Mba Mis Report

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Report on building an e-Commerce website for a retail store. We have analyzed and prepared a recommendation on how we can build a website for Agora to enable online buying and selling of its products.

Transcript of Mba Mis Report

A RECOMMENDED E-COMMERCE SITE FOR AGORA

Institute of Business Administration (IBA)

A RECOMMENDED E-COMMERCE SITE FOR AGORA

Prepared For Mohammad Behroz Jalil Course Instructor Institute of Business Administration (IBA)

Prepared by: S Y N E R G YAnita Fairuz Md. Towhidul Islam Laura Mohiuddin Partha Das Gupta Roll: 55 (39D) 71 (40D) 73 (40D) 75 (40D)

June 18, 2008

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Institute of Business Administration (IBA) University of Dhaka.

June 18, 2008 Mohammad Behroz Jalil, Course Instructor, IBA

Dear Sir, Enclosed is our final report on building an e-Commerce website for a retail store. We have analyzed and prepared a recommendation on how we can build a website for Agora to enable online buying and selling of its products. We truly appreciate this assignment and sincerely hope that our recommendations will fulfill the requirements of this report.

Sincerely,

Anita Fairuz (#55, 39D)

Md. Towhidul Islam (#71, 40D)

Laura Mohiuddin(#73, 40D)

Partha Das Gupta (#75, 40D)

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Table of Contents Section Page Acknowledgementv Executive Summary.v

Table of Contents ....................................................................................................................... 4 Acknowledgement ..................................................................................................................... 6 Executive Summary ................................................................................................................... 6 1 Orientation to the Report ................................................................................................... 1 1.1 The Authorization Facts .............................................................................................. 1 1.2 Objective of the Report ............................................................................................... 1 1.3 Scope of this report ..................................................................................................... 1 1.4 Data Collection............................................................................................................ 1 2 Introduction ........................................................................................................................ 1 1.1 The Elements of E-Commerce .................................................................................... 1 2.2 Overview of eCommerce in Bangladesh .................................................................... 2 3 Overview of Agora ............................................................................................................ 4 3.1 Overview of Agora ...................................................................................................... 4 4 System Proposal ................................................................................................................. 5 4.1 Type of Information System and Business Model ...................................................... 5 4.2 Data flow for the proposed system.............................................................................. 5 4.3 Establishing online identity with the right web address.............................................. 6 4.4 Building a user friendly website.................................................................................. 7 4.5 Hosting the site .......................................................................................................... 10 4.6 New Equipment to be installed ................................................................................. 12 4.7 Minimizing the Risks of e-Commerce ...................................................................... 12 4.8 Payment Options: Pre-paid Card ............................................................................... 13 4.9 New procedures to be implemented .......................................................................... 16 4.10 Cost-Benefit Analysis ............................................................................................ 16 4.11 Anticipated problems............................................................................................. 18 4.12 Implementation plan .............................................................................................. 18 5 Conclusion ....................................................................................................................... 19 6 Appendix .......................................................................................................................... 20

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List of TablesTable 1: HostsStation.Com Asp Web Hosting Plans Table 2: Costs incurred

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List of FiguresFigure 1: Data flow for the proposed system Figure 2: Domain Registration for Agora Figure 3: Shared Linux- E-Commerce Plan Figure 4: New Account Creation Figure 5: Registered users can logon to their accounts(left), Agora Pre-paid Card(Right) Figure 6: Account Recharge Figure 7: The Rational Unified Process Figure 8: Implementation Plan 15 16 19 19 06 07 11 15

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AcknowledgementWe would like to our respectable teacher Mohammad Behroz Jalil for assigning us this report. Preparing this report has been a valuable learning experience for us. We would like to thank some personnel on behalf of clickbd.com and Mamun Murtaza Sharif, Partner of Dhaka-bd.com for answering some of our queries.

Executive SummaryAn ecommerce website has been proposed for Agora to enable online buying and selling of Agora products. The website will have the following features: It will enable buying and selling of Agora products online Inventory levels will automatically be adjusted after each transaction User account balances will be credited

We proposed the installation of four Personal Computers (IBM compatible PC) with internet access in a separate room in each of the outlets where online orders can be taken and decision on the outlet from where the product will be delivered can be taken. Accordingly the transaction status, remaining inventory level will be updated and the users account credited. Four trained personnel will be required for each of the machines to take the orders. No major organizational changes will be required to implement the system. The capital cost will be Tk.100, 000 and Salaries and Training expenses will amount to Tk. 544,000 and recurring cost will amount to Tk.169,488/year . The expected benefits are: a. Increased sales due to ease of shopping b. Retail stores at present have to close by 08:00pm because of Government regulations. However, with the proposed system, transactions may still take place before 10:00am until 10:00pm c. Greater customer satisfaction because they can study and decide on their product at the comfort of their homes; this will also help create Brand Image of Agora.

d. More sales all over the city with lesser POS terminals reducing the cost of stuff, floor space,power supply cost, etc.

The study has shown that tangible and intangible benefits far outweigh the cost of implementing this system

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A Recommended E-Commerce Site for Agora

EAGORA RECOMMENDED E-COMMERCE SITE FOR AGORA Orientation to the ReportThe Authorization Facts

11.1

Mohammad Behroz Jalil, Course Instructor, Institute of Business Administration (IBA), authorized us to submit a Report on how we could build an e-Commerce website for a retail store. We have chosen Agora and made analysis and recommendations on how we could build an e-Commerce website to enable online buying and selling of Agora products. Submission of this report is due June 18, 2008.1.2 Objective of the Report

The objectives of the report are to: Determine the steps required to build an e-commerce website for a retail store in Bangladesh Determine Hardware and Software requirements Estimate cost of the project Estimate the time required to complete the project Perform cost/benefit and feasibility analysis1.3 Scope of this report

These recommendations are only for building a B2C, that is, business to individual consumers, ecommerce website for Agora. These recommendations do not include B2B e-commerce, that is, online transaction with other businesses such as suppliers. 1.4Data Collection

Primary information was collected from interviews. Secondary information was collected from websites and textbooks.

2 Introduction1.1 The Elements of E-Commerce The business may be small- but the Internet lets entrepreneurs and managers think big. Whatever product or service the business offers, the Internet levels the playing field and facilitates competition with bigger businesses, reaching customers around the world who can conveniently buy from online storefront 24 hours a day. In the competitive world of the Web, growing the business and increasing the profits online requires careful planning and important steps. For every successful e-commerce

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business, there are dozens that fail because they dont address basic risks and pitfalls along the way. So to take full advantage of the e-commerce opportunity, one must make sure that the Web business is based on a solid foundation that covers every element of e-commerce: Establishment of identity. The right domain name, or URL, can make the difference between a memorable e-commerce identity and getting lost in the online crowd.

Find the right online home. For brick-and-mortar stores, location is everything. The Webbusiness needs the right home, too. Businesses can purchase and set up their own Web server, or find a home for their site with a reputable Internet Service Provider (ISP) or Web host. Build an attractive storefront. With the right tools, creating a Web site is easier than ever- but following some basic guidelines will help make the site easy and fun for customers to navigate. And that means more sales for the business. Build trust among Customers. In the anonymous world of the Internet, customers will provide private information, like credit card or phone numbers, only if theyre sure the site is legitimate and the information they send is protected. The site should be secure- and the customers must be made aware of it. Make it easy for customers to pay. One can set up a site so customers can pay by keying in a credit card or a scratch card number. Although it is difficult to achieve this in Bangladesh, offering customers a variety of convenient payment methods, that can be processed reliably is a major element of e-commerce. Let the world know about a site. A memorable domain name, a great looking design, and topnotch products and services can make the site successful only if customers know about it. The site has to be promoted to drive traffic to it.

Building the elements of e-commerce into a business is a big job, but it is too important to ignore for the business to grow and thrive.2.2 Overview of eCommerce in Bangladesh

Many Bangladeshi companies currently distribute their images through the Internet to clients all over the world, but the monetary transactions take place through conventional means. Some companies put messages on bulletin board, on ' internet yellow pages' with email links, and sometimes web pages, but there never is a place to submit a credit card. This is because currently the government does not permit credit card charges over the internet. However, the ISPs in Bangladesh do have the technology for e-commerce, and are anticipating governmental approval soon. E-commerce sites needed too be hooked up to a merchant bank account. A merchant bank account allows a company to accept and process credit card transactions. All businesses that use electronic credit cards need to be hooked up to their merchant account. For example, in a grocery store, when

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A Recommended E-Commerce Site for Agora

one swipes a card through the card swipe machine, machine is hooked up to the grocery store's merchant account. In our proposed system however, there will be no merchant bank hooked up in the transaction process. The transaction will use no electronic card.Barriers1

Out of 64 districts, Internet services are available only in 6 major district headquarters. BTTB is planning to gradually roll out an IP network up to the 64 district headquarters. In January 2002, the Internet facilities were extended to 12 districts. The project is running on very fast and today almost 40 plus districts are getting Internet facilities. Followings are the barriers of e-commerce in Bangladesh: Very minimum number of users of web sites; Poor telecommunication infrastructure with limited fixed-line access, unreliable connectivity and low bandwidth (9K); Relatively high price of computer hardware and internet connection compared to the per capita income of people; Lack of technically efficient personnel; Lack of investment in hardware and software; The banking infrastructure in terms of electronic payments and inter-bank connectivity is poor. No local banks issue credit cards and very few companies accept credit card payments. As such, the customers of 5770 branches of the local banks are unable to operate their account with the other branches of the same bank. Inter bank transaction is more cumbersome as the clearing-house of the central bank is not online. An inter-bank transaction may take even 2 weeks if the branches are different cities. Only 27 branches of the eight foreign banks are interconnected with their respective head offices. They are also satisfactorily computerized. This represents only 0.47% of the entire banking sector. Small number of Credit Card users; Limitations of supportive legal system. Such as, exchange controls, protection of telecommunication monopolies, restrictive trade practice and prohibitions; Absence of cyber law; Peoples mindset and very slow and expensive Internet services; Enterprise managers lack of initiative and leadership in taking advantage of e-commerce; Bureaucratic complexities; and Lack of awareness at government level of e-commerce issues.

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Electronic Commerce in Bangladesh: Status, Constraints and Prospects, Pradip Kumar Panday, University of Rajshahi

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Opportunities

Despite being a poor country, selected segments of the Bangladeshi business community has embraced technology with reasonable success. The Facsimile in the 1980s and mobile telephones in the 1990s popularized modern technology in the mass market. Personal computers and the Internet are also emerging as day-to-day business tools. These positive indicators are favoring the prospects of e-commerce in Bangladesh.

3 Overview of Agora3.1 Overview of Agora

Rahimafrooz Superstores Ltd. (RSL) launched the first retail chain- Agora in the country in 2001. Currently there are four Agora outlets at Gulshan, Dhanmondi, Moghbazar and Mirpur in Dhaka. With many more coming up at important locations in Dhaka and other major cities, Agora claims to fulfill the everyday shopping needs of the urbanites through fair price, right assortment, and best quality While Agora mainly focuses on food items - ranging from a wide variety of fish, meat, vegetables, fruits, bakery, dairy, and grocery - it also carries a vast array of other household, grocery, personal care, and miscellaneous products. At any point in time, there are nearly 20,000 different products available at the stores.

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4 System Proposal4.1 Type of Information System and Business Model Transaction processing system (TPS)

By TPS daily transactions via online will be recorded. Daily revenue from sales, delivery of goods, sales commission etc will be recorded. Order collected from different region of Dhaka city will be sorted according to the nearest outlet of Agora.Management Information system (MIS)

To depict current sales, highest sold products, lowest ordered products, delivery status, inventory control etc weekly and monthly report will be prepared by using management information system will be used. It will help managers to summarize and report on the companys basic operations. The basic transaction data from TPS will be compressed and presented in long term reports that will be produced on a regular schedule. MIS will transforms transaction-level data from inventory, production and accounting into MIS files that will be used to provide managers with reports.Clicks and Mortar

The proposed e-commerce site for Agora will be a hybrid clicks-and-mortar business model because it is an extension of existing physical firms.4.2 Data flow for the proposed system

See Figure 1. The following represents a typical flow of data and goods:1. Creation of a new Account. User enters information such as name, address, and scratch card ID (although optional for creating an account. An account can be created with zero balance, but orders cannot be placed). 2. A new user account is created. 3. User requests for products. 4. The server receives this request and based on the users location, sends the order to the nearest outlet. 5. The nearest outlet receives the order, sends the goods to the user. 6. If good delivery is successful, the system at Dhanmondi outlet lets the central system know. 7. The central server updates the user account and inventory accordingly.

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Figure 1: Data flow for the proposed system

5. Goods

Existing Customer at Lalmatia 3.Order Moghbazar Outlet Dhanmondi Outlet 4. Customer Order to the nearest outlet

Gulshan Outlet

6. Goods delivery status 1. Customer Info, Scratch card ID Web and Database Server 7. Update Mirpur Outlet

2. Create

New Customer

Inventory

User Account

4.3

Establishing online identity with the right web address Domain Registration:

The first step toward e-commerce is selecting the name of the site. The Web address (also called a URL- Uniform Resource Locator- or domain name), tells customers to whom the site belongs and how to find the site on the Internet. It is the core of the sites Internet identity- the online brand. And because no two parties can have the same Web address, the websites online identity is totally unique. E-commerce businesses most often register a name with com as the domain name extension (the letters after the dot; also called a top-level domain, or TLD), but often also register their names with .net and .org (for organization). A domain for Agora can be registered exclusively as agora-bd.com which can be bought for $9.99/year from a domain name registrar- Godaddy (www.godaddy.com). They include full, web-

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based access to domains and every aspect of the domain registration process: modifying contact names, DNS servers, locking domains, changing redirection, and much more- all done instantly through a secure and easy-to-use web interface (see Fig 2).Figure 2: Domain Registration for Agora

4.4

Building a user friendly website Alternative Solutions Examined and Evaluated

Next step is to select- from among various alternatives - the most easy to use and feasible web server language. For each alternative solution, the costs and the benefits of building the website with that language and cost of a server to host the site has to be examined before deciding on one of the alternatives.

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For the study considered we will examine the following server side languages:JSP- Main features:

JSP (Java Server Pages) is Sun's adaptation of its Java programming language for the web. These are pages which are used to serve dynamic content to the user using logic and data (XML, Database etc) on the server side. JSP is used to develop efficient, scalable and secure web applications in quick time. Its simpler syntax and 'write once run anywhere' capability makes it a popular server side programming language of choice. It will run on almost all major operating systems e.g. Windows, UNIX, Mac etc.-no need to create separate applications for separate platforms. Tomcat 6.x is an open source and free Servlet Container and JSP Engine.2ASP.NET - Main features:

Microsoft's Active Server Pages is widely supported by inexpensive web hosting companies. ASP.NET could be used and easily implemented into a dynamic environment. The main advantage with ASP.NET was the fact that it was actually designed to interact with the server rather than being taken from an existing programming language. Most Asp Hosting services are designed for ecommerce hosting using MySql Server database or Microsoft SQL Server database and the ecommerce shopping cart of choice. However ASP is limited to Windows servers whereas JSP can run pretty much anywhere. ASP.NET is not open source and it is costly.Table 1: HostsStation.Com Asp Web Hosting Plans3 Asp Hosting 250 Asp Hosting 500 Asp Hosting 1000

5GB Data Transfer 250MB Disk Space $5.99/mo (yearly) $7.99/mo (bi-yearly)

10GB Data Transfer 500MB Disk Space $11.24/mo (yearly) $14.99/mo (bi-yearly)

15GB Data Transfer 1000MB Disk Space $16.49/mo (yearly) $21.99/mo (bi-yearly)

PHP- Main features:

PHP has origins in the C programming language. PHP is open source and a powerful server side scripting language ideal for the creation of dynamic data driven web sites, especially when used in conjunction with MySQL or PostGreSQL databases. PHP can be used on all major operating systems, including Linux, many Unix variants (including HP-UX, Solaris and OpenBSD), Microsoft Windows, Mac OS X, RISC OS, and probably others. PHP has also support for most of

2 3

http://www.stardeveloper.com/article/display http://www.hostsstation.com/services

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the web servers today. This includes Apache, Microsoft Internet Information Server, Personal Web Server, Netscape and many others.4

The website will require Database servers for storing, retrieving, and processing information. For the study considered we will examine the following database servers:MySQL:

For IT organizations looking to maximize the flexibility, control, and cost-effectiveness of Linux and open source technology for database applications, MySQL is a good option. MySQL delivers the ease of use, scalability, and performance that has made MySQL the world's most popular open source database. MySQL Enterprise Server software is the most reliable, secure and up-to-date version of MySQL for cost-effectively delivering E-commerce. It is a fully integrated transaction-safe, ACID compliant database with full commit, rollback, and crash recovery and row level locking capabilities.5PostgreSQL:

PostgreSQL 8.3.0 is the most advanced, fully featured, stable, open source SQL-compliant database server.6 If working in Linux platform then PostgreSQL is best providing more security than oracle server. Most PHP developers choose PostgreSQL because of their individual features stated earlier and also because most PHP based software packages that use a database require MySQL or PostgreSQL; as a consequence of that most hosting companies offer MySQL or PostgreSQL and pretty much nothing else, so to use anything else can become rather expensive. In this case the cost of hosting will be $29.95/month.Oracle Database Standard:

Oracle Database 11g Standard Edition One (Oracle Standard Edition One) allows customers to take advantage of the proven performance, reliability and security Oracle is renowned for on single server systems up to a maximum of two processors on Linux, UNIX and Windows. Fully compatible with the complete Oracle Database family, Oracle Standard Edition One is easy to install, supports all data types, and comes complete with automated management and Web application development tools.7 Oracle Database 11g Standard Edition One is an affordable- costs4 5

http://www.webhost4life.com/php_hosting.asp http://www.mysql.com/products/enterprise/server.html 6 http://sourceforge.net/forum/forum.php 7 http://www.oracle.com/corporate/press/2004_oct

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$149 per user (5 user minimum), full-featured database for servers with up to two sockets. It supports all business applications with enterprise-class performance, security, availability and scalability.8 Although Oracle provides greater security, building an application with oracle is more costly to be used by a mid size business in Bangladesh. Oracle is for huge databases, with millions of rows of data

After looking at broad alternative solutions, the best option considered is PHP along with PostgreSQL. This combination has been considered regarding their operational and economic feasibility.4.5 Hosting the site

The next is to setup ones own web server or select an ISP to host a site. A web site is a series of files that reside on a special computer, called a Web server, connected to the Internet. For customers to visit

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http://www.oracle.com/database/std_one.html

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a site, they must actually connect to that Web server via the Internet and view the files. Many businesses prefer the complete control of purchasing, setting up, and managing their own Web server hardware and software. But since bandwidth in Bangladesh is poor and there is frequent power failure- setting up a web server is not feasible. Moreover currently supermarket chain in Bangladesh is not so large as to incorporate setting up a web server for initiating a click-and-mortar business. Hence this report does not consider it a feasible option. Usually small- and medium-sized ecommerce businesses prefer to turn to an Internet Service Provider (ISP) or Web hosting company, instead of investing in the hardware, software, and infrastructure necessary to get online. For a monthly fee, ISPs and Web hosting companies will connect a site to the Internet at high speed via one of their Web servers, allowing the site to be viewed by anyone with an Internet connection and a Web browser. The host provides a site with space on a server, and also

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http://www.olnevhost.net

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offers Web server software, access to its high-speed Internet connection, tools for managing and maintaining your site, customer support, e-commerce features, and more. Figure 3 shows the features and cost of a web hosting provider called OH for a website using PHP as the server side scripting language and PostgreSQL as the database server.4.6 New Equipment to be installed

IBM compatible PC with Linux 512 MB main memory 20GB hard disk Monochrome 15 monitor Writable CD Rom for backup 1000C UPS4.7 Minimizing the Risks of e-Commerce

With the Internet identity established and the site built, its time to turn the online storefront into a thriving e-commerce business. To do that, we must win the customers trust. Merchants who can prove the security of their Web site and win the confidence of these customers will gain their business and loyaltyand an enormous opportunity for grabbing market share and expanding sales.The Risks of E-Commerce

In traditional retail business, consumers accept the risks of using credit cards in brick-and-mortar stores because they can see and touch the merchandise and make judgments about the store. On the Internet, without those physical cues, it is more difficult for customers to assess the safety of the business. Also, serious security threats such as Spoofing10, Unauthorized disclosure11, Unauthorized action12, Data alteration13 have emergedThe Trust Solution: Authenticated SSL Certificates

In the age of e-business, authenticated SSL digital certificates provide crucial online identity and security to help establish trust between parties involved in online transactions over digital networks.10

When transaction information is transmitted in the clear, without proper security and encryption, hackers can intercept the transmissions to obtain customers sensitive informationlike personal information and/or credit card numbers. 12 A competitor or disgruntled customer can alter a Web site so that it malfunctions or refuses service to potential clients 13 The content of a transaction can be not only intercepted, but also altered en route, either maliciously or accidentally. User names, credit card numbers, and dollar amounts sent without proper security and encryption are all vulnerable to such alteration

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The low cost of Web site creation and the ease of copying existing pages makes it all too easy to create illegitimate sites that appear to be operated by established organizations. In fact, con artists have illegally obtained credit card numbers by setting up professional looking Web sites that mimic legitimate businesses.

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Customers must be assured that the Web site they are communicating with is genuine and that the information they send via Web browsers stays private and confidential. There are three key elements to inspiring the confidence of your customers and ensuring a truly secure online transaction: Encryption14, Authentication15, and Digital Certificates16.SSL Certificates

An authenticated SSL Certificate allows the receiver of a digital message to be confident of both the identity of the sender and the integrity of the message. Fundamental to the process of issuing highassurance SSL Certificates to an organization for use on its Web site are three basic, and very important, authentication and verification steps: Confirmation that the organization named in the SSL Certificate has the right to use the domain name included in the certificate Confirmation that the organization named in the SSL Certificate is a legal entity Confirmation that the individual who requested the SSL Certificate on behalf of the organization was authorized to do so When Web visitors connect to Web sites, they reach one of two kinds of servers. If they reach servers that are secure, they will get messages indicating that fact (a closed padlock icon and https: in the URL). Similarly, if they reach servers that are not secure, there will be warnings to that effect. A truly secure Web server is one that has an authenticated SSL Certificate. The authenticated SSL Certificate tells users that an independent, trustworthy third party has verified that the server belongs to the company it claims to belong to. A valid authenticated SSL Certificate means that users can have confidence that they are sending confidential information to the place to which they think they are sending it. We therefore chose a web service provider like OH that has SSL support.4.8 Payment Options: Pre-paid Card Legal Issues

We will require prior permission of Bangladesh Bank in order to launch a prepaid card. Bangladesh Bank has no restriction on introduction of such a card if the card is meant for buying or selling of

Businesses that are serious about e-commerce must implement a complete e-commerce trust infrastructure based on encryption technology. Encryption, the process of transforming information to make it unintelligible to all but the intended recipient, forms the basis of data integrity and privacy necessary for e-commerce. 15 Although some Certificate Authorities believe that encryption is enough, it is imperative that the Web site is also authenticated. This will improve customers trust in the site 16 A digital certificate is an electronic file that uniquely identifies individuals and Web sites on the Internet and enables secure, confidential communications. They serve as sort of a digital passport or credential. The practice of providing unauthenticated SSL Certificates exposes online users to the risks of false online storefronts operating on the Internet.

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goods or services. However, application along with purpose of the card is reviewed by Bangladesh Bank.Selling of prepaid card

The cards will be available in denominations of Tk.500 (that is, Tk 500, Tk 1000, Tk 2000 and Tk 5000). The prepaid card will initially be available at the outlets of the store only. Later on, they will be available at different groceries, dispensaries and other common shops at different localities of Dhaka City.How the prepaid card will be used

1.

Individual customer will buy a prepaid card of his desired amount from his nearest outlet or shop where available.

2. 3.

New users will have to create an account as show in Figure 4. He/she will be able to log on to his/her account at the website of the store through internet (see left of Figure 5).

4.

The customer will scratch the card to reveal the unique card number at the back of the Agora Cards, Figure 5(right), and the user will be able to recharge his/her account using that unique number (Figure 6 on page 15).

5. 6. 7.

The value of the card will be added with the existing balance. There will be no time-limit for using this balance. The customer will then be able to shop within this balance. A customer may also order Agora Scratch cards online given he/she has the required balance in the account

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8. 9.

A delivery charge of Tk.100 will be charged. This will be credited to the users account. A customer may also edit account information such as address and telephone number, in which case goods will be delivered to the new address.

Figure 5: Registered users can logon to their accounts(left), Agora Pre-paid Card(Right)

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The store will directly get the money from selling the cards. There will be no bank involved in the transaction process using prepaid card.Figure 6: Account Recharge

4.9

New procedures to be implemented

The database system must be updated and integrated with the present database system at Agora. Information such as inventory and purchase, both online and offline, must be updated in the database. One computer with UPS has to be installed in each of the outlets. Trained personnel provided by us will be taking orders in each of the outlets. The cost of these stuffs for one year is included in the cost of the project. If Agora wishes to continue e-commerce, it will have to bear the salary of these stuff after one year. One employee will also have to be available at each of the four outlets responsible for the delivery of the goods. Agora will be responsible for maintaining these personnel. Other than that, no major organizational changes will be required.4.10 Cost-Benefit Analysis

Cost-benefit analysis is necessary to determine economic feasibility. The primary objective of cost-benefit analysis is to find out whether it is economically worthwhile to invest in the

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project. If the return on investment is greater than its associated costs or at least equal at beginning of the project, then the project is considered economically worthwhile. Cost-benefit analysis is performed by first listing all the costs associated with the project.Costs involved are presented in Table 2 Table 2: Costs incurred

Cost Incurred Hardware cost (clone machine) UPS Developer salary System analyst salary Project manager salary Tester salary Training cost POS persons salary Domain Registration cost Web Hosting cost Other costs plus profit margin

Price Tk.20,000 per m/c Tk.5000 per UPS Tk.16,000/month Tk.25,000/month Tk.25,000/month Tk.12,000/month Tk.1000/person Tk. 3000/person -

Required. 4 m/c 4 UPS 2 person * 6 months 1 person * 6 months 1 person * 6 months 1 person * 4 months 4 4 person * 12 months -

Amount Tk.80,000 Tk.20,000 Tk.192,000 Tk.150,000 Tk.150,000 Tk.48,000 Tk.4000 Tk.144,000 $9.99/yr = Tk.689.31/yr $29.95/month =Tk.24798/yr -

Grand total Capital cost Tk.100,000

Salaries and Training expense Tk. 544,000

Recurring cost: Tk.169,488 per year

Tk.500,000 Tk. 1,169,487

Initial Cash Outlay Benefits can be classified as tangible and intangible benefits. Tangible benefits:

Tangible benefits are directly measurable- revenue generated from selling products online. As information gathered from interview at Agora, their monthly revenue from all four outlets in Dhaka is Tk. 4 crore (approximately) per month. Agora expects that from their existing customers initially 20% of them will be buying online if available. So revenue from online selling- from existing customers- will be Tk.8,000,000 [Tk 40,000,000 * 20%] per month. Moreover new customers would create another Tk. 1,000,000 (approximately) per month worth of revenue initially. Therefore their total monthly revenue from online selling would be Tk. 9,000,000 (apprx.). Previously we determined that initial cost for building an e-commerce 17 | P a g e

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facility is Tk.1,169,487 (apprx.). Therefore, revenue from this new facility will cover up the costs incurred to facilitate the project.Intangible benefits are:

Better customer satisfaction Brand Image Building Wide recognition inside and outside the country4.11 Anticipated problems

There may be a problem integrating the proposed information system with the existing database system at Agora. There may result a mismatch of data when the current information system is integrated with the existing information system. This may be overcome by rigorous testing during implementation phase and regularly backing up all files and data regarding inventory levels, purchase, etc. Power failure may lead to difficulties, since it is very frequent nowadays in Bangladesh. Agora has to consider installing high capacity batteries for 1 hour backup (minimum) for the uninterrupted power supply system. Other problems may be lack of trust among users regarding shopping online, since this is a novel model in Bangladesh. There will also be lack of awareness among users, which may be overcome with massive marketing activities.4.12 Implementation plan

We shall be following the Rational Unified Process (RUP) which is an iterative software development process framework17. Projects are delivered, even though often only internally, in increments in an iterative fashion (Figure 7). The increment, which includes the value of thepast iteration, is used to measure the progress of the project. That increment is also used to encourage feedback from stakeholders about the direction of the project. This allows projects to adjust to changed situations based on the feedback. The stakeholders on the other side, can influence the shape of the development effort while the project is executed. The combination of the iterative development and the focus on risks in RUP, allows projects an iterative risk-assessment. Quality checks are not only at the end of each iteration but a continuous ongoing activity in the software engineering project, often performed in a daily rhythm supported by the entire team. Automating test scenarios helps in dealing with the increasing amount of tests due to iterative development.

17

http://en.wikipedia.org/wiki/IBM_Rational_Unified_Process

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Figure 7: The Rational Unified Process

Figure 9 below shows our implementation planFigure 8: Implementation Plan

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Conclusion

The proposed system will cost Tk.100,000 capital cost and will pay for itself within the first month of operation. It will meet most of the goals of a B2C e-Commerce business for Agora and can be implemented within 6 months. We are confident that it will fully meet the expectations of the management, if such a system were to be developed.

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AppendixSelected References: V. RAJARAMAN. Analysis and Design of Information Systems, 2nd ed Laudon and Laudon. Management Information Systems: Management of the Digital Firm, 9th ed. A VeriSign Guide. How to Create an E-Commerce Web Site Pradip Kumar Panday, University of Rajshahi. Electronic Commerce in Bangladesh: Status, Constraints and Prospects

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