Assessing different Internet projects

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A further organisational capability issue is the decision about different information systems marketing applications. Typically, there will be a range of different Internet marketing alternatives to be evaluated. Limited resources will dictate that only some applications are practical.

Portfolio analysis can be used to select the most suitable projects. For example, Daniel et al. (2001) suggest that potential e-commerce opportunities should be assessed for the value of the opportunity to the company against its ability to deliver. Typical opportunities for Internet marketing strategy for an organisation which has a brochureware site might be:

• online catalogue facility;

• e-CRM system - lead generation system;

• e-CRM system - customer service management;

• e-CRM system - personalisation of content for users;

• partner relationship management extranet for distributors or agents;

• transactional e-commerce facility.

Portfolio analysis

Identification, evaluation and selection of desirable marketing applications.

Transactional E-CRM e-commerce Personalisation

E-CRM Customer service

Online catalogue

E-CRM Lead generation

Partner extranet

Low High

Reward

Low High

Reward

Figure 4.26 Example of risk-reward analysis

Such alternatives can then be evaluated in terms of their risk against reward. Figure 4.26 shows a possible evaluation of strategic options. It is apparent that with limited resources, the e-CRM lead generation, partner extranet and customer services options offer the best mix of risk and reward.

For information systems investments, the model of McFarlan (1984) has been used extensively to assess the future strategic importance applications in a portfolio. This model has been applied to the e-commerce applications by Daniel et al. (2001) and Chaffey (2006). Potential e-commerce applications can be assessed as:

1 Key operational - essential to remain competitive. Example: partner relationship management extranet for distributors or agents;

2 Support - deliver improved performance, but not critical to strategy. Example: e-CRM system - personalisation of content for users;

3 High-potential - may be important to achieving future success. Example: e-CRM system - customer service management;

4 Strategic - critical to future business strategy. Example: e-CRM system - lead generation system is vital to developing new business.

A further portfolio analysis suggested by McDonald and Wilson (2002) is a matrix of attractiveness to customer against attractiveness to company, which will give a similar result to the risk-reward matrix. Finally, Tjan (2001) has suggested a matrix approach of viability (return on investment) against fit (with the organisation's capabilities) for Internet applications. He presents five metrics for assessing each of viability and fit.

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