Assignment 2: Setting Strategy and Structure for Your Organization

Running head: COMPOSING AN E-COMMERCE BUSINESS

COMPOSING AN E-COMMERCE BUSINESS

Composing an e-Commerce Business

Student Name

Course Name

Institution

Key elements of an organizational e-commerce solution for a retail business

The organizational backbone of an E-commerce business comprise of back office infrastructure which is the information technology aspect of the business skeleton. A running e-commerce website considers developed online platform that connects the merchant, suppliers and consumers. A traditional retailing business could move online to take the advantages of the information technology and the online platform, which is thought to be affordable way of doing business because of reduced fixed asset expenses (Klopping & McKinney, 2004). However, the most important consideration for e-commerce performance is the ability for the merchant website or the retail owner for will customer satisfactions. For Johnson and Johnson Company, which is preparing to stage a mega e-commerce website, the following infrastructure components will critical to construct:

· E-commerce infrastructure skeleton that takes care of servers, back office management, warehouses, suppliers, inventory services for suppliers, order fulfillment and product shipping arrangement. This correct order management process include order review with automated prioritizing so that suppliers and buyers are able to sort and filter products of prices of their interests (Klopping & McKinney, 2004).

· Cloud storage with independent network infrastructure that guaranteed highest (99.9%) uptime. In addition, the e-commerce site should be scalable, responsive and have the highest possible speed so work in any bandwidth.

· Utilizing a complete suit for secure payment system. One of the main concerns from customers is the security and safety of their transactions using their credit or debit cards. Secure online payment processes will guarantee returning and royal customers (Klopping & McKinney, 2004). Secure payment system should feature fraud management system using sophisticated online rules but easy to use interface.

· Due to the evolving nature of the online industry, Johnson and Johnson should have fulltime IT management technician in a 24 hour basis to identify and manage risks. An e-commerce website utilizes dozen of different third party services who supply different online tools. These tools need monitoring for updates and more important for the security modeling and risk management (Klopping & McKinney, 2004).

Technological infrastructure and e-commerce strategy for competitiveness in the market place

The type of technological infrastructure and e-commerce strategy for competitive online retailing is complex and sophisticated requiring a combination of secure online management resources that ensure secure transactions and responsiveness to customers. Secure online e-commerce sites must comply with Payment Card Industry Data Security Standard (PCI DSS) security requirements (Rowlingson, & Winsborrow, 2006). Therefore, these sites should backbones that follow closely to PCI DSS security guidelines.

The e-commerce industry is evolving. Even though it is easy to start an online business in form of pure online retailing, the industry is better suited for older companies that have shown royalty to consumers. To start building loyalty, win new customers and retain old customers, a new e-commerce website should deliver to customers in form of product availability, on time and practical shipping, non-compromising customer service, and develop onsite non-compromising fraud management system. Apart from business delivery, another significant e-commerce skeleton is responsive technology that allows customers and suppliers to the log in, manage and monitor their accounts from any devise including mobile phones. Powerful and up to date data analytic tools guarantee stakeholders safety of their investment and customer’s safety of their money.

In order to continue approaching competition, a competitive e-commerce should be able to accommodate most online payment systems accepted worldwide. E-commerce services serve the global and customer across the world would need products from this company. Since different countries have different payment systems, there is need to utilize most common payment services to ensure that the business does not lock out potential consumers who are interested in buying from this site.

Loyalty is important for referrals. This means that customers who have bought goods and services online will refer their friend through word of mouth or through review. The importance of positive and negative reviews comes in to the platform so that customers can see the level of engagement with real customers before they continue with transaction.

The need for a data warehouse and data mining system to achieve operational efficiency

The data mining system is a way of extracting customer responses in the form of buying or doing business with the company. Data mining involves collecting customer feedback and using those feedbacks as recommendation to improve business. On the other hand, data warehouse concept work the same as data mining concept except that data warehousing is collection and storage of data from different sources. In an e-commerce website, data stored in this concept is historical. Depending on the objective of the e-commerce website such as targeting certain products to certain regions or certain consumer groups, the benefits of data mining and data warehousing strategies in to allow business managers analyze information collected in data warehouse to design marketing and sales strategies to improve the online operations.

Two ways in which data mining and data warehousing tie into sales / production goal

1.) These processes assist an organization in presenting information consistently using a single model regardless of the source of data or regardless of the onsite data collection tools. Since the online trend change, historical data will be used to track occurring changes so that managers can develop custom strategies tailored towards these changes.

2.) Data mining and warehousing resources assists in restructuring data for a certain query. This means that managers can compare e-commerce tools that attract most clients and they will use this information to install attractive tools to attract more clients. Historical business data assists managers to frame a question and analyze available data to respond to their questions.

Justification for the choice of Payment Card Industry Data Security Standard (PCI DSS)

PCI DSS is a comprehensive security standard that all e-commerce websites should comply to. Compliance with PCI DSS means that the e-commerce platform conducts business with the following secure strictures as Wood & Lineman, (2009) demonstrates:

a. Building and maintaining secure network: the first consideration is building a secure network is installing a firewall that protects the site and site users from all kinds of malwares and viruses. A secure network also includes custom encryption transmission rather than default encryptions supplied by vendors.

b. Risk analysis management system/program: as part of PCI DSS compliant, e-commerce website should develop and update online risk priorities. Card holder data protection is the top asset that should be secured. Therefore, IT specialists in the e-commerce websites should develop, update, monitor and maintain secure system.

c. Developing independent testing and strong control measures: PCI DSS require e-commerce website to develop testing system for their sites. Independent testing ensures that the site is up to date from ever emerging online threats. Regular testing and monitoring the security strength of an e-commerce website is a priority for the PCI DSS compliance.

Choosing a secure e-commerce website platform as an alternative secure platform

There are dozens of readymade e-commerce websites. Although some like Symphony Commerce is considered the most secure platform, PCI DSS require custom development of an e-commerce website. The problem with default, readymade sites is that they miss security updates. An organization can acquire this site to begin with but ensure to build on it until it is PCI DSS comprehensive compliant.

EuroPay, MasterCard and Visa (EMV)

E-commerce competitiveness relies on the use of global payment methods. The most popular payment methods are the use of credit or debit cards although consumers are encouraged to use credit cards for online transactions rather than debit cards because credit cards have completed a transaction only they have cash on them (Woosley, March 22, 2006). Therefore, global use and tendencies of credit nature are expected advantages to use the following cards as site payment systems:

EuroPay

1. Payment without credit cards: The importance of using EuroPay payments system in e-commerce websites is that, it allows customers or consumers to purchase and pay for their online transaction without the need for credit cards. Transaction with EuroPay only requires a local bank account. Merchant prefer this payment system because it is quick has the lowest cost meaning that sellers will price their products with reducing cost of transaction for increased sales and attracting more customers.

2. Servicing 70 countries: EuroPay system is used in approximately 70 countries. The e-commerce industry is developing and it works practically in all developed countries. Therefore, servicing in these countries means that the online merchant is able to receive payment on time when customers buy goods abroad.

MasterCard

1. International/Interbank/Virtual bank/unbanked debit cards: The advantages of using MasterCard is that it is a prepaid debit card that anyone can afford. This card receive payment from all of its approved banks such that the cardholders can sent money to this cards from their banks. This means that, the cardholders are not going to use their bank accounts for online purchase hence guaranteed safety for purchasers. Additionally card holders can receive money from virtual online banks such as PayPal and use the money to make purchases (Martin, April 8, 2010). For e-commerce, MasterCard is most used methods of making online payments surpassing all other payment methods because the card is available even to the unbanked and people from developing countries.

2. Designed for Online use: MasterCards are designed for online use. Therefore, it is most likely that many people around the world are already using these cards. As the oldest and the most widespread online payment method, every e-commerce website has MasterCard as it first priority payment method because of the wide spread use (Martin, April 8, 2010).

Visa

a. Acceptable worldwide: Visa are the norm of worldwide payments systems that work offline and online. They are designed with default to complete both online and offline transactions without extra registration. As one of the EMV popular transaction method, e-commerce websites use Visa cards to allow consumers from the widest audience to buy and pay for goods online (Woosley, March 22, 2006).

b. Secure transactions for both merchant and cardholders: Through symmetric and asymmetric chip security technologies, Visa’s are by far the most secure payment systems (Woosley, March 22, 2006). They are popular because they are provided by local banks of any country but are enabled to work online. Their secure nature attracts most customers to transact with them.

References

Woosley, B. (March 22, 2006). What are the pros and cons of prepaid debit cards? Retrieved on February 4, 2015 from http://www.creditcards.com/credit-card-news/prepaid-debit-card-benefits-1271.php

Wood, C.C. and Lineman, D. (2009). Information Security Policies Made Easy Version 11. Information Shield, Inc.

Rowlingson, R. & Winsborrow, R. (2006). A comparison of the Payment Card Industry data security standard with ISO17799. Computer Fraud & Security. 2006 (3): 16-19

Martin, A. (April 8, 2010). Mastcard Set to Open an Online Shopping Mall. The New York Times. Retrieved on February 4, 2015 from http://www.nytimes.com/2010/04/09/business/09credit.html

Klopping, I.M. & McKinney, E. (2004). Extending the Technology Acceptance Model and the Task-Technology Fit Model to Consumer E-Commerce. Information Technology, Learning & Performance Journal. 22 (1): 35-48