Transition to Cloud Sourcing - Innovation and Competitive Advantage

Looking into the topic of cloud sourcing, at first glance it might be seen as an off the shelf pay per use service that is easy and fast to adopt for most companies. Although in practice not all companies succeed with cloud sourcing. Previous research shows that cloud sourcing entails risks especially in the adoption phase in terms of security, trust, data loss, and transparency among others. The challenges faced by cloud customers and in specific larger companies are extensive; and can be all but cost effective. Companies that decide to cloud source need to understand that it is not only a service delivery model, but also perhaps a long term business relationship that can offer benefits beyond the cloud basics (scalability, cost reduction, flexibility). To address these complex challenges, more research is necessary on the barriers to cloud sourcing, capabilities to overcome these barriers and stay in the cloud successfully. The research purpose is to investigate cloud sourcing from the firm client perspective, more specifically the transitioning process from traditional IT outsourcing to cloud sourcing, i.e., the barriers to continuance of cloud sourcing, how cloud sourcing triggers innovation capabilities and its implications for competitive advantage. This is done in order to contribute to the business and management research knowledge of cloud sourcing.
The research is qualitative including interviews, observations and text analysis, based on three studies and reported in five appended papers. The first study is a state-of-art literature review on cloud sourcing phenomenon. Subsequent studies were based on empirical investigations. The second study identified sourcing motives behind sourcing decisions based on a pilot study. The third study expanded those findings through two case studies with cloud customer companies and other cloud partners involved in cloud sourcing relationships.
The cloud continuance process is argued to be a stage-based model enabling different types of innovations implicating various levels of competitive advantage, e.g., depending on how the cloud customer together with the other partners in cloud sourcing manages to develop the business relationship development process. Findings in this research suggest that dynamic capabilities in different forms can sense, seize and transform cloud sourcing into innovations and affect competitive advantage in the long run through new business models, market expansion, and new services. From a practical perspective the research can inform managers about common implementation problems when transitioning to cloud sourcing, and help them prepare for this process.