chapter 2.pdf
- 2. Introduction In the changing world, there is a necessity to improve the business requirements according to the changing needs of technologies, trends in the market, and customers. Whether you are new to ecommerce or already into ecommerce, your major priority is to increase the overall efficiency of the organization. When you want to improve efficiency, you must have a strategy and the right infrastructure to address the needs of the user and flexible enough to satisfy their requirements. Infrastructure is the foundation that makes your business stand out. Ecommerce infrastructure is a collection of hardware, software, network, facilities, etc. that you need to run an ecommerce business. When you have the right infrastructure, you will have an optimized business performance. Here are some important components that you must consider while planning your ecommerce infrastructure.
- 3. E-Commerce Infrastructure Categorisation 1. Ecommerce environment: This defines general guidelines and frameworks that will make your business suitable for running ecommerce. It is a standard like technical tools, legal and regulatory frameworks, and the involvement of service providers. 2. Infrastructure services: These are the services that specify ecommerce functions. One or more services will work together to provide particular functions to the ecommerce business. Services like user authorization, payment processing, order validation, etc., help in during products checkout by the user. The infrastructure services can further be classified in terms of the services they provide to the user or an organization. Network services, directory services, payment services, and security services are common infrastructure service providers to the user. 3. Ecommerce solution providers: They offer an end-to-end solution for ecommerce business who does not have their implementation team
- 4. EC Infrastructure Components E-commerce infrastructure is computer-based. As a result, like most computer systems, e-commerce infrastructure has both hardware and software components to it. Software components used: Content management systems, Web analytics, Text analytics, Application Programming Interface (API), Database server, Middlewares etc. Object oriented (e.g. CORBA), Transaction processing, communication (https, messaging), data base (e.g. ODBC), application middleware (CGI) Hardware components used: Servers, proxy servers, load balancing systems. Firewalls, encryption devices and interactive voice response units etc.
- 5. What is the importance of these components?
- 6. Components discussed Middleware: Systems that resides between the client (user) and the server (database and application resources). These could be data access components, communication protocols, specialized servers, or a mix of all. Directory services: Email Directory Services enables users to locate other users for sending emails. LAN Directory Services facilitates functions like connecting to the web, sharing printers, LAN chats, LAN based KMS Lookup Database: This is the database that stores information about network resources and user profiles. Enables usage of network resources based on entitlements. Meta-Directories: Facilitates the flow of data between one or more directory services and databases. Enables synchronization of data across databases or data warehouses Groupware: Facilitate the automation and streamlining of business processes not implemented in legacy/ERP systems. Group communications and information sharing enabling collaboration between teams and individuals Internet Domain Name Service (DNS): DNS facilitates the unique identification of an organization or entity on the Internet. DNS maps the domain name of an organization to its IP address Devices: Computers, hubs, routers, data centers, etc. Servers: Server provides the necessary functionality for other programs. It can be a computer program or a device and can be used for different purposes. Some common servers are a proxy server, web server, application server, etc.
- 7. Components continued API: An application program interface is a protocol or a tool for building the software applications. It specifies how a software component should interact with each other. Management services: When you run an ecommerce business you need to manage various services like content, database and resources. Enterprise resource planning, content management, and data centers are some software services that help in managing the resources of the company efficiency. Analytics: Ecommerce business is more competitive since it is growing day by day. So, it's important to analyze your capacity, which helps in improving your system to perform better. Web analytics and text analytics tools will help in estimating your ecommerce site.
- 8. Objectives for E commerce Infrastructure A business owner should focus on e-commerce infrastructure and plan on it so as to be clear on its mission. Its mission can be defined to be: to design, develop and maintenance of e- commerce business venture and enable three critical objectives: First objective (what we are building): An open, distributed and safe infrastructure which is scalable and thus has provisions for future needs Second objective (how we can use): Using internet based technologies to demonstrate the value creation for the users, and facilitate the delivery Third objective (who will pay repeatedly): Define the right business model to sustain in the future, in tandem with the IT infrastructure
- 10. Criteria for evaluating E-Commerce infrastructure Typical criteria for evaluating infrastructure for e-commerce setup could comprise of the following: Flexibility: The ability to respond quickly to changing requirements, and scale up based on the need of the customer. Resource virtualization can be an important factor in such a scenario. Costs: The CapEx & WorkEx, like acquisition and maintenance costs for servers, licenses and other hardware and software. License cost and its renewal policy would also play a significant part of the evaluation. Scope & performance: Factors include degree of fulfillment of specific requirement, knowledge about service and performance quality. Service uptime could be another sub-criteria. IT security & compliance: Factors like government, industry and firm specific needs in the areas of security, compliance and privacy are covered. How the information assets are protected could be a regulatory issue. Reliability & trustworthiness: Factors like service availability, consistency of delivery and fulfillment of the Service Level Agreements. Whether the consumer can get the same uniformity of service every time, is the evaluation parameter. Service & cloud management: Factors like offered support and functions for controlling, monitoring and individualization of the web interface.
- 12. Key metrics of an e-commerce policy- discussion
- 13. Performance Models associated with E- Commerce Infrastructure May be useful during audits. A model is a representation of an information system. It could be physical, logical or functional. The model should be as simple as possible. It should be capable of capturing the most relevant characteristics of the system under evaluation or audit. The performance of e-Commerce site depends on the pattern of services requested by customers, as described by customer model. It also depends on the demands that each service places on the site’s resources and the intensity at which customers arrive at the site.
- 14. Perfomance model cont’ In view of this, it would be pertinent to focus on the following aspects of E- Commerce Infrastructure: Monitoring and Reporting on Web and other e-Business Applications, and the Response Times for Web transactions TCP/IP Performance focusing on End-to-End network response times and the Effects of operational performance control Network Routes and Equipment focusing on the End-to-End route response times, Identify route patterns and defects and Identify and minimize loss of data in the network Other important dimensions include adequate site capacity, Scalability and Fault-tolerance.
- 15. Basic Question for the evaluation would attempt to address the key question: What portions of my “service-product” are popular? This would need renewed focus on the Capacity Issue and the Method of Analysis Capacity Issue: Which files are being requested frequently? Which content configurations are requested frequently? Which processes deliver that content? Am I paying too much for my ISP service contract? Can I get by on a lower-bandwidth contract? Method of Analysis: Site log file analysis Add up all http: transactions made to your web site during some time period Visitor on site trend analysis Purchase trend analysis
- 16. Capacity planning-Capacity planning would address these requirements through a cycle of workflows of analysis in a multi-stage approach.
- 17. Business functional planning During the Business & Functional Planning, focus would be on the following components: Interaction Model: It focuses on how a user interacts with the e-Business site to execute the function. Example: two consecutive HTML forms may be needed to implement the function of online application to a course. Web Technology Used: Different technologies may be used to implement an e-Commerce function. E.g. HTML forms, Java Applets, Active X controls. Suitability of technology chosen to fulfil functional needs would have paramount importance. Use of User Credentials for Authentication: This information specifies if an authentication protocol such as SSL is used to implement the e-Commerce function. This would have significant importance in terms of security and information assurance.
- 18. The Customer Behaviour Planning would comprise predominantly on the Business Intelligence aspect to mine the customer’s preferences and purchase behavior and make suitable recommendations. Techniques like classification, pattern association and sequential rule mining may be used to meet the requirements of this stage. The IT Resource & Infrastructure Planning would focus predominantly on the specification of the workload model. This would entail a series of activities focusing on workload estimation, workload specification, performance modeling and calibration for validation. Further, based on the performance modeling output, cost-benefit analysis of the system needs to be completed. Subsequently the IT Infrastructure Evolution Plans can be drawn based on the completion of this analysis.
- 19. Key Ecommerce Infrastructure decisions Every business requires an infrastructure to support its customers and operations. This includes facilities, equipment, and processes for all functional areas. Choosing the correct infrastructure to match your business strategies enables your operations to run efficiently. Conversely, if an element of your infrastructure is out of sync with your strategies, you will likely feel the pain in every aspect of your business.
- 20. marketing Of all the infrastructure elements, marketing may be the most important. To succeed, your website must be found. Once visitors are on your site, you need to keep them there and compel them to buy from you. That’s the job of your marketing team. Whether it’s website design, social media, search marketing, merchandising, email, or other forms of advertising, it’s all about marketing. Managing marketing activities in-house is very challenging. Most small ecommerce businesses outsource at least part of it.
- 21. 2. Facilities A key competitive advantage that ecommerce businesses have over brick- and-mortar stores is not having to invest in physical facilities. In many cases, you can run your business out of a home office, basement, or garage. If you drop ship or outsource fulfillment, you may be able to do that for a long period of time. Even with many employees you have no need for a fancy store in a high- traffic location. A word of advice is to keep your options flexible. Try to find an office park with a variety of spaces of different sizes. You may be able to start in a smaller space and move up to a larger one (without penalty), as your needs change.
- 22. 3. Customer service There are many choices today for delivering high-quality customer service. You can manage those activities in-house or outsource to a third party. Basic customer service for sales and post-sales activities can be handled using email and, for more extensive needs, phone support. A customer-management system will make those activities easier, but for smaller companies, it is not a requirement. Live chat will impact your operations — someone needs to be available during specified hours of operation. Be sure to gauge the impact of that on your organization, if you decide to handle those activities in-house.
- 23. Information technology Choosing an ecommerce platform is one of the most important decisions you will make in your business. Do you want to build and host your own system, outsource the development and then manage the system going forward, or use a hosted, software-as-a-service platform that is turn-key and externally managed? If you build and host your own system, you may need more cash upfront and skilled administrators and developers on your staff. By using a SaaS platform, you will not need to host or manage the system in- house, but you may still need web developers on staff. Choosing to outsource the development and hosting will reduce your staffing costs, but you will incur higher costs for any future enhancements or changes to your websites. There are pros and cons to any approach. Think through the impacts on your staffing, cash flow, and bottom line before you move forward.
- 24. 5. fullfillment Another key decision is whether you will manage your own inventory or outsource those activities to a fulfillment house or through drop shipping arrangements with your suppliers. Managing your own inventory will provide a high level of control, but you will tie up cash in warehouse space and fulfillment staff. In some industries managing your own inventory is the most logical choice. Select the best fulfillment option to meet your needs. Be sure to understand the costs involved and analyze the other options before moving forward.
- 25. Finance and administration You can manage your finance and administration activities in-house, outsource them, or use a hybrid of the two. If your ecommerce platform is tightly integrated into your accounting system, you may have very little need for an in-house bookkeeper. If you use separate systems for your website, order management, and accounting, you may need more help for data entry and making sure that the information is properly managed. Many ecommerce companies use outside services for vendor payments, payroll, and other basic accounting activities. They decide to focus on the sales, marketing, and customer service. This allows them to maintain a focus on growing their businesses, instead of paying an internal accountant — or doing that work yourself as the business owner. On the administration side, you need a leadership team. Good communication is important, whether you have three or 100 employees. Be authoritative or democratic in your management style — it is up to you. But choose a style and stay consistent. Be sure that everyone understands their roles, as well as the overall business strategies. You may need to adjust your approach as your business evolves.
- 26. Human Resources Many small-business owners avoid the human resources function. Recruiting, setting up compensation, maintaining compliance, and other HR activities are specialized and time-consuming. You may choose to bring the resources in-house. But, should you outsource, there are many individuals and agencies well equipped to do the job.