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Chapter 1 Introduction to e-business and e-commerce 15

5 Reduced or eliminated processing, 93%
6 Easier organizational publishing, 92%.
It is apparent that benefits focus on information delivery, suggesting that management of infor-
mation quality is a key to successful use of intranets. Notice that cost saving is not referred to
directly in the list of benefits. Direct cost reduction can be achieved through reduced cost of
printing and indirectly though reduced staff time needed to access information. However,
intranets represent a substantial investment, so careful consideration of the return on investment
is required. David Viney, who has managed implementation of intranets at Pricewaterhouse-
Coopers, British Airways and Centrica PLC estimates that for a large implementation of more
than 10,000 staff, the cost could average £250 per user or seat (Viney, 2003). He suggests this cost
breaks down into four categories: software (content management systems), hardware (servers to
store content and applications), integration of information sources and applications and process
change (staff costs and opportunity costs associated within implementation). He also suggests
that if the portal project involves integration with ERP systems, this could add £150 per seat.
If access to an organization’s web services is extended to some others, but not everyone
Extranet beyond the organization, this is an extranet. Whenever you log on to an Internet service
A service provided such as that for an e-retailer or online news site, this is effectively an extranet arrangement,
through Internet and web
technology delivered by although the term is most often used to mean a business-to-business application such as the
extending an intranet Shell SIMON capability described in Case Study 6.1 where certain customers or suppliers are
beyond a company to
customers, suppliers and given shared access. We look at examples of intranets and extranets in Chapter 3 including
collaborators. the Dell Premier extranet.

Different types of sell-side e-commerce
Sell-side e-commerce doesn’t only involve selling products such as books and DVDs online,
but also involves using Internet technologies to market services using a range of techniques
we will explore in Chapters 8 and 9. Not every product is suitable for sale online, so the way in
which a web site is used to market products will vary. It is useful to consider the four main
types of online presence for sell-side e-commerce, which each have different objectives and
are appropriate for different markets. Note that these are not clear-cut categories of web sites
since any company may combine these types, but with a change in emphasis according to the
market they serve. As you review web sites, note how organizations have different parts of the
site focusing on these functions of sales transactions, services, relationship-building, brand-
building and providing news and entertainment. The four main types of site are:
1 Transactional e-commerce sites. These enable purchase of products online. The main
business contribution of the site is through sale of these products. The sites also support
the business by providing information for consumers that prefer to purchase products
offline. These include retail sites, travel sites and online banking services.
2 Services-oriented relationship-building web sites. Provide information to stimulate
purchase and build relationships. Products are not typically available for purchase online.
Information is provided through the web site and e-newsletters to inform purchase decisions.
The main business contribution is through encouraging offline sales and generating enquiries
or leads from potential customers. Such sites also add value to existing customers by providing
them with detailed information to help support them in their lives at work or at home.
3 Brand-building sites. Provide an experience to support the brand. Products are not typi-
cally available for online purchase. Their main focus is to support the brand by developing
an online experience of the brand. They are typical for low-value, high-volume fast-
moving consumer goods (FMCG brands) for consumers.
4 Portal,publisher or media sites. Provide information, news or entertainment about a range
of topics.‘Portal’ refers to a gateway of information. This is information both on the site and
through links to other sites. Portals have a diversity of options for generating revenue,
including advertising, commission-based sales, sale of customer data (lists). Social networks
can also be considered to be in this category since they are often advertising-supported.
Complete Activity 1.4 to consider examples of these different types of sites.