#2: Planning the Electronic Commerce Initiative Flashcards
downstream strategies
improve the value that the
business provides to its customers
upstream strategies
reducing costs or generating value by
working with suppliers or inbound logistics
Measuring Benefit Objectives
create Web sites to build their brands or enhance existing marketing programs
set goals in terms of increased brand awareness, as measured by market research surveys
measure sales volumes in units or dollars
measure supply cost reductions, quality improvements, etc
Measuring Cost Objectives
project budget must include the cost of hiring, training, and personnel
79% of that cost was labor related
10% was the cost of software
11% was the cost of hardware
minimum dollar amount needed to open an entry level electronic commerce Web site at $150,000
cost for a large company to build and implement an adequate entry-level electronic commerce site was about $1 million
Comparing Benefits to Costs
evaluate each element of their electronic commerce strategies using this cost/benefit approach
return on investment (ROI) to evaluate any
capital investment
Internal Development vs. Outsourcing
The Internal Team
Early Outsourcing
Late Outsourcing
Partial Outsourcing
The Internal Team
Business knowledge and creativity are much more important than technical expertise
Customer satisfaction, number of sales leads generated, and reductions in order-processing time
Early Outsourcing
initial site design and
development to launch the project quickly
trains the company’s employees in the new technology before handing the operation of the site over to them
Late Outsourcing
company does the initial design, development, implementation, and operates the system
until it becomes stable
After the company has gained all the competitive advantages provided by the system, the
maintenance of the electronic commerce system can be outsourced.
Partial Outsourcing
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
For smaller electronic commerce projects, teams can consult an ISP
directory, such as ‘The List’.
For larger Web sites, the team will want to obtain the advice
of consultants or other firms that rate ISPs and CSPs, such as ‘Keynote Systems’
factors to evaluate when selecting a hosting service
Functionality
* Reliability
* Bandwidth and server scalability
* Security
* Backup and disaster recovery
* Cost
Incubators
offers start-up companies a physical location with offices, accounting and legal assistance, computers, and Internet connections at a very low monthly
cost
offer seed money, management advice, and marketing assistance
In exchange, they receive an ownership interest in the company
Fast venturing
an existing company that wants to launch an electronic commerce
initiative joins external equity partners and operational partners to scale up the project rapidly.
equity partners are banks or venture capitalists
Operational partners are
firms that have experience in moving projects along
