Business Plan for Implementing Electronic Commerce

advertisement
Introduction to Electronic Commerce
Business Plan for
Implementing
Electronic Commerce
Objectives
In this chapter, you will learn about:
Š Planning electronic commerce initiatives
Š Strategies for developing electronic
commerce Web sites
Š Managing electronic commerce
implementations
An Introduction to E-Commerce
Winter 85, 2
1
Planning Electronic Commerce
Initiatives
Š 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
An Introduction to E-Commerce
Winter 85, 3
Linking Objectives to Business
Strategies
Š Downstream strategies
„
Used to improve the value that the business
provides to its customers
Š Upstream strategies
„
Focus on reducing costs or generating value
z
Work with suppliers or inbound shipping and freight
service providers
An Introduction to E-Commerce
Winter 85, 4
2
Linking Objectives to Business
Strategies (continued)
Š 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
An Introduction to E-Commerce
Winter 85, 5
Measuring Benefits
Š Tangible benefits of electronic commerce
initiatives
„
Increased sales
„
Reduced costs
Š Intangible benefits of electronic commerce
initiatives
„
Increased
customer satisfaction
An Introduction to E-Commerce
Winter 85, 6
3
Measuring the Benefits of
Electronic Commerce Initiatives
An Introduction to E-Commerce
Winter 85, 7
Managing Costs
Š Total cost of ownership
„
Includes costs of hardware, software, design
work outsourced, and salaries
Š Change management
„
Process of helping employees cope with changes
Š Opportunity costs
„
Lost benefits from an action not taken
An Introduction to E-Commerce
Winter 85, 8
4
Web Site Costs
Š International Data Corporation and Gartner,
Inc.
„
Cost for large company to build and implement
entry-level electronic commerce site is about $1
million
z
79 percent of cost is labor related
z
10 percent is the cost of software
z
11 percent is the cost of hardware
An Introduction to E-Commerce
Winter 85, 9
Starting a Web Business: Three
Price Tags
An Introduction to E-Commerce
Winter 85, 10
5
Web Site Costs (continued)
Š Experts agree that the annual cost to maintain
and improve a site will be
„
50 and 200 percent of the initial cost
Š McKinsey & Company study
„
Full portal site cost estimate was $2.4 million to
build and $4.3 million per year to maintain
„
Companion site cost estimate was $150,000 to
build and $270,000 per year to maintain
An Introduction to E-Commerce
Winter 85, 11
Cost Estimates for Building and Operating
Magazine Publisher Web Sites
An Introduction to E-Commerce
Winter 85, 12
6
Cost Estimates for Building and Operating
Magazine Publisher Web Sites (continued)
An Introduction to E-Commerce
Winter 85, 13
Comparing Benefits to Costs
Š Capital projects (capital investments)
„
Major investments in equipment, personnel, and other
assets
Š Key part of creating a business plan for electronic
commerce initiatives
„
Identifying potential benefits
„
Identifying costs required to generate benefits
„
Evaluating whether benefits exceed costs
An Introduction to E-Commerce
Winter 85, 14
7
Cost/Benefit Evaluation of Electronic
Commerce Strategy Elements
An Introduction to E-Commerce
Winter 85, 15
Return on Investment (ROI)
Š Techniques provide a quantitative expression
of a comfortable benefit-to-cost margin
Š Built-in biases that can lead managers to
make poor decisions
„
ROI requires that all costs and benefits be stated
in dollars
„
Focus is on benefits that can be predicted
„
Tends to emphasize short-run benefits over longrun benefits
An Introduction to E-Commerce
Winter 85, 16
8
Strategies for Developing
Electronic Commerce Web Sites
Š Typical early Web site
„
Static brochure not updated frequently
„
Seldom had any capabilities for helping the
company’s customers
Š Today’s Web site includes
„
Transaction-processing tools
„
Automated homes for business processes of all
kinds
An Introduction to E-Commerce
Winter 85, 17
Increasing Complexity of Web
Site Functions
An Introduction to E-Commerce
Winter 85, 18
9
Internal Development vs.
Outsourcing
Š Outsourcing
„
Hiring another company to provide outside
support for all or part of a project
Š Internal team
„
„
Should include people with enough knowledge
about the Internet and its technologies
Should be creative thinkers
Š Measuring achievements of internal team is
very important
An Introduction to E-Commerce
Winter 85, 19
Early Outsourcing
Š Outsource initial site design and development
to launch a project quickly
Š Outsourcing team trains company’s
information systems professionals in the new
technology
Š It is best to have a company’s own information
systems people working closely with the
outsourcing
team
An Introduction to E-Commerce
Winter 85, 20
10
Late Outsourcing
Š Information systems professionals
„
Do initial design and development work
„
Implement system
„
Operate system until it becomes a stable part of
the business operation
Š Once a company has gained a competitive
advantage maintenance of the electronic
commerce system can be outsourced
An Introduction to E-Commerce
Winter 85, 21
Partial Outsourcing
Š Company identifies specific portions of the
project that can be completely designed,
developed, implemented, and operated by
another firm
Š Many smaller Web sites outsource their email handling and response functions
An Introduction to E-Commerce
Winter 85, 22
11
Selecting a Hosting Service
Š Factors to evaluate when selecting a hosting
service
„
Functionality
„
Reliability
„
Bandwidth and server scalability
„
Security
„
Backup and disaster recovery
„
Cost
An Introduction to E-Commerce
Winter 85, 23
New Methods for Implementing
Partial Outsourcing
Š Incubators
„
„
Company that offers start-up companies a
physical location with
z
Offices, accounting, and legal assistance
z
Computers and Internet connections
Receive ownership interest in the company
An Introduction to E-Commerce
Winter 85, 24
12
New Methods for Implementing
Partial Outsourcing (continued)
Š Fast venturing
„
Existing company that wants to launch an
electronic commerce initiative joins external
equity partners and operational partners
Š Equity partners
„
Banks or venture capitalists
Š Operational partners
„
Firms that have experience in moving projects
along and scaling up prototypes
An Introduction to E-Commerce
Winter 85, 25
Elements of Fast Venturing
An Introduction to E-Commerce
Winter 85, 26
13
Managing Electronic
Commerce Implementations
Š Project management
„
Formal techniques for planning and controlling
activities undertaken to achieve a specific goal
Š Project plan
„
Includes criteria for cost, schedule, and
performance
Š Project management software products
„
„
Microsoft Project
Primavera Project Planner
An Introduction to E-Commerce
Winter 85, 27
Tracking Activities in
Primavera Project Planner
An Introduction to E-Commerce
Winter 85, 28
14
Project Portfolio Management
Š Each project is monitored as if it were an
investment in a financial portfolio
Š Chief Information Officer
„
Records projects in a list
„
Updates the list with current information about
each project’s status
„
Assigns ranking for each project based on
importance and level of risk
An Introduction to E-Commerce
Winter 85, 29
Staffing for Electronic
Commerce
Š General areas of staffing
„
„
„
„
„
„
„
„
Business managers
Project managers
Account managers
Applications specialists
Web programmers
Web graphics designers
Customer service
Systems administration
An Introduction to E-Commerce
Winter 85, 30
15
General Areas of Staffing
Š Business manager
„
Should be a member of the internal team that sets
objectives for a project
Š Project manager
„
Person with specific training or skills in tracking
costs and accomplishment of specific objectives
Š Account manager
„
Keeps track of multiple Web sites in use by a
project
An Introduction to E-Commerce
Winter 85, 31
General Areas of Staffing
(continued)
Š Applications specialists
„
Maintain accounting, human resources, and
logistics software
Š Web programmers
„
Design and write underlying code for dynamic
database-driven Web pages
Š Web graphics designer
„
„
Person trained in art, layout, and composition
Understands how Web pages are constructed
An Introduction to E-Commerce
Winter 85, 32
16
General Areas of Staffing
(continued)
Š Customer service personnel
„
Help design and implement customer
relationship management activities
Š Call center
„
Company that handles incoming customer
telephone calls and e-mails for other companies
Š Systems administrator
„
Responsible for the system’s reliable and secure
operation
An Introduction to E-Commerce
Winter 85, 33
Postimplementation Audit
Š Formal review of a project after it is up and
running
Š Gives managers a chance to examine
„
Objectives
„
Performance specifications
„
Cost estimates
„
Scheduled delivery dates
An Introduction to E-Commerce
Winter 85, 34
17
Postimplementation Audit
(continued)
Š Allows internal team, business manager, and
project manager to
„
Raise questions about the project’s objectives
„
Provide feedback on strategies
Š Final report should analyze
„
Project’s overall performance
„
How well the project was administered
„
Specific
performance of the project team(s)Winter 85, 35
An Introduction to E-Commerce
Summary
Š Plans for electronic commerce implementations
„
Set objectives
„
Benefit and cost objectives should be stated in measurable
terms
Š Project evaluation technique
„
Return on investment
Š Determining an outsourcing strategy
„
Form an internal team that includes knowledgeable
individuals from within the company
An Introduction to E-Commerce
Winter 85, 36
18
Summary (continued)
Š Project management
„
Formal way to plan and control specific tasks and
resources used in a project
Š Project portfolio management techniques
„
Used to track and make trade-offs among multiple
ongoing projects
Š Critical staffing areas
„
„
„
Business management
Application specialists
Systems administration
An Introduction to E-Commerce
Winter 85, 37
19
Download