E- commerce Applications

SystemTech organizationThe current organizational structure of the company is shown in Figure 1.1. The three founders have divided the business among themselves. Emeka Steven (who has a sales background) looks after the sales and operations side, Daniel Okw, an accountant, takes care of finance and administration and Ric Nelson who is a lawyer and experience in IT takes care of the IT and company’s legal matters. The small IT department within the administration function consists of the IT manager, Peter Clay, three analyst/programmers and a computer operator/trainee programmer.Figure 1.1 Organization of SystemTechThe projectBecause of the small size of its IT department, and since the department lacks skills in the design of e- commerce applications, SystemTech has decided to entrust the development of its internet service to a consultancy company, Eagles iTechnology. This firm has tendered for the following services:• Analysis of the requirements.• Production of a detailed requirements specification.• Design, development and implementation of the internet systems, including a new website and secure communications links.• Training SystemTech staff in the use of the new systems.• Specification of the interfaces required from SystemTech’s existing customer database and booking system (the development of the links at the SystemTech end to be done by its own IT department).• Specification of the additional hardware required to support the new system (to be obtained from SystemTech’s usual suppliers, the procurement to be managed by the IT department).• ‘Skills transfer’ to SystemTech’s IT department, so that ongoing maintenance and development of the new system can be handled in-house. The development of the MIS aspects of the new system will be dealt with by SystemTech’s IT department.The date now is 1 November 2020 and SystemTech wants to have the new system up and running for the start of the winter season’s bookings at the end of June 2021.The internet booking project is a result of a recent strategic review of SystemTech undertaken by its senior managers – the three directors and their direct reports. The SWOT analysis showed that SystemTech has a good reputation in its marketplace and a lot of ‘brand recognition’ by its target market. However, this target market (reasonably affluent professionals) does make extensive use of the internet and it was felt that being unable to offer this service would increasingly become a weakness. At least one of SystemTech’s competitors already has an internet booking service (albeit not a very good one) and others are sure to follow soon. Applying the internet to SystemTech’s position using Porter’s five forces model also produced some interesting results. The internet tends to increase the power of buyers (as they can shop around more easily) and lowers the cost of entry for new competitors. In addition, the suppliers (the owners of the gîtes and chalets) can also set up their own websites, thereby cutting out brokers like SystemTech and increasing their own relative power. The conclusion of the strategy review was, therefore, that not setting up an internet service was not a viable option. Also, since the competitors’ sites were not very good at present, it was felt that creating a very good and user-friendly site would provide a source of competitive advantage (at least in the short to medium term).The SWOT analysis conducted by SystemTech has already shown that not having an internet service is not a viable scenario, since so many of the company’s customers now regularly use the internet. However, the issue still arises as to how much it would be worth investing in the project, and this means that the company has had to develop a business case for undertaking the internet development. Ric Nelson, as the accountant, has undertaken production of the business case and he has identified three main business options that could be considered:1. Building an internet booking system for SystemTech and interfacing that with the company’s existing systems.2. Building a standalone internet system and operating the internet booking as, in effect, a separate subsidiary business.3. Finding a partner organization with an internet booking system and interfacing SystemTech’s system with that.