E-COMMERCE OUTSOURCING

"Outsourcing" (the hiring of outside experts or companies to fulfill part of the business model) is a modern business methodology that addresses the needs of organizations, merchants, and consumers to cut costs while improving convenience, the quality of goods and services and increasing the speed of service delivery. Outsourcing is defined by the CCTA (Central Computer and Technology Agency) as: the management and operation of part or all of an organizations IT services by an external source, at agreed service levels to an agreed cost formula over an agreed period" (Halvey & Melby 48).

When applied to the multivariate complexities of Electronic Commerce, the definition encompasses more than just the particular financial transactions that exchange funds. Electronic commerce is conducted in any industry, from manufacturing to retail sales, to banking and finance, to publishing, entertainment, and many others.

Halvey and Melby (1999) argue that "One of the major issues facing information systems management is that of outsourcing part or all of the organization's IS function to a specialist supplier" (Halvey & Melby 23). Part of the reason for the trend to outsourcing is the complexity of the decision-making required when a company chooses to enter the E-Commerce competition.

When it comes to building the complete E-commerce site there seem to be much more complex processes to deal with. Table 1 shows the typica

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be to analyze all company expenses connected with processing an order (short of the actual inventory fulfillment.) He discovered that each order that was processed cost the company $3.08 (before loss from bad credit cards or product returns). Leventhal was able to show the company quotes from four different E-Commerce outsourcers that would perform the same identical tasks with higher-level security (256 bit encryption instead of the company's 132-bit method) for fees ranging from 32 cents per order to $1.09 per order. Did the company accept the cost-savings proposal? No. Why? Because of the fear of losing control (Leventhal). Consumer Demand for Outsourcing A good indication of the size of the outsourcing market is to conduct a careful Boolean search on the Internet. A controlled search request of "E-Commerce + Outsourcing vendors w/5 US." This query resulted in the following results: Search Engine Results For Outsourcing Vendors Search Engine/Directory Number of Hits Yahoo! 866,412 Excite 477,304 InfoSeek 844,332 MSN 204,312 Alta Vista 433,612 Investigating some of these, it was apparent that the search was also revealing ISP's so this term was factored

Category: Science - E