Chapter 3 Building an E-commerce Presence

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2 Learning Objectives Understand the questions you must ask and answer, and the steps you should take, in developing an e-commerce presence Explain the process that should be followed in building an e-commerce presence

3 Learning Objectives Identify and understand the major considerations involved in choosing Web server and e-commerce merchant server software Understand the issues involved in choosing the most appropriate hardware for an e-commerce site

4 Learning Objectives Understand the most important considerations involved in developing a mobile Web site and building mobile applications

5 Imagine Your E-commerce Presence What s the idea? Vision includes: Mission statement Amazon To be earth s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online Copyright 2017 Pearson Education Ltd. Slide 4-13

6 Imagine Your E-commerce Presence Facebook to give people the power to share and make the world more open and connected LinkedIn to connect the world s professionals to make them more productive and successful Copyright 2017 Pearson Education Ltd. Slide 4-14

7 Imagine Your E-commerce Presence What s the idea? Vision includes: Mission statement Target audience. What are two key questions here? Intended market space Strategic analysis SWOT analysis Development timeline Preliminary budget Copyright 2017 Pearson Education Ltd. Slide 4-15

8 Imagine Your E-commerce Presence (cont.) Where s the money? Business model(s): Portal, e-tailer, content provider, transaction broker, market creator, service provider, community provider (social networks) Revenue model(s): Advertising, subscriptions, transaction fees, sales, and affiliate revenue Any examples of firms combining revenue models? Copyright 2017 Pearson Education Ltd. Slide 4-16

9 Imagine Your E-commerce Presence (cont.) Who and where is the target audience? Describing your audience Demographics. What are these? Age, gender, income, location Harley-Davidson example Behavior patterns (lifestyle) Consumption patterns (purchasing habits) Digital usage patterns Content creation patterns (blogs, Facebook) Buyer personas Copyright 2017 Pearson Education Ltd. Slide 4-17

11 Imagine Your E-commerce Presence (cont.) Changes and related questions Is the market growing, or receding in size? When growing, among which age and income groups? Is it shifting from offline to online delivery? If so, is the market moving towards traditional sites, mobile, and / or tablets? How many Twitter posts mention similar offerings? How many Facebook likes are attached to products you want to offer? Copyright 2017 Pearson Education Ltd. Slide 4-19

12 Imagine Your E-commerce Presence (cont.) Characterize the marketplace Demographics Size, growth, changes Structure: Competitors (and their Internet voice) Copyright 2017 Pearson Education Ltd. Slide 4-20

13 Competitors and related questions How many UMVs do they have? How many Facebook likes or Twitter followers do they have? What are customer reviews of competitors products? Exclusive supplier relationships? Are there any local substitutes? Copyright 2017 Pearson Education Ltd. Slide 4-21

14 Imagine Your E-commerce Presence (cont.) Characterize the marketplace Demographics Size, growth, changes Structure: Competitors (and their Internet voice) Where is the content coming from? Static or dynamic? Copyright 2017 Pearson Education Ltd. Slide 4-22

15 Energy crops SWOT in Greece Paschalidou et al. (2016) Slide 4-23

16 Shall we use: Energy crops SWOT Sunflower to produce biodiesel or sunflower oil? Sugar beet to produce bioethanol or sugar? Slide 4-24

17 Energy crops SWOT Results of the first alternative show strengths including: Creation of direct and indirect jobs (Biofuel production industry), diversity of energy supply, and positive contribution on the greenhouse effect. Weaknesses include: Dependence on land availability (additional need of arable land other than that required to grow food), and environmental impact. Slide 4-25

19 Building an E-commerce Site: A Systematic Approach Most important management challenges: Developing a clear understanding of business objectives Knowing how to choose the right technology to achieve those objectives Key point: Let business decisions drive the technology, not the reverse Copyright 2017 Pearson Education Ltd. Slide 4-27

21 Pieces of the Site-Building Puzzle Main areas where you will need to make decisions: Human resources and organizational capabilities Creating team with skill set needed to build and manage a successful site Hardware/software Telecommunications Site design Copyright 2017 Pearson Education Ltd. Slide 4-29

23 System Analysis/Planning Business objectives: List of capabilities you want your site to have System functionalities: List of information system capabilities needed to achieve business objectives Information requirements: Information elements that system must produce in order to achieve business objectives Copyright 2017 Pearson Education Ltd. Slide 4-31

25 Build/Host Your Own vs. Outsourcing Outsourcing: Hiring vendors to provide services involved in building site Build own vs. outsourcing: Build your own requires team with diverse skill set; choice of software tools Host own vs. outsourcing What could be possible risks and benefits? Hosting: Hosting company responsible for ensuring site is accessible 24/7, for monthly fee Co-location. What is the meaning of this notion? Copyright 2017 Pearson Education Ltd. Slide 4-33

26 Build/Host Your Own vs. Outsourcing Outsourcing: Hiring vendors to provide services involved in building site Build own vs. outsourcing: Build your own requires team with diverse skill set; choice of software tools; both risks and possible benefits Host own vs. outsourcing Hosting: Hosting company responsible for ensuring site is accessible 24/7, for monthly fee Co-location: Firm purchases or leases Web server (with control over its operation), but server is located at vendor s facility Co-location is rapidly replaced by cloud services, where a virtual space is rented Copyright 2017 Pearson Education Ltd. Slide 4-34

27 Build/Host Your Own vs. Outsourcing Outsourcing: Hiring vendors to provide services involved in building site Build own vs. outsourcing: Build your own requires team with diverse skill set; choice of software tools; both risks and possible benefits Host own vs. outsourcing Hosting: Hosting company responsible for ensuring site is accessible 24/7, for monthly fee Co-location: Firm purchases or leases Web server (with control over its operation), but server is located at vendor s facility Co-location What are possible is rapidly disadvantages replaced by when cloud outsourcing services, where hosting? a virtual space is rented Copyright 2017 Pearson Education Ltd. Slide 4-35

Choices in Building and Hosting Figure 3.

29 Simple vs. Multi-tiered Web Site Architecture System architecture Arrangement of software, machinery, and tasks in an information system needed to achieve a specific functionality Two-tier Web server and database server Multi-tier Web application servers Backend, legacy databases Copyright 2017 Pearson Education Ltd. Slide 4-37

Multi-Tier E-commerce Architecture Figure 3.

33 Microservices (variant of SOA) Do one thing and do it well The services perform a single function Automation of testing and deployment, which allows for different development teams to work on independently deployable units of code The culture and design principles should embrace failure and faults, similar to anti-fragile systems Each service is elastic, resilient, composable, minimal, and complete Source: Slide 4-41

34 Monoliths and Microservices Source: Slide 4-42

35 Conway s Law Any organization that designs a system (defined broadly) will produce a design whose structure is a copy of the organization s communication structure --Melvyn Conway, 1967 Slide 4-43

36 Conway s Law in Action Source: Slide 4-44

37 Service Boundaries Reinforced by Team Boundaries Source: Slide 4-45

38 Products not Projects Project model: Deliver some piece of software which is then considered to be completed and handed over to maintenance Product model: you build, you run it Service development team 24/7 responsibility Amazon and Netflix have adopted this model Source: Slide 4-46

39 Decentralizing Databases Source: Slide 4-47

40 Microservices at Netflix Database corruption in 2008 by a missing ; Separate data stores for microservices implies not having to update every service individually when there s a change in the database Agile development pipeline where its developers deploy many smaller changes into production over the course of a day Slide 4-48

41 Basic tools Site Management Tools Included in all Web servers Verify that links on pages are still valid Identify orphan files Third-party software for advanced management Monitor customer purchases, marketing campaign effectiveness, and so on Webtrends Analytics 10 Copyright 2017 Pearson Education Ltd. Slide 4-49

43 Dynamic Page Generation Tools Dynamic page generation: Contents stored in database and fetched when needed Common tools to retrieve content: CGI, ASP, JSP, ODBC, JDBC Advantages Lowers menu costs. What are menu costs? Permits easy online market segmentation Enables cost-free price discrimination Enables content management system (CMS) Copyright 2017 Pearson Education Ltd. Slide 4-51

44 Application Servers Web application servers: Provide specific business functionality required for a Web site Type of middleware Isolate business applications from Web servers and databases Single-function applications being replaced by integrated software tools that combine all functionality needed for e-commerce site Copyright 2017 Pearson Education Ltd. Slide 4-52

45 E-commerce Merchant Server Software Provides basic functionality for sales Online catalog List of products available on Web site Shopping cart Allows shoppers to set aside, review, edit selections, and then make purchase Credit card processing Typically works in conjunction with shopping cart Verifies card and puts through credit to company s account at checkout Copyright 2017 Pearson Education Ltd. Slide 4-53

46 Web Services and Open-Source Options Options for small firms Hosted e-commerce sites Offer site building tools and templates Example: Yahoo Stores Basic Open-source merchant server software Enables you to build truly custom sites Requires programmer with expertise, time Copyright 2017 Pearson Education Ltd. Slide 4-54

BUS Chapter 4 Building an E-commerce Presence: Web Sites, Mobile Sites, and Apps

BUS Chapter 4 Building an E-commerce Presence: Web Sites, Mobile Sites, and Apps BUS 168 - Chapter 4 Building an E-commerce Presence: Web Sites, Mobile Sites, and Apps Imagine Your E-commerce Presence What s the idea? Vision Mission statement Target audience Intended market space Strategic