1、Implementing EC Systems: From Justification to Successful PerformanceLearning ObjectivesDescribe the major components of EC.Describe the need for justifying EC investments.Understand the difficulties in measuring and justifying EC investments.Recognize the difficulties in establishing intangible met

2、rics.List and describe traditional and advanced methods of justifying EC investments.Describe some examples of EC justification.Describe the role of economics in EC evaluation.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-1Learning ObjectivesDiscuss the steps in developing an

3、EC system.Describe the major EC development strategies.List the various EC development methods along with their benefits and limitations.Discuss the major outsourcing strategies.Describe the criteria used in selecting software vendors and packages.Describe EC organizational structure, business proce

4、ss management, and change management.Understand how product, industry seller, and buyer characteristics impact the success of EC.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-2The Implementation LandscapeTHE MAJOR IMPLEMENTATION FACTORSJustification/EconomicsAcquire or Develop

5、 Your merce SystemOrganizational Readiness and Impacts of merceHow to Succeed?Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-3Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-4Why Justify merce Investments? How Can They Be Justified?INCREASED PRESSURE FOR FI

6、NANCIAL JUSTIFICATIONOTHER REASONS WHY EC JUSTIFICATION IS NEEDEDEC INVESTMENT CATEGORIES AND BENEFITSCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-5Why Justify merce Investments? How Can They Be Justified?HOW IS AN EC INVESTMENT JUSTIFIED?costbenefit analysisA comparison of t

7、he costs of a project against the benefitsCostBenefit Analysis and the Business CaseWHAT NEEDS TO BE JUSTIFIED? WHEN SHOULD JUSTIFICATION TAKE PLACE?Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-6Why Justify merce Investments? How Can They Be Justified?USING METRICS IN EC JUST

8、IFICATIONmetric A specific, measurable standard against which actual performance is comparedkey performance indicators (KPIs)The quantitative expression of critically important metricsCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-7Copyright 2012 Pearson Education, Inc. Publish

9、ing as Prentice Hall13-8Why Justify merce Investments? How Can They Be Justified?Web analytics(1) The analysis of clickstream data to understand visitor behavior on a website(2) The measurement, collection, analysis, and reporting of Internet data for the purposes of understanding and optimizing Web

10、 usageCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-9Difficulties in Measuring and Justifying merce InvestmentsTHE EC JUSTIFICATION PROCESSDIFFICULTIES IN MEASURING PRODUCTIVITY AND PERFORMANCE GAINSData and Analysis IssuesEC Productivity Gains in One Area May Be Offset by Los

11、ses in Other AreasHidden Costs and BenefitsIncorrectly Defining What Is MeasuredOther DifficultiesCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-10Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-11Copyright 2012 Pearson Education, Inc. Publishing as Prentic

12、e Hall13-12Difficulties in Measuring and Justifying merce InvestmentsINTANGIBLE COSTS AND BENEFITSTangible Costs and BenefitsThese costs can be measured through accounting information systems.Intangible Costs and BenefitsIt is necessary to consider intangible benefits in a way that reflects their po

13、tential impact.Handling Intangible BenefitsThe first step in dealing with intangible benefits is to define them and, if possible, specify how they are going to be measured.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-13Difficulties in Measuring and Justifying merce Investment

14、sTHE PROCESS OF JUSTIFYING EC AND IT PROJECTSCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-14Difficulties in Measuring and Justifying merce InvestmentsTHE USE OF GARTNERS HYPE CYCLEhype cycleA graphic representation of the maturity, adoption, and social application of specific

15、 IT toolsCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-15Difficulties in Measuring and Justifying merce InvestmentsEach hype cycle has five stages that reflect the basic adoption path any technology follows:Technology triggerPeak of inflated expectationsTrough of disillusionme

16、ntSlope of enlightenmentPlateau of productivityApplication of the Hype CycleCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-16Methods and Tools for Evaluatingand Justifying merce InvestmentsOPPORTUNITIES AND REVENUE GENERATED BY EC INVESTMENTMETHODOLOGICAL ASPECTS OF JUSTIFYING

17、EC INVESTMENTSTypes of CostsDistinguish between initial (up-front) costs and operating costsDirect and indirect shared costsIn-kind costsCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-17Methods and Tools for Evaluatingand Justifying merce InvestmentsTRADITIONAL METHODS FOR EVAL

18、UATING EC INVESTMENTSThe ROI MethodPayback PeriodNPV AnalysisInternal Rate of Return (IRR)Break-Even AnalysesCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-18Methods and Tools for Evaluatingand Justifying merce Investmentstotal cost of ownership (TCO)A formula for calculating t

19、he cost of owning, operating, and controlling an IT systemtotal benefits of ownership (TBO)Benefits of ownership that include both tangible and intangible benefitsEconomic Value AddedUsing Several Traditional Methods for One ProjectBusiness ROI Versus Technology ROICopyright 2012 Pearson Education,

20、Inc. Publishing as Prentice Hall13-19Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-20Methods and Tools for Evaluatingand Justifying merce InvestmentsIMPLEMENTING TRADITIONAL METHODSROI calculatorCalculator that uses metrics and formulas to compute ROIThe Offerings from Baselin

21、e MagazineOther CalculatorsCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-21Methods and Tools for Evaluatingand Justifying merce InvestmentsADVANCED METHODS FOR EVALUATING IT AND EC INVESTMENTSFinancial approachesMulticriteria approachesRatio approachesPortfolio approachesCopyr

22、ight 2012 Pearson Education, Inc. Publishing as Prentice Hall13-22Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-23Examples of merce Metrics and Project JustificationJUSTIFYING E-PROCUREMENTJUSTIFYING A PORTALJUSTIFYING SOCIAL NETWORKING AND THE USE OF WEB 2.0 TOOLSJUSTIFYING A

23、N INVESTMENT IN MOBILE COMPUTING AND IN RFIDJUSTIFYING SECURITY PROJECTSCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-24The Economics of merceREDUCING PRODUCTION COSTSProduct Cost CurvesCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-25The Economics of mer

24、ceproduction functionAn equation indicating that for the same quantity of production, Q, companies either can use a certain amount of labor or invest in more automationagency costsCosts incurred in ensuring that the agent performs tasks as expected (also called administrative costs)Copyright 2012 Pe

25、arson Education, Inc. Publishing as Prentice Hall13-26Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-27The Economics of mercetransaction costsCosts that are associated with the distribution (sale) or exchange of products and services including the cost of searching for buyers a

26、nd sellers, gathering information, negotiating, decision making, monitoring the exchange of goods, and legal feesCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-28Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-29The Economics of merceINCREASED REVENUESReach

27、 Versus RichnessOther Ways to Increase RevenuesCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-30The Economics of merceREDUCING TRANSACTION FRICTION OR RISKFACILITATING PRODUCT DIFFERENTIATIONproduct differentiationSpecial features available in products that make them distinguis

28、hable from other products. This property attracts customers that appreciate what they consider an added valueEC INCREASES AGILITYagilityAn EC firms ability to capture, report, and quickly respond to changes happening in the marketplace and business environmentCopyright 2012 Pearson Education, Inc. P

29、ublishing as Prentice Hall13-31The Economics of merceVALUATION OF EC COMPANIESvaluationThe fair market value of a business or the price at which a property would change hands between a willing buyer and a willing seller who are both informed and under no compulsion to act For a publicly traded compa

30、ny, the value can be readily obtained by multiplying the selling price of the stock by the number of available shares.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-32A Five-Step Approach to Developing an merce SystemOnce it has been determined that a business can benefit from

31、an online presence, the business type, the product line, the businesss organization, and the budget dictate what functionality the EC system should have and how the website should be developed.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-33Copyright 2012 Pearson Education, In

32、c. Publishing as Prentice Hall13-34Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-35A Five-Step Approach to Developing an merce SystemIdentifying, justifying, and planning ec systemsCreating an EC architectureSelecting a development optionInstalling, testing, integrating, and d

33、eploying ec applicationsOperations, maintenance, and updatesCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-36Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-37A Five-Step Approach to Developing an merce SystemSTEP 2: CREATING AN EC ARCHITECTUREEC architectu

34、reA plan for organizing the underlying infrastructure and applications of a siteSTEP 3: SELECTING A DEVELOPMENT OPTIONSTEP 4: INSTALLING, TESTING, INTEGRATING, AND DEPLOYING EC APPLICATIONSunit testingTesting application software modules one at a timeintegration testingTesting the combination of app

35、lication modules acting in concertCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-38A Five-Step Approach to Developing an merce Systemusability testingTesting the quality of the users experience when interacting with a websiteacceptance testingDetermining whether a website meets

36、 the original business objectives and visionSTEP 5: OPERATIONS, MAINTENANCE, AND UPDATESMANAGING THE DEVELOPMENT PROCESSCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-39Development Strategies for merce ProjectsFour basic options for developing an EC website:Develop the site in-

37、house either from scratch or with off-the-shelf componentsBuy a packaged application designed for a particular type of EC siteOutsource system developmentLease the applicationCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-40Development Strategies for merce ProjectsIN-HOUSE DEVE

38、LOPMENT: INSOURCINGinsourcingIn-house development of applicationsreusabilityThe likelihood a segment of source code can be used again to add new functionalities with slight or no modificationinteroperabilityConnecting people, data, and diverse systems; the term can be defined in a technical way or i

39、n a broad way, taking into account social, political, and organizational factorsCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-41Development Strategies for merce ProjectsBUY THE APPLICATIONS (OFF-THE-SHELF APPROACH)turnkey approachReady to use without further assembly or testin

40、g; supplied in a state that is ready to turn on and operateoutsourcingA method of transferring the management and/or day-to-day execution of an entire business function to a third-party service providerTypes of Outsourcing OptionsCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-4

41、2Development Strategies for merce ProjectsLEASING EC APPLICATIONS: CLOUD COMPUTING AND SOFTWARE-AS-A-SERVICEcloud computingThe provision of computational resources on demand via a computer network; you pay only for actual usageSoftware-as-a-Service (SaaS)Advantages of Cloud ApplicationsCopyright 201

42、2 Pearson Education, Inc. Publishing as Prentice Hall13-43Development Strategies for merce ProjectsOTHER DEVELOPMENT OPTIONSJoin an e-marketplaceJoin a consortiumJoin an auction or reverse auction third-party siteForm joint venturesUse a hybrid approachSELECTING A DEVELOPMENT OPTIONCopyright 2012 Pe

43、arson Education, Inc. Publishing as Prentice Hall13-44Organizational Impacts of merceIMPROVING MARKETING AND SALESTRANSFORMING ORGANIZATIONS AND WORKTechnology and Organizational LearningThe Changing Nature of WorkDisintermediation and ReintermediationdisintermediationElimination of intermediaries b

44、etween sellers and buyersCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-45Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-46Organizational Impacts of merceRestructuring Business Processesbusiness process reengineering (BPR)A methodology for conducting a com

45、prehensive redesign of an enterprises processesbusiness process management (BPM)A holistic management approach focused on aligning all aspects of an organization with the wants and needs of clients; promotes business effectiveness and efficiency while striving for innovation, flexibility, and integr

46、ation with technologyCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-47Organizational Impacts of merceREDEFINING ORGANIZATIONSNew and Improved Product CapabilitiesPersonalization and Mass Customizationmass customizationA method that enables manufacturers to create specific produ

47、cts for each customer based on the customers exact needsImpacts on ManufacturingCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-48Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-49Organizational Impacts of mercechange managementA structured approach to shift

48、ing/transitioning individuals, teams, and organizations from a current state to a desired future state; it is an organizational process aimed at empowering employees to accept and embrace changes in their current business environmentCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall1

49、3-50Organizational Impacts of merceHOW TO ORGANIZE AN EC UNIT IN A COMPANYOptions for Organizing the EC WorkforceReport to the Marketing DepartmentReport to the Finance DepartmentReport to the Chief Operating OfficerDistribute the EC Workforce in Several DepartmentsReport to the IT DepartmentCreate

50、a New, Autonomous EC DepartmentNo Formal Structure for ECCreate an Autonomous Division or a Separate Online CompanyCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-51Opportunities for Success in merce and Avoiding FailureFACTORS THAT DETERMINE MERCE SUCCESS merce Failures MERCE S

51、UCCESSESStrategies for EC SuccessCULTURAL DIFFERENCES IN EC SUCCESSES AND FAILURESCan EC Succeed in Developing Economies?Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-52Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall13-53Managerial IssuesHow should the value of EC investment be justified?Which investment analysis method should we adop