ANALYZING THE IMPACT OF CLOUD COMPUTING ON DIGITAL TRANSFORMATION

INITIATIVES IN TRANSPORTATION INDUSTRY

Introduction

In recent years, cloud technologies have become very popular. Information and

communication technology (ICT) have risen to prominence across many industries as a

result of the digital transformation of recent years. Scalable, agile, safe, and worldwide

solutions have emerged thanks to cloud technology. One of the various ICT tools is cloud

computing. According to (Mell & Grance 2011), 1–7, the definition of cloud computing is "a

model for enabling ubiquitous, convenient, on-demand network access to a shared pool of

configurable computing resources." Hence, this paper will examine the impact of cloud

computing on digital transformation initiatives in the transportation industries. On digital

transformation, (Vial, 2019) suggested a theoretical explanation for digital transformation

(DT) as an approach which aims to improve an organization by inducing major shifts in its

characteristics through the use of knowledge, computer technology, communication, and

interconnection technologies. The author also proposed an inductive structure that

summarizes the available data based on the author's study. In order to do a critical analysis

to the integration of cloud computing into the transportation sector, this paper will review the

impacts, challenges, opportunities, application of cloud computing using various case

studies.

The Concept of Cloud Computing

According to a recent poll by the IT analysis company Gartner (Gartner 2011), cloud

computing is identified as the top technological priority for businesses worldwide in 2011.

Cloud computing is described as "a model for permitting commonplace practical, streaming

services. network utilization of a shared pool of configurable computing assets that can be

lightning fast provisioned and released with little or no management or service provider
interaction" by the Nationwide Institute of Standards and Technology of the United States

(Mell and Grance 2011: 2). Organizations may be able to save costs while enhancing

flexibility, productivity, and quality by adopting cloud computing (Hayes 2008; Armbrust et al.

2010; Aral et al. 2010). According to certain observers, cloud computing signifies a paradigm

change in IT towards a utility model that is similar to the way power plants provide energy

(Carr 2009). The management consulting company McKinsey & Company, the applications

vendor Oracle, and the IT study companies Gartner and Forrester were among the high-

profile corporations whose CEOs have engaged in rare, tense public arguments over the

very contentious topic of cloud computing. Despite the once opposing viewpoints, cloud

computing is today driving both the demand and supply sides of the worldwide IT service

market (Gartner, 2011).

On the demand side, businesses in established nations like the U.S. (Microsoft 2011a) and

rising economies like China (Bloomberg 2011) are quickly adopting cloud computing. On the

side of supply, cloud computing is increasingly being offered as a key service by many IT

companies. These companies include both traditional IT service providers like IBM, HP, and

Fujitsu as well as cloud computing specialists like Amazon, Google, and Salesforce.com.

According to (Kogias, Xevgenis, and Patrikakis, 2016), computing via the cloud enables

users to obtain computer services and resources as needed without having to invest in their

own infrastructure. Instead, customers simply pay for what they need. The concept of cloud

computing is intended to be universal or pervasive. This renders it practical for all parties

concerned who may request network access in accordance with their needs to flexible

computer resources. Networks, apps, data storage, servers, and numerous services are

examples of computing resources. Low service provider contact makes it possible to deliver

the resources, necessitating fewer managerial effort (Mell and Grance, 2011). According to
Armbrust et al. (2010), cloud computing refers to the software as well as the equipment that

offer services and the applications that are provided to a business as a service.

Dropbox and Google Drive are the two most widely used cloud storage options. Cloud

computing adoption must be mapped onto other well-known online marketplaces in addition

to commercial sectors. It is crucial that we use cloud computing to address the problems and

difficulties in those fields as a result of the rapidly expanding elearning industry and internet-

based learning. This will enable us to improve these marketplaces' operational efficiency and

effectiveness (Shana and Abulibdeh, 2017).

Categories of Cloud Computing Model

Software as a Service
(Saas)

Platform as a Service
(Paas)

Infrastructure as a Service
(Iaas)
Digital Transformation

Almost every activity in the contemporary world has been impacted by technology, including

trade, transportation, tourism, events, and so forth. The aforementioned industries have seen

a substantial digital shift as a result of technological innovation. The benefits of digital

transformation have led to its adoption across industries. Digital transformation is the use of

technology to build a new business or change an existing one's culture, operations, and

customer interactions to reflect current market demands and experiences. In other words,

digital transformation refers to the radical adjustments a firm makes as a result of

implementing digital technology. The major reasons business sectors go through digital

transformation are to reinvent consumer experiences, include new projects, change current

procedures, and embrace a distinctive culture. The aforementioned objectives are meant to

equip the company to adapt to changing market needs and business conditions. Through the

advancement of technology, the transport sector may benefit from digital transformation to

obtain a competitive edge and grasp the continuously shifting market (Heilig, Schwarze, Voß,

2017). Several contemporary trends are being used to the transportation sector to hasten the

digital transformation process. Artificial intelligence (AI), big data analytics, cognitive

computing, robotic process automation, and the internet of things are just a few of the

technologies that make such movements possible (Nekrasov, Sinitsyna, 2019). Digital

transformation is also made possible by other platforms, including the cloud, which collect,

store, and use information (Hartley, Sawaya, 2019).

Digital transformation needs to be started properly for the transportation sector to function in

the current economy. The aforementioned is due to the digital change that other businesses
that interface with the transportation industry have undergone. Because transportation is

crucial to the supply chain, it can have an impact on the entire company model (Haq;

Genzorova, Corejova, & Stalmasekova, 2019).

The Impact of Cloud Computing on Digital Transformation Initiatives in the

Transportation sector

For administering and providing services through the internet, cloud computing is

transforming IT into utility IT (i.e., metered services and paid per consumption such as

energy). Due to its omnipresent, on-demand, self-service, highly scalable, and pay-as-you-go

IT qualities, it appeals to enterprises. (Zhang, et al., 2010; Mell & Grace, 22 2011). According

to Zhang et al. (2010), cloud computing enables transportation enterprises to start small and

add resources as needed to meet demand. Cloud computing is available to all enterprises

and lowers the barrier to entry for smaller businesses that get faster access to more powerful

business data.

Additionally, it improves connectivity with developing nations who lack the resources for

substantial IT service implementation (Marston et al., 2011). The use of pay-for-use systems

for the quick supply of extensive on-demand IT services globally is made possible by cloud

computing (Mell & Grace, 2011; Rodero-Merino et al., 2010).

Organizations are able to exchange information, resources, and improve cooperation thanks

to cloud computing (Wang et al., 2010). When supply chain partners use their priceless

resources and talents for mutual advantage, collaborative partnerships and relational

outcomes are improved (Chen, Daugherty, & Landry, 2009; Shin, Collier, & Wilson, 2000).

A move from locally installed software, servers, and computers to the Internet-based

distribution of software and processing power is represented by the cloud computing

industry. As a result, it assists the transportation industry in lowering the initial and ongoing
expenses of IT (Armbrust et al., 2010). Users may align communication and incentives

gained from using cloud computing by choosing from a range of services and payment

alternatives scaled to their needs (Schniederjans & zpolat, 2013).

Cloud services, which are mainly determined by economic factors, assist organizations in

lowering their total cost of ownership while increasing flexibility, agility, and collaboration

among businesses in remote locations that are unable to pay for their own storage facilities

(KPMG, 2011, Martin, 2010, McKendrick, 2011). According to research, collaboration is

improved when communication, rewards, and information flow are in line (Hendricks &

Singhal, 2003).

IT efficiency is provided by cloud computing (Marston et al., 2011). IT efficiency is the

practice of using computer resources more effectively through scalable deployment,

business agility, and real-time interaction and response that may be shared by a large

number of users.

Additionally, cloud computing eliminates upfront commitment, permits payment for short-term

usage of computer resources, creates economies of scale owing to very huge data sets, and

provides theoretically unlimited computing resources on demand.

In the manufacturing industry, the use of cloud tools to swiftly assess and implement

platforms for supplier-manufacturer-customer collaboration and quality management

dashboards, improve design services by finding a cost-effective way to increase value-added

design-in services, and improve early cross-partner collaboration speeds up product

development and introduction strategies (Baljko, 2013) are all examples of this.

Cloud-based transportation management systems (TMS) assist managers simplify their

processes, save time, money, and resources by replacing operations now performed

manually, by phone, fax, or mail. Real-time communication with partners around the globe is
made possible by TMS, which also offers complete order visibility, schedules and monitors

shipments, locates delays by using purchase information and routing status, and gives

information on the cost of parcel and freight shipments over any given time period

(Kontoravdis, 2011). For instance, real-time communication and coordination with

international partners are made possible through a cloud-based transportation management

system (TMS) (Kontoravdis, 2011). These days, complex distribution centers can use cloud-

based warehouse management systems (WMS), which can be accessed through a Web

browser and provide new WMS functionalities like put away/flow through, inventory

management, order fulfillment, replenishment, loading, and shipping, as well as the ability to

configure processes (Highjump, 2013).

The Hazards of Cloud Computing on the Transportation Industry

Despite so many advantages of cloud computing on the transportation sector, there are

some drawbacks that will be examined in this paper. Organizations, have certain worries

about security, anonymity, and regulatory compliance as a result of cloud computing.

According to (Marston et al. 2011), the corporation's idea of ceding authority over data and

assigning crucial data to another company, worries about the possibility of cloud computing

suppliers going bankrupt, a lack of regulations and standards, and security are some of the

drawbacks and hazards of cloud computing adoption. According to IDC's study, security is

the top issue for CIOs and IT executives, followed by performance and dependability

(Wired.com, 2009). Business process complexity, entrepreneurial culture, and the degree of

compatibility and functionality are factors that influence a firm's inclination to embrace cloud

computing technology, according to a poll of managers or executives in the manufacturing,

retail, and logistics sectors (Wu et al., 2013). Other hazards in the use of cloud computing in

the transportation industry includes;

  Security concerns (privacy, verification, malware, confidentiality, third party, data

integrity, and loss of data: Predictable, requiring regular backups to be kept on the

PC).

 Data management.

 Efficiency, speed, safety, and connectivity.

 Virtual security is essential, and on the road to hybrid cloud deployments, security

concerns must be addressed.

 Unknown hardware and software physical location. Site exploration and inspections

are challenging.

 Issues with T7 Quality and CSP.

 The CSP is in charge of measuring the end user actions and the usage of beneficial

resources.

 Opaque pricing structure as a result of more flexible cloud service consumption.

 Lack of or little understanding of CSP ambiguous processes.

 Natural disasters (T11).

Strategies for Reducing the Risks in Cloud Computing in the Transportation Sector

Research has concentrated on offering data security by storing and accessing related data in

various places so that information pieces are not valuable for malicious users or by providing

"Security as a Service" based on the needs of the application to make the safety mechanism

less predictable in order to reduce security concerns (Subashini & Kavitha, 2011, p. 10).

Additionally, event management simulation tools like GridSim simulate cloud computing

scenarios by modeling network entities, users, machines, and traffic. These tools also offer

economic functions that lower processing costs and guarantee efficient resource acquisition

(Belalem et al., 2011).

In order to respond to seasonal fluctuations in demand, a corporation can access more or

less power, add complicated capabilities as needed, and rely on approved suppliers to offer

data security that is far superior to internal requirements (Fuerst, 2013, p. 1).

Conclusion

This paper has examined the basic principles of cloud computing and its impact on digital

transformation initiatives in the transportation industries by considering the concept of digital

transformation, cloud computing, the impact of cloud computing and the hazards involved in

the application of cloud computing in the transformation industry. Hence, a template of how

organizations could solve and harmonize the various strategies in order reduce risk and

achieve a reasonable result has been provided in this paper. Absolutely, cloud computing

has contributed immensely to the development of the transportation industries while the

hazards are not too difficult to handle.

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