XML (eXtensible Markup Language) is emerging as the industry standard platform for application integrationrnand many organizations are either adopting the technology or seriously evaluating this option. One of thernmajor concerns of the senior management in such an endeavor is the cost associated with the decision. In thisrnpaper, a model is proposed to evaluate an organization’s position in an XML adoption space by evaluating itsrncurrent level of IT sophistication. The model identifies critical factors necessary for the successful adoptionrnof XML technology along three dimensions – intranet, extranet and Internet. A simulation experiment isrnconducted to find the most cost effective strategy for allocating the resources to achieve the desired goal. Twornoptions are evaluated under the constraint that the organization can increment the diffusion level of a factorrnonly by a fixed amount. It has been observed that improving the factor that has the highest significance in therndimension in which the company needs to improve most is a more effective strategy than improving the diffusionrnlevel of the factor that has organization-wide highest importance.
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