Demand for business-to-consumer (B2C) systems continues to grow as more and more of us shop online. This has motivated every kind of consumer-oriented firm worldwide to implement their Web sites with a view toward cashing in on the worldwide e-commerce boom. Despite the remarkable growth of B2C spending, we have witnessed many dot-com firms come and go in the world of e-business. Executives of these firms were, perhaps, guilty of jumping onto the e-business bandwagon and spending big on custom-made e-solutions. These failure cases provide an important insight: that firms have not yet discovered how to implement their Web sites effectively and efficiently.
Globalization today and the proliferation of communication channels, coupled with more-demanding customer expectations and technology developments (such as wireless technology), are creating a digital networked economy in which only e-enabled companies are able to thrive. Here, we introduce a new framework for B2C application development that helps firms implement successful B2C sites. But first we explore several earlier studies of B2C implementations to show why a new framework is needed.
References in [7] include some 280 e-commerce-related articles, all published during the 1990s in nine journals considered by business and IT scholars the leading publications for e-commerce research. Among them, many relevant to B2C are concerned with online retailing and online stock trading, while only some focus on Internet technologies (such as CORBA and XML) and Web page design.
Exploring Internet technologies alone is insufficient for implementing an e-commerce Web site because these technologies are not isolated. Any new technology is ultimately integrated into larger, more complex social and technological systems, including business firms [1]. Identifying the best use of a technology requires knowledge of not only the technology itself but of the organization in which it will be embedded. Moreover, Web page design is but one of the many factors that contribute to successful B2C implementations. Developers need a comprehensive B2C implementation framework that takes into account pre- and post-implementation issues, as well as various critical success factors (CSFs).
Implementing a B2C site is a complex endeavor requiring a good idea, a systemic approach, and a solid understanding of business, technology, and social issues. With regard to B2C implementations, firms face two important challenges: developing a clear understanding of their own business objectives and choosing the right approach, methodology, and technology to achieve them. Based on our interviews with firms that have implemented B2C sites, along with our experience providing e-commerce consulting to industry and studies of B2C cases, we have developed a B2C implementation framework we call PRESENT, or PREpare, SElect, build and maintaiN, and audiT (see Figure 1), aiming to help firms address the two challenges.
Being aware of only CSFs for B2C implementations is necessary but not sufficient for developing an effective B2C site. Firms must also know when these factors should be considered during B2C site development. Hence, PRESENT indicates not only the CSFs but also in which stage(s) of the framework each CSF should be addressed. PRESENT involves four steps and their associated CSFs:
Step 1: Prepare the Organization
Business strategy. Implementing a B2C site does not alone yield business success. Firms must define their strategies for positioning their products in the marketplace. Table 1 outlines four generic strategies—differentiation, cost, scope, and focus—for achieving a profitable business [4, 9], along with how the Web might support each of them.
Customer relationship management (CRM) strategy. Marketing and selling products on the Web does not ensure a profitable business. Due to the high costs associated with adding new customers and losing existing ones, firms must gain and hold onto all they can. For the growth and sustainability of a firm, an effective CRM strategy should induce and manage long-lasting relationships with customers. This formulation requires an accurate prediction of the preferences of individual customers, so the right message is delivered to the right customer at the right time through the right media.
E-commerce leadership. Because B2C projects create opportunities for strategic innovation, experienced managers with strategic business vision first and technical skills second should be assigned to lead the project. An emerging option is to designate a chief e-commerce officer (CeCO) with strong decision-making authority over the intersection of corporate strategy and the e-commerce effort.1 The CeCO, together with the project steering committee, supports project managers, removes roadblocks beyond the control of the project team, and ensures involvement of all key users in project activities.
Development by internal IT staff is not cost-effective because it must reinvent what B2C vendors have already built and may face a long learning curve, increasing time to market for the site.
Step 2: Select B2C Development Methodologies
Development methodology. Like any complex software development, B2C project implementations must be methodical. Firms must follow a proven software development methodology to build their B2C sites. Some researchers [4] believe the systems development life cycle (SDLC) methodology is good for most B2C projects, especially if they are large-scale. Alternatively, other development methodologies (such as prototyping, joint application development, or JAD, and participatory design) could be used as substitutes for or supplements to SDLC [11]. Firms can select the right development methodologies by considering their specific environments; for example, prototyping could be used if a firm wants to establish an online presence quicker than its competitors, building a prototype instead of a full-fledged application. On the other hand, JAD can be used in the analysis phase of SDLC if a firm wants to collect systems requirements simultaneously from the key users of a B2C site [11].
We delineate our framework by assuming the use of the SDLC methodology for developing B2C sites because it is commonly used in B2C projects and provides comprehensive coverage ranging from project inception to final system deployment [4].
Step 3: Build and Maintain the Site
SDLC is the oldest methodology for building information systems (introduced in 1970) and is still used today for mid- and large-size system projects. It assumes that a systems development project consists of an ordered representation of its phases, from inception of a problem to operational life of the software solution (see Figure 2) [11]. For each of the methodology’s subphases, Table 2 outlines the corresponding CSFs that must be considered in B2C implementations.
Systems planning and selection. Firms benefit from using a formal process for initiating and planning the project:
Return-on-investment (ROI) analysis. In the early days of e-commerce, Web site success and failure were measured in broad strokes by corporate executives and investors alike. As e-commerce has matured, such measurement is no longer adequate for measuring site performance. Nowadays, firms must calculate the ROI of their B2C projects. Facilitating this calculation requires formulating good business plans with specific objectives for incremental benefits to be achieved (such as increased sales of goods) and incremental costs to be incurred (such as for hardware and software).
Project team. The team should be cross-functional, with representatives from all major functions affected by the B2C site, including those who understand the firm’s business and supporting strategies and those with knowledge about Internet technologies. Team members should be creative thinkers interested in taking the firm beyond its current boundaries.
Implementation plan. The complexity of a B2C project demands a good implementation plan to help the project team proceed systematically. The plan helps determine all the essential tasks to be performed, then schedule them, allocate project resources, assign responsibilities to individuals, identify project deliverables, assess project status, and estimate the effects of changes to any project variable. The plan should be a living document, evolving continuously to ensure it maintains its effectiveness.
Knowledge management. Frequent communication and knowledge sharing among team members are essential in both formal ways (such as project team meetings) and informal ways (such as chats in an office galley). These processes could be made more effective through a centralized project repository (containing such information as the project plan and deliverables) in the firm’s local area network. While team members simultaneously access the repository, the project manager can review the project deliverables described there for quality and completeness.
Systems analysis. This phase of SDLC helps determine how a particular system functions, then assesses what users would like to see in the new B2C site:
Requirements specification. B2C projects may involve external consultants and/or outsource service providers. Because these people may not initially understand a firm’s needs and customers, the firm must provide them sufficient information and supervision over their decisions. In particular, the in-house project team should actively participate in the specification of the systems requirements that serve as a blueprint for both the consultants and the outsource service providers.
Business process integration. Many firms operate in the marketplace under the divide-and-conquer concept, separating their business applications and creating functional specialists. Business theorists challenge this concept, arguing that, if a chain of processes is to be run effectively, its individual functions must be tightly linked with the other business processes around them. Thus, in the early stages of a B2C project, the firm should consider integrating orders from the B2C site to back-end systems [12]. Ideally, a B2C site should eliminate the gaps among ordering, distribution, and payment. The greatest benefits from a B2C site are attainable only if the firm stresses the enterprise over the application systems.
External consultants. Given the complexity of B2C projects, problems may arise that are beyond the knowledge and experience of the project team. If this happens, and depending on the nature of the problems, the project manager should seek assistance from two types of external consultants [10]:
- Organizational. For guidance on organizational structure, employee job design, communication strategies, training techniques, and incentive programs that support deployment of the B2C site; and
- Technical. For knowledge about operating systems and database systems and how these systems are linked to a B2C site; they are thus often able to help with new Internet technologies and standards.
Development approach. One straightforward approach is simply to buy a B2C package and deploy it. It will not, however, deliver an enterprise-class solution [5]. Another approach is to have the internal IT staff develop a B2C site entirely from scratch. We recommend against it for two main reasons: it is not cost-effective because the firm must re-invent what B2C vendors have already built, and the internal IT staff may face a long and difficult learning curve, thereby increasing the time to market for the site.
The Web is a competitive environment where firms can frustrate and lose customers through dysfunctional sites.
For a firm that lacks in-house expertise, outsourcing might help saves time and money for staff training and education.2 Another feasible approach is to use an e-commerce suite (such as IBM’s WebSphere Commerce Suite) that integrates development tools and back-end systems. The firm still needs to do part of the development of its B2C systems, but the e-commerce suite takes care of basic integration functions and provides database- and legacy-system adapters [5]. In general, the vendor selling the e-commerce suite also provides consulting services; its consultants know the suite well and, hence, are able to assist the in-house IT staff building and deploying the B2C site more efficiently.
Web site scalability. Along with the increasing popularity of B2C, customer demand and Web site traffic are also increasing. An underpowered and sluggish Web site inevitably results in lost customers. Therefore, firms must ensure that the platform they use to host their Web sites can be scaled up as needed.
Systems design. After identifying the business objects and systems functionalities, the firm must consider how to deliver them:
Web presence design. A B2C site provides services to customers through one or more Web pages that serve as the primary interface between the seller and the buyer. A Web visitor’s positive impression increases the likelihood of his or her being transformed into a buyer. The eight most important factors in successful Web presence design [4] (listed in Table 3) are useful guidelines for designing Web presence.
Web site personalization. An effective B2C site creates an element of personalization for each customer. By using cookie files and collecting personal information at user registration, as well as customer sales histories, the firm can create a marketing plan tailored to a particular customer. This one-to-one marketing approach can offer incentives that appeal to the customer’s sense of value and provide services that attract the customer back to the Web site. Moreover, the firm should be aware of the variety of communication channels (with bandwidths and data transmission speeds) connecting its Web visitors to the Internet. The B2C site should thus offer separate versions of the site—with and without frames—and give visitors the option of choosing one or the other.
Failure cases of B2C implementations during the dot-com craze continue to warn us that B2C projects are complex development tasks that are not easily managed.
Customer trust.3 B2C firms are automatically at a disadvantage due to their virtual nature. It is not unusual for Web visitors to ask: How do I know the product will be shipped to me? and How do I know my credit card information will be handled securely and in confidence? A B2C firm that successfully generates a perception of trustworthiness through the design of its Web presence is more likely to attract potential visitors to shop online. Three ways to generate a perception of trustworthiness are: use timely email and a Web site to keep customers informed of the status of their orders; formulate and post policies on information privacy and returned goods on the Web site; and use secure server technologies (such as the secure socket layer protocol, the secure HTTP protocol, and the secure electronic transaction protocol) to enhance customers’ sense of security [3].
Web site availability. Firms cannot afford site failover if they opt to function as a pure B2C business. To minimize the adverse effect of failover, two separate Web sites should be maintained: one live, the other permanently in hot standby. Fallback procedures should be established, documented, and tested. Under these arrangements and in the event of a complete loss of the live site, the hot standby site can be brought up quickly after the fallback decision is made. The firm should further consider implementing its Web servers with an automatic fallback capability. In addition, backup and recovery procedures should be tested and implemented to ensure the damaged Web site can be restored to its full operational capability as soon as possible.
Web site security.4 Web site security is one of the most important issues inhibiting potential customers from shopping online [2, 3]. A B2C site may house sensitive information about the firm and its customers that might be accessed by inside employees, as well as by outside hackers, if the site is not properly protected. Thus, the firm should identify the critical points in a B2C infrastructure at which data could be stolen and implement appropriate security measures (such as firewalls and multiple levels of intrusion detection).
Systems implementation and operation. This phase helps build and test the B2C site, requiring the firm monitor and maintain it in accordance with the business environment.
Testing and quality assurance. Both before and after B2C sites are made publicly available, they must be tested for bugs and for quality assurance. Along with IT people, key users of the site should participate in testing, particularly in acceptance testing. Testing normally covers several things: hyperlinks and navigation; the site search engine; components and special functions; design and content of Web pages; speed of loading Web pages; and additional load testing, script testing, and database connection testing [6].
Knowledge transfer and documentation. External consultants and outsource service providers may be able to gain, then leave with, firsthand knowledge of how to maintain and update the B2C site when the project is completed. The firm must therefore transfer knowledge from these people to the in-house project team and ensure that documentation is complete. Both tasks are largely viewed as housekeeping chores that are easily and regularly overlooked.
User training. Users may not always understand the extent to which changes might alter a B2C implementation. Users may also worry about their ability to learn the new way of doing business. Training helps. The firm’s key users, as well as the project team members, should lead the training effort, looking to promote the buy-in of other users, who will see that people like themselves have learned how to use the functionality of the B2C site to do their jobs [10].
Web site monitoring and adaptation. The Web is a competitive environment where firms can frustrate and lose customers through dysfunctional sites. Therefore, the long-term success of a B2C site depends on a dedicated Web team whose primary responsibility is to monitor and adapt the site to changing market conditions [4]. The Web team should include IT people, as well as users from various functions affected by the site. The Web team has several responsibilities: listening and responding to customer feedback on the Web site; regularly monitoring and testing the site to ensure that all its links are operating, its prices are correct and its Web pages up to date; and benchmarking the site against the sites of competitors in terms of response speed and quality of layout and design.
Step 4: Audit the Site
Post-implementation audit. A formal review of the project performed after a B2C site is launched allows the firm to examine whether its business and CRM strategies (defined in Step 1) and the project’s specific business objectives (defined in the ROI analysis in Step 3) have been met. The audit allows the project team and users alike to ask questions about the project’s objectives and provide feedback on the strategies established at the project’s initial stages. The feedback is especially useful for planning future projects.
Conclusion
Despite the promise of B2C, firms must still produce good Web sites to take advantage of it. Unfortunately, repeated failure cases of B2C implementations during the dot-com craze continue to warn us that B2C projects are complex development tasks that are not easily managed. A B2C implementation framework must be able to help firms overcome implementation obstacles. Here, we have introduced our own B2C implementation framework—PRESENT—to serve this need. PRESENT gives firms a better chance of building enterprisewide B2C sites and becoming business winners in their markets.
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