Design and implementation of an e-commerce site

Executive Summary

This proposal covers the design and implementation of an e-commerce site that will sell Acme products online. The proposed system will be capable of reaching customers around the world and offer them real-time transaction processing.

The proposed system will be accessible to customers through a web browser. For employees, the interface will be implemented through both a web browser and also by adapting interfaces on existing systems that the proposed system will be integrated with.

To make the system cost-effective, open source software will be used when possible. The development approach will be modular to enable a scalable system and to also allow many of the development tasks to be performed in parallel with other tasks.

The recommended system will be the one proposed in this document. If it is decided that the proposed system will not be used, and alternative option using EBay is recommended.

Case Overview

Acme Widgets is planning on launching an online store that will offer customers the option to make purchases online using a shopping cart. This proposal will cover all aspects of developing and implementing this system. The aim is to provide Acme Widgets with all of the information they need to be successful in bringing their store to the Internet.

Developing the Problem Statement

The widget industry is very competitive. It is important that Acme Widgets stay competitive by differentiating ourselves from our competitors. By providing customers with a fast and convenient way to order Acme products, Acme will increase business from existing customers as well as attract new customers.

For this to be successful, it must be adopted by both the customer and Acme employees who will be using it to perform their job, which means the system must not only function properly but be designed with them in mind.

Information Gathered

To get an idea of the company culture, how tasks are performed and what Acme customers would expect, interviews were conducted. An employee was selected from each department for an interview. Existing customers were asked to fill out a questionnaire.

Employee Interviews

The first employee interviewed was Don Smith from Inventory. The interview consisted of three questions with the goal of determining if the e-commerce system would require a redesign of the inventory and logistics system or if integrating the e-commerce system with the existing inventory and logistics system would be more feasible.

Q: What type of software do you use for managing inventory?

A: We use some custom software that was designed in-house.

Q: Does the current system have an API or any other support for integration with other systems?

A: Yes, it does have an API as well as support for EDI.

Q: Are you pleased the system?

A: We had a lot of input during the design of the system so we are very happy with it.

The next employee that was interviewed was Pamela Johnson from Customer Service. The goal of this interview was to get an idea of how customers are served to make sure the new system would be able to provide the same level of service.

Q: What is Acme's return policy?

A: Any item to be returned must be received by within thirty days of purchase. The returned item must also be shipped with the receipt.

Q: Once an item is returned what is the procedure?

A: The returned item goes to Customer Service where a refund is issued and then the item goes to inventory where they scan the bar code and put it back into inventory.

Q: How do you handle customer complaints?

A: All customer complaints go through Customer Service where the appropriate action is taken and the complaint is then entered into a database.

The last employee to be interviewed was John Adams from Sales. The goal of interviewing John was to find out how products are promoted and gain some insight into how

Acme attracts customers.

Q: Could you give me some examples of how you promote Acme products?

A: We send out mailers and we also do email campaigns with customers who have consented to receiving promotional email from us.

Q: Is there anything you would like to see in the online store?

A: I would like to get a better picture of how our customers shop. Get a better understanding of their behavior.

Customer Questionnaire

To get a better understanding of what Acme's customers are looking for, a group of 50 customers were asked to fill out a questionnaire with a rating scale of 1-5 for some questions and other questions having a yes or no option. The results are as follows.

Would you prefer to buy products from Acme online rather than mail order?

Yes – 39

No – 11

Do you have an email address?

Yes – 46

No - 4

On a scale from 1- 5, with 5 being excellent, how would you rate the service you have received from Acme in the past?

Average – 4

Analysis

Acme is a small business of 20 employees and is a flat organization so everyone is somewhat of a decision maker. Employees communicate is through both email and verbal conversation. The office environment is laid back and the dress is casual.

Feasibility

The employees were very open to the proposed system. The overall feeling was that it was necessary to stay competitive and wanted to take part in making it successful.

Since the current inventory system was designed in-house, modifications will be possible if necessary. Any modifications needed will be minimal. Customer service currently enters orders into the inventory system when they are received. The proposed system could be integrated with the current processes by notifying customer service of orders via email. The proposed system is feasible due to the attitudes of employees and the ability to easily integrate it with existing systems and processes.

Assumptions

To get a feeling of the economic effect the proposed system will have on the company, economic trends and future growth need to be considered. Break-Even Point and Cash Flow analysis were conducted as another way to measure the economic impact the system will have on the company.

Trends

Customer satisfaction is an important part of e-commerce. Even if launching an ecommerce site does not represent a departure from what Acme's competitors are doing, it will provide a way to better serve its customers. According to University of Michigan researchers, ecommerce business made their customer happier than competitors that did not conduct business online (“Five E-commerce Trends” 2002).

Economics

In today’s competitive market, it is important to be able to introduce new products faster than ever. Waiting for catalog printing and mailing cycles can be too long. An e-commerce site will enable Acme to make products available for purchase before they are in inventory. A database of registered users will also allow Acme to notify consenting customers of new products or products in development.

Growth

The proposed system is expected to bring in 200 orders a day once it has been implemented. Half of these orders are expected to be from customers that would have placed their order over the phone had the e-commerce site not been available. The other 100 orders will most likely be new business that was made possible by the proposed system.

Break-Even Point

The proposed system will bring costs that did not exist before but it is estimated that the benefits will cover those costs after two years. As the table below shows, after the first year, the benefits of $104,000 will cover the development cost along with ongoing cost of the system.

Year

Cost ($)

Cumulative Costs ($)

Benefits ($)

Cumulative Benefits

($)

0

50000

50000

0

0

1

5000

55000

104000

104000

2

5600

60600

120000

224000

3

6000

66600

121000

345000

4

7000

73600

118000

463000

5

7500

81100

127000

590000

Cash Flow Analysis

To get a better idea of how the system will affect probability on a quarterly basis, a Cash Flow Analysis was performed and is show in the table below. After the second quarter, the system will start to generate a profit.

Year 1

Year 2

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Quarter 1

Revenue ($)

20000

23000

29000

32000

32000

Costs ($)

Development

50000

1000

0

0

0

Equipment lease

550

550

550

550

800

Maintenance

400

500

550

350

400

Total Costs ($)

50950

2050

1100

900

1200

Cash Flow ($)

-30950

20950

27900

31100

30800

Cumulative

Cash Flow ($)

-31200

-10250

17650

48750

79550

Discussion of Case Study

To meet the requirements of Acme, the proposed system must be designed properly from the ground up. The first area covered is input/output design.

Input/Output Design

The input data screens will include customer registration, customer login and employee login. Employee registration will not be necessary since an account will be setup when an employee is entered into the human resources system. All of the screens will be accessible through a browser.

The customer registration screen will be a web form that contains input fields for their first name, last name, address, phone number, email address and password. Below the input fields, there will be a submit button. The customer login screen will have input fields for their email address, which will be their username, and their password. A submit button will be at the bottom of the screen.

The employee login screen will contain an input field for their employee identification number.

Output screens for customers will include a customer receipt and email purchase confirmation. Employees will have access to transaction records and customer details reports.

Data Dictionary

The data dictionary contains all of the data elements to be used in the system. The data elements in the proposed system are product record, purchase record and customer record.

Product Record

=

Product Number +

Product Name +

Product Manufacturer+

Product Price +

Product Description+

(Product Image)

Purchase Record

=

Purchase Number +

Customer Number +

Credit Card Number +

{Product Number}

Customer Record

=

Customer Number +

First Name +

Last Name +

Phone Number +

Address +

Email Address +

Password

Normalization

To make the proposed system efficient and manageable, all data will be stored in a relational database and will be in third normal form. The structure of the data table will be as follows.

Customer (Customer-Number, First-Name, Last-Name, Phone, Email, Password)

Purchase (Purchase-ID, Purchase-Number, Customer-Number, Credit-Card,

Product-Number)

Product (Product-Number, Product-Name, Product-Manufacturer, Product-Price,

Product-Description, Product-Image)

Hardware and Software Specifications

The system will run on a web server and will require the capacity to handle 1000 visitors a day of which 200 will place orders. To meet this requirement, the following hardware is recommended:

  • Dual Intel XeonE 3.0 GHz
  • 2048 MB DDR2-400 ECC RAM
  • Dual 250 GB SATA RAID1 HDDs

To reduce costs without sacrificing performance or dependability, the system will run on a stack of open source software:

  • Operating System – Mandrake Linux
  • HTTP Server – Apache
  • Server-Side Script Processor – PHP
  • Database – MySQL
  • Securing Transactions – OpenSSL

Testing

The system will be created using a modular approach. This will make debugging an easier process since most errors will be caught before the modules are put together. Testing the system will be performed at server points in the development process. As each module is being developed, the developer will program test with test data. Once all of the modules are complete, link testing will be performed to make sure they all work together. The final stage of test will be performed once the system is up and running. This testing phase will first use test data and then live data.

Implementation

Once the system has been tested, the customer-facing portion of the system will be moved to a live web server where customers can access it. Since the testing involved live data, the internal portion of the system will already be in place for employees to use.

User manuals for customers will be available in the form of FAQs and a procedural manual on the website. The procedure manual for employees will be placed on the company’s intranet and will be accessible through a web browser.

System Documentation

The system documentation will consist of several crucial elements so that any fixes or updates can be performed as efficiently as possible. All classes will be documented using UML. There will also be data flow diagrams to illustrate how the system handles transactions.

Conclusions and Recommendations

When choosing whether or not to develop the proposed system, there will be many different business factors to consider. The information contained in this proposal is intended to make this decision easier.

The recommended system is the one described in this proposal which consists of an internal order processing system and newly designed online store where customers can shop. If it is decided that the proposed system is not feasible, an alternative recommendation would be to utilize EBay as a storefront to sell Acme's products. EBay provides a list of seller tools that could be utilized for order processing. This option will be cheaper initially but may contain higher future costs.

Appendix of Supporting Documents

Design and implementation of an e-commerce site Image 1

Figure A. Organizational Chart

Design and implementation of an e-commerce site Image 2

Figure B. Gantt Chart of Project Plan

Design and implementation of an e-commerce site Image 3

Figure C. Data Flow Diagram

Design and implementation of an e-commerce site Image 4

Figure D. Entity-Relationship Diagram

References

Five E-Commerce Trends To Watch. (2002). Retrieved June 19, 2006 from http://www.ecommercetimes.com/story/16967.html