Have you been involved with a company doing a redesign of its business processes? If so, what were the key things that went right? What went wrong? What could have been done better to minimize the risk of failure? What do you think are the critical success factors in making a digital transformation successful? This chapter explores the business of information technology (IT) and the customers it serves. Beginning with the introduction of a maturity model to understand the balancing act between the supply and business demand for information systems (IS), the chapter describes key IT organization activities and relates them to one of three maturity levels. The chapter continues with a discussion about the work done by the IT organization and how the leadership within the IT organization ensures that activities are conducted efficiently and effectively, both domestically and globally. We then examine business processes within the IT department, including building a business case, managing the IT portfolio, and valuing and monitoring IT investments. The remainder of the chapter focuses on funding models and total cost of ownership. A new inventory management system for ABC Company could be developed at a cost of $260,000. The estimated net operating costs and estimated net benefits over six years of operation would be: Year Estimated net operating cost Estimated net benefits 0 350,000 0 1 9,000 6,000 2 15,250 98,000 3 17,000 105,000 4 22,500 121,000 5 18,000 115,000 6 32,000 190,00 a. What would the payback period be for this investment? Would it be a good or bad investment? Why? b. What is the ROI for this investment? c. Assuming a 9% discount rate, what is this investment's NPV