A head of business management function of e-commerce initiative should also be an employee of a company implementing the project even if most of the work is outsourced. This normally happens because being an employee that company; he would bring everyone up to speed. The speed in which the work is done should be very fast and this can only be effective if the boss becomes a member of the third party. By being a collaborator he is also able to get new skills that can help him bring some positive changes in his firm. Lastly he may also act as a teacher to the employees. He may guide them on how the job is to be done.
In electronic commerce projects outsourcing is commonly applied due to the following reasons. First in an information technology firm, a company may outsource its whole information technology operation so that another outsourcing firm can provide the hosting and maintenance of its servers and ensures that the systems run smoothly. Outsourcing is also done when there is need for improvement in performance and reliability. This will lead to elimination of operational costs or errors. Outsourcing also accelerates business transformation in that the time in which the information reaches the customers will be fast. Again new skills through outsourcing are also acquired which is important in improving quality of services and allows the organization to focus on their core business. (Linda, 2005 P. 276)
Outsourcing is also done for quite a number of reasons like when a company wants to save money of free its resources for other activities .If resources like the technological experts are few then outsourcing may be done-so that the available employees can take part in other activities. Lastly outsourcing is done when a company wants to share some of its risks with another company therefore it helps in risk management. This will guarantee a company, which is facing some risk to access and acquire some relevant skills, and knowledge, which will improve the production quality. (Linda, 2005.p268). Many business companies have therefore engaged in outsourcing to cut down the cost of production especially when they are making losses. This has improved the quality of products or services and effectiveness in the work.
Organizations are now able to stay focused on their core areas as a result of outsourcing. There has been increase in innovation, improvement in customer satisfaction and improved speed of market acceptance.
Before starting any electronic commerce business it is necessary to determine the costs associated with this business. There is a number of ways in which costs of starting an electronic commerce or business is determined. For example three major factors are considered. One factor is the external environment factor. This includes pressure from outside competitors, buyers or suppliers. If the firm is to face stiff competition from the global market, then it will be needless to start the business. Other traders in electronic commerce should be checked. (Corper, 2002. p130). Another external factor is the role of the government in the establishment of the business. Electronic business requires a lot of capital so if the government is not able to assist in the provision of some of the requirements then the business would not progress. Technology support infrastructure is also another major external factor to be considered. This refers to how effective is the area. If it is poorly developed then the business may close down.
Apart from external factors, the other factor is the organization context. This deals with issues such as the technological knowledge of employees on information technology and their attitude towards the business. The chief executive officersi?? characteristics or top management staff knowledge on it should be considered. If the CEO is not innovative then the business may not function. Financial reasons must also be considered. If there is an insufficient fund then the business cannot be started.
The last factor to be considered is the technological context. This includes level of knowledge in information and technology that may reduce productivity. Benefits are also considered whereby it should lead to decreased costs and increased efficiency. (Robert, 1997.p326).
The following are some of the ways I would use to determine the cost associated with starting an electronic commerce. One way is by considering the salary cost of the employees. If the cost is high then a lot of capital required would be high. Other ways of determining the cost of starting an electronic commerce are the training cost, advertising fee, working capital and cost of the equipment. Advertising fee should also be checked. If one is to make sure that the business is known to a wider area, then a lot of cost would be incurred. If cost of training workers is high then starting the business would require a lot of money.
Korper, S. (2002) Building in Electronic Empire. New York: Morgan Kaufman
Linda. (2005). Outsourcing Information Security: UK: Artech house publishers
Rorbert, K. (1997) Outsourcing Information Technology Systems and Services. New York:
Prentice Hall publishers.