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Unit 10: Managing E-business Projects

measures the extent to which the internet contributes to sales and refers to the sales that are Notes
actually placed on the web site. It does not include the amount of revenue indirectly achieved
due to the internet influencing buying decisions, although the internet has also in this case made
a real contribution to sales (Lee).

Operational cost reductions, cost reductions of acquiring a new customer, cost reductions of
customer relationship management and cost reductions of promotional material are measures
that explain how the web site is helping to reduce costs. Cost reductions of promotional material
e.g. are lower printing and distribution costs. In direct mail, money has to be spent for every
additional person that a company wants to reach whereas with a web site there is no extra cost.
E-business is supporting the customer on an ongoing basis through interactive online user
groups, online technical support, frequently asked questions and answers, newsletters and online
renewal and subscriptions. Therefore, the cost of supporting customers can be reduced because
some of these functions can be partly of totally automated through specific E-business software
such as customer relationship management products (e.g. Siebel), customer-facing e-mail products
to manage large volumes of incoming e-mails, collaborative filtering packages to derive what
products or services individuals will be likely to purchase based on their similarity to other
individuals or groups, etc.

An E-business project represents a capital investment that entails expenses as well as revenues.
The start of an E-business project is also the initiation of a permanent commitment to resource
demands because of ongoing expenses that are often difficult to predict. Therefore, a financial
evaluation is needed that compares the actual costs with the budgeted expenses. Important cost
categories include the costs associated with the development and – not to forget – the maintenance
of a web site and its back office systems.

Did u know? An E-business project represents a capital investment that entails expenses as
well as revenues. The start of an E-business project is also the initiation of a permanent
commitment to resource demands because of ongoing expenses that are often difficult to
predict.

Self Assessment

State whether the following statements are true or false:
5. The costs that go with the development, implementation and the maintenance of an
E-business project can be very high.
6. The Business Contribution perspective captures the business value created from the
E-business investments.
7. Value-business projects often are deployed on the basis of a step-by-step approach.
8. The business value of E-business projects shows how the E-business projects are affecting
the performance of the whole business.
10.6 Measures for Customer Orientation

The measures for customer orientation describe the company’s success in acquiring and retaining
customers and sales. This orientation also represents customer satisfaction and effective internet
marketing that both are performance drivers for outcome measures regarding acquiring and
retaining clients.

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