Feasibility Study, Cost Benefit Analysis for your new eCommerce Web Site

Feasibility Study, Cost Benefit Analysis for your new eCommerce Web Site
February 11, 2015 Rob Abdul

OVERVIEW
This case study will try and asses the feasibility for an ecommerce website.

CHALLENGE
The challenge in this case study is do the following
Analyse the costs and benefits associated with the implementation of an ecommerce website for a membership society.

Feasibility Study, Cost Benefit Analysis for your new eCommerce Web Site
Fig 1
Membership Process

(Rob Abdul, 2009)

Figure 1 illustrates typifies the processes of a generic membership system.  You can see the effect e-enablement has on the current process on the right site of the illustration.

Costs for technology
To produce an ecommerce website requires a high speed connection to the Internet, a web server, and software.  Other costs that are relevant is the cost of the payment system, whether it is taking online payment directly from the Societys web site or an alternative third-party like Pay pal or more expensively using an online bank.

Costs for technological development
This will involve a number of programmers who are able to interpret your functional requirements and program/create your website.

Costs for the consultancy support (design and implementation)
You would require the services of specialists in ebusiness design and implementation to guide you through this process.

Costs for the organisation for piloting training
During the technological development of a website it is always a good idea to allow admin staff who will be using the system on a daily basis to pilot the system to as a training initiative.

Running costs
These are an upkeep of the web server and maintenance costs.

Running costs for change process
This is the cost of factoring in for your employees to train and adapting to the newly introduced technology, mainly the strategies used to make the change as smooth as possible.

Additionally being on the Internet would result in the your company having to become familiar to respond to emails, queries, and complaints that require instant or quick responses as opposed to replying to a Customer/Client via a letter. To be successful online, your company would have to address this issue of Change Management in that it would have to incorporate into its business, processes in order to guide the company to successfully maximise its effectiveness on the Internet.  “Business is streamlined and service is almost instantaneous when it is done on the Web. (SolSystems LLC: E-Commerce, 2001)

FINANCIAL BENEFITS

Improve Cash flow
Online payment would result in the lead-time to receive payments for membership within the same day of the application being made rather than the average 14 day delay.  E-enabling the membership process is not just about reengineering a process so that it is quicker than before, it would result in a complete overhaul of the previous way of managing membership.  Figure 1 illustrates the current membership process on the left and the E-enabled equivalent.  As you can see in the E-enabled application and payment are made online.  Once the application has been completed the documentation is sent via email to the member adding value by cutting the waiting time.  This also saves on printing and postage for the Society.  Even if the member does not have an email address the documentation will be available for download for registered members to the web site.

Increase Revenues
The Internet will increase the volume of members. By going online with your business, you will generate revenue from places you never imagined” (SolSystems LLC: E-Commerce, 2001). 


NON-FINANCIAL BENEFITS

Communication
Direct email marketing incurs little or no cost compared to the traditional direct mail marketing.  Direct email marketing allows the flexibility of sending the your companies message day or night, exactly when they want.

Transparency
The Information Management Website will allow the membership process to become transparent.  For example, for the first time ever, Management will be able to know as a matter of fact:

    1. The total number of members
    2. Those members who need to renew their membership
    3. Those members who are in arrears with their membership fees
    4. Total number of members and accredited members
    5. Forecast for the expected revenue that will be generated in advance and look at historic monthly generated revenues.

Exposure
The Internet means that your company will become a global Business.  Thus attracting potential members from internationally.  “Using the Web to sell your products removes the physical boundaries from your customer base.  Customers from all over the world can learn about and purchase your products online”(SolSystems LLC: E-Commerce, 2001).

Wider Considerations
When prospective members are signing up for membership they are providing personal data.  This data includes the members name, full address, and credit card details.  This means that the Society should register for the Data Protection Act 1998 which has a one off fee of £35.

Furthermore, your company must take measures to secure the line of communication from the visitors computer and your web site..  An SSL[1] connection guarantees that this communication cannot be intercepted by any other person like a hacker.

SOLUTION
Your site will be database driven.  For example; the storing, modification and retrieval of Members, information can be efficiently incorporated into a Relational Database Management System.  MS Access, MySQL and MS SQL Server are some of the most widely used databases on the Internet.

 There are three options of making online payment possible.  These are:

  1. Payment System Manually inputting credit card details into the existing ePDQ[2] machine.
  2. Paypal is a third party service, which is a cost-effective way for businesses to accept payments online for a small fee per transaction.   This is the most likely method of taking payment online and one which the author is considering to recommend; mainly because it is has been tried and tested and has proved a real confidence booster to consumers.  The only downside to Paypal is that members must have Paypal accounts to make payment on Paypal.  Members who do not have Paypal accounts will be forced to open a Paypal account.
  3. Using an online bank to accept payment is the best choice because its safe and quick.

Technical Solution Analysis
MySQL has been chosen over the other possibilities with the following reasoning:

  • MySQL is licence free for registered charities.
  • MySQL can handle 50,000,000 + records.
  • MySQL is an ideal database type to create a prototype of an e-commerce web site.
  • The MySQL database can be easily upgraded to MS SQL at a later date.
  • MySQL with the use of ASP (Active Server Pages) can best satisfy the functional requirements.

[1] Secure Socket Layer – Information Security Standards http://www.diffuse.org/secure.html#S-HTTP

[2] ePDQ The Barclaycard Merchant Services Internet Payment Engine.

Rob Abdul
Translate »