Building a business case for your ecommerce website

Building the Business Case

Just as with a business-to -business solution, a business case must be built before  embarking on an implementation for your ecommerce website, which means:

• understanding your objectives;
• understanding the business model;
• balancing costs against profits.

In assessing the cost-effectiveness of a business-to-c it is useful to make the distinction between:

• existing businesses taking advantage of the web;
• small-time entrepreneurs seeing an sales opportunity and setting up a small shop front;
• and new Internet start-up companies with innovative ideas.

The distinction is made because the three types of company may have very different plans.

Assuming that an existing business has planned for E-commerce properly (and is not just building a Web site because its main competitor has one), then it should have a very good idea of what it is doing and how much it will cost. It should also have projections for what effect this will have on its profits and running costs. It is almost unavoidable that certain things will be overlooked or unforeseen (perhaps the need for a foreign language version of the site), but in general creation of a business-to-consumer application will be absorbed into the company's overall IT strategy.

Key aspects of the business cash for the existing business will be factors such as;

Are the existing products/services suitable for selling online?

• What are the risks of selling online?
• What are the risks of not selling online?
• What arc the commercial benefits to be gained by selling online, can they be quantified as part of the business case, how quickly will they be realised and how do they stack up against the likely costs that will be incurred?

The small-time entrepreneur probably has enough capital to try a few different ideas without being too concerned about whether some of them fail to get off the ground. The costs involved in setting up a web shop front are really quite small so it amounts to a little speculation on behalf of the entrepreneur.

The new Internet start-up company is a very different beast and, at least at the time of writing, is as much fuelled by high market expectations and an abundance of risk capital. The innovators have to have a good idea, and preferably some amazing technology, but the rewards may be tremendously high if the launch is handled in the right way.

Objectives

This small list below summarizes what a company's objectives may be for a web-based E-commerce solution.

• Do you know what your target audience is?
• Will the site be used for: sales, marketing, research, delivery of goods or services?
• Do you need it to be integrated to other back office systems?
• Are two versions of the site needed - one for the corporate internet and one for public access via the WWW?
• Do you know what sales levels are likely to be initially?
• Do you have targets in place for how you would like these sales levels to grow?
• Can you cope with them?

By now you should have a feel for what types of question you need to consider in looking at what E-commerce can do for your business. Defining what you want to achieve will help with the next stage -deciding how you are going to achieve it.

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