Ch. 12Ch. 12Planning for Electronic Planning for Electronic

CommerceCommerce

Kevin LylesKevin Lyles

Learning ObjectivesLearning Objectives

Planning electronic commerce Planning electronic commerce initiativesinitiatives

Strategies for developing electronic Strategies for developing electronic commerce web sitescommerce web sites

Managing electronic commerce Managing electronic commerce implementationsimplementations

Planning Electronic Planning Electronic Commerce InitiativesCommerce Initiatives

OBJECTIVE OBJECTIVE

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Identifying objectivesIdentifying objectives

Increasing sales in existing marketsIncreasing sales in existing marketsOpening new marketsOpening new marketsServing existing customers betterServing existing customers better Identifying new vendorsIdentifying new vendorsCoordinating more efficiently with Coordinating more efficiently with

existing vendorsexisting vendorsRecruiting employees more Recruiting employees more

effectivelyeffectively

Linking Objectives to Business Linking Objectives to Business StrategiesStrategies

Downstream strategies- improve the Downstream strategies- improve the value that the business provides to value that the business provides to its customersits customers

Upstream strategies- focus on Upstream strategies- focus on reducing costs or generating value reducing costs or generating value by working with suppliers or inbound by working with suppliers or inbound shipping and freight service shipping and freight service providersproviders

Linking Objectives to Business Linking Objectives to Business StrategiesStrategies

Building brandsBuilding brands Enhancing existing marketing programsEnhancing existing marketing programs Selling products and servicesSelling products and services Developing a better understanding of Developing a better understanding of

customers needscustomers needs Improving after-sale service and supportImproving after-sale service and support Purchasing products and servicesPurchasing products and services Managing supply chainsManaging supply chains Operating auctionsOperating auctions Building virtual communities and web Building virtual communities and web

portalsportals

Measuring BenefitsMeasuring Benefits

Tangible- easy to measure. Sales and Tangible- easy to measure. Sales and costs for examplecosts for example

Intangible- difficult to measure. Intangible- difficult to measure. Increased customer satisfactionIncreased customer satisfaction

Online SurveysOnline SurveysMetrics- measurements used to Metrics- measurements used to

assess the value of benefitsassess the value of benefits

Managing CostsManaging Costs

Total Cost of Ownership- everythingTotal Cost of Ownership- everythingChange Management- process of Change Management- process of

helping employees cope with helping employees cope with impending changeimpending change

Opportunity cost- Best use?Opportunity cost- Best use?Web-site costs-79% labor, 10% Web-site costs-79% labor, 10%

software, and 11% hardwaresoftware, and 11% hardware10 of top 100 spent over $10,000,00010 of top 100 spent over $10,000,000

Managing Costs Managing Costs

continuedcontinued

Comparing Benefits to costsComparing Benefits to costs

Capital Projects- major investments Capital Projects- major investments in equipment, personnel, and other in equipment, personnel, and other assetsassets

Return On InvestmentReturn On Investment

ROI= return divided by the ROI= return divided by the investmentinvestment

ROI requires all costs and benefits be ROI requires all costs and benefits be stated in dollarsstated in dollars

ROI focuses on benefits that can be ROI focuses on benefits that can be predictedpredicted

Cisco exampleCisco example

Strategies for Developing Strategies for Developing Electronic Commerce Electronic Commerce

WebsitesWebsites

ObjectiveObjective

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Internal Development vs. Internal Development vs. OutsourcingOutsourcing

The internal teamThe internal teamKnowledgeKnowledgeCreative ThinkersCreative ThinkersCredibilityCredibilitySuccess should be measurableSuccess should be measurable

Early OutsourcingEarly Outsourcing

Initial site design and development Initial site design and development for quick launchfor quick launch

Internal IT should be involvedInternal IT should be involved

Late OutsourcingLate Outsourcing

Design is internalDesign is internalMaintenance is externalMaintenance is externalElectronic commerce lend Electronic commerce lend

themselves more to early themselves more to early outsourcingoutsourcing

Partial OutsourcingPartial Outsourcing

A.K.A. Component outsourcingA.K.A. Component outsourcingOutsource specific portionsOutsource specific portionsExamples: e-payment, e-mail Examples: e-payment, e-mail

systems, Web-hostingsystems, Web-hosting

Selecting a Hosting ServiceSelecting a Hosting Service

FunctionalityFunctionalityReliabilityReliabilityBandwidth and server scalabilityBandwidth and server scalabilitySecuritySecurityBackup and disaster recoveryBackup and disaster recoveryCostCost

New Methods for Implementing New Methods for Implementing Partial OutsourcingPartial Outsourcing

Incubators: Idealab! Was an incubator for Incubators: Idealab! Was an incubator for Carsdirect.com, Overstock.com, and Carsdirect.com, Overstock.com, and Tickets.comTickets.com

Fast VenturingFast Venturing

Managing Electronic Managing Electronic Commerce InitiativesCommerce Initiatives

ObjectiveObjective

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Project ManagementProject Management

Developed by US military in 1950sDeveloped by US military in 1950sProject Plan: Cost, schedule, and Project Plan: Cost, schedule, and

performanceperformanceProject management softwareProject management software

Microsoft ProjectMicrosoft ProjectPrimavera Project PlannerPrimavera Project Planner

Project Portfolio managementProject Portfolio management

Each project is monitored as if it Each project is monitored as if it were in an investment portfoliowere in an investment portfolio

Staffing for Electronic Staffing for Electronic CommerceCommerce

Business ManagersBusiness ManagersProject ManagersProject ManagersAccount ManagersAccount ManagersApplications SpecialistApplications SpecialistWeb ProgrammersWeb ProgrammersWeb Graphics DesignersWeb Graphics DesignersContent CreatorsContent Creators

Staffing for Electronic Staffing for Electronic CommerceCommerce

Content Managers and EditorsContent Managers and EditorsCustomer ServiceCustomer ServiceSystems AdministratorSystems AdministratorNetwork OperationsNetwork OperationsDatabase AdministratorDatabase Administrator

Post Implementation AuditsPost Implementation Audits

Formal ReviewFormal ReviewDid we meet our objectives?Did we meet our objectives?Comprehensive reportComprehensive report