Backup of insurance company

Backup of insurance company - For Evaluation Only....

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CollECTeR’98 48 Pre-EDI Cost-Benefit Analyses: A Case Study in an Insurance Company Introduction Electronic Data Interchange (EDI) is defined by Emmelhainz (1990) as “the inter- organisational exchange of business documentation in a structured, machine-processable form” (p 4). It has the potential to remove significant time and money from the existing business procedures through the dematerialisation and automation of inter-organisational business document transmission. Thus, EDI allows enterprises to respond to new opportunities and to the constant pressure for greater productivity, efficiency and responsiveness to the customer’s needs (Gottardi and Bolisani 1996). Despite the many benefits of EDI and the fact that the quality and price of computers and communications equipment have improved significantly over the past two decades, many organisations, particularly small and medium sized enterprises, are still reluctant to adopt EDI (Parker and Swatman 1995; Tung and Turban 1996). A number of reasons attributable to the somewhat disappointing uptake of EDI include, inter alia (Cuk 1996; Kurnia and Swatman 1997): lack of management awareness of the strategic benefits and opportunities EDI may bring the difficulty of evaluating the tangible benefits of EDI lack of top management commitment to the EDI implementation process
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concern with the high cost of EDI hardware, software and value-added network subscriptions difficulty in justifying the investment in EDI. One possible remedy for these problems is to conduct EDI cost-benefit analysis providing significant information to assist in the decision process regarding EDI implementation. Besides serving as a decision making tool (when conducted prior to implementation), cost benefit analysis may also serve as an evaluation tool (when conducted after the implementation) (Nowak 1992; Tung and Turban 1996). Cost-benefit analysis examines the economic feasibility of a project but it is more than merely a financial appraisal of a project. It takes into account the lifetime benefits and costs, as well as the intangible benefits of an undertaking in assessing whether the project will bring improvements to the welfare of the community involved. As part of this process, intangible benefits which are unquantified, are presented with as much descriptive information as possible to be weighed alongside other quantifiable costs and benefits (Australian Department of Finance 1991; Whitten et al. 1994). Thus, the result of cost-benefit analysis can actually provide a measurement of how justifiable an EDI project is to a particular organisation. There has been little work undertaken in conducting cost-benefit analysis of EDI projects (Nicolopoulou and Smithson 1996). The benefits of EDI are commonly regarded by management to be self-evident, going by other organisations’ experiences, so that performing cost-benefit analysis is often considered to be a waste of time and resources (Roberts 1996). Hornback (1994), however, suggests that conducting cost-benefit analysis of EDI projects is
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This note was uploaded on 09/17/2009 for the course IT it771 taught by Professor Jenisha during the Fall '09 term at University of Advancing Technology.

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Backup of insurance company - For Evaluation Only....

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