Planning for Electronic Business
In this chapter, you will learn about:
• Identifying the value of electronic commerce initiatives
• Aligning implementation plans with strategies
• Deciding which electronic commerce project elements to outsource
• Selecting Web hosting services
• Using incubators and fast venturing techniques to launch Internet business initiatives
• Using project and portfolio management techniques to plan and control electronic commerce activities
• Staffing electronic commerce activities
Planning the Electronic Commerce Initiative
A successful business plan for an ...view middle of the document...
Staffing costs can consume over 79% of the site’s total budget. The capital acquisition budget for an electronic commerce Web site requires more managerial judgment of the real value of intangible assets, such as customer satisfaction or public recognition of brand names, than traditional business investments. The nature of intangible benefits associated with a commercial Web site is related to the virtual nature of the Web.
Strategies for Web Site Development
Few firms are large enough or have sufficient in-house expertise to launch an electronic commerce project without some external help. The key to success is finding the right balance between outside and inside support for the project. The practice of hiring another company to provide the outside support for all or part of the project is called outsourcing. The first step in determining which parts of an electronic commerce project to outsource is to create an internal team that is responsible for the project. The internal project team should be composed of employees with sufficient knowledge of the various Internet technologies and its possibilities. The internal team should hold ultimate and complete responsibility for the electronic commerce initiative, from the setting of objectives to the final implementation and operation of the site. The internal team will decide which parts of the project to outsource, to whom those parts will be outsourced, and what consultants or partners the company will need to hire for the project.
Early outsourcing refers to the strategy of hiring consultants, the outsourcing team, to design and develop the project while training company employees to manage the system after it is established. In late outsourcing, a firm’s internal team takes responsibility for the initial design and development work. After the initiative is established and integrated into the firm’s overall strategic plan, the outsourced professionals can be engaged to maintain the commercial site. Late outsourcing is recommended to build the internal expertise needed to fully exploit the beneficial objectives and maintain positive control over the system.
Selecting a hosting service
Another responsibility of the internal team should be the selection of the ISP or the CSP that will provide the site’s hosting service. The critical factors for the internal team to consider in their selection decision are:
▪ Bandwidth and server scalability
▪ Backup and disaster recovery
Quick Quiz #1
Q. What is another name for component outsourcing?
A. Partial outsourcing
Q. What is early outsourcing?
A. The hiring of an external team to do initial development on a project, which is transitioned to an internal team.
Q. What is late outsourcing?
A. The hiring of a company to maintain an electronic commerce project that has been developed by an internal team.
Q. What is partial outsourcing?