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Businesses invest in technology to save money. They hope that the latest invention will live up to the marketers’ claims of efficiencies over old ways of doing business. But paradoxically, when “computing” the savings, don’t forget the extra costs — the “technology burden” as it’s called — imposed by innovation, whether cutting edge or mainstream. Keep in mind that sometimes you have to spend more — a lot more — before you can spend less. For example, Internet security has received significant attention recently. Few businesses can function today without an “always on” connection — and protection against the risks that viruses and spyware create for e-commerce, as well as for the old-fashioned kind. Consider all the resources that Internet security drains from your business: • Firewalls and antivirus definitions must be maintained; • The near constant stream of Windows patches must be properly installed; and • Employee Internet usage must be monitored for improper activity. NOT JUST SECURITY COSTS Unfortunately, as long as security must take first priority, inventing better ways to do business with the latest tools must take a second seat. Security precautions are time-consuming, but routine for large firms with a full-time information technology (IT) department. But most businesses do not have those resources. They must rely on expensive consultants, or spare-time, “do-it-yourself” work. As a practical matter, that approach most often becomes “do nothing and hope for the best.” But the sapping technology burden doesn’t stop with security. Any firm that depends on its computers and Internet connection must solve what seems like a googol of legal challenges they create, and all at the same time that the firm is trying to make sales and collect receivables. For example, new rules on Internet domain names — the word before the “.com” — make it critical to monitor registrations. Also, be sure renewals are paid on time. Under the new rules, a single missed e-mail to the originally listed contact person, regardless of whether that person still works for a business, could quickly lead to loss of a firm’s Web site and e-mail address. Even worse, a pornographer or spammer could get control of that Internet address, and legally extort a large payment to sell it back. OTHER TECHNOLOGY ISSUES Similarly, little-understood metadata in common business documents can easily reveal any firm’s secrets. No one wants the opposing party in a deal to read every revision or comment that preceded the final draft. Inexpensive software can clean out that metadata — if anyone even knows it was needed; even firms that install it must still train staff to use it, and make sure that employees run it every time they e-mail a document. Software incompatibility also has always been a concern for firms that rely on multiple programs, and today’s increasingly complex, Internet-connected applications only increase the risk of programs not working together. As a result of this complexity, even the most routine software installation can never again be as simple as running a CD. Sophisticated preparations are necessary to avoid conflicts, as well as yet another backup in case the installation still doesn’t succeed, or other programs stop working. And changes in operating systems and termination of support for “legacy” software mean that the software rule of thumb — “if it ain’t broke, don’t fix it” — is itself broken. Who didn’t have a DOS or early Windows program that handled a task perfectly, but is now obsolete? A firm can certainly maintain older machines to keep those programs alive. But soon technology that is only a few years old probably won’t work with newer programs that customers and vendors install. The intended solution will become its own problem — that is, if the double cost of the redundant work hasn’t killed off the older technology first. Any firm that collects customer information must also monitor constantly evolving privacy issues. For several years, the Federal Trade Commission has only sporadically enforced voluntary privacy policies. Today, however, states are increasingly passing their own mandatory privacy laws that may not be consistent with federal law, much less with one another. Pennsylvania’s new law, for example, even adds criminal penalties. Firms in regulated businesses have an even greater burden because failure to comply with strict recordkeeping and security obligations could cost stiff penalties, or suspension of a license to conduct business. Employees, too, face challenges from technology. The ability to work anywhere, at any time — and all times — is the blessing and the curse of the Internet. Employee stress as technology constantly increases and changes job demands may be the greatest cost of innovation, and one certainly not worth the investment in the long run because of the toll of fatigue, burnout and other negative effects that can hamper a business. A GREATER BURDEN Apart from keeping up with known problems, businesses must now invest even more time in beating competitors to the latest developments that may provide a competitive advantage, and guessing the risks of being the first to adopt them. Even worse, a customer may never be persuaded to pay for a new product, no matter how good or useful, if something similar becomes available online for free. For all its costs, however, the technology burden is far less than the cost to a business of not keeping up-to-date. At “best,” customers or vendors may find it inconvenient or difficult to do business with a firm that is using outdated technology, if that can be considered a best alternative. Worse still, however, is the potential harm to a firm’s reputation. Customers may perceive a firm with technology inadequate for current business demands as unreliable or uncompetitive. In an international economy that rewards flexibility and adaptability, no one can be content to stand firm on any technology decision simply to avoid the cost of improvement. Even the most up-to-date high- and low-tech inventions will soon be bypassed. Over time, all the latest discoveries, from videocassettes to floppy disks to high-speed dial-up modems, have been replaced by cheaper and better alternatives. The “burden” of keeping up with technology is not optional. Firms that do not understand this reality will soon find their products, and themselves, in the same historical dustbin as the 8-track tape. Stanley P. Jaskiewicz, a business lawyer, helps clients solve e-commerce, corporate, contracts and technology law problems, and is a member of e-Commerce Law & Strategy’s Board of Editors. He can be reached at the Philadelphia law firm of Spector Gadon & Rosen, at [email protected]. Subscribe to E-Commerce Law & Strategy.

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