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Chapter 3

Building an E-commerce Presence

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Learning Objectives
3.1 Understand the questions you must ask and answer, and the steps
you should take, in developing an e-commerce presence.
3.2 Explain the process that should be followed in building an e-
commerce presence.
3.3 Identify and understand the major considerations involved in
choosing web server and e-commerce merchant server software.
3.4 Understand the issues involved in choosing the most appropriate
hardware for an e-commerce site.
3.5 Identify additional tools that can improve website performance.
3.6 Understand the important considerations involved in developing a
mobile website and building mobile applications.
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3.1 Imagine Your E-commerce Presence (1

of 4)

• What’s the idea? The vision includes:

– Mission statement
– Target audience
– Intended market space
– Strategic analysis
– Marketing matrix
– Development timeline
– Preliminary budget
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3.1 Imagine Your E-commerce Presence (2

of 4)

• Where’s the money?

– Business model(s)
– Revenue model(s)
• Who and where is the target audience?
– Demographics, lifestyle, consumption patterns, etc.
• What is the ballpark? Characterize the marketplace
– Size, growth, demographics, structure
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3.1 Imagine Your E-commerce Presence (3

of 4)

• Where’s the content coming from?

Static content is text and images that do not frequently
change, such as product descriptions, photos, or text that
you create to share with your visitors
Dynamic content is content that changes regularly, can be
created by you, or by bloggers and fans of your website
and products.
• Know yourself-SWOT analysis (Figure 4.1)
• Develop an e-commerce presence map (Figure 4.2)
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Figure 4.2 E-commerce Presence Map

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3.1 Imagine Your E-commerce Presence (3

of 3)

• Develop a timeline: Milestones (Table 4.1)

• How much will this cost? (Figure 4.3)
– Simple website: up to $5000
– Small startup: $25,000 to $50,000
– Large corporate website: $100,000+ to millions
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3.2 Building an E-commerce Site: A

Systematic Approach
• Most important management challenges:
1. Developing a clear understanding of business objectives
2. Knowing how to choose the right technology to achieve
those objectives
• Main factors to consider
– Management
– Human resources
– Hardware architecture
– Software
– Design
– Telecommunications
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Planning: The Systems Development

Life Cycle (SDLC)
• Methodology for understanding business objectives of a
system and designing an appropriate solution
• Five major steps:
– Systems analysis/planning
– Systems design
– Building the system
– Testing
– Implementation
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System Analysis/Planning
• Business objectives:
– List of capabilities you want your site to have
• System functionalities:
– List of information system capabilities needed to
achieve business objectives
• Information requirements:
– Information elements that system must produce in
order to achieve business objectives
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Table 4.2 System Analysis, Business Objectives,
System Functionalities, and Information
Requirements for a Typical E-commerce Site (1 of 2)

Business Objective System Functionality Information Requirements

Display goods Digital Catalog Dynamic text and graphics catalog
Provide product Product database Product description, stocking numbers,
information inventory levels
Personalize/customize Customer on-site tracking Site log for every customer visit; data mining
product capability to identify common customer paths
and appropriate responses
Engage customers in On-site blog; user forums Software with blogging and community forum
conversations functionality
Execute a transaction Shopping cart/payment Secure credit card clearing; multiple payment
system options
Accumulate customer Customer database Name, address, phone, and e-mail for all
information customers; online customer registration
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Table 4.2 System Analysis, Business Objectives,
System Functionalities, and Information
Requirements for a Typical E-commerce Site (2 of 2)

Business Objective System Functionality Information Requirements

Provide after-sale Sales database Customer ID, product, date, payment, shipment
customer support date
Coordinate Ad server, e-mail server, Site behavior log of prospects and customers
marketing/advertising e-mail, campaign linked to e-mail and banner ad campaigns
manager, ad banner
manager
Understand marketing Site tracking and reporting Number of unique visitors, pages visited,
effectiveness system products purchased, identified by marketing
campaign
Provide production Inventory management Product and inventory levels, supplier ID and
and supplier links system contact, order quantity data by product
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Systems Design: Hardware and

Software Platforms
• System design specification:
– Description of main components of a system and their
relationship to one another
• Two components of system design:
– Logical design
▪ Data flow diagrams, processing functions, databases
▪ A description of the security and emergency backup
procedures and the controls that will be used in the system.
– Physical design
▪ The specific model of server, the software to be used, the size
of the telecommunications link, the way the system will be
backed up and protected from outsiders, and so on.
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Figure 4.6(a) A Logical Design for a

Simple Website
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Figure 4.6(b) Physical Design for a

Simple Website
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Building the System: In-House Versus

Outsourcing
• Outsourcing: Hiring outside vendors to provide services
involved in building site
• Build own v s. outsourcing:
ersu

– Build your own requires team with diverse skill set;

– Choice of software tools (Figure 4.8);
– Both risks and possible benefits
Risks: the costs are high; the efforts could fail; If you
choose more expensive site-building packages, you will
have to evaluate and modify many different packages, and
this can take a long time and increase the cost.
Benefits: a site is exactly what you want; develop the in-
house knowledge to allow you to change the site rapidly
due to a changing business environment.
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Building the System: In-House Versus

Outsourcing
• Host own v s. outsourcing
ersu

– Hosting: Hosting company is responsible for ensuring site is

accessible 24/7, for monthly fee
– Co-location: Firm purchases or leases web server (with
control over its operation), but server is located at vendor’s
facility. The vendor maintains the facility, communications
lines, and the machinery.
– Cloud services are rapidly replacing co-location because
they are less expensive. The firm does not own the
hardware.
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Figure 4.7 Choices in Building and

Hosting
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Testing the System

• Testing
– Unit testing: testing the site’s program modules one at a
time
– System testing: testing the site as a whole
– Acceptance testing: it requires that the firm’s key personnel
and managers actually use the system as installed on a test
Internet or intranet server. The test verifies the business
objectives of the system
– A/B testing (split testing): showing two versions (A and B) of
a web page or website to different users to see which one
performs better.
– Multivariate testing：identify specific element, or variables,
on a web page. Multivariate testing enables designers to
identify the most optimal layout, color, content, and format.
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Implementation, Maintenance, and

Optimization
• The operational life of a system is just beginning
• Systems break down unpredictably and maintenance is
ongoing
• Maintenance costs: Similar to development costs
– A $40K e-commerce site may require $40K annually
to maintain
• Benchmarking：the site is compared with those of
competitors in terms of response speed, quality of layout,
and design.
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Alternative Web Development

Methodologies
• Prototyping
• Agile development
• DevOps
• Component-based development
• Web services
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3.3 Choosing Software

Simple v s Multi-Tiered Website
ersu

Architecture
• System architecture
– Arrangement of software, machinery, and tasks in an
information system needed to achieve a specific
functionality
• Two-tier
– Web server and database server
• Multi-tier
– Web server layer
– Middle-tier layer (Web application servers)
– Backend layer
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Figure 4.10(a) Two-Tier E-commerce

Site Architecture
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Figure 4.10(b) Multi-Tier E-commerce

Site Architecture
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Web Server Software

• Apache
– Leading web server software
– Works with UNIX, Linux operating systems
– Reliable, stable and free
• Microsoft’s Internet Information Server (IIS)
– Second major web server software
– Windows-based
– Integrated, and easy-to-use
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Table 3.11 Basic Functionality Provided

by Web Server Software
Functionality Description
Processing of HTTP requests Receive and respond to client requests for HTML
pages
Security services (Secure Verify username and password; process certificates
Sockets Layer)/ Transport Layer and private/public key information required for credit
Security card processing and other secure information
File Transfer Protocol Permits transfer of very large files from server to
server
Search engine Indexing of site content; keyword search capability
Data capture Log file of all visits, time, duration, and referral
source
E-mail Ability to send, receive, and store e-mail messages
Site management tools Calculate and display key site statistics, such as
unique visitors, page requests, and origin of
requests; check links on pages
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Site Management Tools

• Basic tools included in all web servers
– Verify that links on pages are still valid
– Identify orphan files
• Third-party software for advanced management
– Monitor customer purchases
– Marketing campaign effectiveness
– Keep track of hit counts and other statistics
– Example: Webtrends Analytics 10
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Dynamic Page Generation Tools

• Dynamic HTML (DHTML): used to change a way a web
page looks but does not generate a unique web page
• Dynamic page generation:
– Contents of e-commerce site stored in database;
when the user requests a web page, the contents for
that page are then fetched from the database
• Common tools:
– JSP, ASP, ODBC, JDBC
• Advantages
– Lowers menu costs
– Permits easy online market segmentation
– Enables cost-free price discrimination
– Enables web content management system (WCMS)
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Application Servers
• Web application servers:
– Provide specific business functionality required for a
website
– Type of middleware
▪ Isolate business applications from Web servers
– Single-function applications being replaced by
integrated software tools that combine all functionality
needed for e-commerce site
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E-commerce Merchant Server Software

(E-commerce Software Platforms) (1 of 3)
• Provides basic functionality for sales
– Online catalog
▪ List of products available on website
– Shopping cart
▪ Allows shoppers to set aside, review, edit selections, and
then make purchase
– Credit card processing
▪ Typically works in conjunction with shopping cart
▪ Verifies card and puts through credit to company’s account
at checkout
• Integrated environment that provides most or all of the
functionality and capabilities needed to develop a sophisticated,
customer centric site
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Merchant Server Software Packages

(E-commerce Software Platforms) (2 of 3)
• Different options for different-sized businesses
– Small and medium-sized businesses: Shopify;
WordPress (WooCommerce), Wix, Square, Weebly,
Squarespace, Bigcommerce, open-source solutions
– Mid-range: HCL Commerce; Sitecore Experience
Commerce
– High-end: SAP Commerce, Oracle ATG Web
Commerce, Adobe Commerce
• Many now also available as cloud-based SaaS solutions.
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Merchant Server Software Packages

(E-commerce Software Platforms) (3 of 3)
• Key factors in selecting a package
– Functionality
– Support for different business models, including m-
commerce
– Business process modeling tools
– Visual site management and reporting
– Performance and scalability
– Connectivity to existing business systems
– Compliance with standards
– Global and multicultural capability
– Local sales tax and shipping rules
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3.4 Choosing Hardware

• Hardware platform:
– All the underlying computing equipment needed for e-
commerce functionality
• Objective:
– Enough platform capacity to meet peak demand
without wasting money. Failing to meet peak demand
can mean your site is slow, or actually crashes.
• Important to understand the factors that affect speed,
capacity, and scalability of a site
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Right-Sizing Your Hardware Platform:

the Demand Side
• The most important factor affecting speed of site is the demand
customers put on the site
• Factors in overall demand:
– Number of simultaneous users in peak periods
Stateless：web session initiated by the typical user. The
server does not have to maintain an ongoing interaction
with the client
I/O intensive：Serving up static web pages is I/O intensive.
Website performance is constrained primarily by the server’s
I/O limitations and the telecommunications connection,
rather than the speed of the processor
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Right-Sizing Your Hardware Platform:

the Demand Side
• Factors in overall demand:
– Nature of customer requests (user profile)
– Type of content (dynamic v s static Web pages)
ersu

– Required security
– Number of items in inventory
– Number of page requests
– Speed of legacy applications
 Right-Sizing Your Hardware Platform: 42

the Supply Side

• Scalability:
– Ability of site to increase in size as demand warrants
• Ways to scale hardware:
– Vertically(Table 4.6)
▪ Increase processing power of individual components
▪ Two drawbacks: expensive; The entire site becomes
dependent on a small number of very powerful
computers.
– Horizontally(Table 4.6)
▪ Employ multiple computers to share workload
▪ Advantages: inexpensive; redundancy
▪ Disadvantage：the size of the physical facility increases
– Improve processing architecture(Table 4.7)
▪ A combination of vertical and horizontal scaling
▪ Splitting the workload into I/O-intensive activities (such as serving
web pages) and CPU-intensive activities (such as taking orders).
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Table 4.6 Vertical and Horizontal

Scaling Techniques
Technique Application
Use a faster computer Deploy edge servers, presentation servers, data
servers, etc.
Create a cluster of computers Use computers in parallel to balance loads.
Use appliance servers Use special-purpose computers optimized for their
task.
Segment workload Segment incoming work to specialized computers.
Batch requests Combine related requests for data into groups,
process as group.
Manage connections Reduce connections between processes and
computers to a minimum.
Aggregate user data Aggregate user data from legacy applications in
single data pools.
Cache Store frequently used data in cache rather than on
the disk.
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Table 4.7 Improving the Processing

Architecture of Your Site
Architecture Improvement Description
Separate static content from Use specialized servers for each type of workload.
dynamic content
Cache static content Increase RAM to the gigabyte range and store
static content in RAM.
Cache database lookup tables Use cache tables used to look up database
records.
Consolidate business logic on Put shopping cart, credit card processing, and
dedicated servers other CPU-intensive activity on dedicated servers.
Optimize code Examine your code to ensure it is operating
efficiently.
Optimize the database schema Examine your database search times and take
steps to reduce access times.
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3.5 Other E-commerce Site Tools

• Website design: Basic business considerations
– Enabling customers to find and buy what they need at the
site, make a purchase and leave (Table 4.8 and 4.9)
• Tools for search engine optimization
– Search engine placement
▪ Metatags, keywords, titles, content: prepare pages with
keywords that accurately describe what you say you do
in your metatag site
▪ Offer expertise: users can get help and guidance
▪ Links: encourage other sites to link to your site
▪ Buy ads: paid search engine keywords and ads
▪ Local e-commerce: use keywords that connote your
location so people can find you nearby
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Table 4.8 E-commerce Website Features

That Annoy Customers (1 of 2)
Features
• Requiring user to view ad or intro page before going to website content
• Pop-up and pop-under ads and windows
• Too many clicks to get to the content
• Links that don’t work
• Confusing navigation; no search function
• Requirement to register and log in before viewing content or ordering
• Slow loading pages
• Content that is out of date
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Table 4.8 E-commerce Website Features

That Annoy Customers (2 of 2)
• Inability to use browser’s Back button
• No contact information available (web form only)
• Unnecessary splash/flash screens, animation, etc.
• Music or other audio that plays automatically
• Unprofessional design elements
• Text not easily legible due to size, color, format
• Typographical errors
• No or unclear returns policy
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Table 4.9 The Eight Most Important Factors

in Successful E-commerce Site Design

Factor Description
Functionality Pages that work, load quickly, and point the customer toward
your product offerings
Informational Links that customers can easily find to discover more about
you and your products
Ease of use Simple foolproof navigation
Redundant navigation Alternative navigation to the same content
Ease of purchase One or two clicks to purchase
Multi-browser Site works with the most popular browsers
functionality
Simple graphics Avoids distracting, obnoxious graphics and sounds that the
user cannot control
Legible text Avoids backgrounds that distort text or make it illegible
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Tools for Interactivity and Active

Content
• CGI (Common Gateway Interface)
• Java, JSP, and JavaScript (including Angular JS, D3,
jQuery and Ajax)
• ASP (Active Server Pages)/ASP.NET
• ColdFusion
• PHP, Ruby on Rails, Django
• Other design elements:
– Widgets, mashups
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Personalization Tools
• Personalization: ability to treat people based on personal
qualities and prior history with site
– Website personalization alters site based on who is
viewing it
• Customization: ability to change the product to better fit the
needs of the customer
– E-commerce customization focuses on generating
personalized product recommendations
• Cookies a basic method to achieve personalization
• Other more sophisticated tools available
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The Information Policy Set

• Privacy policy
– Set of public statements declaring how site will treat
customers’ personal information that is gathered by
site
• Accessibility rules
– Set of design objectives that ensure users with
disabilities can effectively access site
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3.6 Developing a Mobile Website and

Building Mobile Applications
• Types of m-commerce software
– Mobile website: version of a regular desktop website that is
scaled down in content and navigation
– Native app: an application designed specifically to operate
using the mobile device’s hardware and operating system.
– Mobile Web app: an application built to run on the mobile
web browser built into a smartphone or tablet computer, e.g.
Safari
– Hybrid app
▪ Combining elements of native apps and mobile web
apps
▪ Like a native app: Runs inside native container on the
mobile device; App for distribution from an App store
▪ Like a mobile web app: Based on HTML5, CSS3,
JavaScript
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Planning and Building a Mobile

Presence
• Identify business objectives, system functionality, and
information requirements (Table 4.10)
• Choice:
– Mobile website or mobile Web app
▪ Less expensive
– Native app
▪ Can use device hardware, available offline
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Planning and Building a Mobile

Presence
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Mobile Presence Design Considerations

Table 4.13 Unique Features That Must be Taken into

Account When Designing a Mobile Presence

Feature Implications For Mobile Platform

Hardware Mobile hardware is smaller, and there are more resource
constraints in data storage and processing power.
Connectivity The mobile platform is constrained by slower connection
speeds than desktop websites.
Displays Mobile displays are much smaller and require simplification. Some
screens are not good in sunlight.
Interface Touch-screen technology introduces new interaction
routines different from the traditional mouse and keyboard.
The mobile platform is not a good data entry tool but can
be a good navigational tool.
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Mobile Presence Design Considerations

• Platform constraints
– Graphics, file sizes
• Mobile first design
– Desktop website design after mobile design
– Advantages: mobile first design focuses on creating the
best possible experience given mobile platform
constraints and then adding back elements for the
desktop platform; focus on what is most important, and
this helps create an efficient mobile design.
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Mobile Presence Design Considerations

• Responsive web design (RWD)
– automatically adjusts its layout and display according
to the screen resolution (whether a desktop, tablet, or
smartphone)
– HTML5 and CSS3
– Costly; slow to load and perform on a mobile device
• Adaptive web design (AWD)
– Server-side technique that detects the attributes of the
device making the request, and using predefined
templates based on device screen size along with CSS
and JavaScript, loads a version of the site that is
optimized for the device
– Faster load times, the ability to enhance or remove
functionality on the fly, and typically a better user
experience
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Cross-Platform Mobile App

Development Tools
• Objective C, Java
• Low cost, open-source alternatives
– Flutter
– React Native
– Appery.io
– Codiqa
– Swiftic
– PhoneGap
– Axway Appcelerator
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Mobile Presence: Performance and

Cost Considerations
• Mobile first design (If you don’t have an existing website)
– Most efficient
• Mobile website (If you already have a website )
– Resizing existing website for mobile access is least
expensive
• Mobile web app
– Requires more effort and cost than developing a mobile
website
– Better graphics, more interactivity
• Native app
– Most expensive; requires more programming
– Unique customer experience