Ch. 12
Planning for Electronic
Commerce
Kevin Lyles
Learning Objectives
Planning electronic commerce initiatives
 Strategies for developing electronic
commerce web sites
 Managing electronic commerce
implementations
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Planning Electronic
Commerce Initiatives
OBJECTIVE
1
Identifying objectives
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
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Linking Objectives to Business
Strategies
Downstream strategies- improve the value
that the business provides to its customers
 Upstream strategies- focus on reducing
costs or generating value by working with
suppliers or inbound shipping and freight
service providers
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Linking Objectives to Business
Strategies
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Building brands
Enhancing existing marketing programs
Selling products and services
Developing a better understanding of customers
needs
Improving after-sale service and support
Purchasing products and services
Managing supply chains
Operating auctions
Building virtual communities and web portals
Measuring Benefits
Tangible- easy to measure. Sales and
costs for example
 Intangible- difficult to measure. Increased
customer satisfaction
 Online Surveys
 Metrics- measurements used to assess the
value of benefits
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Managing Costs
Total Cost of Ownership- everything
 Change Management- process of helping
employees cope with impending change
 Opportunity cost- Best use?
 Web-site costs-79% labor, 10% software,
and 11% hardware
 10 of top 100 spent over $10,000,000
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Managing Costs
continued
Comparing Benefits to costs
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Capital Projects- major investments in
equipment, personnel, and other assets
Return On Investment
ROI= return divided by the investment
 ROI requires all costs and benefits be
stated in dollars
 ROI focuses on benefits that can be
predicted
 Cisco example
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Strategies for Developing
Electronic Commerce Websites
Objective
2
Internal Development vs.
Outsourcing
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The internal team
 Knowledge
 Creative
Thinkers
 Credibility
 Success should be measurable
Early Outsourcing
Initial site design and development for
quick launch
 Internal IT should be involved
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Late Outsourcing
Design is internal
 Maintenance is external
 Electronic commerce lend themselves
more to early outsourcing
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Partial Outsourcing
A.K.A. Component outsourcing
 Outsource specific portions
 Examples: e-payment, e-mail systems,
Web-hosting
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Selecting a Hosting Service
Functionality
 Reliability
 Bandwidth and server scalability
 Security
 Backup and disaster recovery
 Cost
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New Methods for Implementing
Partial Outsourcing
Incubators: Idealab! Was an incubator for
Carsdirect.com, Overstock.com, and Tickets.com
 Fast Venturing
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Managing Electronic
Commerce Initiatives
Objective
3
Project Management
Developed by US military in 1950s
 Project Plan: Cost, schedule, and
performance
 Project management software
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 Microsoft
Project
 Primavera Project Planner
Project Portfolio management
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Each project is monitored as if it were in
an investment portfolio
Staffing for Electronic Commerce
Business Managers
 Project Managers
 Account Managers
 Applications Specialist
 Web Programmers
 Web Graphics Designers
 Content Creators
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Staffing for Electronic Commerce
Content Managers and Editors
 Customer Service
 Systems Administrator
 Network Operations
 Database Administrator
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Post Implementation Audits
Formal Review
 Did we meet our objectives?
 Comprehensive report
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