CONCORDIA UNIVERSITY

eCommerce
Total Quality Project Management
Business Case
INSE 6230



Team members
Abhishek Sharma
Gourav Shrivastava
Vidya Venkatesha Murthy
Vijay Ashish Kumar
Yi Dou

Date: 14
th
October 2014
INSE 6230 Business Case

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Introduction
E-Commerce is the purpose of Internet and the web to conduct business. E-Commerce is the
process of buying and selling of various products, services and information by businesses
through the Internet. It deals with various kind of business concern, from retail site of the
consumer, which includes auction.
Business Objective
iStore which is a growing multi-national corporation whose head office is located in Cupertino,
California is intending to open its branch in Montreal, CA. iStore is one of the leading consumer
retailers of multi-brand electronic products. iStore serves in many countries. In FY 2013, iStore
reported consolidated revenues of $37.5 billion. The company plans to develop a new website
which would serve for Canada for transactional operations and intends to introduce new features
which will be convenient for the users to inquire about the product as well as make purchases.
Critical Assumption and Constraints
Category Constrains
1 External Software/ Hardware availability
2 Internal Time limit ( 2 months)
3 Internal Lack of Expertise
4 External Legal ( Software/ hardware use)

Budget Estimate and Financial Analysis
The entire project will incur a cost of $128000. The total cost is estimated based on the
following:
1. Cost applicable to conducting a market research.
Before launching the new product in the market, careful research of the industry is necessary.
According to our analysis, a typical external market firm charges around $10000 for conducting
the research. In this case, we count in the worst casewhich is $10000 for this activity.
2. Costs to ensure the website meets regulatory compliance
To be able to meet regulatory requirements or to make sure the product is compliant with the
government of Canada, as well as meets the quality standards expected for any country in North
America and Europewe set aside a certain amount which is just based on an estimate. In this
case, a budget of $2000 has been allocated.
INSE 6230 Business Case

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3. Cost involved for prototyping the website and operational cost.
In order to meet carry out development, we will need the hardware/software resources. This also
means having the most optimal operational procedures in place for achieving an optimal
production of the website. This will involve a substantial amount which is $10000 currently.
4. Cost of human resources.
There are six people working on this project. The hourly rates for the project manager and the
internal staff are $80 and $100 respectively. The project is likely to be completed within 2
months. On average, the team will be working for 30 hours weekly. Therefore, the estimated
employee costs will be $910000.
5. Marketing, advertising and promotional costs.
Cost of marketing, advertising and promoting the website is initially estimated at $7000. This is
kept on the moderate level as we are planning to leverage the social network and the web to
advertise our website.
6. Costs associated with ensuring quality of operation and quality of website.
To ensure the website maintains its quality for all areas of development, and to be able to have it
at least equal to that of the competitors, a certain amount needs to be invested in researching the
optimal operational efficiency in maintaining the website without compromising its quality. The
estimated cost for this is $3000.
7. Cost of obtaining market data on a regular basis to get an update of market trends for the
website.
We need to get data pertaining to market trends in order to avoid risk of being outdated from the
market in the area of eCommerce. It will costs about $5000.
8. Maintenance and servicing costs.
Last but not the least, we need to dedicate some amount to the maintenance of the processes and
products quality as well as customer service costs for customer grievances. Total estimate for
these activities lead to an amount of $20000.
Exhibit A summarizes the project annual costs and projected annual benefits of the project for
the next three years. It also shows the estimated net present value (NPV), year in which payback
occurs and the return on investment (ROI) for the project. It also shows the assumptions made in
performing the preliminary financial analysis. According to our preliminary financial analysis,
the NPV value is $327400 and the ROI based on three years of business is 183%. The estimated
payback period is year 1.