Factors Considered before Deploying E-Commerce - Literature review Example

Name :xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Institution :xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Tutor :xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Title : E-Commerce @2010 E-Commerce Introduction E-commerce is a term used to describe the business transactions done through electronic systems. The transactions include transfer of goods and services trough the internet as the main medium of the exchange of this services and goods. In most cases people involved in this transactions are always far from the other depending with the area radius, some may even be from one continent apart (Chaudhury 2002).The process of E- commerce has been made easier through the use of internet as the system involved in this process may include certain computer net works that are interconnected through the entire world for in stance through the World Wide Web. Most of the business activities that are carried out within the process of E-commerce includes transfer and exchange of electronic data interchange, inventory management systems, automated data collection systems, internet marketing, supply chain management, electronic funds transfer among other things. Electronic commerce makes use of the email applications such as gmail, yahoomail.com, hot mail and the World Wide Web (Chaudhury 2002). Factors considered before deploying E-commerce In most cases companies which tend to apply E-commerce as a marketing tool within their organization or company has to consider several factors for in stance virtual items occupy a reasonable portion of E-commerce that is done electronically while rest of the business is done through transportation of items physically from one place to another. Many big business dealers can be found the World Wide Web dealing in e-commerce L. Burgess & J. Cooper (1999).Company size dictates what kind of business strategies the company will take in order to remain in business. Small and big companies will therefore employ different strategies depending on their financial ability, degree of establishment, volume of products and services produced and the size of the market they want to reach out to. Retailers with a large volume of products and services will definitely say they need a wider market for their goods. Those companies with the capacity to produce a large number of services or goods are in most cases large companies (Burgess & J. Cooper 1999).Actually small companies may not have the capacity to make huge productions. A bigger market means the large number of products will be sold readily and as a result more profits will be made. It therefore remains that a big company will easily develop the interest to use Electronic commerce in its business because of the need to reach a bigger number of customers for its products. Smaller companies on the other hand may have the desire and interest to do business electronically but may be putting that possibility into the future. The future may mean when the company has expanded and enlarged its production capacity or the volume of products it deals in. A small company therefore considering the benefits of E-commerce may have the proposition of using E-commerce in its plans but can easily be limited by the size of its market since its products are still few. It will therefore not be in a hurry to appeal to a bigger market bearing in mind that it cannot satisfy the demands of that market satisfactorily. A large company also, may have the interest of employing electronic commerce in selling or the promotion of its products because it is easier for it in terms of the costs involved. Current technology comes with its own price to pay. (Roger 2002 p 57 ).Big retailers have the advantage over small retailers in the area of wealth held as assets and the profits being made on daily basis. Huge profits coming in will easily enable the company to pay for running costs comfortably including those incurred in advertising and sales. E commerce therefore is an opportunity that is ready and within the reach of the big retailing companies. They are able to spend huge sums of money in order to widen their market and acquire more profits. An interest in Ecommerce therefore is something that a big company will easily have if it wants to conduct business in the modern way. Another reason why a big sized company may be more likely to adopt Electronic commerce as opposed to a smaller one is that the big company is more established in structure as compared to the younger company and therefore it may be easier to introduce a new system without much trouble. Many businesses start as small ventures and in their early stages of establishment they are always young. Some of them collapse even before they reach maturity. In the time when the business is young it can therefore be described as unstable (Roger 2002 p 57 ) Organizations therefore may be less structured and may lack adequate fixed procedures which are required for introduction of internet technology. At such a time a small business is also not very formal. Because the business is growing and developing with time some things like use of internet technology usually come in slowly. The age of the organization and the amount of fixed procedures present therefore determine whether a company can introduce Information Technology in its operations or not. A smaller company has the likely disadvantage of not being able to have its own Information Technology Department together with its own resident experts. This is another setback since expertise hired or obtained from external sources may not sustain the use of technology at the small business premises. An Information Technology is very important for all operations concerning electronic commerce (Roger 2002 p 57).This is because the department will serve as the centre of operations for electronic-commerce activities. Without properly laid out Information system, procedures and coordination processes in a recognized department then e-commerce is just a dream without any reality. It may remain on the ‘proposed programs’ list of an organization for some time until the right environment has been created for the introduction of this kind of marketing technology. Small organizations as compared to bigger businesses may not be in a position to analyze properly the processes in their business or any flows in information related to the business. This hinders them from adopting e-commerce technology. New businesses are started in the mind of their founders or entrepreneur. Knowledge of business and its processes are normally not recorded or formulated in a manner which is represented externally. Such information is supposed to be coded before it can be used in the marketing. Electronic commerce introduction and development of its systems must include and consider businesses that are in any kind of partnership in business processes with the company in question. All these partners don’t move at the same rate and each of them may be at totally different levels of maturity in matters of electronic commerce implementation. It is mandatory therefore to have the knowledge of the levels attained by these partner organizations when an organization is in the early stages of analyzing the business processes (Nissanoff 2006).This is crucial since it determines to a large extend what kind of systems can be introduced successfully to the company and which ones are likely to fail if introduced. The introduction and use of Information Technology involves so many risks. These risks may be too costly for a small young business to try and introduce technology in its operations. An established big organization on the other hand can be able to try out some things without the fear of the business collapsing or going bankrupt because it can is cushioned from the possible risks involved through its financial stability. A new system analysis approach is also required in the introduction of e-commerce because the times have changed. The introduction of Information Technology in small businesses does not happen in the same way as in former generations. Younger businesses may not be in a position to implement such a new approach of analyzing its systems. As a result the prospects of introducing internet marketing may be too slim L. Burgess & J. Cooper (1999). Many small enterprises since their time of establishment may not have had time for checking out the web. Many of the things happening there seem not to bother them. Big companies have had many of these opportunities. For a mall company with little knowledge and awareness of internet technology matters, chances are that introduction of e-commerce may not be of much interest. Larger companies have grown over time and their businesses processes definitely have had time for formulation and recording. Online revenue models & business models Online revenue models are also referred as online business. Online publisher models are discussed in this array. The models are all conducted on online basis which are either owned by either individuals or organization that targets affiliate selling revenue; the alternative models are elaborated in this research. Revenue from subscription access to content According to Billy, (2006). An array of documents and materials are accessed within a given period of time. It can be either monthly or within a specified year. For instance one can subscribe to FT.C fort the aim of accessing the digital technology resources under a given subscription fee of $ 20 per month. Revenue from Pay per View access to documents, In this case payments are done on every time one access materials or documents on the internet the resources accessed may include movies, videos and other downloadable music files and profiles. In this model the resources are protected with passwords. An individual or organization is allowed to pay for any access of the materials through various channels of money transfers which may involve use of credit cards or pay pal method example is Marketing Sherpa. Different revenue models for web portals For a portal such as yahoo has majority of the subscribers hence it has to derive different ways of earning revenue to ensure it continues with the daily and efficient delivery of service, The portal has to insure the engineers server and all data backs are securely monitored and maintained by use of the revenues. Hence the models of the revenue are discussed below. Marketing services In this model the companies are allowed to bid for the spaces to place their advertisement so that people can view throughout the entire glob, the bidder with the highest market price is then considered for the service (Seybold 2001 pg 3)Yahoo do offer a variety of services hence people will tend to follow links that are pasted and nested in the yahoo domains, this strategy is very effective whereby the clients will enjoy by generating more income from the advertisements, this is enhanced by yahoo portal for its recognition in the global market, majority of the potential business sectors will tend to use yahoo hence they will be forced to offer higher volumes of monies to secure the contract with the internet engine. Web hosting The company do provide web hosting services for small companies to connect to the entire world though world wide web, the clients ranges from individual who own their own companies to companies that need to display their sites online, this can be made easier and effective through additional of the clients URL or Blogs that are connected with the yahoo search engine, for instance when one opens the yahoo engine the address appears, the links are constructed in a manner they ten d to attract the to visit and try to explore the information on the site hence the information will be past to the third party or the targeted group, by use of this means yahoo will generate income and enhance their services to the customers standards for instance by adding more storage facilities Billy,(2006). Sponsorship of site content Majority of the companies do pay a fixed amount of monies to secure a space in the yahoo domain for advertisement, for instance banks to pay a particular amount of monies in a particular channel. Billy,(2006). A good example is outlined in banks sponsorship in Wanadoo/Orange portal (www.wanadoo.com). Conclusion In conclusion the introduction and adoption of electronic commerce in any organization strongly relies on the level of maturity of that company in matters of e-commerce. More established businesses may have more advantages as compared to younger ones considering many factors (Miller, Roger 2002).The market being targeted is a contributing factor, the pool of resources owned by the company and its profit margin, presence of resident expertise and an established Information Technology Department and the ability to analyze, formulate and record business processes all must be considered. These factors are normally considered and in many cases the possibility of big companies having all of them the way they should be is normally high. That means big companies have the ability to venture into electronic commerce more easily than smaller companies and therefore their interest is brought about by their size. Reference: Chaudhury, Abijit(2002) Jean-Pierre Kuilboer.e-Business and e-Commerce Infrastructure. McGraw-Hill New York city.    Miller, Roger .The Legal and E-Commerce Environment Today (Hardcover ed.).Thomson Learning New York: Epstein Publishers, 2002) pp.741. L. Burgess & J. Cooper (1999).A Model for Classification of Business Adoption of Internet Commerce Solutions. In: Global Networked Organizations: (12th International Bled Electronic Commerce Conference Bled, Slovenia 1999), June 7-9, pp. 46-58. Nissanoff, Daniel (2006).FutureShop: How the New Auction Culture Will Revolutionize the Way We Buy, Sell and Get the Things We Really Want (Hardcover ed.). The Penguin Press. pp. 246 Seybold, Pat (2001). Customers.com. Crown Business Books (Random House). ISBN 0-609- 60772-3. Miller, Roger (2002). The Legal and E-Commerce Environment Today (Hardcover ed.). Thomson Learning. pp. 741 pages. ISBN 0-324-06188-9. Read More