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own IT infrastructure.
In some organizations, the investments of IT may exceed 50 % of annual capital investment and it has been suggested that, by 2010, the average IT expenditure will be 5 % of revenue [Graeser, Willcocks, Pisanias, 2010]. That is why few SMEs implement IT infrastructure. So we want to propose alternative information technology that can implement by SMEs but can answer the limitation of capital that SMEs face.
Most of papers discussed about cloud computing side more than SMEs side.
Several researchers that discussed about cloud computing and SMEs are from information technology background like Kourik, 2011; Briscoe and Marinos, 2009;
Weindhardt, 2009. Kourik, 2011 discussed about implementation cloud computing in SMEs from risk assessment and security side.
Briscoe and Marinos, 2009 discussed about cloud computing in community. How cloud computing used in community service.
Although some of researchers have discussed about cloud computing and SMEs like Sharma, et al. 2010.
The originality of this paper is the author wants to propose cloud computing as an alternative IT solution for SMEs especially in Indonesia. Sharma, et al. 2010 already discussed about implementation cloud computing for SMEs in India. They used qualitative and quantitative as their research methodology. In Indonesia, there is no paper that discuss about propose implementation of cloud computing in SMEs. The author used different research methodology and
SMEs’s capital.
1.2. Research objectives
The research objectives of this paper are : 1. To understand why information
technology is needed especially for SMEs
2. To propose alternative technology that suitable for SMEs condition 3. Compare between own information
technology and alternative technology (cloud computing) based on affect for SMEs’s capital
2. Literature Review 2.1. Cloud Computing
Many definitions related to cloud computing.
Basically the concept of cloud computing is access the source of information through internet, anywhere and anytime. Vaquero ,Rodero-Merino, Caceres, and Lindner defined cloud computing could be defined as the integration of virtual resources according to user requirements, flexibly combining resources including hardware, development platforms and various application to create services [Vaquero, Rodero-Merino, Caceres, Lindner, 2009]. U.S. NIST (National Institute of Standards and Technology) defined cloud computing is a model for enabling convenient, on demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.
Figure 1 In figure connect or custo anywher consider server. B based on The be [Saugatu
• S c a m o
• L b e p
• L i S b e
• C o w a
• I o S S e
• R r r o
1. Cloud Com e 1, we see t tion to use c omer can a re and anyti r about th Because clo n the needs enefits of uck Technol
Short impl computing e as a servic minimal tim of a button Low entry based prici entirely line planned Low risk of interest of t SaaS offer benefit fro extended fu Customizati offer a wide well adapte and medium Integration, offers web Service-orie SaaS solutio existing soft Reduced d resources, c reduce the organization
mputing Co that user jus cloud compu access their ime. They d he spesifica oud comput
of custome the clou logy, 2008], i ementation especially a ce) can be me, often ju
costs, due ing approa ear to usag f obsolescen
the provider rings up-to om new unctionality e
ion, usually e range of d the requi m enterprises
if the S b service ented Archit ons can be i tware enviro demand f cloud servi requiremen n of an
oncept Map t need inter uting. The u sources fro do not have
ation of ting will ad er.
ud comput include :
cycles, clo SaaS (softw
employed st with a cl to the usa ch, costs ge and can
nce, it is in r to keep th o-date. Us releases w easily
cloud servi configuratio irements sm s
SaaS provi –APIs a tectures (So integrated in onments for own
ices drastica nt on the
enterprise net user om e to the dapt
ting oud ware in lick age-
are be the heir sers with ices ons mall der and oA), nto IT ally IT in
Cl org res op [V 20 20 20 foc ch op ma cap pro Th co Wa
terms base
• Focus small from related
• Collab service enterp anytim interne especi and/o oud compu ganizations;
sources and pportunities Vouk, 2008; B
009; Schub 010; Chang 010;Chang,
cus of clo hange from c perational ex any SMEs p pital expen oposed to ch here are thr
mputing pro alters, 2011]
• Infrast divided Resou provid resour
of required on the core and medium the reductio d overhead boration an
es offer ins prise applic me and from
et access i ally benef or distributed uting provid
; saving c d staff-as w for servic Briscoe, Ma ert, Jeffere g, Bacigalu
Wills, De oud compu capital expen xpenditure (
perceive tha nditure). Cl
hange that p ree kind of opose [Chan
:
tructure as d into Com rce Clouds de users acce
rces such as
d personnel e business, e m enterprise on of “tedi nd mobility stant access cation envi
m anywher s available.
ficial for d workforce des added v osts in op well as new
ce-oriented arinos, 2009;
ey, Neideck upo, Wills,
Roure, 201 ting is in nditure (CA (OPEX). No
at IT resou loud comp problem.
services th ng, De Rou
a Service mpute Clou s. Compute
ess to comp s CPUs, hyp
and skill especially e benefit ious” IT y, cloud s to the ironment re where
This is mobile es.
value for peration,
business models
; Haynie, ket-Lutz, Roure, 10]. The
how to APEX) to
owadays, urces as puting is
hat cloud re, Wills, (IaaS) is uds and Clouds utational pervisors
execution according to user requests (e.g. access rate).
• Software as a Service (SaaS), referred to as Service or Application Clouds, offer implementations of specific business functions and business process that are provided with cloud capabilities. Therefore, they provide applications and/or services using a cloud infrastructure or platform, rather than providing cloud feature themselves.
Cloud computing also have some characterization. Necessity, reliability, usability, and scalability are the characters of cloud computing. Necessty related to utility to satisfy everyday needs of the users.
Reliability related to expectation about the utility when the user requiree it. Usability related to the convenient and easy to use, despite cloud computing is quite complex architecture. Scalability related to capacity that fit with the needs of users and can be expand according to the needs of the customer.
2.2. System Dynamic
The fundamental idea of System Dynamics is that socioeconomic and business systems can be regarded as continous feedback control systems that have self-regulating properties by virtue of the technological and accounting relationships between system variables and the policies that are used to manage system [Sharp, 1977]. System dynamic is used to change or modify the structure of a problem.
It is different with statistical approach.
Statistical approach just focus to adapt the
• Defining problems dynamically, in terms of graphs overtime
• Striving for an endogenous, behavioral view of the significant dynamics of a system, a focus inward on the characteristics of a system that themselves generate or exacerbate the perceived problem
• Thinking of all concepts in the real system as continous quantities interconnected in loops of information feedback and circular causality
• Identifying independent stocks or accumulations (levels) in the system and their inflows and outflows (rates)
• Formulating a behavioral model capable of reproducing, by itself, the dynamic problem of concern. The model is usually a computer simulation model expressed in nonlinear equations, but is occasionally left unquantified as a diagram capturing the stock-and- flow/causal feedback structure of the system
• Deriving understanding and applicable policy insights from resulting model.
• Implementing changes resulting from model-based understandings and insights
3. Model Building 3.1 . Scope of the model
In this section, we do some steps to build the model. Figure 2, explain the steps that we follow to build the model.
Figure In step business capital i informa informa amount analyzed capital o is affect Because the level we defin some as variable.
that has analyzed step 4,
Figure 3
2. System D 1, we desc s on SMEs.
is influence ation techno ation techno
of server d how the of SMEs. Th ted by level e the functio l of materia ned the leve ssumptions t . In step 3 s been buil d the structu
we design
3. Causal Lo
Dynamic Ste ribed the sy
We focus o ed by imple
ology infras ology that w r that SME
amount of he amount o
of inventor on of server al for produc el in each v to define th 3, we simula
lt. After sim ure of the m
alternative p
op Diagram
eps From Pr ystem of fl on how SM ementation structure. T we observed Es need. W f server aff
of server its ry of mater r is to moni ction. In ste variable. We
e level of ea ate the mo mluated it, model. And policies in
m for Own IT
roblem Sym low MEs of The d is We fect self rial.
itor p2, do ach odel we d in the
mo ne an co the po foc ad cap exp 3.2In thaexp thahav
T Infrastruc
ptomps to I odel. We m ew model a nalyzed the b mpared it w en in step olicies. As w cus on capit vantages of pital exp penditure.
2. Causal Loo this paper, at explain plained the at build the ave to buy se
cture
Improvemen modified som
and simulate behavioral o
with the pr p 6, we im we stated ear
tal and expe f cloud com penditure
ops/ Causal R we built 2 c of each c causal loop eir own IT erver by them
nt [Forrester me variable ed it.In ste of new struc revious mod mplement t rlier, that th ense. Becaus puting is ch to op
Relationship causal loop d condition. F p diagram o
infrastructu mselves.
r, 1994]
es in the ep 5, we cture and
del. And the new his model
e one of hange the perational
diagrams Figure 3 of SMEs ure. They
Figure 4 Because change expendi affect th need co manpow cost. An is the decrease example so the a But wh data so decrease provider amount
4. Causal Lo e the basic
IT infras ture (OPEX he expense ost of ma wer because nother advan amount of e depend e, if monitor
amount of en the mon o the amo ed. SMEs ju r to decrea of server.
op Diagram of cloud structure a X), the cost of SMEs.
aintenance all costs in ntage of clo f server ca on SME ring system
server will nitoring jus ount of se
ust have to ase the spe
m of Cloud C computing as operatio of server o SMEs do n
and cost ncluded in r
oud comput an inrease s need. F needs big d l be increas t needs a f erver will ask the clo esification a
Computing g is onal only not of rent ting For or data sed.
few be oud and
3..In buof is the theexp infma Figif
Thinc andif imclo exp
3 SFD/ Ma SFD sectio uild SFD. W f SMEs. The fix. And the e value of o e effect to pense als frastructure.
aintenance, gure 5 descr
SMEs build he amount crease. It wi nd increase
fferent mplementatio
oud comput pense of SM
ain Formulatio on, we do We set that s e price of th e amount of order manua the capital so just . So the ex manpower o ribe the stoc d their own I of server i ill affect the
the expen with cl on. We can ting affect MEs.
on some limita sales is only he product o f order is fix ally in order l and expen
affected xpense just
of IT infras ck and flow IT infrastruc n figure 5 e amount o se of SME loud co
see in figur the capital
ations to y income of SMEs x. We set
to know nse. The
by IT cost of structure.
diagram cture.
is fix or of capital
Es. It is omputing
re 6 how and the
Capital Profit
Expense
Income
Price
Order Inventory Production Sold Product
Production Capacity
Output each machine Amount of Machines
Production Materials
Level Inventory of Raw
Materials Monitoring System
Server Capacity
Cost of Server
Price per Server Output Machines
Server
The amount of server that have to buy
Server
Additional Server
Maintenance Server
Cost of Maintenance Server Server
Cost of Server
Man Hour
Capital Profit
Expense
Income
Price
Order Inventory Production Sold Product
Production Capacity
Output each machine Amount of Machines
Production Materials
Level Inventory of Raw
Materials Monitoring System
Server Capacity Output Machines
Server
The amount of server that have to buy
Server
Additional Server
Cost of Server
The Price Rent Server per month Server
The amount of server that have to
buy Reduction of Server
Figure 5. Stock and Flow Diagram for Own IT Infrastructure Capital is our parameter to differentiate
between owning IT infrastructure and implementation of cloud computing for SMEs.
The equation will be :
Capital = Profit – Expense, where Profit = income * price
Expense (maintenance server) = cost of maintenance server * man hour * amount of servers
Figure 6. Stock and Flow Diagram The Implementation of Cloud Computing
Jan Feb Mar Apr Mei Jun Jul Agust Sep Okt Nop Des Rp60.000.000
Rp70.000.000 Rp80.000.000 Rp90.000.000
Capital
Jan Feb Mar Apr Mei Jun JulAgustSep OktNopDes (Rp3.000.000)
(Rp2.000.000) (Rp1.000.000) Rp0 Rp1.000.000 Rp2.000.000 Rp3.000.000 m o^-1
Profit (m o^-1) Expense (m o^-1) Incom e (m o^-1)
Jan Feb Mar Apr Mei Jun Jul Agust Sep Okt Nop Des (Rp50.000.000)
Rp0 Rp50.000.000
Capital
(Rp4.000.000) (Rp2.000.000) Rp0 Rp2.000.000 Rp4.000.000 Rp6.000.000 m o^-1
Profit (m o^-1) Expense (m o^-1) Income (m o^-1)
will impact to the cost of IT infrastructure (server). The cost of maintenance server and manpower of IT in figure 5 is fix and could be increased. In figure 6 the cost could be increased and decreased depend on the amount of server. It wil save the expense of SMEs.
4. Experiments
b. Scenario 2, the amount of order is higher than server capacity 2. Condition 2 (SMEs implement cloud
computing)
a. Scenatio 3, the amount of order is lower than server capacity
b. Scenario 4, the amount of order is higher than server capacity
Figure 7. Scenario 1
Figure 8. Scenario 2
Jan Feb Mar Apr Mei Jun Jul Agust Sep Okt Nop Des Rp100.000.000
Rp105.000.000 Rp110.000.000 Rp115.000.000 Rp120.000.000
Capital
Jan Feb Mar Apr Mei Jun Jul AgustSep O kt Nop Des Rp0
Rp500.000 Rp1.000.000 Rp1.500.000 Rp2.000.000 m o^-1
Incom e Expense Profit
Jan Feb Mar Apr Me i Jun Jul Agust Se p O kt Nop De s R p93.000.000
R p96.000.000 R p99.000.000
Capital
Jan Fe b Ma r Apr Mei Jun Jul AgustSep O k t Nop Des R p0
R p500.000 R p1.000.000 R p1.500.000 R p2.000.000 m o^-1
Incom e Expense Profit
Figure 9. Scenario 3
Figure 10. Scenario 4
In scenario 1 and 2 the modal will increase because the amount of cost by server (maintenance, manpower, and server) is fix. It is different with scenario 3 and 4.
5. Conclusions
From the experiment, we can conclude that : 1. Information technology is very useful
for SMEs to increase their income and
make their business effective and efficient.
2. Cloud computing is one of promising alternative IT solution for SMEs and is useful to be implemented
3. The implementation of cloud computing did not affect capital expenditure of SMEs directly. So compare with build own IT infrastructure, cloud computing is very affordable.
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