Your next steps as IT manager developing a business plan for the new HWE Accessories website are creating a project plan and a risk matrix. Use Microsoft Excel to create a project plan that includes

Introduction

This is a business plan for HWE Accessories, and it contains the problem statement, analysis of the situation, cost-benefit analysis, and preliminary feasibility study, the total cost of ownership (TCO), return on investment (ROI), solution options, and lastly, recommendations for the proposed solution. Let us start by looking at the problem statement.

Problem statement

HWE Accessories is a small company that has a website that is only informational and now it wants a new website that will allow clients to browse inventory, compare items, and even make purchases.

Analysis of the situation

According to Guthrie (2020), situation analysis is a “process that helps you identify opportunities and challenges, both internal and external to your organization/service or product”. Guthrie (2020) outlines the steps of performing situation analysis as analyzing your customers, analyzing your products and services, analyzing what your competitors are doing, and lastly, putting your resources together e.g., budget, workforce, etc.

We analyzed our customers and realized that most of them would love to purchase goods online at the comfort of their couch instead of making a trip to the business premises. We also learned that customers like comparing products and prices from different vendors before deciding. When it comes to our products, clients agreed that our products are popular and are preferred in the market. Our competitors have websites where their clients can purchase goods online and the goods delivered to their doorsteps. When it comes to mapping our resources, we realized we don’t have a skilled team that can come up with an electronic commerce website, so we have the option of hiring a new team or outsourcing the work to a third-party company.

Cost-benefit analysis

According to Landau (2021), cost-benefit analysis is a “process that is used to estimate the costs and benefits of decisions to find the most cost-effective alternative”. Landau (2021) adds that cost-benefit analysis evaluates the following costs: direct costs, indirect costs, opportunity costs, intangible costs, and costs of potential risks. It also looks at direct and indirect benefits, net benefits, and total benefits (Landau, 2021). We will analyze the cost in terms of having the website developed internally and giving the contract to a third party.

Having the website designed internally

We will need to buy a website server that will host our website which costs $1500 to $3000

We will need to hire at least six skilled personnel: one graphic designer, two front-end developers or UI/UX developers, two back-end developers, and one content writer. An e-commerce website can take up to three months to design; therefore, the following are the salaries of these developers:

Graphics designers can charge $30 to $150 per hour amounting to $4800 to $24000 per month per person (Exposure, 2021).

A front-end developer can charge $60 – $80 per hour amounting to $9600 to $12,800 per month per person (Code mentor, 2021).

A back-end developer can charge $60 - $80 per hour amounting to $9600 to $12, 800 per month per person.

A content writer can charge $15 - $40 per hour amounting to $2400 to $6400 per month.

The following table shows the entire cost of having the website developed in-house:

According to Smith (2021), e-commerce can cost $ 10,000 to $500,000 or more to develop depending on the company size.

Benefits

Clients can buy products online and we will be able to expand our market.

Preliminary feasibility study

According to Sampliner (2021), a feasibility study is “used to determine the viability of an idea, such as ensuring a project is legally and technically feasible as well as economically justifiable”.

If we design the website in-house, we will need to comply with PCI DSS compliance since we will store and transmit the client’s credit card information. If we outsource the job to a third-party company, we will ensure that they comply with PCI DSS compliance.

The total cost of ownership (TCO)

According to Rock content (2020), TCO is a “metric that measures the amount of money spent on acquiring any asset”. Rock content (2020) adds that it also entails money that will be spent in the long term on maintenance and operation.

The following table shows the breakdown of our total cost of ownership of letting a third-party company design and host our website:

Return on Investment (ROI)

According to Proctor and Saad (2021), return on investment is a “metric used to assess an investment’s efficiency or profitability”. Proctor & Saad (2021) add that “return on investment is calculated by dividing the net return earned on an investment by its total cost”.

Return on investment is calculated as:

ROI = (Net investment/ cost of investment) * 100

The company expects to increase clientele using a newsletter to facilitate conversion and to make sales of phone accessories worth $500,000 through the website.

ROI = ((200,000 – 37,900)/37,900) * 100 = 427.70

Solution options

We have the option of building the website in-house

Pros of building it in-house

We will have total control of everything, e.g., hosting machine, data, etc.

Future changes will easily be incorporated because the skilled developers understand the system

Cons of building it in-house

We will incur the cost of hiring skilled developers

We will incur cost of purchasing the hardware platform such as hosting server

We will need to employ personnel who will maintain the website

We have the option of outsourcing the job

Pros of outsourcing the job

We won’t incur the cost of hiring personnel

We won’t buy hardware for hosting the website

Every process will be done by skilled personnel e.g., security of data by security specialists, etc.

Cons of outsourcing the job

Our data including sensitive information such as credit card information will be stored and maintained by a third-party Company

Recommendations for the proposed solution

We recommend that the job be outsourced because it will take a lot of time and money to hire the right personnel and to also retain personnel that will ensure maintenance of the website.

References

Code mentor. (2021). Freelance front-end developer hourly rate.

https://www.codementor.io/freelance-rates/front-end-developers

Exposure, (2021). Graphic design pricing – how much do designers make?

https://www.eksposure.com/graphic-designer-rates/

Guthrie, G. (2020). What is situation analysis, and why is it so important? Cacoo.

https://cacoo.com/blog/what-is-situation-analysis-and-why-is-it-so-important/

Landau, P. (2021). Cost benefit analysis for projects – a step by step guide. Project Manager.

https://www.projectmanager.com/blog/cost-benefit-analysis-for-projects-a-step-by-step-guide

Proctor, C. & Saad, A. (2021). What is ROI? This simple financial metric assesses an

Investment’s potential return in relation to its cost. Business Insider.

https://www.businessinsider.com/roi-return-on-investment?r=US&IR=T

Rock content, (2020). What is total cost of ownership and how to calculate the TCO.

https://rockcontent.com/blog/total-cost-of-ownership/

Simpliliearn, (2021). Feasibility study and its importance in project management.

https://www.simplilearn.com/feasibility-study-article

Smith, J. (2021). eCommerce website pricing: determining cost of an eCommerce build.

Outerboxdesign. https://www.outerboxdesign.com/web-design-articles/ecommerce_website_pricing