Why Justify EC Investments? How Can They be justified? Other Reasons Why ec justification Is Needed Companies need to assess the success of ec projects after they have been completed and then on a periodic basis(see Chapter 14 The success of EC projects may be assessed in order to pay bonuses to those involved with the project Electronic Commerc Prentice Hall 2006
Electronic Commerce Prentice Hall © 2006 6 Why Justify EC Investments? How Can They Be Justified? • Other Reasons Why EC Justification Is Needed – Companies need to assess the success of EC projects after they have been completed and then on a periodic basis (see Chapter 14) – The success of EC projects may be assessed in order to pay bonuses to those involved with the project
Why Justify EC Investments? How Can They Be Justified? EC Investment Categories and Benefits The /T infrastructure provides the foundation for ec applications in the enterprise EC applications are specific systems and programs for achieving certain objectives Electronic Commerc Prentice Hall 2006
Electronic Commerce Prentice Hall © 2006 7 Why Justify EC Investments? How Can They Be Justified? • EC Investment Categories and Benefits – The IT infrastructure provides the foundation for EC applications in the enterprise – EC applications are specific systems and programs for achieving certain objectives
Why Justify EC Investments? How Can They Be Justified? Specific Benefits cost reduction(85%) productivity improvement (7%) improved customer satisfaction(6%) improved staffing levels(5%) higher revenues(4%) higher earnings(4%) better customer retention(4%) more return of equity( 3%) faster time-to-market (3%) Electronic Commerce Prentice Hall 2006
Electronic Commerce Prentice Hall © 2006 8 Why Justify EC Investments? How Can They Be Justified? • Specific Benefits – cost reduction (85%) – productivity improvement (7%) – improved customer satisfaction (6%) – improved staffing levels (5%) – higher revenues (4%) – higher earnings (4%) – better customer retention (4%) – more return of equity (3%) – faster time-to-market (3%)
Why Justify EC Investments? How Can They Be Justified? How Is an ec investment justified? cost-benefit analysis A comparison of the costs of a project against the benefits Electronic Commerc Prentice Hall 2006
Electronic Commerce Prentice Hall © 2006 9 Why Justify EC Investments? How Can They Be Justified? • How Is an EC Investment Justified? cost-benefit analysis A comparison of the costs of a project against the benefits
Why Justify EC Investments? How Can They Be Justified? Justification may not be necessary when The value of the investment is relatively small for the organization The relevant data are not available, inaccurate. or too volatile The EC project is mandated--it must be done regardless of the costs and benefits involved Electronic Commerc Prentice Hall 2006
Electronic Commerce Prentice Hall © 2006 10 Why Justify EC Investments? How Can They Be Justified? • Justification may not be necessary when: – The value of the investment is relatively small for the organization – The relevant data are not available, inaccurate, or too volatile – The EC project is mandated—it must be done regardless of the costs and benefits involved