Identifying and Estimating Costs

What's the Opportunity Cost? 

Cost of not undertaking an initiative. Largest and most significant costs associated with Electronic Commerce (EC). 

Examples; Customers never obtained, sales not made, suppliers not identified and cost reductions not achieved. 

Web site costs? Total dollar amounts required to create and maintain the web site. This can vary over the years. What are the proportions of costs which remain stable. 

Decisions to be made when setting up your website need to be made based on features, reliability, scalability, security, backup and recovery and cost. 

Initial costs or ongoing for setup, maintenance and operation. Is there a backup solution that comes with the website. What's the guaranteed uptime percentage, guaranteed speed? What bandwidth will the website require to operate and function. How easy is it to expand the bandwidth, disk space and install different software etc. 

Funding Online Business Startups. 

Venture capitalists are very wealth individuals or investment firms. Which look for small companies which are about to grow rapidly. Businesses with the hope for rapid growth and initial public offering invest. 

What's the Initial public Offering? 

System of financing startup and initial growth of online businesses. Benefits access to large amounts of capital early. 

Comparing Benefits to Costs (Assessment) - Identify the Benefits > Determine the benefits then compare the value of the benefits to total costs. 

Internal Development vs. Outsourcing... 

Initiative's success dependency - How well initative integrates into and supports business activities.

Internal people leading projects ensures - The company's specific needs are addressed and congruent with organisation goals and culture.
Outside consultants - Seldom able to learn enough about organisation's culture to accomplish objectives. 

The Internal team - First step in outsourcing decision-making is to create internal team. The internal team has a project lead which is a person with business knowledge; creativity; respect of firm's operating function managers, good sense of goals and culture etc. A bade choice would be someone who is a technical wiz but lacks the above mentioned qualities. 

Early Outsourcing - Company outsources initial site design and development to launch the project quickly. Outsourcing team trains company's information systems professionals before handing site operation to them. Company's own IFS employees work closely with the outsourcing company.