The Impact of Cloud Computing: Should the IT Department Be Organized as a Cost Center or a Profit Center?

• 成果类型: Article
• 署名作者: Choudhary, Vidyanand; Vithayathil, Joseph
• 署名单位: University of California System; University of California Irvine; Washington State University
• 刊物名称: JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
• ISSN/ISSBN: 0742-1222
• DOI: 10.2753/MIS0742-1222300203
• 发表日期: 2013
• 页码: 67-100
• 关键词: Supply chain coordination; INFORMATION; services; QUALITY; CONTRACTS

摘要

How does the adoption of cloud computing by a firm affect the organizational structure of its information technology (IT) department? To analyze this question, we consider an IT department that procures IT services from a cloud computing vendor and enhances these services for consuming units within the firm. Our model incorporates the competitive environment faced by the cloud vendor, which affects the price of the cloud vendor. We find that when the cloud vendor faces intense competition, the cost-center organizational model is preferred over the profit-center model. Infrastructure services such as basic storage, e-mail, and raw computing face intense competition, and our results suggest that such services be offered as a free corporate resource under the cost-center organizational structure. When the cloud vendor has pricing power, a profit-center organizational structure is likely to be preferred. Our results suggest that highly differentiated services such as cloud-based enterprise-wide enterprise resource planning or business intelligence be offered under the profit-center structure. Finally, the profit-center structure provides greater internal quality enhancement to cloud-based IT services than the cost center.