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Developing a Web Site Privacy Policy


Dirt Bikess management g wants to make sure it has p policies and procedures in place to protect the privacy of visitors to its Web site. You have been asked to develop Dirt Bikess Web site privacy policy. Th TRUSTe The TRUST Web W b site it at t <URL>www.truste.org URL t t h Model has M d l Privacy Pi Disclosures in its Privacy Resources that you can download and review to help you draft Dirt Bikess privacy policy. You can also examine specific companies companies privacy policies by searching for Web site privacy policies on Yahoo!, Google or another search engine. Prepare a report for management g that addresses the following g issues shown on the following slides:

Koffka Khan

Tutorial 5
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Running Case Solution


1. How much data should Dirt Bikes collect on visitors to its Web site, and why that data? What information could it find out by tracking their activities at its Web site? What value would this information provide the company? What are the privacy problems raised by collecting such data? 2.

Running Case Solution


Should Dirt Bike use cookies? What are the advantages of using cookies for both Dirt Bikes and its Web site visitors? What privacy issues do they create for Dirt Bikes?

DB could benefit from using its Web site to learn more about its customers tastes and interests. The Web site could collect information such as visitors age, location, marital status, t t occupation, ti income i level, l l hobbies, h bbi and d specific ifi motorcycle t l i interests t t (i (including l di why h they might purchase a motorcycle and how they would use itraces, transportation, joining a motorcycle group). Such information will help p DB to know the types yp of p people p interested in its products and how it can communicate to them, create more targeted and personalized advertising and even affect DBs plans for the future, including designing new products to better fit their interests. If DB collects such personal data through its Web site site, privacy problems would arise if DB tried to share that information with other companies without the knowledge and explicit consent of the Web site visitors. The company would have to state clearly its privacy policy and then carefully follow that policy in order to avoid privacy problems. Otherwise many visitors might find themselves inundated by advertisements from DB and from any other companies with which DB might have shared the information. It could even cause DB to lose sales and its good reputation.

Cookies could be very useful for both DB and visitors to its site. site The visitors would find their return to DBs site easier and more personal, while DB could use the cookie data to provide to them with information of greatest interest to them. Moreover it might induce visitors returning more often. However, Web site visitor information collected from cookies could be misused by DB and by companies the collect that data, creating problems for both the visitor and for DBs reputation. reputation

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Running Case Solution


3. Should Dirt Bikes join an organization such as TRUSTe to certify it has adopted approved privacy practices? Why or why not? 4.

Running Case Solution


Should Dirt Bikes design its site so that it conforms to P3P standards? Why or why not?

Joining TRUSTe or other such organizations can only help DB because many of its site visitors may want to see their privacy protected. On the other hand many visitors would not care, and in any case few will notice the certification, so that its impact would probably be minor. Also many organizations such as TRUSTe are not necessarily diligent in enforcing its standards. One real question for DB is how important is it to DB management and employees that they help protect individual privacy regardless of its minor affect on DB DBs s business. business A search of the Internet will highlight several other organizations. The real issue is which ones are most respected and well known; these would be the best certification organizations.

While P3P works only on sites that support it, it is capable of giving site visitors more control over the use of their personal information. information Giving site visitors such control will certainly enable some people who have privacy concerns to explore DBs site and perhaps become a DB purchaser. DB management must realize that it has to have a long range perspective on its success because DBs bike must be of high quality and last for years, and must draw customers back to purchase again after a number of years, and it must also inspire them to help promote DB DBs s bikes to family, family friends and acquaintances.

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Running Case Solution


5. Should Dirt Bikes adopt an opt-in or opt-out model of informed consent? 6.

Running Case Solution


Include in your report a draft privacy statement for the Dirt Bikes Web site. You can use the TRUSTe model privacy statement as a guideline if you wish.

Obviously the opt-in approach puts more power in the hands of site visitors and therefore does not enable DB to collect as much information. DB would have to make the choice between collecting more information and having some visitors not being happy with the policy choice, or collecting less information but leaving more of its visitors isitors happy happ to have ha e been there. there

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The TRUSTe Web site (http://www.truste.org/) is a good place to obtain i f information ti and d a model d l privacy i statement. t t t The Th privacy i statements t t t they th develop would address the following: what personally identifiable information the company or a third party collects from Web site visitors; ; how the companies use this information; whether Dirt Bikes shares such information with other companies. If a privacy statement is based on these TRUSTe guidelines, Web site visitors will know: the organization collecting the information, how the information is used, with whom the information may be shared, shared what choices are available to visitors regarding collection, use and distribution of their information; the kind of security y p procedures that are in p place to p protect the loss, , misuse or alteration of visitor information; and how users can access and correct any inaccuracies in the information collected about them. 1-8

Case Study - Salesforce.Com: Cloud Services Go Mainstream


1. How does Salesforce.com use cloud computing? Salesforce.com provides customer relationship management and other software applications using the software-as-a-service business model over the Internet. Cloud computing, also known as on-demand computing, eliminates the need for f a business to make large up-front hardware and software investments and reduces the time to implement new programs. Subscribers to Salesforce.com dont have to purchase or maintain any hardware (albeit personal computing devices) nor do they have to install any special operating systems, database servers, or application servers. Other than the monthly user subscription fee, businesses reduce their licensing and maintenance fees. Users access the Salesforce.com cloud through a standard Web browser or a mobile handheld device. Businesses using the Salesforce.coms cloud have an easier time scaling their system as they increase or decrease their workforce they adjust the number of subscriptions to the cloud. Salesforce.com offers some customization of its software so a business can adjust the software to unique business processes. It offers three types of clouds: Sales cloud, service cloud and the custom cloud. cloud, cloud The sales and service clouds help businesses improve sales and customer service. The custom cloud provides a venue for customers to develop their own applications for use within the broader Salesforce network. 1-9 .

Case Study - Salesforce.Com: Cloud Services Go Mainstream


2. What are some of the challenges facing Salesforce as it continues its growth? How well will it be able to meet those challenges?
Challenges include: Increased competition both from traditional industry leaders and new challengers hoping to replicate Salesforces success E Expanding di its it business b i model d l into i t other th areas Ensuring the system is available 24/7 with no outages Defending the system against security breeches Salesforce is answering the first two challenges by partnering with Google and combining its services with Gmail, Google Docs, Google Talk, Docs Talk and Google Calendar to allow its customers to accomplish more tasks via the Web. Web Salesforce.com Salesforce com and Google both hope that their Salesforce.com for Google Apps initiative will galvanize further growth in on-demand software. By partnering with Apple, Salesforce.com can expand its applications to iPhone users who will have access to their data anywhere any time. Through its partnership with Amazon.com, Force customers can tap into Amazon.coms cloud computing services that can handle cloud burst computing tasks that require extra processing power or storage capacity. p y Salesforce opened up its Custom Cloud (also known as Force.com) application development platform to other independent software developers and listed their programs on its AppExchange. The company introduced a development tool for integrating with Facebooks social network that allows customers to build applications that call functions at the Facebook site. Small businesses can go online and download software applications, some add-ons to Salesforce.com and d others th th t are unrelated. that l t d In order to grow its revenues to levels that industry observers and Wall Street eventually expects, Salesforce will need to change its focus from selling a suite of software applications to providing a broader cloud computing platform on which many software companies can deliver applications. To ensure system availability, Salesforce.com provides tools to assure customers about its system reliability and also offers PC applications that tie into their services so users can work offline.

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Case Study - Salesforce.Com: Cloud Services Go Mainstream


3. What kinds of businesses could benefit from switching to Salesforce and why?

Case Study - Salesforce.Com: Cloud Services Go Mainstream


4. What factors would you take into account in deciding whether to use Saleforce.com for your business?

Small to medium-size businesses are probably the most likely ones to switch to Salesforce.com because of cost factors and the lack of having in-house resources to t provide id the th same level l l of f computing ti capacity. it Businesses B i th t are that trying to increase the sophistication of their computing capabilities could also benefit from switching to Salesforce as long as the two are compatible. y on smart customer management g would benefit g greatly y from Businesses that rely using the tools available at Salesforce.com. Also companies that have small sales and marketing teams can benefit from the software-as-a-service business model.

Businesses should assess the costs and benefits of the service, weighing all people, organization, and technology issues. Does the software-as-a-service applications integrate well with the existing systems? Does it deliver a level of service and performance thats acceptable for the business? Does the SaaS fit with the business overall competitive strategy and allow the company to focus on core business issues instead of technology challenges?

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Case Study - Salesforce.Com: Cloud Services Go Mainstream


5. Could a company run its entire business using Salesforce.com, Force.com, and App Exchange? Explain your answer.
Depending on the type of business, a company probably could run its entire operations using Salesforce com Force.com, Salesforce.com, Force com and App Exchange. Exchange All four major functional areas of a business are supported: Sales and Marketing, Manufacturing and Production, Finance, and Human Resources. There are dozens of applications available to fully support all of these areas. It would be a matter of integrating the software from Salesforce.com and App Exchange with any existing legacy systems within the b i business.

Running Case Assignment: Improving Decision Making: Making the Rent vs. Buy Decision for Hardware and Software
This project provides an opportunity for you to help a real-world company make a decision about whether to rent or buy new technology. Youll use spreadsheet software to compare the total three-year cost of licensing and maintaining new manufacturing software or renting the software from an application service provider. Dirt Bikes would like to implement new production planning, quality control, and scheduling software for use by 25 members of its manufacturing staff. staff Management is trying to determine whether to purchase the software from a commercial vendor along with any hardware required to run the software or to use a hosted software solution from an application service provider. (The hosted software runs on the ASPs computer.) You have been asked to help management with this rent vs. buy decision by calculating the total cost of each option over a three-year period. Th costs The t of f purchasing h i the th software ft (actually ( t ll for f purchasing h i a license li from f the th vendor d t to use its it software package) include the initial purchase price of the software (licensing fee of $100,000 paid in the first year), the cost of implementing and customizing the software in the first year ($20,000), one new server to run the software (a first-year purchase of $4000), one information systems specialist devoting half of his or her time to supporting pp g the software ($ ($55,000 , in full-time annual salary y and benefits with a 3% annual salary increase each year after the first year), user training in the first year ($10,000), and the cost of annual software upgrades ($5,000). The costs of renting hosted software are the rental fees ($2500 annually per user), implementation and customization costs ($12,000 in the first year), and training ($10,000 in the first year). Calculate the total cost of renting or purchasing this software over a three-year period. Identify the lowest-price alternative that meets Dirt Bikess requirements. What other factors should Dirt Bikes consider besides cost in determining whether to rent or buy the hardware and software?

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Running Case Solution: Improving Decision Making: Making the Rent vs. Buy Decision for Hardware and Software

Review Questions
1. What is IT infrastructure and what are its components?

1.1 Define IT infrastructure from both a technology and a services perspective. Technical perspective is defined as the shared technology resources that provide the platform for the firms specific information system applications. It consists of a set of physical devices and software applications that are required to operate the entire enterprise. Service perspective is defined as providing the foundation for serving customers, working with vendors, and managing internal firm business processes. In this sense, IT infrastructure focuses on the services provided by all the hardware and software. IT infrastructure is a set of firm-wide services budgeted by management and comprising both human and technical capabilities.

The total 3-year cost of renting hosted software is less expensive than purchasing it and using hosted software requires less management than Dirt Bikes owning and running its software. However, there are other factors to consider-the functionality of the hosted software versus purchased software, the flexibility of the hosted software compared to in-house resources, and the reliability and reputation of the hosted software vendor. 1-15

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Review Questions
1.2 List and describe the components of IT infrastructure that firms need to manage. IT infrastructure includes hardware, software, and services: 1. Computing platforms: Includes mainframes, midrange computers, desktop and laptop computers, and mobile handheld devices anything that connect employees, customers, and suppliers into a coherent digital environment. 2. Telecommunications services: Data, , voice, , and video connectivity y between employees, customers, and suppliers. 3. Data management: Store, manage and analyze data. 4. Application software: Includes enterprise resource planning, customer relationship management, g , supply pp y chain management, g , and knowledge g management g systems. y 5. Physical facilities management: Develop and manage the physical installations for computing, telecommunications, and data management. 6. IT management: Planning and developing the infrastructure, coordinate IT services among g business units, , manage g accounting g for IT expenditures, p , and p provide p project j management. 7. IT standards: Policies that determine which information technology will be used, when, and how. 8. IT education: Employee p y training g in system y use and management g training g for IT investments. 9. IT research and development: Research future IT projects and investments that can help the firm differentiate itself from competitors.

Review Questions
2. What are the stages and technology drivers of IT infrastructure evolution? 2.1 List each of the eras in IT infrastructure evolution and describe its distinguishing characteristics. 1. General-purpose mainframe and minicomputer era (1959 to present): Consists of a mainframe performing centralized processing that could be networked to thousands of terminals and eventually some decentralized and departmental computing using networked minicomputers. 2. Personal computer era (1981 to present): Dominated by the widespread use of standalone desktop computers with office productivity tools. 3. Client/server era (1983 to present): Consists of desktop or laptop clients networked to more powerful server computers that handle most of the data management and processing. 4. Enterprise computing era (1992 to present): Defined by large numbers of PCs linked together into local area networks and the growing use of standards and software to link disparate networks and devices into an enterprise-wide network so that information can flow freely across the organization. 5. Cloud and mobile computing era (2000 to present): A model of computing where firms and individuals obtain computing power and software applications over the Internet, rather than purchasing their own hardware and software.

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Review Questions
2.2 Define and describe the following: Web server, application server, multitiered client/server architecture.

Review Questions
2.3 Describe Moores Law and the Law of Mass Digital g Storage g

Web server: Software that manages requests for Web pages on the computer where they are stored and that delivers the page to the user users s computer. Application server: Software that handles all application operations between browser-based computers and a companys back-end business applications or databases. Multitiered client/server architecture: Client/server network in which the work of the entire network is balanced over several different levels of servers.

Moores Law: The number of components on a chip with the smallest manufacturing costs per component (generally transistors) had doubled each year year. Moore later reduced the rate of growth to a doubling every two years. Law of Mass Digital Storage: The amount of digital information is roughly doubling every year. The cost of storing digital information is falling at an exponential rate of 100 percent a year. Both of these concepts explain developments that have taken place in computer processing, memory chips, storage devices, telecommunications and networking hardware and software, and software design that have exponentially increased computing power while exponentially reducing costs.

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Review Questions
2.4 Describe how network economics, , declining g communication costs, and technology standards affect IT infrastructure. Network economics: Metcalfes Law helps explain the mushrooming use of computers by showing that a networks network s value to participants grows exponentially as the network takes on more members. As the number of members in a network grows linearly, the value of the entire system grows exponentially and theoretically continues to grow forever as members increase. Declining communication costs: Rapid decline in communication costs and the exponential growth in the size of the Internet is a driving force that affects the IT infrastructure. infrastructure As communication costs fall toward a very small number and approach zero, utilization of communication and computing facilities explodes. Technology standards: Growing agreement in the technology industry to use computing and communication standards that define specifications that establish the compatibility of products and the ability to communicate in a network Technology standards unleash powerful economies of scale and result network. in price declines as manufacturers focus on the products built to a single standard. Without economies of scale, computing of any sort would be far more 1-21 expensive than is currently the case.

Review Questions
3. What are the current trends in computer p hardware platforms? p 3.1 Describe the evolving mobile platform, grid computing, and cloud computing.
Mobile platform: More and more business computing is moving from PCs and desktop machines to mobile devices like cell phones and smartphones. Data transmissions, Web surfing, email and instant messaging, digital content displays, and data exchanges with internal corporate systems are all available through a mobile digital platform. Netbooks, small low-cost lightweight subnotebooks that are optimized for wireless communication and Internet access, are included. The mobile platform is expanding to include tablet computers (iPad) and digital e-book readers. Grid computing: Connects geographically remote computers into a single network to create a virtual supercomputer by combining the computational power of all computers on the grid. Since most computers use their central processing units only about 25 percent of the time, they can be used for other tasks. Cloud computing: A model of computing where firms and individuals obtain computing capacity, data storage, and software applications over the Internet, rather than purchasing their h i own hardware h d and d software. f D Data are stored d on powerful f l servers i in massive i d data centers, and can be accessed by anyone with an Internet connection and standard Web browser. Public clouds are maintained by external service providers while private clouds 1-22 are restrained inside a proprietary network or a data center.

Review Questions
3.2 Explain p how businesses can benefit from autonomic computing, p g, virtualization, green computing, and multicore processors.
Autonomic computing Systems that automatically do the following: 1. Configure themselves 2. Optimize and tune themselves 3. Heal themselves when broken 4 Protect themselves from outside intruders and self-destruction 4. self destruction 5. Reduce maintenance costs 6. Reduce downtime from system crashes Virtualization 1. Run more than one operating system at the same time on a single machine. 2. Increase server utilization rates to 70 percent or higher. 3. Reduce hardware expenditures. Higher utilization rates translate into fewer computers required to process the same amount of work. work 4. Mask server resources from server users. 5. Reduce power expenditures. 6. Run legacy applications on older versions of an operating system on the same server as newer applications applications. 7. Facilitates centralization of hardware administration.
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Review Questions
Green computing p g 1. Businesses can minimize their impact on the environment by adopting better practices and technologies for designing, manufacturing, using, and disposing of computers, servers, and other computing devices. 2 Reducing power consumption in data server centers is the leading practice in 2. the green computing movement. Multicore processors 1. Cost savings by reducing power requirements and hardware sprawl 2. Less costly to maintain as fewer systems need to be monitored. 3. Performance and productivity benefits beyond the capabilities of todays single-core processors processors. 4. Run applications more efficiently than single-core processors giving users the ability to keep working even while running the most processor intensive task in the background.

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Review Questions
4. What are the current trends in software platforms? p 4.1 Define and describe open source software and Linux and explain their business benefits.
Open-source software provides all computer users with free access to the program code so they can modify the code, fix errors in it, or to make improvements. Open-source software is not owned by any company or individual. A global network of programmers and users manage and modify the software. software By definition, definition open-source open source software is not restricted to any specific operating system or hardware technology. Linux is the most well-known open-source software. Its a UNIX-like operating system that can be downloaded from the Internet, Internet free of charge, charge or purchased for a small fee from companies that provide additional tools for the software. It is reliable, compactly designed, and capable of running on many different hardware platforms, including servers, handheld computers, and consumer electronics. Linux has become popular during the past few years as a robust low-cost low cost alternative to UNIX and the Windows operating system. system Thousands of open-source programs are available from hundreds of Web sites. Businesses can choose from a range of open-source software including operating systems, office suites, Web browsers, browsers and games. games Open-source Open source software allows businesses to reduce the total cost of ownership. It provides more robust software thats often more secure than proprietary software.
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Review Questions
4.2 Define Java and Ajax j and explain p why y they y are important. p Java: Java is a programming language that delivers only the software functionality needed for a particular task. With Java, the programmer writes small programs called applets that can run on another machine on a network. network With Java, Java programmers write programs that can execute on a variety of operating systems and environments. Further, any program could be a series of applets that are distributed over networks as they are needed and as they are upgraded. Java is important because of the dramatic growth of Web applications. Java is an operating system-independent, processor-independent, object-oriented programming language that can run on multiple hardware platforms. platforms It provides a standard format for data exchange on Web sites. Ajax: Ajax is short for Asynchronous JavaScript and XML. It allows a client and server to exchange small pieces of data behind the scene so that an entire Web page does not have to be reloaded each time the user requests a change. Its another Web development technique for creating interactive Web applications that make it easier and more efficient for Web site users to complete forms and other interactive features.
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Review Questions
4.3 Define and describe Web services and the role p played y by y XML. Web services offer a standardized alternative for dealing with integration across various computer platforms. Web services are loosely coupled software components based on XML and open Web standards that are not product specific and can work with any application software and operating system. They can be used as components of Web-based applications linking the systems of two different organizations or to link disparate systems of a single company. Web services are not tied to a particular operating system or programming language. Different applications can use them to communicate with each other in a standard way without time-consuming custom coding. Businesses use Web services to tie their Web sites with external Web sites creating an apparently seamless experience for users. The benefit derives from not having to re-create applications for each business partner or specific functions within a single company. XML provides a standard format for data exchange, enabling Web services to pass data from one process to another. another It performs presentation, presentation communication, communication and storage of data whereas HTML simply describes how data is presented on Web pages. XML allows computers to manipulate and interpret data automatically 1-27 and perform operations on data without human intervention.

Review Questions
4.4 Name and describe the three external sources for software.
1. Software packages and enterprise software: Prewritten commercially available set of software programs that eliminates the need for a firm to write its own software program for certain functions like payroll processing or order handling. Large Large-scale scale enterprise software systems provide a single, integrated, worldwide software system for firms at a cost much less than they would pay if they developed it themselves. 2. Cloud-based Cloud based software services and tools: A business that delivers and manages applications and computer services from remote computer centers to multiple users using the Internet or a private network. Instead of buying and installing software programs, subscribing companies can rent the same functions from these services. Users pay for the use of this software either on a subscription or a per per-transaction transaction basis. The business must carefully assess the costs and benefits of the service, weighing all people, organizational, and technology issues. It must ensure it can integrate the software with its existing systems and deliver a level of service and performance that is acceptable for the business. 3. Outsourcing custom application development: An organization contracts its custom software development or maintenance of existing legacy programs to outside firms, frequently firms that operate offshore in low-wage areas of the world. An outsourcer often has as the e technical ec ca a and d management a age e s skills s to o do the e job be better, e , faster, as e , a and d more oe e efficiently. ce y Even though its often cheaper to outsource the maintenance of an IT infrastructure and the development of new systems to external vendors, a business must weight the pros and cons carefully.

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Review Questions
4.5 Define and describe software mashups p and apps. pp
Mashups are new software applications and services based on combining different online software applications. Users create new software applications and services by combining different online software applications into a new application. The idea is to take different sources and produce a new work that is greater than the sum of its parts. Web mashups combine the capabilities of two or more online applications to create a kind of hybrid that provides more customer value than the original sources alone. Apps are small pieces of software programs that are downloaded to computers or cell phones. Apps turn mobile handheld devices into general-purpose computing tools. They cost much less than full-fledged software programs and perform one particular task. They tie customers to a specific hardware platform like the Apple iPhone or Android operating system and increase switching costs. Business-related apps allow users to create and edit documents, connect to corporate systems, schedule and participate in meetings, track shipments, and dictate voice messages. Businesses benefit most from these new tools and trends by not having to re-invent the wheel. Apps have already been developed by someone else and a business can use them for its own purposes. Mashups let a business combine previously developed Web applications into new ones o es with new e pu purposes. poses They ey do dont have a e to o re-invent e e the ep previous e ous app applications ca o s from o sc scratch ac merely use them in the new processes.
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Review Questions
5. What are the challenges g of managing g g IT infrastructure and management g solutions? 5.1 Name and describe the management challenges posed by IT infrastructure.
Creating and maintaining a coherent IT infrastructure raises multiple challenges including: 1. Dealing with platform and infrastructure change: As firms grow, they can quickly outgrow their infrastructure. As firms shrink, , they y can g get stuck with excessive infrastructure p purchased in better times. Scalability refers to the ability of a computer, product, or system to expand to serve a larger number of users without breaking down. Businesses that bring mobile computing and cloud computing platforms into the mix need new policies and procedures for managing them. Management and governance: Involves who will control and manage the firm firms s IT infrastructure. infrastructure Will the IT infrastructure be centrally controlled and managed or divided among departments and divisions? How will infrastructure costs be allocated among business units? Making wise infrastructure investments: IT infrastructure is a major capital investment for the firm. If too much is spent on infrastructure, it lies idle and constitutes a drag on firm financial performance. If too little is spent, important business services cannot be delivered and the firms competitors will outperform the underinvesting firm. The organization needs to determine if it will buy or rent all or portions of its IT infrastructure. Coordinating infrastructure components: Firms create IT infrastructures by choosing combinations of vendors, people, and technology services and fitting them together so they function as a coherent whole. 1-30

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Review Questions
5.2 Explain p how using g a competitive p forces model and calculating g the TCO of technology assets help firms make infrastructure investments The competitive forces model can be used to determine how much to spend on IT infrastructure and where to make strategic infrastructure investments. investments What is the market demand for the organizations services? What is the organizations business strategy? What is the organizations information technology (IT) strategy, infrastructure, and costs? Has the organization performed an IT assessment? What technology services do competitors offer to their customers, suppliers, and employees? How much does the organizations competitors spend on IT infrastructure? The total cost of owning technology resources includes not only the original cost of acquiring and installing hardware and software, but it also includes the ongoing administration costs for hardware and upgrades, maintenance, technical support, training, and even utility and real estate costs for running and housing the technology. The TCO model can be used to analyze these direct and indirect costs to help firms determine the actual cost of specific technology implementations.

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