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

2. E-Commerce: The Second Wave, Fifth Annual Edition2 Objectives In this chapter, you will learn about: Planning electronic commerce initiatives Strategies for developing electronic commerce Web sites Managing electronic commerce implementations

3. E-Commerce: The Second Wave, Fifth Annual Edition3 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

4. E-Commerce: The Second Wave, Fifth Annual Edition4 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

5. E-Commerce: The Second Wave, Fifth Annual Edition5 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

6. E-Commerce: The Second Wave, Fifth Annual Edition6 Measuring Benefits Tangible benefits of electronic commerce initiatives –Increased sales –Reduced costs Intangible benefits of electronic commerce initiatives –Increased customer satisfaction

7. E-Commerce: The Second Wave, Fifth Annual Edition7 Measuring the Benefits of Electronic Commerce Initiatives

8. E-Commerce: The Second Wave, Fifth Annual Edition8 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

9. E-Commerce: The Second Wave, Fifth Annual Edition9 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

10. E-Commerce: The Second Wave, Fifth Annual Edition10 Cost/benefit Evaluation of Electronic Commerce Strategy Elements

11. E-Commerce: The Second Wave, Fifth Annual Edition11 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

12. E-Commerce: The Second Wave, Fifth Annual Edition12 Increasing Complexity of Web Site Functions

13. E-Commerce: The Second Wave, Fifth Annual Edition13 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

14. E-Commerce: The Second Wave, Fifth Annual Edition14 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

15. E-Commerce: The Second Wave, Fifth Annual Edition15 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

16. E-Commerce: The Second Wave, Fifth Annual Edition16 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

17. E-Commerce: The Second Wave, Fifth Annual Edition17 Selecting a Hosting Service Factors to evaluate when selecting a hosting service –Functionality –Reliability –Bandwidth and server scalability –Security –Backup and disaster recovery –Cost

18. E-Commerce: The Second Wave, Fifth Annual Edition18 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

19. E-Commerce: The Second Wave, Fifth Annual Edition19 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

20. E-Commerce: The Second Wave, Fifth Annual Edition20 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

21. E-Commerce: The Second Wave, Fifth Annual Edition21 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

22. E-Commerce: The Second Wave, Fifth Annual Edition22 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

23. E-Commerce: The Second Wave, Fifth Annual Edition23 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)