mic Spring 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 its 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 O 350,000 O 9,000 6,000 15,250 98,000 + 17,000 105,000 22,500 121,000 18.000 115,000 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