Cost Benefit Analysis

Cost Benefit Analysis

Costs

This is a case study trying to assess the feasibility of an e-commerce website. The study will analyse the costs and the benefits which are due to the implementation of the website in the membership society. The website will capture applications mad online; payment made online members details and the documentations sent.

The costs of technology include the high-speed Internet connection, a web server and the software. Other significant costs include the cost of the payment system. The firm may consider hiring a third-party payment system like PayPal or use an online bank. The costs also include the number of programmers who will be used to create the website and the functional requirements. PayPal is the most cost-effective way at the price of $13 per month.

For the e-commerce website to be successful e-business specialist will be required to provide consultancy services for the implementation of the website. The implementation will require three experts in a period of six months at the cost of $40 per person. The website will require maintenance costs and running cost for the change process. The employees will have to be trained on how to adapt to the new technology this will help to make the strategies as straightforward and swift as possible. The company will have to address the issue of change management; this will enable the company to maximize its effectiveness on the internet successfully.

Benefits

The e-commerce website will result to reduced lead-time to receive payments for membership within the same day compared to the 10 to 14 days delay. Payment is made online and once the transaction is done a documentation is sent to the member via the email. This will save the company printing and postage cost. The internet will increase the membership of the firm. The volume of the members will lead due to the easy accessibility this in return will increase the revenues. The estimated revenue increase is 37% from the current $ 123000

The website will have non-financial benefits which include, increased and efficient communication; the direct mail marketing allows flexibility of sending the member’s information day and night. The website will enhance transparency; members will be able to know the latest developments through the information management website. Lastly, the internet will lead to exposure of the firm it will make the firm a global brand for it removes the physical boundaries of the customer base.

Risk Analysis

The company should put careful considerations when prospective members are signing up for the membership. This is because they are providing personal data. This data includes member’s names, addresses and credit cards details. During the implementation of the system, the firm should consider registering for the data protection act 1998. This will help to prevent cyber security issues with the member’s information.

Secondly, failure of the firm to embrace this new e-commerce website may lead to it being obsolete to the current market. The market trends are changing, and the majority of the competitors are going to the online based system top increase their customer base and keeping up with the technological changes in the market. The firm has to change to the technology or else it will be phased out.

A 100% increase in sales by the organization will lead to an increased total membership and the renewal of the old membership tickets. This will help the firm to run its activities with less ease and compete effectively. The company will invest more to ensure it establishes itself as a solid global brand in the market.

If the server goes down, the database management team will isolate the services that are affected. The server will be diagnosed and fixed in the minimum time possible. A business recovery plan has been established to take care of the down time when the servers are affected

When the system gets hacked or compromised, a security recovery plan has been set up to respond to the issue effectively. The first step is to check and find out what happened, the data that is compromised or affected, seek a cyber-security insurance, often communicate and early to the members and work out to eliminate if not reduce the damage caused by the data breach. The system will then be rebuild and the security plan redeveloped.