Agency problems and consequent industrial cloud service usage patterns over time
Daniel J Ciborowski, David Gefen · 2021
Companies have begun subscribing to Cloud Services in order to outsource common IT management tasks. When the use of IT first started to explode in the late 1980’s research had difficult quantity the gains from technology, referred to as the “Productivity Paradox”. New evidence suggests that the paradox has reemerged, despite the major advances in data processing speeds provided by cloud services. We used Agency Theory as an alternative way to analyze the successfulness of outsourcing contracts. Using two years of historical cloud usage and billing data, we performed a multivariant time series analysis. We proposed and evaluated three constructs based on the Agency Problems which are known to impact the overall successfulness of a contract. We found that two of our measures of Agency Problems, Moral Hazards, and Collections of Knowledge were significant in the three industries we analyzed. Using time series analysis enables us to use these learnings to provide future growth projections. These measures offer simple, and now proven, ways to historically evaluate contract records, as well as to continuously monitor the current relative risks of the Agency Problems.