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The reason to explain the cloud computing assimilation, as well as the understanding of the operational performance, still remains unclear. To investigate this issue, this study has examined the assimilation of cloud computing by examining the organization’s implementation of cloud computing and performance in the Malaysian public sector. Grounded by the Diffusion of Innovation Theory (DOI), Technology-Organization-Environment Framework (TOE) and IS Success Model. This study proposes a framework by decomposing Technological characteristic, Organizational characteristics, Environmental characteristics and Human characteristics as factors. A total of 169 agencies from the Malaysian public sector have participated in this study. Data for all the study variables have been collected through self-administered survey questionnaires and analysed using SEM-PLS. The study has shown that the effect of the operational effectiveness of cloud implementation is at a lower level. The study also reveals that factors of relative advantage, compatibility, perceived risks, top management support, and organizational readiness are found to have a significant effect on cloud computing implementation. However, both external support and government regulations are not significant to the cloud computing implementation in the Malaysian public sector. The results indicate that the model provides a good understanding of the factors that influence the implementation of cloud computing as well as operational performance.
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International Journal of Business and Society, Vol. 21 No. 1, 2020, 134-152
134
PERFORMANCE AND KEY FACTORS OF CLOUD
COMPUTING IMPLEMENTATION IN THE PUBLIC
SECTOR
Hasimi Sallehudin
§
Universiti Kebangsaan Malaysia
Azana Hafizah Mohd Aman
Universiti Kebangsaan Malaysia
Razli Che Razak
Universiti Malaysia Kelantan
Mohammad Ismail
Universiti Malaysia Kelantan
Nur Azaliah Abu Bakar
Universiti Teknologi Malaysia
Ahmad Firdause Md Fadzil
University of Sultan Zainal Abidin
Rogis Baker
National Defence University of Malaysia
ABSTRACT
The reason to explain the cloud computing assimilation, as well as the understanding of the operational
performance, still remains unclear. To investigate this issue, this study has examined the assimilation of cloud
computing by examining the organization’s implementation of cloud computing and performance in the
Malaysian public sector. Grounded by the Diffusion of Innovation Theory (DOI), Technology-Organization-
Environment Framework (TOE) and IS Success Model. This study proposes a framework by decomposing
Technological characteristic, Organizational characteristics, Environmental characteristics and Human
characteristics as factors. A total of 169 agencies from the Malaysian public sector have participated in this
study. Data for all the study variables have been collected through self-administered survey questionnaires
and analysed using SEM-PLS. The study has shown that the effect of the operational effectiveness of cloud
implementation is at a lower level. The study also reveals that factors of relative advantage, compatibility,
perceived risks, top management support, and organizational readiness are found to have a significant effect
on cloud computing implementation. However, both external support and government regulations are not
significant to the cloud computing implementation in the Malaysian public sector. The results indicate that
the model provides a good understanding of the factors that influence the implementation of cloud computing
as well as operational performance.
§ Corresponding author: Fakulti Teknologi dan Sains Maklumat, Universiti Kebangsaan Malaysia, UKM Bangi, 43600 Bangi,
Selangor. hasimi@ukm.edu.my
Performance And Key Factors Of Cloud Computing Implementation In The Public Sector 135
Keywords: Cloud computing; Implementation; Public sector; Performance; TOE framework; IS Success
Model
___________________________________
Received: 11 August 2018
Accepted: 30 December 2019
1. INTRODUCTION
The adoption and implementation of new IT innovation continue to be an interesting research topic.
The advancement of IT innovation implementation provides organizations the excess for potential
opportunities to increase efficiency, enhance services, lower costs, and improve business value.
As IT innovation implementation becomes an increasingly integral aspect of organizations,
decision makers must understand the forces and factors that shape the adoption and implementation
decision. However, this decision is far from simple. In today’s dynamic, global, and highly
competitive business environment, executives and IT decision makers must make smart and value-
justified decisions about their technology implementation, investment and strategy (Laudon &
Laudon, 2010; Tarutė & Gatautis, 2014). Organizations must carefully assess their current state
of IT environment, determine potential gaps, identify opportunities, evaluate a range of IT options,
and select the right solutions that can meet their immediate needs and align with their long-term
business goals.
In many cases, IT adoption decisions are further complicated by incompatible and complexity of
innovation, uncertainty for risks, lacks organizational readiness, stakeholders’ pressure and
requirement, regulatory influences, and supplier forces (Ayyash et al., 2012; Hong & Zhu, 2006;
Premkumar, 2003; Ramdani et al., 2013; Ramdani et al., 2009). In addition, contextual factors
often shape the decisions organizations make with respect to their IT implementation investments.
The complexity of the technology decision increases even further when the IT under consideration
is just emerging and its value is still unknown. For instance, the decision of the latest IT innovation
such as virtualization, green computing, and cloud computing adoption among businesses and
governments around the world is not growing as fast as expected even though it provides both
strategic and operational advantages to its adopters (Buyya et al. 2009; Low et al. 2011).
In relation with the emergence of new technologies in the era of Industry Revolution 4.0 (IR4.0)
such as cloud computing, organizations’ innovativeness in adopting these technologies varies
distinctly (Li et al. 2015). Although the technologies are proclaimed to provide numerous benefits
to the organizations, the acceptance of cloud computing services and resources among organization
has been far from expectations (Buyya et al., 2009; Low et al., 2011). Many organizations are
undertaking cloud computing services and resources initiatives quite cautiously by taking one step
at a time or preferring to 'wait-and-see'. Hence, it is imperative that a study on cloud computing
services and resources adoption in an organization is carried out to determine the factors that
influence organizations’ propensity to adopt technologies. Our assertion is supported by the Cisco
Internet Business Solutions Group (IBSG), which has identified the topic of cloud computing
services and resources adoption, and measuring economics survive today as a critical strategy for
the organization and become the main research priority for 2013 to 2020 (Williams, 2012).
In the Malaysian Public Sector, the government cloud initiatives or MyGovCloud (formally known
as 1GovCloud) was introduced and officially launched in July 2013 to embark the initiative of
136 Hasimi Sallehudin, Azana Hafizah Mohd Aman, Razli Che Razak,
Mohammad Ismail, Nur Azaliah Abu Bakar, Ahmad Firdause Md Fadzil, Rogis Baker
National Digital Economy. MyGovCloud offers cloud hosting that provides a number of resources
(network, storage, server and operating system) to the agency. The deployment model of
MyGovCloud is based on a private cloud and the service is based on Infrastructure as a Service
(IaaS). Until now, a total of 250 applications that included in MyGovCloud such as MyMTC,
MyMesyuarat, MAMPU website, MyRELA website, and e-Solat JAKIM. The MyGovCloud
services are offered to all seven hundred thirty (730) organization in the Malaysian public sector
which covers all federal central agencies, federal operating agencies, and state operating agencies.
However, recent statistic from MAMPU stated that there were only 61 public agencies utilized the
MyGovCloud services while majority of agencies prefer to operate their own data centres, even
though they have already subscribed to MyGovCloud (Amron et al., 2018; Sallehudin et al., 2019).
Based on the issue highlighted, there is a lack of studies regarding the IT effectiveness in the public
sector. Several initiatives have been taken by the Malaysian government to adopt IT innovation
such as cloud models for optimizing digital economy practices. However, the effectiveness
measures in this study is sufficient to explain that cloud computing implementation is significant
to the performance on IT effectiveness (Sallehudin et al., 2019). Therefore, this study concerns to
understand what are the hindering factors in the implementation of cloud computing services in
the Malaysian Public Sector context by deriving an integrated information system theory models
used by similar studies. This is highly relevant theoretically and practically, since despite of mega
implementation of cloud computing initiative by the government, it seems that not all government
agencies fully utilizing the cloud computing infrastructure and services provided. Hence, the
central aim of this study is to examine the influence factors related to cloud computing services
assimilation and its operational effectiveness in the Malaysian public sector. Determining the key
factors that contribute to the implementation of cloud services in Malaysia is essential. Without
understanding the diversity factors affecting complex processes and stages of cloud computing
implementation, the drive to adopt and develop cloud computing implementation will not
effectively contribute to the public sectors’ IT effectiveness (Amron et al., 2018; Meri et al., 2019;
Mukred et al., 2017; Sallehudin et al., 2016). Therefore, this study aims to fill this gap by
investigating technological, organizational and environment affecting cloud computing
implementation by the public sector.
2. THEORETICAL FOUNDATION
The spread of innovation theory (DOI) from Rogers (2003) is often used to describe adoption and
acceptance of innovation, especially in the fields of IT research. Rogers focuses on connecting
ideas which consist of ideas, processes, and technologies throughout the interval between members
in the social system. According to Rogers (2003), participants of the social system are adopters
who can be individuals, organizations or communities. Rogers’s DOI theorizes that five
innovations characteristics - relative advantage, compatibility, complexity, trialability and
observation; make it easier for technology innovation to adopted and faster dissemination.
Research on the use of innovation has explored the factors that affect the adoption of technological
innovation using these characteristics. However, the nature of technology is characterized by the
main objectives context of the technology itself (e.g. cloud computing technology), rather than the
independent context, such as the nature of the decision maker as well as regulatory and
environmental factors (internal or external).
Performance And Key Factors Of Cloud Computing Implementation In The Public Sector 137
Another model of technology adoption that is the basis for many investigations of information
systems (IS) use in organizational levels is the TOE framework. This model discusses the
predictors of information systems penetration by Tornatzky and Fleischer (1990). The TOE
framework is an organizational ranking model that describes three different context attributes of a
company that influence the decision on use. These three elements are technology, organization
and environment. Technological backgrounds represent technological and innovation characters
used by organizations. The organizational context refers to the characteristics of the company,
such as the size of the organization and the volume of resources. Finally, the context of the
environment illustrates the structure of the industry and the environment surrounding the
organization that conducts the business. The TOE model suggests that the attributes of the three
contexts will influence the use of innovation within the organization particularly cloud computing
(Sallehudin et al., 2019; Hassan et al., 2017).
Next, the IS success is one of the most studied topics in information systems literature (Ayyash et
al., 2012). Measuring IS success is considered a critical issue in the IS field. Several studies have
been conducted and many attention has been given to this problem because of the amount of funds,
time and effort spent on the IT projects (Mohammed & Ibrahim, 2015; Syed et al., 2018). IS
literature have some definitions and dimensions of IS success. As DeLone and McLean (1992)
stated that, even though there are many measurement in the studies; evidently there is no decisive
definition of IS success. The definition of IS success can vary depending on different IT types that
provide different benefits to individuals, working groups, and organizations. Based on definitions
and construct conceptualization by DeLone and McLean's (2003) and IS success model, this study
conceives Ramamurty's (1990) implementation outcome as in reduced IT operating cost as well as
principal to enhanced productivity and quality in service delivery. Therefore, this study defines the
Malaysian Public Sector cloud computing implementation particularly on its effect to operational
efficiency as a success measure in this context.
3. RESEARCH MODEL AND HYPOTHESES
Based on the work of DeLone and McLean (1992) and Tornatzky and Fleischer (1990) a
theoretical-based model for cloud computing implementation using a TOE framework and IS
Success Model was developed and is depicted in Figure 1. The implementation variable in the
model is not acting as mediator. It is a sequence of events to implement then followed with
consequences after the implementation, which is in this study conceptualized as operational
effectiveness. More specifically, it is similar to the sequent of events in TAM model for behavioral
intention to actual use (Davis, 1989).
3.1. Technology Context
In this study, the technological context characterizes cloud computing characteristics such as
relative advantage and compatibility. Both factors might determine the likelihood might stimulate
of cloud computing implementation by the Malaysian public sector. Both the DOI theory and TOE
model of IT innovation emphasize on the importance of the innovation factor to the implementation
of IT innovation.
138 Hasimi Sallehudin, Azana Hafizah Mohd Aman, Razli Che Razak,
Mohammad Ismail, Nur Azaliah Abu Bakar, Ahmad Firdause Md Fadzil, Rogis Baker
Relative advantage is perceived as benefits for an organization over previous ways of completing
the same task (Alam et al., 2011; Moore & Benbasat, 1991). Relative advantage has been found
to be one of the dominant factor and completely correlated to an IT innovation implementation.
For instance, a recent study by Sallehudin et al. (2019) confirmed that the relative advantage of
cloud computing is positively associated with cloud computing adoption within the SMEs in
Malaysia. In view of the benefits that cloud computing compromises, the Malaysian public sector
who perceived cloud computing as advantageous would likely to adopt cloud computing hence
enhance their service delivery. Therefore, the following hypotheses were proposed.
H1: Relative advantage positively affects the implementation of cloud computing.
Cloud computing compatibility refers to the degree to which cloud computing is compatible with
an organization’s values and beliefs. The questions measure respondent’s perspective in terms of
the compatibility of the cloud computing on the current aspect of IT system or services in the
agency and the fitness of cloud computing to be integrated with the current IT systems (Sallehudin
et al., 2019). In the Malaysian public sector, most of the traditional or incumbent systems and
technology infrastructure are based on the famous and known technology solutions such as
Microsoft, Linux, Oracle, Cisco, and etc. This technology supports cloud computing compatibility.
Therefore, the following hypotheses were proposed.
H2: Compatibility positively affects the implementation of cloud computing.
The literature identifies perceived risks as an essential element of a relationship when security,
trust or uncertainty is present (Akturan & Tezcan, 2012; Chen, 2013; Gewald & Dibbern, 2009;
Horst et al., 2007; Oh et al., 2012). The intention to focus on implication and impact of the
TECHNOLOGICAL
Relative Advan tage
Compatibility
Perceived Risks
ORGANIZATIONAL
Top management support
Organizational Readiness
ENVIRONM ENT
Government Regulatory
Vendor Support
CLOUD COMPUTING
IMPLEMENTA TION
OPERATIONAL
EFFECTIVENESS
H1, H2, H3
H4, H5
H6, H7
H8
Figure 1: Research Model
Performance And Key Factors Of Cloud Computing Implementation In The Public Sector 139
perceived risk factor in this study is because recents studies reveals that the dark side of cloud
computing are the security concerns which become a main barrier toward cloud computing
acceptance, adoption and implementation (Buyya et al., 2009; Jaatun et al., 2012; Wyld, 2010).
Despite vendor claims to improved security through improved expertise and redundancy, security
remains a sticking point for the cloud computing model. A customer of cloud computing will lose
control over their resources. They only provided with access to the subscribed package.
In a highly sensitive situation, security and other business requirements customised by the vendors
but with the extra and special setting and it’s involved with a high cost. Data integrity and privacy
were other issues in cloud computing models (Sallehudin et al., 2019; Wyld, 2010). In traditional
infrastructure environment, the organization has full control over their sensitive and confidential
data within the organization or secret data recovery centre in other places. However, in a cloud
computing environment, the organization will lose its control over access to sensitive and
confidential data because the data is stored outside of their premises or country. In the public
sector particularly in the Malaysian public sector, security and confidentiality of the data are the
main focus for any new IT innovation implementation (Safie et al., 2017). Therefore, perceived
risk factors will negatively influence this relationship when it compromises to IT security breach
as a big issue in the public sector. Therefore, the following hypotheses were proposed.
H3: Perceived Risks are less likely to affects the implementation of cloud computing.
3.2. Organization Context
The organization context signifies the organizational elements, which is described by this study as
the element of the agencies in the Malaysian public sector that determine its influence to adopt
cloud computing. The TOE emphasizes the prominence of the organizational factor to the adoption
of innovation. Commitment and support by top management structure are shown to be a favour
for the acceptance of technological innovation in adopting organization (Alshamaila &
Papagiannidis, 2013; Borgman et al., 2013; Low et al., 2011; Ifinedo, 2010; Tornatzky & Fleischer,
1990).
The influence of top management acts as change agents in the decision process. The decision could
be positive or negative to the adoption. The positive decision by top management will create full
support to the adoption process and leads to project implementation success. In the context of
cloud computing, this innovation provides a better solution for business process both in technical
and non-technical. For the technical view, cloud computing offers 3 types of service and 4
implementation models as discussed previously. From a non-technical point of view which is
considered as benefits for business advantage, cloud computing offers elasticity, simplicity,
shared-services, enhanced service delivery and collaboration solution for competitive advantage
that leads to greater achievement for e-government service sustainability. Therefore, the following
hypotheses were proposed.
H4: Top Management Support positively affects the implementation of cloud
computing.
Organizational readiness represents the internal IT maturity for new innovation implementation.
The availability of financial, human and technical readiness should be adequate with the related of
140 Hasimi Sallehudin, Azana Hafizah Mohd Aman, Razli Che Razak,
Mohammad Ismail, Nur Azaliah Abu Bakar, Ahmad Firdause Md Fadzil, Rogis Baker
new innovation that will be implemented (Yusof & Arifin, 2016). In the context of Malaysian
public sector, agency’s readiness would cover all these three aspects; adequate cost, competence
human resources (IT staff) for support and troubleshoot, and sufficient technological/technical
infrastructure. A prior study found that organizational readiness was the significant factor for IT
innovation adoption such as enterprise resource planning (ERP), e-business and knowledge
management system (Lin, 2012). New IT innovation implementation without organizational
readiness in terms of inadequate financial, incompetence or insufficient IT staff support and lack
of technological infrastructures will create problem to the implementation project and sometimes
the project was delayed or failed.
For cloud computing implementation in the Malaysian public sector, the agency should ready with
competence IT staff to support and troubleshoot the services during and after implementation.
Agency also should have sufficient computer network infrastructure with a reliable internet
connection and faster download/upload speed. This is because access to cloud computing services
is via computer networking infrastructure. Unreliable internet connection and slow
download/upload speed in the agency will create problem or disruption of services, thus will lead
to the failure of cloud computing implementation. Therefore, the following hypotheses were
proposed.
H5: Organizational Readiness positively affects the implementation of cloud
computing.
3.3. Environmental Context
The environmental factor represents the environmental characteristics, which can be defined as the
characteristics of the environment in which the agencies run its business that may contribute in
creating the need for an ability to adopt and implement the cloud computing innovation. The TOE
framework emphasizes the importance of the environmental factor to the adoption of innovation.
However, the environmental factor needs to be modified based on the current issues and problems
identified at the organizational-level adoption of innovations in the Malaysian public sector
agencies. Many studies have emphasized the importance of the environmental factor to the
adoption of IT innovation (e.g. Alshamaila & Papagiannidis (2013); Lin (2013)).
The IT innovation implementation in the public sector is an internal arrangement within the IT
department and another department such as finance, human resource and management board or
council to support an approval. There is a body of research showing that the assistance of external
IT experts, consultants and vendors, and their quality are some of the most important aspects of
the IS implementation among organizations (Ghobakhloo & Tang, 2015). As explained
previously, most agencies in the Malaysian public sector are suffering from a lack of internal IT
expertise (MAMPU, 2011). Since this issue is a significant barrier to the IT development and
advancement within the Malaysian public sector, they must overcome this problem through either
seeking help from external sources or developing their own internal cloud computing skills.
Consistently, Kaliannan, Raman, & Dorasamy (2009) empirically demonstrated that IT usage
within organizations hiring external consultants has been higher than usage among organizations
without consultants. It was also reported that user satisfaction with IT among organizations is also
affected significantly by external IT assistance. The author consistently argues that public sectors,
especially in developing countries are suffering from severe lack of IT knowledge, skills and
Performance And Key Factors Of Cloud Computing Implementation In The Public Sector 141
supports (Ghobakhloo & Tang, 2015), therefore, it is imperative for these organizations to
frequently seek assistance from external experts to lower their IT innovation barrier.
On the other hand, technology providers or vendors often try to promote the adoption of new
technology by giving discounts or incentives on new technology purchases, offering competitive
upgrades to newer technology, providing free help and training to potential customers (Maclennan
& Belle, 2014). Thus, all this will provide direct support for IT innovation implementation. In
addition, various external IT integration and development tools supporting heterogeneous
environments and runtime monitoring tools are important in the cloud computing environment for
the public sector. Therefore, the following hypotheses were proposed.
H6: External IS support positively affects the implementation of cloud computing.
Government regulatory supports is found to be another critical environmental factor that tends to
affect innovation diffusion. In the Malaysian public sector, government regulatory supports are
the directives or circulars from Chief Secretary of the Government (KSN), federal ministries or
central agencies such as MAMPU, regarding the implementation of certain policies or procedures
for adoption, along with a set of specific deadlines. In response to such directives, a series of
actions will follow where agencies will instruct their internal department to act accordingly. The
directives or circulars could be as a mandated, voluntary and guidelines for agencies to comply.
For mandated directive, agencies must obey the rules and guidelines provided. For instance, the
5-years Public Sector ICT Blueprint that was developed by MAMPU triggered the development of
agency-specific ICT Strategic Plans (ISP) across the nation, in an effort to enhance nationwide
public service delivery. In another example of mandated directive and guidelines is the approval
for IT projects (MAMPU, 2015), data center management guidelines (Garis Panduan Pengurusan
Pusat Data, 2011) and ICT security policy in agencies (MAMPU, 2000). For a voluntary situation,
agencies are not forced to follow or implement the directive order but they can follow the
guidelines provided for reference. The example of the voluntary directive is the implementation of
an open source system in agencies.
In other situation, agencies can adopt and implement any of IT innovation to the organization by
their own accord without a directive from central agencies. In this case, the organization need to
provide justification and project paper for financial approval by MAMPU and Economic Planning
Unit (EPU) in the Prime Minister Department. Cloud computing implementation with a directive
from MAMPU will be easily to receive support in terms of human resource, management and
financial within the organization. Therefore, the following hypotheses were proposed.
H7: Government regulatory support positively affects the implementation of cloud
computing.
3.4. Cloud computing Effectiveness
The benefits of cloud computing in the public sector are also reflected in the use of an expanded
IT to create government value. For instance, in the virtualization environment (Buyya et al., 2011),
the characterization of a cloud computing system allows adopters to feel the needs of the service
provision and improve the capacity of the corresponding organization by unifying the IT
infrastructure throughout the organization. With that environment, the organizations can evaluate
142 Hasimi Sallehudin, Azana Hafizah Mohd Aman, Razli Che Razak,
Mohammad Ismail, Nur Azaliah Abu Bakar, Ahmad Firdause Md Fadzil, Rogis Baker
or stimulate stakeholder’ requests accurately and seek the provision of services provided by the
government. As such, the extent of cloud computing implementation can lead to enhance
productivity and quality in service delivery (Armbrust et al., 2010; Buyya et al., 2011).
In addition, the cloud computing implementation benefits the IT procurement cost by saving the
procuring of redundancies hardware and software across agencies in the public sector as well as
improves IT staff utilization. Cloud computing offers inexpensive, faster, reduced inventory,
enhance the effectiveness of logistics, as well as improved access to IT services (Armbrust et al.,
2010; Buyya et al., 2011). For instance, one platform of IT server or data centre can be
consolidated by many organizations. As such, the operational IT services by one agency can be
shared by other agencies may reduce the IT operational cost for the entire organization. From the
purchasing government’s point of view, cloud computing facilitates procurement innovations to
result in a reduced purchased price, reduced cycle time and improved IT sourcing (Craig et al.,
2009; Wyld, 2009). Thus, the cost savings and efficiencies associated with cloud computing
implementation would result in reduced IT operating cost, which in tum result in better financial
performance thus improve the operational effectiveness. Therefore, the following hypothesis was
proposed.
H8: The implementation of cloud computing technology positively affects operational
effectiveness
4. RESEARCH METHOD
The population for this study was the agencies, departments and ministries in the Malaysian public
sector. Currently, there are seven hundred thirty (730) organization in the Malaysian public sector
enterprise. These organizations can be categorized into three administrative groups; federal central
agencies, federal operating agencies, and state operating agencies. To represent all of these
organizations, IT personnel at each of these organizations will appoint as appropriate respondents
to answer the questionnaire for this study. Stratified sampling techniques used to identify the
organizations to be as respondents. Based on Hair et al. 2010, a minimum sample size for this
study is 250. Because of the low response rate faced by the previous study in the Malaysian public
sector, this study decided to implement oversampling which doubles up the number. Therefore, in
total, five hundred (500) organizations identified as a respondent for this study and questionnaires
were distributed. After 2 months of the data collection period, only 226 questionnaires were
collected. After the data preparation process and examined for missing data and suspicious
response patterns, only 169 data were analysed for further data analysis.
From 169 valid responses, 36.1% were from the Federal agencies, State Statutory agencies by
17.8%, Federal Statutory agencies by 16.6%, Local Authority by 16% and followed with State
agencies by 13.6%. Majority of the respondents were located in the Klang Valley area consist of
Wilayah Persekutuan Putrajaya by 39%, Wilayah Persekutuan Kuala Lumpur by 17.2% and
Selangor by 10.1%. These can be explained that the majority of the government agencies
especially Federal agency are centrally located at Wilayah Persekutuan Putrajaya and scatted
around Wilayah Persekutuan Kuala Lumpur and Selangor.
Performance And Key Factors Of Cloud Computing Implementation In The Public Sector 143
Next, all item measurements are derived from previous studies that have been proven its validity
and reliability. All items have been adapted and adjusted to coincide with the context of this
research TOE and IS Success Model construct. Five-point Likert scales ranging from “1=strongly
disagree” to “5 = strongly agree” were used.
5. DATA ANALYSIS AND RESULTS
The methodology for measuring the research model of this study was structural equation modelling
(SEM) based partial least squares (PLS), SmartPLS M3 2.0 software. This approach has multiple
advantages over other methods such as multiple regressions. SEM-PLS are a popular structural
equation modelling technique to conduct data analysis.
Confirmatory factor analysis was performed to measure the reliability and uniqueness
(dimensionality) of the items. As suggested, we used factor loading, composite reliability (CR)
and average variance extracted (AVE) to assess convergent validity. The loadings of all items
have exceeded the recommended value of 0.5, except for one (1) item in the measures of
organizational readiness, perceived risk and top management support that below the recommended
value, which are dropped out for future analysis.
Based on Table 1, the CR value, which shows how constructive indicators indicate the latent
construct, exceeds the recommended 0.7, ranging from 0.763 to 0.965. The AVE, which reflects
the overall amount of variance in the indicators accounted for by the latent construct, were in the
range of 0.523 and 0.837 which exceeded the recommended value of 0.5. This suggested that there
was adequate convergent validity in all measures.
Table 1: Measures Validity and Reliability
Factor Loading
AVE
CR
Cronbach’s Alpha
0.862
0.776
0.965
0.959
0.887
0.885
0.849
0.737
0.918
0.881
0.874
0.894
0.814
0.929
0.837
0.911
0.853
0.812
NA*
NA*
0.523
0.763
0.643
0.616
0.724
0.802
NA*
0.555
0.861
0.799
0.799
0.722
144 Hasimi Sallehudin, Azana Hafizah Mohd Aman, Razli Che Razak,
Mohammad Ismail, Nur Azaliah Abu Bakar, Ahmad Firdause Md Fadzil, Rogis Baker
Factor Loading
AVE
CR
Cronbach’s Alpha
0.724
0.680
0.792
0.637
0.603
0.883
0.833
0.704
0.832
0.796
0.726
0.738
0.551
0.859
0.793
0.714
0.834
0.864
0.791
0.796
0.921
0.874
0.960
0.917
Notes: NA* items were deleted due to low loading
Discriminant validity is supported when the square root of the average variant extracted for each
latent construct is highest in its assigned construct. The evidence for the discriminant validity
between dimensions is given by comparing the correlation between the square roots of the AVE
among constructs. The results in Table 2 shows that the correlation of each construct is smaller
than the value of the square root of the AVE extracted by the index measuring the construct, thus
indicating sufficient validity of discrimination. Overall, the measurement model confirmed
adequate convergent validity and discriminant validity.
Table 2: Discriminant Validity of Latent Variables
RA
COMP
RISKS
TMS
ORS
GOVT
EXT
IMPL
OPEF
RA
0.881
COMP
0.646
0.858
RISKS
0.110
0.144
0.915
TMS
0.272
0.369
-0.094
0.723
ORS
0.204
0.312
0.054
0.314
0.745
GOVT
0.270
0.316
0.122
0.272
0.469
0.742
EXT
0.213
0.220
0.129
0.270
0.549
0.537
0.776
IMPL
0.348
0.270
0.021
0.049
0.263
0.353
0.306
1.00
OPEF
0.450
0.491
0.125
0.303
0.395
0.431
0.380
0.184
0.892
Notes: Items on the diagonal are square roots of AVE scores.
Lastly, the causal relationship between variables is examined through a structural model analysis.
The path coefficient and t-value analysis can approve data to support hypothesis models. To run
this analysis, statistical significance was assessed by t-tests based on a bootstrap procedure with
5,000 bootstrapping. This study begins our interpretation with the hypothesized factors. Table 3
shows a summary of the structural model in this study.
Performance And Key Factors Of Cloud Computing Implementation In The Public Sector 145
Table 3: Results of Hypothesis Testing
Hypothesis
Path Relationship Between
Variables
Path
Estimatio
n (β)
t
Valu
e
p-
Value
Results
H1
RA -> IMPLEMENTATION
0.194***
3.585
0.000
Supported
H2
COMP -> IMPLEMENTATION
0.086***
3.719
0.000
Supported
H3
RISKS -> IMPLEMENTATION
-0.017*
1.665
0.098
Supported
H4
TMS -> IMPLEMENTATION
0.160***
2.731
0.007
Supported
H5
ORS -> IMPLEMENTATION
0.145***
2.798
0.006
Supported
H6
EXT -> IMPLEMENTATION
-0.037ns
1.072
0.285
Not Supported
H7
GOVT -> IMPLEMENTATION
-0.070ns
1.161
0.247
Not Supported
H8
IMPLEMENTATION ->
OPERATIONAL
EFFECTIVENESS
0.267***
3.977
0.000
Supported
Note: Significant level = *** p<0.01; ** p<0.05; * p<0.10; ns not significant for one-tailed t-test
RA=Relative Advantage; COMP=Compatibility; RISK=Perceived Risks; ORS=Organizational Readiness; TMS=Top
management support; EXT=External Vendor Support; GOVT=Government Regulatory
The next step of structural model evaluation criteria analysis is the determination of R2. The R2
provides the percentage of variation in dependent variable(s) explained by the independent
variable(s) (Keil et al., 2000). The R2 value is one of the methods that can be used to predict model
accuracy in which a higher value of R2 means a higher level of predictive accuracy. The value of
R2 varies according to the number of measuring an independent variable(s) i.e. a higher number of
independent variable needs to produce a higher value of R2 and vice-versa (Chin, 1998).
Furthermore, the rule of thumb for acceptable R2 according to Chin (1998) that model having R2
as 0.67, 0.33, and 0.19 are considered as substantial, moderate, and weak respectively.
The result shown in Table 4 revealed that the R2, both initiation and implementation of cloud-based
services and resources by the Malaysian public sector falls under the moderate level that explained
by Technology, Organization and Environment factors, 41% for Initiation and together explained
50.2% or half of the variance for implementation. However, only 16.9% of the variance for
consequences by the cloud computing assimilation in the Malaysian public sector has been verified
in this study.
Table 4: Result of R2
Latent Variable
R2 Value
Implementation
0.502
Operational Effectiveness
0.169
6. DISCUSSION
The relative advantage was found to be the strongest total effect of the relationship between
technological factors and initiation as well as implementation. The relative advantage was found
to be a significant determinant of technology adoption in previous studies among organizations,
146 Hasimi Sallehudin, Azana Hafizah Mohd Aman, Razli Che Razak,
Mohammad Ismail, Nur Azaliah Abu Bakar, Ahmad Firdause Md Fadzil, Rogis Baker
firms and industries, including those related to e-commerce applications, Internet and e-business
technologies, Internet-based ICT, e-commerce, and RFID adoption as well as cloud computing
(Sallehudin et al., 2019). With regard to the relative advantage in this study, it can be argued that
the organization’s initiation and actual implementation of cloud computing can be adequately
predicted based on the relative advantage factors. One possible explanation for the relative
advantage being significant in this study is the diverse types of cloud computing being adopted,
with the belief that it provided a relatively greater improvement over their previous IT
infrastructure.
Compatibility was also found to be the strongest total effect of the relationship between
technological factors and the implementation of cloud computing by the Malaysian public sector.
This finding is consistent with earlier findings in other previous IT adoption studies among
organizations, firms and industries, including those related to e-commerce applications, enterprise
application and e-business technologies by (Alam et al., 2011) that found compatibilities are
significant to IT implementation. It can be argued that agencies perceived cloud computing as
being compatible and consistent with their potential needs, and prior experience with the existing
agency’s policies, practices, and IT infrastructure. The cloud computing features that are
compatible with all aspects of IT services in the Malaysian public sector lead to a higher level of
implementation among the agencies. Most agencies in the Malaysian public sector also found that
cloud computing services are completely compatible with the current IT system in their
department, thus influencing cloud computing implementation.
Perceived risks were hypothesized to have a negative influence or barrier factors on the
implementation of cloud-based services in the Malaysian public sector. This study found
significant support for the relationship between perceived risks as a barrier factor on the
implementation of cloud computing services and resources by the Malaysian public sector. This
finding is consistent with findings in the other previous IT adoption studies by Akturan and Tezcan
(2012). This finding is also consistent with the perception by Armbrust et al. (2010), Buyya et al.
(2011) and Wyld (2010), which stated that security plays the main dominant factors of a barrier to
cloud computing implementation. It can be argued that agencies believe that the risks of cloud
computing may affect their implementation of the cloud environment, especially the public cloud.
This is particularly true in the Malaysian public sector because the agency’s data requires a more
secure environment for storage and retrieval. Privacy issues are also a critical concern in the public
sector industry (Wyld, 2009). In addition, information and data confidentiality and privacy issues
in a cloud computing environment also turn to be significant to the Malaysian public sector to
implement this IT innovation.
Top management’s support and organizational readiness were found to be a significant
organizational factor in determining the implementation of cloud computing by the Malaysian
public sector. Top management’s support in an organization is important to enhance the diversity
of cloud computing. Moreover, intensive cloud computing services and resources require top
managers to continuously provide commitments and support to facilitate cloud computing projects
(Wyld, 2010). This finding is consistent with findings mentioned in the other previous IT adoption
studies such as enterprise resource planning application, e-commerce, Web 2.0, electronic supply
chain and business intelligence applications by Akca and Ozer (2014) and Xin et al., (2014) that
stated the top management plays a significant role in enhancing IT innovation implementation in
an organization. The positive effect of top management support may be even more significant in
Performance And Key Factors Of Cloud Computing Implementation In The Public Sector 147
the cloud computing service and resource context. It can be argued that cloud computing is a
complex organizational IT innovation involving a transformation in business processes and
strategies. Unlike e-business, ERP, e-commerce or other IT innovations, cloud computing services
and resources assimilation involves more complex organizational restructuring and transformation.
Therefore, continuous and practical supports from top managers may be more critical for cloud
computing services and resources engagement than other IT engagements. It can be argued that
the significant findings of top management support in cloud computing implementation extend the
cumulative knowledge of top managers’ role in innovation implementation of cloud computing.
That is, in the context of complex innovation, such as cloud computing, the power and influence
of top managers remain substantial and necessary for diffusing and routinizing innovation within
the Malaysian public sector.
Organizational readiness was found to have a significant effect on the implementation of cloud
computing assimilation by the Malaysian public sector. This is consistent with the findings in
other previous IT adoption studies such as green IT, RFID technology, enterprise systems and
internet and web technology which found that organizations with more IT resources have more
abilities to implement IT innovation. In studies specific to cloud computing adoption,
organizational readiness was a positive significant factor in the study (Hassan et al., 2017).
External IS support and government regulatory factors were found to have no significant to the
implementation of cloud computing in the Malaysian public sector. The result of this study is
consistent with the findings in Alkhater et al., (2014) and Dahiru et al., (2014) that found external
IS support was insignificant to cloud computing adoption. In addition, the result of this study also
supports the results of the study by Lin (2013), and Ramdani et al. (2009) that found external IS
support was insignificant to the IT adoption. Thus, it can be argued that the effect of external IS
support on initiation and implementation of cloud computing, especially from vendors, may be
different for each organization. Not all organizations received support from the same vendors for
the same solutions provided. However, the involvement of vendors to introduce cloud computing
solutions to organizations may provide the foundational motivation to the organization to evaluate
the potential benefits of cloud computing services and resources. These arguments are supported
by the significant relationship between external IS support and cloud computing initiation.
Government regulatory support in this study is viewed as the promotion, direction and support
from MAMPU as the main agency for IT administration and policy makers in the Malaysian public
sector. The study found that all the promotion, direction and support from MAMPU only influence
other agencies in the Malaysian public sector to initiate the potential benefits of cloud computing
services and resources but not enough to influence some of the agencies to actually implement it.
The policy, directive and promotion from MAMPU seem to be only taken as guidelines and the
advice is not mandatory for cloud computing assimilation. Thus, it only provides the foundational
intention for the organization to evaluate the potential benefits of cloud computing services and
resources but not the direction for their actual implementation.
As expected, the implementation of cloud computing significantly affects the organization’s
operational effectiveness thus, providing evidence to support the hypothesis H8 of this study. The
result of this study is consistent with the finding by Ainin et al., (2015) and Tseng and Liao (2015)
that emphasized IT innovation implementation and use have a positive impact on several
dimensions of organizational performance. In this regard, the consequence of organizational
performance measured in this study is operational effectiveness. According to Kundra (2011) and
148 Hasimi Sallehudin, Azana Hafizah Mohd Aman, Razli Che Razak,
Mohammad Ismail, Nur Azaliah Abu Bakar, Ahmad Firdause Md Fadzil, Rogis Baker
Wyld (2010), the public sector will gain an advantage to their IT operation and services by
implementing cloud computing. Therefore, the results confirm that the extent of cloud computing
implementation by the Malaysian public sector influences and is able to reduce IT operational cost,
improve productivity and enhance service delivery systems. Although the study found a significant
relationship between assimilation and impact, the variance effect of operational effectiveness and
actual implementation is only 0.169 or 16.9%. According to Gangwar et al., (2015), to gain value
and take full advantage of IT innovation implementation, organizations should make efforts to
fully routinize, and make full use of the cloud computing. In addition, another consideration to
improve the value of operational effectiveness is a complete integration of IT systems into cloud
computing of the Malaysian public sector.
7. CONCLUSIONS, LIMITATIONS AND FUTURE RESEARCH
This study was motivated to explore the relationship of the TOE framework toward the
implementation of cloud computing in the Malaysian public sector as well as the operational
effectiveness for its implementation. The study found that all technological and organizational
factors are influencing the implementation of cloud computing. However, environmental factors
found to not significant. By understanding the factors enhancing the implementation of a cloud
computing, the IT Manager or Decision Makers can consider these factors during the ICT Strategic
Planning blueprint development as part of the agency’s objective, action and KPI to implement
cloud computing. Further, the IT manager needs to engage decision maker in the development and
implementation phases to enhance cloud computing. These practices will help to maintain
effective communications between the top management, IT division and cloud provider and ensure
the continuity of cloud usage and utilization in agencies.
Although this study has produced interesting findings in term of presenting an extended model of
an organization’s assimilation process, these findings carry important limitation which is relevant
for future research. This study limitation is the subjectivity of classifying cloud computing
deployment strategies (public, private, and hybrid) and delivery strategies (IaaS, PaaS, and SaaS).
In this study, the approached agencies initially were only asked whether they implement any of the
thirteen-cloud computing in their agencies. Therefore, this study is unable to classify delivery and
deployment strategies of cloud computing implementation by the Malaysian public sector.
Another important factor for cloud computing, such as cost factors, is missing in this study. The
cost of adopting an innovation includes initial setup cost, fixed as well as variable operational cost.
The study has achieved its research objectives to construct the implementation framework of the
cloud computing services and resources in the Malaysian public sector based on the TOE and IS
success model. It has been developed and validated by robust statistical analyses. The results
generated based on the proposed assimilation framework of cloud computing in the Malaysian
public sector. It also can be used as empirical evidence for the decision makers in the public sector
to provide a plan for the successful adoption and implementation of cloud computing in the
Malaysian public sector. The results also can help the vendors and developers of cloud computing
to enhance the existing cloud computing support in order to meet the requirements and needs of
the public sector agencies.
Performance And Key Factors Of Cloud Computing Implementation In The Public Sector 149
ACKNOWLEDGEMENTS
This research was co-sponsored by the Centre for Software Technology and Management
(SOFTAM) of Faculty of Information Science and Technology, National University of Malaysia
(UKM), Malaysian Administrative Modernisation and Management Planning Unit (MAMPU) and
Public Service Department (PSD) of Prime Minister’s Department.
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The primary purpose of this book is to capture the state-of-the-art in Cloud Computing technologies and applications. The book will also aim to identify potential research directions and technologies that will facilitate creation a global market-place of cloud computing services supporting scientific, industrial, business, and consumer applications. We expect the book to serve as a reference for larger audience such as systems architects, practitioners, developers, new researchers and graduate level students. This area of research is relatively recent, and as such has no existing reference book that addresses it. This book will be a timely contribution to a field that is gaining considerable research interest, momentum, and is expected to be of increasing interest to commercial developers. The book is targeted for professional computer science developers and graduate students especially at Masters level. As Cloud Computing is recognized as one of the top five emerging technologies that will have a major impact on the quality of science and society over the next 20 years, its knowledge will help position our readers at the forefront of the field.