Chapter 12: Planning for Electronic Commerce

Planning Electronic Commerce Initiatives
Identifying Objectives:
- increasing sales in existing markets, opening new markets, serving existing customers better, identifying new vendors, coordinating more efficiently with existing vendors, recruiting employees more effectively
Linking Objectives to Business Strategies:
- downstream of upstream strategies (reducing costs or generating value by working with suppliers)
- opportunities inspire businesses to undertake activities like: building brands, enhancing existing marketing programs, selling products and services, selling advertising, developing a better understanding of customer needs, improving after-sale service and support, purchasing products and services, managing supply chains, operating auctions, building vitural communities and web portals
Measuring Benefits:
- revenue, units, customer satisfaction surveys, time, number of visitors, number of return visits
Managing Costs
- Total Cost of ownership: costs of hardware, software, design work outsourced, salaries and benefits for employees
- Change management: process of helping employees cope with changes
- opportunity costs: cost of not undertaking initiative
- web site costs: anywhere from $100,000 to $15 million and up

Comparing Benefits to Costs
- capital projects/investments: equipment, personnel
- if benefits exceed costs of project by comfortable margin, company invests in the project
Return on Investment (ROI)
- measure the amount of income that will be provided by a specific current expenditure
- provide quantitative expression of comfortable benefit-to-cost margin for specific company

Strategies for Developing E-Commerce Web Sites
Internal Development vs Outsourcing
- internal team: people with enough knowledge about internet and technologies to know what kinds of things are possible, creative thinker who are interested in expanding the company
- early outsourcing: outsource initial site design and development - then company employees are trained in the new technology before taking over the operation of the site
- late outsourcing: company's info system professionals do initial design and development, implement the system and operate the system until it becomes stable part of the business operation
- partial outsourcing: company identifies specific portions of the project that can be completely designed, developed, implemented and operated by another firm that specializes in a particular function
Selecting a Hosting Service
- functionality, reliability, bandwidth and server scalability, security, backup and disaster recovery, cost
New Methods for Implementing Partial Outsourcing
- incubator: company that offers start-up companies physical location with offices, accounting and legal assistance, computers, internet connections at very low monthly cost
- fast venturing: existing company wants to launch an e-commerce initiative joins external equity partners and operational partners that can offer the experience and skills needed to develop and scale up the project

Managing E-Commerce Implementations
Project Management
- collection of formal techniques for planning and controlling the activities undertaken to achieve a specific goal
- project mgmt software: microsoft project, give managers array of built-in tools for managing resources and schedules
Project Portfolio Management
- each project is monitored as if it were an investment in financial portfolio
Staffing for e-commerce
- project manager: specific training or skills in tracking costs and accomplishment of specific objectives in a project
- account manager: keeps track of multiple web sites in use by project or keeps track of projects that will combine to create a larger web site
- applications specialists: maintain accounting, human resources, logistics software
- web programmers: design and write the underlying code for dynamic database-driven web pages
- web graphics designer: trained in art, layout, and composition and who also understands how web pages are constructed
- content creators: write original content and content managers purchase existing material and adapt if for use on the site
- call center: company that handles incoming customer telephone calls and emails for other companies
- systems administrator: responsible for system's reliable and secure operation
- network operations: staff functions include load estimation and load monitoring, resolving network problems as they arise, designing and implementing fault-resistant technologies, managing network operations that are outsourced to service providers
- database administration: support activities such as transaction processing, order entry inquiry