How does usability of cloud computing affect its adoption among SMEs?
  1. Research Hypotheses

Hypothesis 1 If commercial expectations are high, then adoption and usage of cloud computing increases

Ho 1: Accept if high

Ha 1: Reject if low

Hypothesis 2 If the need for risk management is high, then usage and adoption of cloud computing is low

Ho 2: Accept if need is high

Ha 2: Reject if the need is low

Hypothesis 3 If SMEs want to reduce cost, then they will not use or adopt cloud computing

Ho 3: Accept if true

Ha 3: Reject of false

Hypothesis 4 If SMEs fear cloud computing as a threat to security and data privacy, then they will not use or adopt it.

Ho 4: Accept if true

Ha 4: Reject if false

Hypothesis 5 If cloud computing is easy-to-use among SMEs, then its adoption is high

Ho 5: Accept if cloud computing is perceived by SMEs to be easy-to-use

Ha 5: Reject of if cloud computing is perceived by SMEs not to be easy-to-use

Hypothesis 6 If there is high management support, then the use and adoption of cloud computing is high.

Ho 6: Accept if high management support

Ha 6: Reject if low management support

Hypothesis 7 If the size of the firm id big, then the us and adoption of cloud computing is high

Ho 7: Accept if big size

Ha 7: Reject if small size

Hypothesis 8 If the there is a shortage of qualified IT skills, then the use and adoption of cloud computing among SMEs is high.

Ho 8: Accept if there is a shortage of qualifies IT skills

Ha 8: Reject if there is plenty of qualifies IT skills

 

 

 

 

 

Factor/ Hypothesis

Ho: Accept

Ha: Reject

Commercial expectations

 

 

Risk management

 

 

Cost reduction

 

 

Security and data privacy

 

 

Usability

 

 

Top management support

 

 

Firm size

 

 

Shortage of qualified IT skills

 

 

Table 1: Summary of study hypothesis

  1. Methodology

7.1. Research design

            This study will seek the opinion of top SME employees and managers such as CEOs, IT managers, and business owners and directors in various industries. A total number of 1000 participants will be involved in the study. This will include 300 employees, 200 CEOs, 300 IT managers, and 200 business owners and directors. The aforementioned will be the target population for the study descriptive research design will be relied upon in the case where the target respondents are believed to elucidate or describe specific issues concerning the significant variables in the study. This research design is appropriate because it will allow the research to explore and explicate the nexus between identified factors (commercial expectations, risk management, cost reduction, security and data privacy, usability, top management support, firm size and shortage of qualified IT skills) on SMEs approach toward usage and adoption of cloud computing for their businesses) that influence the usage and adoption of cloud computing and the ability of small and medium enterprises.  The use of descriptive research design will provide quantitative data as well as qualitative data from a representation of the target population.

7.2. Data collection and analysis

            The primary data collection for the study will rely on individual survey questionnaires, which will be sent to randomly selected respondents. The questionnaire will be sent to various randomly selected respondents through email after obtaining their consent prior to sending them the questionnaires. Emails will be preferred because of the fact that these respondents are geographically apart and this will eventually reduce the cost incurred in conducting the research by significantly cutting down on transport costs and other relevant expenses. The questionnaire will be devised in a manner that it will be able to collect both quantitative and qualitative data to improve the reliability and validity of the study in terms of its relevance to top management’s decision-making process, which is critical in the overall management of small and medium enterprises. This research questionnaire will comprise of three distinguished yet crucial parts.

            The first part will focus on acquiring study demographics from the selected respondents and will encompass a variety of both open and closed ended questions related with the identified factors that affect the usage and adoption of cloud computing. The second part will give much attention on exploring the various factors influencing the usage and adoption of cloud computing and will essentially contain 8 different questions. This part will also deal with the identification of other factors and how they affect the usage and adoption of the cloud computing among SMEs in Saudi Arabia. Finally, the third part will allow room for personal viewpoint of the respondent and it will contain a series of open-ended questions relevant in outlining various ways that the managers feel are appropriate to encourage the use and adoption of cloud computing among small and medium enterprises. Analysis of data will be done to give a summary of the research and make necessary recommendation to provide a generalized, reliable, and valid report.

  1. Potential Problems and Limitations

            Although the research is expected to be carried out without any significant hitch, it will be ignorant to assume potential problems and limitation throughout the research period. Possible problems in the course of the study may arise from financial constrains, which will limit the amount of data and hence adversely affect the validity and reliability of data. In addition, due to the long distance between the researcher and the respondents, it is possible to experience delays in getting the responses from the selected target group for the study. Consequently, this will affect the timing and the estimated costs thereby causing unnecessary logjam of data for effective analysis and reporting. It is also possible that some respondents could ignore the emails or procrastinate sending their responses and eventually failing to submit their responses. Other mails may simply fail to be delivered due to system errors and other unexpected hiccups.

  1. Conclusion

            Cloud computing is and has been used by small and medium enterprises in Saudi Arabia for over a decade now. However, there is a lot of disparity as regards to the usage and adoption of it among these business models. Defined by their size, commercial expectations, risk management, cost reduction, security and data privacy, usability, top management support, and shortage of qualified IT skills, SMEs consider this factors before adopting or using cloud computing in their business organization. A critical look at each factor will reveal exactly how they influence the decision to adopt and use cloud computing among SMEs. Using relevant data and information obtained through this research as well as through review of relevant literature, recommendations will be made regarding the use and adoption of cloud computing among SMEs in Saudi Arabia.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bibliography

(IDC), I. D. (2014). Cloud Computing in Saudi Arabia Moves from ‘Hype’ to ‘Test’ Phase; Expected to Grow by 52.9% in 2014 . Massachusetts: IDC .

Abhishek Gupta, L. V.-S. (2013). The Who, What, Why and How of High Performance Computing Applications in the Cloud. Hewlett-Packard Development Company , 1-12.

Bhattacharyya, A. K. (2006). Financial Accounting For Business Managers (3 ed.). (A. K. Bhattacharyya, Ed.) Chicago: PHI Learning Pvt. Ltd.

Janssen, M., & Joha, A. (2011). Challenges for adopting Cloud-Based Software as a Service (SaaS) in the Public Sector. ECIS 2011 Proceedings .

Gazette, S. (2010). Arab bourses gain $100 billion in 2010; trading tumbles. Jeddah: Saudi Gazette.

Grance, P. M. (2011). The NIST Definition of Cloud Computing. Journal of Information Technology Laboratory , 800-145.

International, C. G. (2012). Small and Medium size Developers supply 70% of housing in the Kingdom. Jeddah: Osool Magazine.

Kuyucu, A. D. (2011). The playground of cloud computing in Turkey. Procedia Computer Science , 459–463.

Leimeister, S., Böhm, M., Riedl, C., & Krcmar, H. (2010). The Business Perspective of Cloud Computing: Actors, Roles and Value Networks. ECIS 2010 , 1-13.

Marstona, S., Lia, Z., Bandyopadhyaya, S., Zhanga, J., & Ghalsasib, A. (2011). Cloud computing — The business perspective. Decision Support Systems , 176–189.

Nuseibeh, H. (2011). Adoption of Cloud Computing in Organizations. Adoption of Cloud Computing in Organizations .

Pratt, S. P. (2009). Business Valuation Discounts and Premiums (2 ed.). (S. P. Pratt, Ed.) New York: John Wiley & Sons.

Stolowy, H., & Lebas, M. J. (2006). Financial Accounting and Reporting: A Global Perspective (reprint ed.). (H. Stolowy, & M. J. Lebas, Eds.) London: Cengage Learning EMEA.

Sultan, N. A. (2011). Reaching for the “cloud”: How SMEs can manage. International Journal of Information Management , 272-278.

Technology, S. A. (2010). Research and Markets: Saudi Arabia Information Technology Report Q4 2010 Forecasts a Software Market Value of US$611mn in 2010, Up From US$558mn In 2009. Dublin: Saudi Arabia Information Technology Report.

 

 

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