BUILDING AN E-COMMERCE WEBSITE *BUILD YOUR OWN (IN - HOUSE) VS OUTSOURCING * HOST YOUR OWN (IN – HOUSE) VS OUTSOURCING * HOST IN CO - LOCATION * Along with Advantages and Disadvantages

Choices in Building and Hosting Figure 4.4, Page 212 Slide 4-2 2

Build Outsource: Do you want to get access to specialized skills and services? Do you want to concentrate more on your core business? Do you want to save on money, time and infrastructure? If your answer is yes to any or all of the above questions, you might be interested in outsourcing. Slide 4-3

Build Outsource: Outsourcing (IN GENERAL): Outsourcing is contracting with another company or person to do a particular function. (call center services, medical billing, Financial Services, Software Development, Research and Analysis Services, Photo Editing Services, Creative Services and Web-analytics Services. Medical Transcription Services ) Outsourcing (specific for e – commerce web ): hiring vendors to provide services involved in building site.

Advantages Take advantage of the cost-advantages! when outsourced! Getting access to high-quality services at a cost-effective price is the biggest benefit that you can get while outsourcing. See an increase in your business Another benefit of outsourcing is seeing a big increase in your profits, productivity, level of quality, business performance and much more. Save Big! When you outsource, you can save on time, effort, infrastructure and manpower. Get access to specialized services -> such as call center services, medical billing, Financial Services, Software Development, Research and Analysis Services, Photo Editing Services, Creative Services and Web-analytics Services. Medical Transcription Services Concentrate more on your core business One of the benefits of outsourcing is that your organization will be free to concentrate on your core business. By outsourcing all your non-core functions, your employees can be put to better use and you will be able to see a huge growth in your core business.

ADVANTAGES Ideal for customers that don't have in-house expertise Make faster deliveries to customers Another benefit of outsourcing is that you can make quicker deliveries to customers. Improved customer satisfaction With timely deliveries and high-quality services you can impress your customers. Increased efficiency Another benefit of outsourcing is increased efficiency. Your non-core business functions will be performed efficiently by your outsourcing partner, while your core functions can be efficiently carried out in-house. Thereby you can achieve overall efficiency and see an increase in your profits. Give your business a competitive edge! Outsourcing can help your organization gain a competitive edge in the market. Outsourcing countries also benefit from outsourcing Countries such as U.S, U.K, Pakistan, India, Norway and Australia amongst others can benefit by outsourcing. The economy of these countries has increased tremendously after outsourcing. In the U.S, after the outsourcing boom, the economy has increased, jobs have increased and the wages of American workers have increased. Ideal for customers that don't have in-house expertise

DISADVANTAGES undesirable results waste of time loss of jobs In the event that the finished products do not meet quality standards. waste of time it can also be very costly for the company who outsourced the project. loss of jobs Many times work is outsourced simply as a means to save money. Outsourcing to a foreign country typically saves a company a great deal in wages. So, the choice is made to reduce their local workforce, at the expense of the laid-off employees.

DISADVANTAGES lack of communication Hidden Costs It can be very frustrating for a consumer who is calling in with a customer service issue. When this individual cannot understand the customer service representative they are speaking with, it just causes more frustration and does little to solve the problem. Hidden Costs You will sign a contract with the outsourcing company that will cover the details of the service that they will be providing. Any thing not covered in the contract will be the basis for you to pay additional charges. Threat to Security and Confidentiality The life-blood of any business is the information that keeps it running. If you have payroll, medical records or any other confidential information that will be transmitted to the outsourcing company, there is a risk that the confidentiality may be compromised. You will have to rehire Web site designers if you decide to make enhancements or upgrades in the future.

Build own( In - House) : If you decide to build an e-commerce Web site in-house, you will need a multi-skilled staff including programmers, graphic artists, Web designers, and project managers. You will also have to select and purchase software and hardware. Building a site from scratch involves a great deal of risk, and the costs can be high because many of the required elements of an e- commerce site such as Catalog shopping carts, Registration credit card authentication and processing, inventory management, order processing are quite complex.

Build own( In - House) : Those tasked with the responsibility of building a Web site must have an understanding of the fundamental principles and concepts associated with Web development. Do you have the expertise to do this? Do you understand the tool & technologies ((e.g., XHTML/CSS, Flash, ASP, PHP, AJAX) )? Are you ready to commit to a deadline and accept responsibility for the project?

ADVANTAGES Specialized firms have already perfected these tools and your staff will often have to learn to build all of these features themselves. The advantage is that you and your staff may be able to build a site that exactly suits the specific needs of your company. Another advantage is that you will be developing a skilled staff and consequently acquiring an invaluable supply of in-house knowledge that will enable your firm to change the site if necessary due to the rapidly changing business environment. Gives you 100% control over the project Keeps talent and knowledge in-house, allowing for future enhancements, modifications and redesigns without having to incur the additional expense of rehiring outside designers

DISADVANTAGES Must have equal expertise in design, development, marketing, and communications. Unless already familiar with Web site concepts and technologies, there's a curve that your schedule might not accommodate.

Host own (IN - HOUSE) versus Outsourcing The hosting decision is an independent decision from the building decision, but the two are usually considered at the same time. OUTSOURCE Hosting company responsible for ensuring site is accessible 24/7, for monthly fee Most businesses choose to outsource hosting because it is generally less expensive than it would be for them to purchase all of the hardware and the physical space and to lease the communications lines and hire the staff. HOST OWN Large hosting firms can build the telecommunication links and emergency power supplies and achieve economies of scale by establishing huge “server farms” in strategic locations around the country. If you host your own site you must also build the security and backup capabilities yourself.

HOSTING IN co-location Another option is co-location in which a firm purchases or leases a Web server and has total control over its operation. but the server is located in the vendor’s physical facility. In a co-location agreement, the vendor maintains the facility, the machinery, and the communication lines. Small ISPs may not be able to provide service that is as reliable as the large providers. The disadvantage of outsourcing hosting is that as your business grows, you may need more power or services than the hosting company can provide. This is the main reason that firms will decide to host their own sites, but the costs will almost always be higher than if they had chosen an outsourcing firm.