Case Study Questions 1. Create a simple logical design and physical design for the REI.com Web site using information provided in the case study, supplemented as necessary by your own research.
In response to this question, you can ask students to submit a simple diagram similar to that shown in Figure 4.2 and a written description. A simple logical design for REI.com would include the following components: HTTP requests and other data from a customer’s client computer travel to Web servers, application servers and database servers, which displays specific Web pages in response to those requests. When an order is submitted, it is forward to an order-processing application database server, which interfaces with a back end system that provides fulfillment, inventory and product SKU information. For the physical design, students can submit a simple diagram similar to that shown in Figure 4.2 A simple physical design for the REI.com Web site consists of the mainframe legacy system and the IBM AS/400 server that provides the fulfillment, inventory, and product SKU information in the backend layer. These two backend systems interface with the order-processing application database server. This in turn interfaces with the middle layer of Web servers, application servers and database servers. On the front end are the client computers and a Web-enabled kiosk and cash register system that allows customers and employees to access REI’s sites on the Web.
2. after reading the case study, identify the key reasons for REI.com’s success thus far.
The key reason for REI’s success to date is the planning that went into the Web site design including clearly defined business objectives, information requirements and system functionalities and well defined system design specifications. When upgrading became necessary, REIs managers researched their options and chose an e-commerce suite that would enable them to retain all of the custom coding they had already developed to connect the online store to the legacy system and decrease the amount of custom coding they would have to do in the future. The site is successful because this meticulous planning resulted in a site in which pages download quickly and efficiently and the server response rate is laudable. The Web site has brought in a creditable percentage of new customers and rather than cannibalizing traditional store sales, the online store has increased the average sale per customer by providing a way to better serve these existing customers. Existing in–store customers simply became multi-channel consumers.
3. Visit the REI.com Web site and rate its performance on the eight factors listed in Table 4.10 on a scale of 1 to 10 (with 1 being the lowest and 10 the highest). Provide reasons for your ratings.
Answers will vary on this question according to the experience each student has with the site. An example of a possible answer is provided below. a. Functionality: 10. The pages loaded quickly, the search engine quickly provided a group of products meeting the product description entered as the keyword for the search, and a table of contents made it simple to locate products in various categories. b. Informational: 10. The Learn and Share link on the site leads you to pages that contain advice, repair information, how-to tips, instructions, gear lists and information on clinics for many different activities including camping and hiking, climbing, cycling, paddling, snow sports, cross-training, fishing, and travel. REI has used their expertise to create a series of comprehensive clinics, checklists, shopping help and quick tips. Visitors can also use the Community bulletin boards to share their outdoor experiences with fellow outdoor enthusiasts. With more than 45,000 individual pages of original editorial on two separate websites, including product description pages, outdoor tips, feature articles, tutorials, and interactive content such as a Web tool that helps customers select the right size ski rack for their cars, informational content is clearly one of REI.com’s competitive advantages. c. Ease of Use: 10. The site provides a simple foolproof navigational scheme. d. Redundant navigation: 9. There are many different methods for accessing the same content. e. Multi-browser functionality: 9. The site functioned equally as well in Internet Explorer 6 and Netscape Navigator 5.5. f. Simple graphics: 7. The graphics for the product offerings were generally fairly good and there were no distracting graphics or sounds, but it would be nice on some products to be able to enlarge the picture more to get a better idea of what the product actually looks like. g. Legible text: 10. There was no problem with backgrounds that distorted text and all text was of a readable size and in a font that was legible
4. Prepare a short industry analysis of the online outdoor sporting goods and apparel industry. Who are REI’s primary competitors?
An industry analysis of the online sporting goods and apparel industry should include a discussion of substitute products, barriers to entry, the bargaining power of consumers, the bargaining power of suppliers, and existing competitors. REI’s primary competitors include Eastern Mountain Sports (ems.com); L.L. Bean (LLBean.com), Outdoor Research.com, Altrec.com, Campmor.com, Reeds Sporting Goods (reedssports.com) beoutdoors.com, MountainGear.com, WomenOutdoors.com, Livetoplay.com, and Sportsmanguide.com End of Chapter Questions
1. Name the six main pieces of the e-commerce site puzzle.
The six main pieces of the e-commerce site puzzle are the organizational capabilities and human resources you will need to build and manage the site, the hardware, software, and telecommunications infrastructure you will need in order to meet the demands of your customers, and the site design you will need to implement your business objectives.
2. Define the systems development life cycle and discuss the various steps.
The systems development life cycle is a methodology for understanding the business objectives of any system so that an appropriate solution can be designed. The five major steps in the SDLC for an e-commerce site are: systems analysis, systems design, building the system, testing the system, and implementation. In the systems analysis step, the business objectives for the site are identified and this list of the necessary capabilities for the site is translated into lists of the types of information systems and the elements of information that will be needed to achieve them. Next, the main components in the system and their relationships to one another must be identified. The system design includes a data flow diagram and the physical components that will need to be purchased. After the system has been built and programmed, the program modules must be tested one at a time and then the site must be tested as a whole, with every conceivable path a user might try examined. Implementation of an e-commerce site includes the continuing maintenance that will be needed over the life of the site to keep it functional, including correcting mistakes and continuing to improve, update, and modify links and other site features.
3. Discuss the differences between a simple logical and simple physical Web site design.
A simple logical design for a Web site describes the flow of information at the site including the processing functions that must be performed and the databases that will provide information. It also includes a description of the security and emergency backup procedures and the controls that will be used in the system. A simple physical design, on the other hand, translates the logical design into the physical components that will be needed such as the servers, software, and size of the telecommunications link, backup servers, and security system.
4. Why is system testing important? Name the three types of testing and their relation to each other.
System testing is important because there can be up to thousands of different pathways through a typical e-commerce Web site and you must make sure that customers can find what they want easily and quickly and most importantly that they can complete a purchase without a hitch. The three types of testing that must be completed are unit testing, which involves checking each program module, system testing, which includes testing the site as a whole in the way a “typical” user might navigate and make requests for functionality, and acceptance testing, which requires the firm’s key personnel and managers to use the system to verify that the business objectives as originally conceived are being met.
5. Compare the costs for system development and system maintenance. Which is more expensive, and why?
The costs for system maintenance for an e-commerce Web site can run anywhere from 50% to 100% per year of the original systems development costs. For small sites the annual maintenance cost can parallel the development costs, with larger sites achieving some economies of scale. Maintenance is more expensive because e-commerce sites are always in a process of change, improvement and correction. E-commerce sites are in fact never finished. They are always in the process of being built and rebuilt.
6. Why is a Web site so costly to maintain? Discuss the main factors that impact cost?
Web sites are so costly to maintain because code must be debugged, hyperlinks must be continually tested and repaired, emergencies must be responded to, reports, data files and links to backend databases must be maintained and updated as necessary, and the general administrative tasks of the site, such as updating the products and prices, must be attended to. Changes and enhancements to the system are also continually being made so that the site is always adapting to changing market conditions. All of this requires a Web team that includes programmers, designers, and business managers from the marketing, sales support and production departments so that customer feedback is responded to and the site is adequately monitored for correct prices and links and updated page display.
7. What are the main differences between single-tier and multi-tier site architecture?
Single-tier site architecture simply consists of a server machine running the basic Web server software. Multi-tier site architecture, on the other hand, provides much more functionality by linking a Web server layer that can include multiple Web servers to a middle tier that includes many Web application servers which provide a wide variety of transaction processing tasks. This middle layer is also linked to a backend layer that includes existing databases, human resources systems, corporate applications, financial data, and enterprise systems. A multi-tiered site typically employs several or more physical computers each running some of the software applications and sharing the workload across many computers.
8. Name five basic functionalities a Web server should provide.
The basic functionalities a Web server should provide are: a. processing HTTP requests (requests for HTML pages) b. providing security services to verify the username and password or process the certificates and private/public key information required for credit card processing (Secure Sockets Layer or SSL) c. processing FTP requests (transfers of very large files from server to server) d. providing search engine services e. capturing data such as logs of visits, time, duration and referral sources f. providing e-mail services including the ability to send, receive, and store e-mail g. providing site management tools to calculate and display key site statistics such as unique visitors, page requests, and the origin of requests, and to check the links on the site
9. What are the three main factors to consider when choosing the best platform for your Web site?
The three main factors to consider when choosing the best platform to use for your Web site are the number of simultaneous users who will likely visit your site, the user profile or nature of the customer requests and customer behavior at your site, and the nature of the content on your site. The more visitors you have the greater the demand will be on your system. If the users will be viewing dynamic pages and large multimedia files, far more capacity will be required.
10. Why is Web server bandwidth an important issue for e-commerce sites?
These three factors will help to determine the telecommunications link you will need for your site. Web server bandwidth is another important consideration because the larger the bandwidth available, the more customers can simultaneously hit your site. Most ISPs or other site-hosting providers are obligated to provide enough bandwidth so that your site can meet peak demands. By 2002, 13 million Americans are expected to have broadband access from their homes or small businesses and this will present additional demands for more dynamic content and additional site capacity.
11. Compare and contrast the various scaling methods. Explain why scalability is a key business issue for Web sites.
In order to meet the demands for service at your site you can scale your hardware vertically, scale your hardware horizontally, or improve the processing architecture at your site. You scale vertically by upgrading the servers from a single processor to multiple processors. You can add up to 20 processors to a machine and also increase the chip speeds. The drawbacks to this method are that it can become expensive to purchase new machines with every growth cycle, and that your entire site becomes dependent on just a small number of very powerful computers. If you horizontally scale your site instead, you add multiple single processor servers to the site and balance the load among many servers. You can also create dedicated servers that only handle certain tasks such as HTTP requests or ASP pages, while others handle just database applications. This method requires the use of special load balancing software to direct the incoming requests to the appropriate server. This is a less expensive method because you can often use older PCs that might otherwise be disposed of, and if one machine fails, there is a good probability that another one of the many other machines can pick up the load. The third alternative, improving the processing architecture, is a combination of both vertical and horizontal scaling and system design changes. The main concept is that the workload is split into Input/Output intensive activities and CPU intensive activities. The servers can then be fine tuned to handle simple requests for Web pages, or more CPU-intensive activities such as order taking. Scalability is a key business issue for Web sites because firms must be able to increase the size of their sites as demand loads increase and they must be able to do so efficiently and cost effectively.
12. What are the eight most important factors impacting Web site design, and how do they affect a site’s operation?
The eight most important factors impacting Web site design are: a. Functionality: The site must have pages that load quickly, function correctly, and send the user to information about the product offerings. b. Informational: The site must have links that the customer can easily find to get information about the company and the products it offers. c. Ease of Use: The site must have a simple foolproof navigation scheme. d. Redundant navigation: The site must have alternative ways to reach the same content. e. Ease of Purchase: There should be no more than one or two clicks required for the purchasing procedure. f. Multi-browser functionality: The site should work with the popular browsers. g. Simple graphics: The site should not use distracting graphics and/or sounds that the user cannot control. h. Legible text: The site should avoid the use of backgrounds that distort text or make it difficult to read. These factors affect the operation of a site because if they are not adhered to users will find the site frustrating to navigate and view, it will be difficult for them to find information about the products, and making a purchase will be far too complicated
13. What are Java and JavaScript? What role do they play in Web site design?
Java is a programming language that allows programmers to create interactivity and active content on the client machine. It saves load on the server because the Java programs or applets are downloaded to the client and executed on the client’s computer. A Java Virtual Machine (VM) is now included in all browsers that will send a request to the server to download and execute the program and allocate page space to display the results. Java can be used to display interesting graphics and create interactive environments such as calculators or calendars. However, different vendors have produced different versions of the language and today many firms will not allow Java applets through their security firewalls. Many Java applets crash or perform poorly, wasting system resources for sometimes not very important functions that do not add much to the page design, so they are not widely in use today by corporate Web sites. JavaScript is a programming language that is used to control the objects on an HTML page and handle interactions with the browser. It is commonly used to control verification and validation of user input, such as confirming that a valid phone number or e-mail address has been entered. It is much more acceptable to corporations because it is more stable and is restricted to the operation of requested HTML pages.
14. Name and describe three tools used to treat customers individually. Why are they significant to e-commerce?
The primary method for treating customers individually through personalization and customization is the placement of cookie files on the user’s client machine. Cookies can be used to store information about the customer such as their customer ID, a campaign ID, and their prior purchases from the site. When a user returns to a site, the prior viewing and purchasing behavior can be accessed from a database, and the customer can be greeted by name and related products can be recommended. Other tools that enable personalization and customization include tools for interactivity and active content, such as CGI scripts, Active Server Pages and Java Server Pages. Personalization and customization are significant to e-commerce because they can potentially make it nearly as powerful as a traditional marketplace and perhaps even more powerful than direct mail or shopping at an anonymous suburban shopping mall. Speaking directly to a customer and tailoring a product to that customer are potentially powerful marketing tools that could help to increase sales and revenues.
15. What are some of the policies e-commerce businesses must develop before launching a site and why?
Some of the policies that an e-commerce business site must develop prior to launching are the privacy policy, the accessibility rules, and the financial reporting policies. The privacy policy is a public statement detailing to customers how the personal information that is gathered at the site will be treated. Accessibility rules are a set of design objectives that ensure that disabled users can effectively access a site. Financial reporting policies describe how a firm will account for revenues and costs at the site. This set of information policies must be developed prior to launching because they will govern how the site is run. Projects
1. Go to www.bigstep.com or Yahoo! Store (store.yahoo.com). Both sites allow you to create a simple e-tailer Web site for a free trial period. The site should feature at least four pages, including a home page, product page, shopping cart, and contact page. Extra credit will be given for additional complexity and creativity. Come to class prepared to present your e-tailer concept and Web site.
Students should choose one of these two sites and build a basic Web site using the tools provided on the site. At either of these site students will proceed through a series of steps. Note that it may not be possible for students to build at least four pages (depending on the free functionality provided by these two sites at the time this project is assigned), so credit should not be deducted if that is in fact the case. Note also that at the current time, Bigstep.com allows students to create an actual free trial Web site without the necessity of providing credit card information, while Yahoo! Stores only allows students to create a very simple Web site via a Guided Tour without providing credit card information. If you wish you students to create a more extensive Web site, tell them to go to Bigstep.com; if only a more simple Web site-creating experience is desired, Yahoo Stores may be sufficient.
At Bigstep.com, students should click the “Try It Free” and choose the free trial period for the Bigstep Professional suite so that they will be able to build a catalog. Encourage your students to read the Free Trial Agreement by clicking on its link at the bottom of the page.
At Bigstep.com, first the Home page and a Contact page including multiple feedback subjects will be created. Next, templates will be provided for many other types of pages including About Us, Job Listings, Employee Bios, Maps and Directions, Survey, and News and PR pages. On the Bigstep.com site, the List of Services template can be used to create a List of Products page. Any page can be easily renamed. A Merchant Policy page must be created first and “online orders” must be selected as one of the ordering options before the checkout process for the online business can be set up in the Commerce section. The merchant policy will include the types of payments that will be accepted and the return policy. In order to create an online catalog, students must also sign up for a free trial period of one of the Catalog Managers. During setup and catalog building, Bigstep.com maintains a convenient to-do list of tasks and their current status. Bigstep.com will guide the students through the building of up to 12 Web pages for their site and an unlimited number of pages in the Catalog. However, the shopping cart page cannot be completed unless a merchant account is applied for and set up. If they wish, students can use a PayPal account that they already have or create one to provide this alternative form of payment for their Web site, but PayPal does not work with the Bigstep shopping cart. This means that when customers send a payment via PayPal, PayPal can't detail the items in the order, calculate tax and shipping rates, display shipping options, or generate confirmation emails. A PayPal button can be added to the site by copying some HTML code from PayPal and pasting it onto a page on the site where the student wants the button to appear.
At Yahoo! Store, students should click the “Get Started Now” link. If the student is already a registered user at Yahoo, he or she should log in with their User ID and password. If not, they must register with Yahoo – look for a “Sign Up Now” link. After the student has successfully signed in, he or she will be taken to a page entitled “Build Your Own Yahoo Store” Free Trial Version for 10 days. Here the student must create an account name that will be part of the URL for the store (so choose carefully), a full name for the store that will appear on the front page of the store, and enter a contact name, an email address and phone number and some additional information. At the end of the page, the student will be asked to check a box that indicates that he or she has read, understand, and agree to the Yahoo! Store Merchant Service Agreement and the Yahoo! Store Test Drive Agreement. You should encourage your students to click these links and carefully read both agreements. After they have done so, they should click the “Create My Yahoo Store” button. This takes you to a Guided Tour page. Click the “Start the Tour” button to begin and follow the instructions to create a simple Yahoo store.
At the end of the guided tour, students will be prompted to reserve their Yahoo Store for a 10-day free trial. Note that a credit card is required to proceed. Although the Yahoo store is free for the first 10 days, Yahoo charges a monthly hosting fee of $49.95/month plus a monthly insertion fee in the amount of $0.10 for every product available from Merchant’s Store unless the account is cancelled.
2. Visit several e-commerce sites, not including those mentioned in this chapter, and evaluate the effectiveness of the sites according to the eight criteria/functionalities listed in Table 4.10. Choose one site you feel does an excellent job on all the aspects of an effective site and create a presentation including screen shots to support your choice.
Errata: If this project in your text refers to Table 4.1, please note that this is in error and should be replaced with the project as set forth above.
The purpose of this project is to extend the critical thinking skills of students as they examine Web sites. For each factor listed in Table 4.10, the students should evaluate the Web site for effectiveness of design. For example, the students should evaluate how effectively the digital catalog conveys the essence of each product using graphics, or other methods such as streaming video, and how effectively products are portrayed in textual descriptions. Students can choose sites at which they are actually shopping or they can simply browse, but they should go through the steps of executing a transaction so that they can evaluate the shopping cart/payment system and ease of purchase. They should also navigate to multiple pages at each site so that they can effectively evaluate the ease of use, and redundancy of navigation. The presentation might include screen shots of product graphics, navigation bars, and pages from the site displayed in multiple browsers. 3. Imagine that you are head of IT for a fast-growth e-commerce start-up. You are in charge of development of the company’s Web site Consider your options for building the site in-house with existing staff, or outsourcing the entire operation. Decide which strategy you believe is in your company’s best interest and create a brief presentation outlining your position. Why choose that approach? And what are the estimated associated costs, compared with the alternative? (You’ll need to make some educated guesses here-don’t worry about being exact.)
The purpose of this project is to get students to begin to consider the managerial decision making process. If they choose to build in-house they might mention such factors as an in-place staff of professionals who are trained for this task including graphic artists, Web designers, programmers, and project managers. They may also posit that they are prepared to purchase a top-of-the line prepackaged site-building tool that will be scalable as the firm expands its customer base. They may also argue that their firm sells a highly specialized product so that the need for a customized Web site is high, or that their staff, which is already highly trained, will be able to build a site that does exactly what the company needs, and moreover, that the staff who participate in the building of the site will be able to change the site rapidly to adapt to any changes in the business environment. Students who opt for outsourcing might mention such factors as the risks involved in building such complex features as shopping carts, credit card authentication and processing systems, inventory management systems, and order processing systems. They may also argue that the risk of ending up with a poorly functioning site is just too great, and that staff will face a long, difficult learning curve. Costs for building in-house might include the salaries of any additional professionals who will have to be hired, the cost of a prepackaged site-building tool, or the costs of additional software or technology that will have to be purchased to build credit card authentication systems. Costs for outsourcing may include an expensive site-building package and costs for hiring an outside vendor to modify the package.
4. Choose two of the e-commerce suite software packages listed in Table 4.5 and prepare an evaluation chart that rates the packages on key factors discussed in the section “Choosing an E-commerce Suite.” Which package would you choose if you were developing a Web site of the type described in this chapter, and why?
The best way for students to approach this project is to choose two of the e-commerce suites and conduct an online research study to find articles in the popular and technical press that evaluate the products based upon the key factors listed in the chapter. Reading articles and comparisons of the suites will give students insight into just how difficult the process of choosing an e-commerce suite can be for a manger. Answers of course will vary according to the suites chosen and the opinions of the authors of the articles collected.
One possible comparison based upon product evaluations from various sources is: (Table is based on a scale of 1-10.) Microsoft Commerce Server IBM WebSphere Commerce Suite Functionality 8.5 7.8 Support for different business 7.5 8 models Business processing models 9.2 7.5 Visual site management tools 9 8 Performance and scalability 7.5 8.2 Connectivity to existing business 7.5 9 systems Compliance with standards 9 8 Global and multicultural ability 8 9 Local sales tax and shipping rules 8 8
IBM’s Commerce Suite compared favorably with Microsoft Commerce Server in the performance and scalability category because of its scalable architecture and its extensive customizability and large set of store and catalog editing tools. It also offered a vast breadth of capabilities, including auctioning features, allowing it to support many different business models. It was also found to have great multilingual support. Furthermore, because it can run on a mainframe, Commerce Suite also provides unmatched integration with back-end systems. However, its support for databases and Web servers was often found to be less inclusive and its lack of high-end reporting tools is a glaring omission. Microsoft Commerce Server, on the other hand, was also found to be extremely extensible and has great analysis tools through SQL server data mining. The drawback is that it only runs on ISS Web servers. Microsoft Commerce Server 2000's data analysis and product prediction modules are invaluable though, and unless a company is running Web servers other than those built into Windows 2000 Server, these tools make it the suite of choice.