How to Start an Ecommerce Business
Commercial trade on a network by electronically exchanging settlement information. As the Internet becomes prevalent, electronic commerce is rapidly expanding, although part of inter-company trade has been conventionally computerized with techniques such as EDI. Electric commerce is generally classified into inter-business trade or B to B (Business to Business), business-consumer trade or B to C (Business to Consumer), and inter-consumer trade or C to C (Consumer to Consumer).
A form of electronic commerce (EC) through the Internet, meaning transactions between businesses (B to B). (Transactions between businesses and consumers is called B2C). Although the conventional EDI system (for order placement and ac ceptance) had a problem of large cost due to the use of exclusive lines, electronic commerce has been rapidly expanding with the spread of the Internet. It contributes to reduction of procurement cost in such fields as personal computers, stationary products, and consumable goods used in factories.
It is vital to use a language that is understood by all parties involved in a project. Infrastructure is defined as the underlying foundation or basic framework (as of a system or organization). Defining, understanding, and engaging standard business processes is fundamental to any company, and that includes ensuring a standard business infrastructure throughout the enterprise environment. A standard technology infrastructure can facilitate the placement of new kinds of technology to support business initiatives. Selecting a robust and scalable infrastructure will enable businesses to profit and expand by harnessing the capabilities and promise of truly global electronic commerce.
In resource procurement, electronic exchange of transaction data such as order reception placement through networks, (EDI - Electronic Data Interchange), has become popular in 1990's. EDI was developed mainly for support of high volume transactions between enterprises. In recent times, business-to-business (B to B) electronic commerce through the Internet including new vendors and suppliers is becoming increasingly important.
Yesterday's sequential planning approach, which provided the IS function with sufficiently long lead times to meet business objectives, no longer exists in today's rapidly changing business world. Although business change drives the integration of process and technology, ineffective communications are causing the gap between business strategy and IS delivery to continue to widen. As IT becomes a major engine of change, it redefines what is strategically possible and gets further embedded into every business process, including electronic commerce, computer-integrated manufacturing, investment program trading, and supply chain optimization. The future of IT therefore requires a holistic understanding of business strategy and processes.
Although the electronic commerce application system is listed as a project-oriented deliverable, we really do not have any idea what exactly will be delivered to the client. In general, the application system will be the largest project deliverable and will, therefore, require the most time and resources to complete. Identifying the features and functionality of the application system (and their complexity) will be pivotal for estimating the time and cost of producing this deliverable. A useful tool for refining the scope boundary and defining what the system must do is a modeling tool called a context level data flow diagram (DFD). A DFD is a process model that has been available for quite some time and is often taught in systems analysis and design courses. A context level DFD, however, presents a high-level representation of the system that has one process (i.e., a circle or rounded rectangle that represents the system as a whole) and depicts all the inflows and outflows of data...
One way to define the scope boundary is to create a scope statement that documents the project sponsor's needs and expectations. For example, let's say we are outside consultants hired to develop an electronic commerce application for a bank. After developing and presenting a business case to our client, we have been given the authority to develop the project charter and plan. Although the business case provides a great deal of relevant information, we will still set up several meetings and interviews with key
In the field of electronic commerce, many businesses are scrambling to develop Internet-specific business practices. There is an explosive growth in the need for system integrators who can provide services ranging from reselling hardware and software to architecture design and business-process consulting. Businesses sometimes look to integrators to assume total responsibility for their business applications and the business processes they support. There is a question about how ready businesses are to turn over mission-critical functions to outside firms, and the answer often lies in talking to people who have been through a similar experience. In an extensive survey of information systems managers, ComputerWorld gathered the criteria into three categories business practices, project management, and technical performance.12 Project
Throughout the book we will illustrate the development cycle of a DNA project. DNA stands for Windows Distributed interNet Application Architecture and involves programming using Internet techniques, but does not necessarily involve developing Internet applications. Our DNA project will be built on the Northwind company - the end result will be a new order entry application however, the company wishes to move into electronic commerce, or e-commerce, and also wishes to reuse some of their existing order entry components. You will see many references to this project throughout the book.
A sequence diagram shows the objects that interact during a use case scenario. As an example, consider the eCommerce use cases on page 112. The following example shows the objects and interactions for the normal flow of Place Order The next step is to try to identify classes for each object, and to turn the messages between the objects into methods on the classes. The class diagram to the right shows the key classes in our eCommerce system, after analysing the Place Order use case
The following shows the overall business process for one of our eCommerce orders, modelled using a UML activity diagram. The business process proceeds from a start state (the customer placing the order) to one or more end states (e.g. receiving the goods) via a number of activities
In basic terms the TCO is the total cost of investment in an IT asset (such as an operating system). The ROI compares the cost of the investment to the additional profit made by the investment. For example, for an ecommerce site the cost of the investment will be the cost to build the e-commerce project and the TCO (cost of licenses for the operating system, web server and the e-commerce software, the cost for maintaining the site, etc.). Increased sales by having wider access to clients and a decrease in the number of operators required to take orders are all ways the investment can increase profit. If the total cost of the investment is less than the additional profit, it is a good investment.
To provide new products and services to its customers. Scope creep may be adding a new feature, such as a new product or service, not originally defined in the project's scope. Scope leap, on the other hand, is an impetus to change the project so that the electronic commerce system would allow the bank to obtain additional funding in the open market. Adding this activity would dramatically change the entire scope and focus of the project. Scope leap can occur as a result of changes in the environment, the business, and the competitive makeup of the industry. Scope leap entails changing the MOV and, therefore, requires that the organization rethink the value of the current project. If this change is critical, the organization may be better off pulling the plug on the current project and starting over by conceptualizing and initiating a new project.
Happened because the companies that provided one of these services did not always provide both - either for business reasons or for regulatory reasons. Some projects involve voice services and networks, while others involve data, and still others involve a combination of the two. In addition to voice and data, there are many other services, such as video, or forms of multimedia services. But we cannot even stop here. Many telecom service providers do not provide the carriage of voice, or data etc at all. Many provide other specialized functions that enable the service providers and or the end users to define their own business. These functions can be related to the network (e.g. network management), related to the user's business, (e.g. call centers), can involve providing a specific function of the overall service, (e.g. billing), or can include management of customer interactions in an electronic commerce type of service such as E-Bay.
A methodology provides a strategic-level plan for managing and controlling IT projects. Think of a methodology as a template for initiating, planning, and developing an information system. Although information systems may be different, it is the product, and not necessarily the process, of managing the project that makes them different. As you can see in Figure 2.1, the methodology recommends the phases, deliverables, processes, tools, and knowledge areas for supporting an IT project. The key word is recommends because different types of projects, such as electronic commerce (EC), customer relations management (CRM), or data warehousing applications, may require different tools and approaches.
This procurement support function has been put to use in cooperation with Electronic Commerce (EC) via the Internet in recent years. The material management, which handles how a component has been used after it was purchased and delivered to a plant or construction site, can be traced more accurately by improving this procurement support function.
In B2B (Business to Business) that is an electronic commerce mode among businesses, direct sales on the Internet, opening of a market place by cyber trading firms, and direct connection between the product supplier and the purchaser, have emerged as new modes of EC. As for the use of EC by a project, the most feasible ways are the procurement through the market place and the method to engage in transactions by directly gaining access to the sales site of the person with whom transactions are to be made.
Suppose that we are planning a project for an end user, to add an ecommerce capability for the provision of their retail products. Let's consider some of the information that would need to be included in the Scope Statement. We will not create the full scope statement for this project, because it would be many pages of information. But we can get an idea of the type of information that would need to be included by considering some examples. The initial two sections include the same information that was provided in the Charter, with new information appearing in all subsequent sections.
Many telecom projects require procurement of equipment of services from outside the company. Most service development projects involve some acquisition - perhaps purchasing ATM or DSL equipment or service components for wireless service. Some marketing studies involve outside help. E.g. we might want to contract some user-needs studies for a new ecommerce service. Many operations projects involve acquisition of either goods or services.
The PIMS project support personnel consists of those Motorola employees who maintain online shop orders on the PIMS system, work with PIMS relational databases for custom and ad hoc reporting of production data, and provide implementation support for the factory operations. These individuals have had to take a much more active role because of the enhanced development process. Their input to requirements definitions must be strict and well investigated. They perform the primary role in the now-formalized user testing. In addition, they provide disciplined tracking of problem and enhancement reports through the PIMS online database.
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