launching a successful online business and ec projects - Prentice Hall

Chapter Twelve: Launching a Successful Online Business and EC Projects W12.39
In many cases, systems need to be built quickly, and the special expertise of outside contractors
and software vendors is necessary.
Large companies may choose outsourcing when they want to experiment with new
EC technologies without a great deal of up-front investment. Outsourcing also allows
large firms to protect their internal networks and to gain expert advice. Small firms with
limited IT expertise and tight budgets also find outsourcing advantageous.
Outsourcers can perform any or all tasks in EC applications development. For
example, they can plan, program, and build applications and integrate, operate, and
maintain them. It is useful for firms to develop good relationships with outsourcers.
Outsourcing Options
Several types of vendors offer services for creating and operating EC applications:
◗ Software houses. Many software companies, from IBM to Oracle, offer a range of
outsourcing services for developing, operating, and maintaining EC applications.
◗ Outsourcers and others. IT outsourcers, such as EDS (now HP Enterprise
Services at hp.com), offer a variety of services. Also, the large CPA companies and
management consultants (e.g., Accenture) offer some outsourcing services.
◗ Telecommunications companies. Increasingly, the large telecommunications companies
are expanding their hosting services to include the full range of IT and EC
solutions. MCI, for example, offers Web Commerce services for a monthly fee.
Although the trend to outsource is rising, so is the trend to conduct outsourcing
offshore—mainly in India and China. This approach is not without risks. For example,
although outsourcing offshore may lead to substantial dollar savings, offshore labor skills
may be inferior to those found onshore, and the resultant quality of the Web site development
may be unacceptable.
OTHER DEVELOPMENT OPTIONS
Besides the three major options for developing EC applications (buy, develop in-house,
and outsource/lease), several other options are currently available and are appropriate
under certain circumstances:
◗ Join an e-marketplace. With this option, the company “plugs” itself into an
e-marketplace. For example, a company can place its catalogs in Yahoo!’s marketplace.
Visitors to Yahoo!’s store will find the company’s products and will be able
to make purchases. The company pays Yahoo! monthly space-rental fees. In such
a case, Yahoo! is a hosting service for the company as well. As for development,
the company will use templates to build its store, and it can start to sell after only
a few hours of preparation work.
◗ Join an auction or reverse auction third-party site. Joining a third-party site is
another alternative. Again the plug-in can be done quickly. Many companies use
this option for certain e-procurement activities.
◗ Form joint ventures. Several different joint-venture partnerships may facilitate
e-business application development. For example, four banks in Hong Kong developed
an e-banking system. In some cases, a company can team up with another
company that already has an application in place.
◗ Join a consortium. This option is similar to the previous one, except that the company
will be one of the e-market owners. Thus, the company may have more control
over the market architecture.