Article from: Modern Metals Magazine | October 1, 2003 | Brody, Daniel | COPYRIGHT 2008 Pixmission, LLC
“Jump on the e-commerce bandwagon or waste away” is a phrase that resonates with the business community. But an ever-growing number of businesses have no idea how to measure their online
success. Most businesses try to measure their e-business tools with the traditional return on investment (ROI) models. However, not all benefits of e-business can be measured this way. Invariably, a company measuring its website’s success with a ROI model will be disappointed with the perceived return and will pull resources from development. The effort will languish before the real benefits can be realized.
Ultimately, those who hold the purse strings want to know one thing: With a low or negative ROI, can e-commerce technology actually be profitable? The simple answer is that it depends on how the revenues and savings generated from a technology project are captured and valued.
Corporations will typically assign a zero value to the revenue generated by the non-commerce portion of a site. Simply put, “We don’t sell anything there, so how can we have revenue?” For the
commerce portion, “We sold $X on the Web.” In both scenarios, corporations are excluding a basic revenue source: Customer education and service...