E-Business, E-Commerce: SOP Case Study
E-Commerce business models
Looking at the SPO case; they already have a website, but need to generate increased revenues, given that their revenue has been fluctuating because government grants are not guaranteed, neither are they fixed. As such, SPO needs to implement an e-commerce website that is based on the Business to Consumer (B2C) model. The B2C business model is related to transactions that bind businesses and end consumers that purchase products and services from the business. This is mainly a type of e-commerce retail trade that happen online (Sharma, 2016). This is a justified model for the company to use because nearly half of its revenues come from installing renewable energy systems to individual consumers such as homes. SOP should also have a business to business (B2B) e-commerce model in which they provide services to other businesses, as this also constitute a portion of their client clientele and customers. The B2B model is one in which electronic transactions are related to the services and goods between companies and organizations. This will ensure that SOP is able to deal with, and meet the needs of consumers (existing and attract new customers) while also providing services to other businesses in order to increase their revenues. The B2B model can be used to provide training to organizations and other players in the sector for a fee and the company can target a global market (Sreedhar, 2018)
E-commerce revenues models
SOP will need to derive revenue from her customers; this will be achieved by using a suitable revenue model that complements the adopted e-Commerce business models. The revenue models that it should use include the direct sales revenue model and the subscription model. The direct sales revenue model is the most prevalent and suitable for the B2B e-commerce model in which the company sells products and services directly to their consumers. Because it will upgrade its website to be a purpose built e-commerce one, they will sell services and products to consumers in a single step transaction and increase their revenues. This model is also suitable for use in the B2B business model where they sell products and services to other businesses. In the subscription model, the company will have clients sign up for services and products and then charge these subscribers at scheduled, regular intervals. This model will especially be useful in guaranteeing the company revenues and which can be used for planning because once there is subscription; the revenues will keep rolling (Keillor & Wilkinson, 2011).
This is suitable for both the B2B and the B2C model, especially because it is planning to start training sessions for the customers. Those seeking education and training from SOP will subscribe so they are charged a regular fee for the duration of the training. Further, businesses and individuals that need advice on energy use and how they can reduce their energy consumption will also benefit from the use of the subscription revenue model. In both cases, the most suitable model is used for each business model and depending on the product and service that the company is selling. The subscription model can be used with the digital content revenue model in which the company generates content; in this case, advise on energy use and then sells them to customers (Kamel, 2006). The content can be customized to meet the needs of various customers; for instance, a firm that seeks to lower energy costs will get specific content, similar to a firm that wants to invest in renewable energy sources or those that are seeking to be carbon neutral. Because it seeks to go global and is in the green energy business, SOP can have choice retailers and vendors use its website to advertise its products and gain from advertising revenue to further boost its own revenue and diversify revenue sources.
Network and communications infrastructure
Implementing an e-commerce business model requires investment in the relevant infrastructure to make it work and reap the benefits. SOP will need to invest in a network that meets the needs of e-commerce and will include networks as well as equipment. The infrastructure will need to support payment processing from its website, which means it must have the capability to process payment methods such as credit and debit cards, mobile wallets, and other payment processors such as PayPal. Safety is a very important aspect of the infrastructure; this is because the company will be handling sensitive client information, including credit cards and their personal information. As such, what is required is an encrypted network and IT resources infrastructure that ensures the safety of users. This is to be complemented with security features including physical and software based firewalls and anti-malware software installed in all its facilities because it also needs to ensure its internal infrastructure is safe. The website itself must be safe with encryption, meaning that it must have an SSL certificate to assure users that it is safe (Sterling, 2011).
The company needs to have an infrastructure in which the e-commerce website remains running (uptime)and that it can support even heavy use (a situation where there are many requests and transactions in the website at the same time). Because the company will need to have a record of all the transactions related to its business and, it will need an enterprise database system; essentially, an e-commerce website requires to be database driven so that all transactions and activities that happen on its website are stored (Saleh, 2012). The e-commerce website and its enterprise system itself need to have a backup to ensure business process continuity even in the event that the physical host is unable to work. To meet these needs, the best solution is for SOP to adopt a cloud model, specifically, a hybrid cloud model consisting of its own private cloud (data center) linked to pubic clouds through a bridge. In the public cloud domain, SOP will use the service models of SaaS (software as a service), IaaS (infrastructure as a service), and PaaS (platform as a service). The public cloud services will ensure that it has sufficient and scalable infrastructure to host and provide its services and products, including advice and education. The private cloud will host its data and critical and sensitive information it wants to keep greater control of. The public cloud will also be used to provide a backup of its existing private cloud and IT resources (Hurwitz, 2012).
Applications (hardware and software)
The cloud infrastructure is preferred because it will ensure the company does not have to spend a lot of resources in purchasing all the IT equipment it needs, as well as the accompanying software such as ERP (enterprise resource planning). Further, it will help save the company from the need to spend money in managing and maintaining its IT resources and equipment. The cloud architecture is also suitable for its needs because of scalability and the pay per use policy; when there is a greater demand for resources, including when there are many requests to the site, the resources are automatically scaled up, ensuring no loss or degradation of service quality. At its data center, SOP will need to invest in modern IT equipment that can handle its envisaged business at an international level. It needs purpose built enterprise servers with operating systems; to cut costs, it can use Open Source server software’s such as Linux that are modified and customized to meet its performance and security needs. In addition, work stations will also be required for the users; the servers will require virtualization software so that SOP can virtualize its existing hardware resources to meet growing needs. The network swill require routers and wireless access points for ease of access to internet resources by staff (Mahmood, 2014)
Security assurance
Security is paramount for the internal needs of SOP as well as that of clients; using the cloud model will enhance security as public cloud services providers are able to offer better security than the company itself would. To enhance security, SOP will first need to sensitize its staff and IT resource users on security issues, especially because the biggest cause of IT insecurity and breaches are internal, caused by errors and mistake or deliberate acts. After educating and sensitizing staff, SOP will need to implement strict security policies; this implies setting credentials to access certain company resources and cloud services. The company will use cloud services that can be exposed to greater security risks; it should therefore implement strong API’s to ensure access to the cloud based services remain safe and secure. Access to certain resources will require two step authentications to enhance safety and security.
The internal networks will need to be isolated, with sensitize resources isolated to ensure they remain safe in the event of an attack in its private cloud (Goetsch, 2014). The networks will have physical and software based firewalls, in addition to anti-malware software installed at the servers and all work stations. Networks provide an additional security risk; SOP will need to ensure the routers are strengthened through strong encrypted passwords as well as have the firmware for the routers regularly updated. To ensure they are in control, SOP will need a security policy that addresses all security issues; this policy ought to be reviewed regularly. The networks should have network monitors installed to monitor traffic and avoid or detect attacks before they occur. The security policy should include the need for frequent updating of all security software and patches; this relates to administrative functions.
E-marketing requirements
The website will be used for e-marketing, including the use of social media handles for marketing. The firm will use SEO (search engine optimization) to ensure it ranks high during searches and this will be helped by a block back linked to the website to enhance ranking in search engines. SOP will use paid up digital advertising, including Google ad sense and social media advertising to promote its products and services.
Payment systems to be used
The payment systems to be used should be convenient for both SOP and customers; the best model for payment for subscribed services is credit card; this is because the client’s account will be changed whether they have money or not, as long as the date falls due. For one off services, such as giving advice or installing some equipment, payment by card or even check is suitable. Further, other model of payment to be used includes mobile wallets and online payment processors; these are also suitable for one-off purchases and payments. For B2B clients, electronic funds transfer is also an accepted means of payment; however, this will not be done from the portal. The money will have to reflect in the SOP account, with the system accepting the transaction number and details. For security reasons, this payment method will be used only for trusted partner companies. The proposed payment systems are meant to give the customers convenience (Liebana-Cabanillas, Mun?oz-Leiva, Sa?nchez-Ferna?ndez, & Marti?nez, 2014).
Privacy and ethical concerns
SOP recognizes the need to safely store and secure customer data and details; this will start from the first time a customer interacts with the website. The website will be encrypted and forms on the webpage will also store and transport customer information in an encrypted form to the cloud storage databases. Further, the use of a public cloud to store customer information will enhance security; internal policies will be set to limit who can access customer details and at what time, with only a few people allowed remote access to such information after a two-step authentication (Lunka, 2017). SOP must recognize the need to protect customer data as per the data protection act; customer information will not be used or disclosed to any third parties, including business partners or government without direct customer authorization or a court order. Further, SOP must not use customer information and data for monetary gain, such as selling it to advertisers. At the website, cookies policies will be explicitly explained and only used to meet customer needs, not to sell it to advertisers for [promotional purposes (Nguyen, 2016).
Legal issues
To limit any liability, the company will be incorporated, in addition to having the business legally registered in Australia with the trademark also registered. The new business model will fully comply with government legal regulations in terms of having a registration certificate and trading licenses with a physical address. A law firm will be hired to provide legal advice and handle any legal issues that may arise in the process of operationalizing the business. Any products used from suppliers will have their trademarks and/ or copyrights used under license/ permission from the supplier company and clients will be duly notified of this (Nasir, 2004). Further, permission will be sought to use their copyright and trademark products at the website as this pertains to public display of trademarks; the permission must be in writing, and if necessary, be renewed when due. For the e-commerce website users, a click wrap agreement will be put in place to ensure SOP has legal remedy in the process of selling products and services to clients. This click wrap agreement ensures SOP will be paid; waive legal warranties implied in law, that users are above age 18, the venue for dispute resolution is disclosed as far as regions are concerned. SOP will also comply with regulations, including truthful advertising and that e-commerce/ web sales comply with relevant regional and national laws (Silver, 2012).
Customer Service issues
This is a mainstay of the business; happy customers’ equal’s revenues and growth; the website, as stated earlier, will also be a portal for providing customer service, in addition to using social media handles for SOP for customer service. The e-commerce portal can be accessed from any location at any time meaning assisting customers will be a huge challenge. Customers will require shopping assistance, which is easy to provide in physical stores, but is a challenge for the e-commerce website: given the presence of competitors, customer service must be done excellently because competitors are just a click away. Aspects such as trust during the payment process and customer gratification pose challenges for the e-commerce web store. The solutions to these challenges and others lie in the creative and innovative use of technology (Grabowski, 2013). The e-commerce website will have a chat feature with an operator always present most of the time (especially during the day) to deal with customer issues and inquiries. Through this chat, customer issues can be handled immediately and promptly.
The website is also designed to be interactive such that customers can post a query or issue through a web based form where the issue will be captured and action taken by a customer service staff at an opportune moment. This will allow the customer issue to be handled by e-mail. The website will also have a phone number and phone line that customers can call to get prompt attention and service. The chat service will be developed with artificial intelligence such that basic customer issues can be handled by the robot so that the customer feels their needs and issues are being attended to. The linked social media handles will also be used for customer service; the user generated content will be monitored and analyzed to be used by SOP for better product offering. In addition, the social media handles will have the chat bots connected to answer customer issues whenever there is no human operator available; this will ensure customer issues are handled as promptly as possible. SOP will also implement a post-sale interaction as part of its customer service using the available channels and for installed products, a representative will visit the client to explain issues and offer personalized support. Customer service will be offered in the context of a customer centric organizational strategy with personalized (human mediated) customer service as well as technology mediated customer service.
Measuring success of proposed system
The success of the system will be measured form a project management point of view; it must be delivered within budget and time schedule, within the defined scope. The success will be measured in terms of return on investment, and business and financial performance; including number of visitors to the site, how many register, and how many are converted into customers. Metrics of customer number retention and new customers acquired as well as financial performance (revenues, profits, operating expenses) when using the e-commerce website will be measured
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