As e-commerce becomes more mainstream, e-commerce Web sites become a virtual necessity for almost any business. And the question of whether to build an e-commerce site yourself or hire a team of professionals is one that just about every future e-business will face. An online "brochure" is no longer enough if a business wants to be taken seriously. In order to stay ahead of, or in many cases, even with the competition, businesses need to take their sites to new levels.
In order to maintain the most effective and state-of-the-art site, more and more companies today are turning to solution providers, or independent contractors such as Web developers, who specialize in e-commerce site development instead of keeping an in-house staff. The practice of hiring an external service provider to manage applications that are too expensive or just too much trouble to manage in-house is know as "outsourcing".
Often, large corporations have the technical expertise and capital needed to establish their own online operation, including hardware, software, programmers, designers, etc. Smaller companies, however, may not have such expertise, finances, and facilities. As a matter of fact, enthusiasm may be in greater supply than support staff.
The process of building a successful e-commerce site is no small undertaking. As J.P. Frenza, author of "Buying Web Services: The survival guide to outsourcing," puts it: "The process of of building a web site is a relatively new experience. Unless you''ve been involved in large-scale project management in the past, you may not be prepared for what will ensue. Web site development involves some very different skill sets and requires managers to temporarily become experts in the fields of marketing, design, technology, and project management. This is a tall order for any individual."
Is It For Me?
So how do you know if your company will benefit more taking on the project in-house or by putting its Web site in the hands of an outside company? Whether the outsourcing approach is right or not for your company depends on several factors. Financial constraints will almost always top this list. Because different companies have different needs, and there are so many pricing structures depending on the provider you contract with, we''re going to focus on what other factors you should consider before signing the dotted line.
Perhaps the first consideration is how much are you willing to let your business be subjected to work which may not always be under your control. To put it another way, how willing are you to trust outsiders? Some of the most important reasons not to outsource your Web site''s development include the sensitivity of the project, the level of confidentiality of your databases, and your company''s culture. Use caution when selecting a solution provider -- you probably do not want to give outsiders access to proprietary information, which you may have to do if your Web site will be used to communicate such data internally.Weigh the Pros and Cons
A careful evaluation of your company''s needs and wants along with determining its technical resources and capabilities should be the next step in deciding which services you should outsource. This may soon become a moot point as the level of expertise needed for a first class business web site, due in part to the labor-intensive processes behind the programming, has become so complex that the level of skills necessary for success may be beyond your company''s grasp. Site concept and design, billing and payment processing, and order fulfillment are classic examples of frequently outsourced services. Other applications, such as Web site hosting, advertising, sales and marketing are also popular outsourcing candidates.
The nice thing about outsourcing is that it gives you access to potentially higher skills, and professional web management. It also lets you avoid "re-inventing the wheel" -- you benefit from costly mistakes already made by others instead of making them yourself. That is, of course, if you select your vendors carefully.
Another positive feature about outsourcing is that, with patient and careful collaboration, costs and deadlines can be pegged to a delivery schedule that can be controlled. Insider work may be more difficult to control -- depending on your organization.
Lay the Groundwork
Before jumping in feet first and hiring a solution provider, any future netrepreneur should
develop a technology plan. Typically, technology plans fall into three phases: pre-production; production; and post production.
Pre-production includes establishing a business plan, setting strategic objectives, analysis of your needs, setting up a partnerships, gauging the short-, mid-, and long-term objectives of the site, and some consideration of how what you do now will impact your flexibility in the future --
often referred to as the "scalability" of the site.
Production includes all of the design and creative skills necessary to actually make your site. This includes ease of navigation, the look and feel of the site, and static versus dynamic aspects. Included in this last concept are items such as linkage to databases. This is very important if you want your site to deliver customized messages and create personalized features. It is the key way in which exciting interactivity occurs.
Other important aspects to consider at this phase include capabilities for transaction processing, cross state/border taxation, and order processing. Customer service is a key for success so decisions must be made about handling customer inquiries, providing support, establishing mechanisms for credit or returns, cross marketing and promotion, timely delivery and follow-up. The role of email as a channel for efficiently communicating with customers also needs careful consideration. Deciding how prepared you are to go it alone in each of these areas -- versus seeking to outsource the functions -- will be vital to your site''s success.
Post-production involves decisions about keeping your site current and how it will be hosted. As sites scale up, hosting becomes more complicated. Issues such as load balancing (distributing access across servers), redundancy (protection from outages that will put you temporarily out of business), and adding new functionality need to be taken into account. Intel, for example has recently announced that they are starting a new business division which will include several hundred "1000 unit server farms" around the country to host Web sites. Likewise, Sun Microsystems has recently announced that it will go into the "application service business" to help business cope with the constant change necessary to be current.
Today, Web sites must be constantly refreshed. Most people don''t go to the Web for old news and information. They want to see the latest information available in "real time." And they return more often when the contents are up to the minute. This means that your site is never really finished; it constantly needs updating and refreshing. So, this aspect, as it relates to in-house staffing versus outsourced providers, needs to be taken into consideration, too.
Finally, you may want to have your site "metered" so that you can keep track of unique visits, specific "hot areas"(where visits and click throughs are high) versus "dead areas" (where there is little traffic and little return on your investment). Having the correct numbers and, even, an authenticated report from a neutral third party auditor will effect your ability to sell advertising and the rates that you can charge. This is an ideal area for outsourcing, but, of course, there are tools that enable you to do this in-house.
Making the Decision
The amount of outsourcing you decide to do will probably depend on your ambition and the goals you set for your site. There are lots of "do-it yourself" packages on the market to create e-stores. Many of them will meet your needs. However, the more you want to customize your e-business and the more functionality that you want, the more you should consider outsourcing as a sensible way to get the job done. You should not become dependent upon an outsourcer for critical functions, though. For example, if rapid customer support is strategic to your future, you probably want to control that function in-house. In this example, you may decide to test the outsourcing waters by contracting for a site that provides a small, less critical piece of your customer support. If the trial is successful and the Web site proves to be effective, you can then expand it and bring it in-house.
Above all, remember that outsourcing does not relieve you of the responsibility to manage your Web interests as effectively as you would any other. It is your business, not the service provider''s.
And choosing to have many of your site''s features outsourced does not mean that you won''t be able to exercise your creativity, skills, imagination and judgment. It just means that instead of making music as a violin virtuoso, you will be acting as the conductor of a grand orchestra.
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