E-Commerce: The Second Wave Fifth Annual Edition

1. E-Commerce: The Second WaveFifth Annual Edition Chapter 12: Planning for Electronic Commerce

2. Objectives In this chapter, you will learn about: • Planning electronic commerce initiatives • Strategies for developing electronic commerce Web sites • Managing electronic commerce implementations E-Commerce: The Second Wave, Fifth Annual Edition

3. Planning Electronic Commerce Initiatives • Objectives of electronic commerce • 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 E-Commerce: The Second Wave, Fifth Annual Edition

4. Linking Objectives to Business Strategies • Downstream strategies • Used to improve the value that the business provides to its customers • Upstream strategies • Focus on reducing costs or generating value • Work with suppliers or inbound shipping and freight service providers E-Commerce: The Second Wave, Fifth Annual Edition

5. Linking Objectives to Business Strategies (Continued) • Electronic commerce opportunities can inspire businesses to undertake activities such as • Building brands • Enhancing existing marketing programs • Selling products and services • Selling advertising • Developing a better understanding of customer needs E-Commerce: The Second Wave, Fifth Annual Edition

6. Measuring Benefits • Tangible benefits of electronic commerce initiatives • Increased sales • Reduced costs • Intangible benefits of electronic commerce initiatives • Increased customer satisfaction E-Commerce: The Second Wave, Fifth Annual Edition

7. Measuring the Benefits of Electronic Commerce Initiatives E-Commerce: The Second Wave, Fifth Annual Edition

8. Managing Costs • Total cost of ownership • Includes costs of hardware, software, design work outsourced, and salaries • Change management • Process of helping employees cope with changes • Opportunity costs • Lost benefits from an action not taken E-Commerce: The Second Wave, Fifth Annual Edition

9. Comparing Benefits to Costs • Capital projects (Capital investments) • Major investments in equipment, personnel, and other assets • Key part of creating business plan for electronic commerce initiatives • Identifying potential benefits • Identifying costs required to generate benefits • Evaluating whether benefits exceed costs E-Commerce: The Second Wave, Fifth Annual Edition

10. Cost/benefit Evaluation of Electronic Commerce Strategy Elements E-Commerce: The Second Wave, Fifth Annual Edition

11. Strategies for Developing Electronic Commerce Web Sites • Typical early Web site • Static brochure not updated frequently • Seldom had any capabilities for helping the company’s customers • Today’s Web site includes • Transaction-processing tools • Automated homes for business processes of all kinds E-Commerce: The Second Wave, Fifth Annual Edition

12. Increasing Complexity of Web Site Functions E-Commerce: The Second Wave, Fifth Annual Edition

13. Internal Development vs. Outsourcing • Outsourcing • Hiring another company to provide outside support for all or part of a project • Internal team • Should include people with enough knowledge about the Internet and its technologies • Should be creative thinkers • Measuring achievements of internal team is very important E-Commerce: The Second Wave, Fifth Annual Edition

14. Early Outsourcing • Outsource initial site design and development to launch project quickly • Outsourcing team trains company’s information systems professionals in the new technology • It is best to have • Company’s own information systems people working closely with outsourcing team E-Commerce: The Second Wave, Fifth Annual Edition

15. Late Outsourcing • Information systems professionals • Do initial design and development work • Implement system • Operate system until it becomes a stable part of business operation • Once company has gained competitive advantage • Maintenance of electronic commerce system can be outsourced E-Commerce: The Second Wave, Fifth Annual Edition

16. Partial Outsourcing • Company identifies specific portions of the project that can be completely: • Designed, developed, implemented, and operated by another firm • Many smaller Web sites • Outsource their e-mail handling and response functions E-Commerce: The Second Wave, Fifth Annual Edition

17. Selecting a Hosting Service • Factors to evaluate when selecting a hosting service • Functionality • Reliability • Bandwidth and server scalability • Security • Backup and disaster recovery • Cost E-Commerce: The Second Wave, Fifth Annual Edition

18. Managing Electronic Commerce Implementations • Project management • Formal techniques for planning and controlling activities undertaken to achieve a specific goal • Project plan • Includes criteria for cost, schedule, and performance • Project management software products • Microsoft Project • Primavera Project Planner E-Commerce: The Second Wave, Fifth Annual Edition

19. General Areas of Staffing • Business manager • Should be member of internal team that sets objectives for project • Project manager • Person with specific training or skills in • Tracking costs and accomplishment of specific objectives • Account manager • Keeps track of multiple Web sites in use by a project E-Commerce: The Second Wave, Fifth Annual Edition

20. General Areas of Staffing (Continued) • Applications specialists • Maintain accounting, human resources, and logistics software • Web programmers • Design and write underlying code for dynamic database-driven Web pages has increased • Web graphics designer • Person trained in art, layout, and composition • Understands how Web pages are constructed E-Commerce: The Second Wave, Fifth Annual Edition

21. General Areas of Staffing (Continued) • Customer service personnel • Help design and implement customer relationship management activities • Call center • Company that handles incoming customer telephone calls and e-mails for other companies • Systems administrator • Responsible for the system’s reliable and secure operation E-Commerce: The Second Wave, Fifth Annual Edition

22. Postimplementation Audit • Formal review of a project after it is up and running • Gives managers a chance to examine • Objectives • Performance specifications • Cost estimates • Scheduled delivery dates E-Commerce: The Second Wave, Fifth Annual Edition

23. Postimplementation Audit (Continued) • Allows internal team, business manager, and project manager to • Raise questions about the project’s objectives • Provide feedback on strategies • Final report should analyze • Project’s overall performance • How well the project was administered • Specific performance of the project team(s) E-Commerce: The Second Wave, Fifth Annual Edition