E-Commerce System for a Clothing Company in Abu Dhabi

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  1. Executive Summary
  2. Introduction
  3. Project Description
  4. References
  5. Annexes

Executive Summary

This paper provides a detailed review of the stages of project management for the triumphant execution of an e-Commerce system for a clothing company in Abu Dhabi, the Unites Arab Emirates (UAE). Project management is a vital process in ensuring a successful implementation of projects since it allows a room for proper planning and reduction of risks that may arise.

The world of technology has revolutionised the business environment in ways that had never been imagined before. This project management dossier details the successful execution of an e-Commerce system at Apparel Company in UAE. The report details various stages and aspects of the project implementation, including the goals and objectives of the project, the project plan and schedule, estimated budget and revenues, and execution and launching.

Introduction

The emergence of computer technology and the internet has brought drastic changes in the world of business in the last one decade. E-Commerce has emerged as a major marketing platform that 21st century businesses can only avoid at their peril.

E-Commerce allows businesses to trade their goods online to equally technologically perceptive customers who are keen on comparing different options, receiving discounts, and making comparisons between different products they seek to purchase. E-Commerce has eliminated the restrictions of time and space, that is, the need to do shopping physically, a factor that is very attractive to customers and hence a platform that businesses cannot ignore.

This paper seeks to give a detailed project management report on a successful implementation of e-Commerce application for Apparel Company in Abu Dhabi, UAE. The report discusses all stages of project management that are necessary for a successful implementation and execution. These stages, which constitute the project implementation cycle, include project definition, planning, execution, and delivery/completion.

Project Description

The need for the adoption of e-Commerce has never been as important as it is in the 21st century (Laudon & Guerci 2002; Nielson 2014). As a marketing platform, e-Commerce offers businesspersons with a platform that has endless opportunities of selling their products to a wider group of people through the internet.

In less than a decade, e-Commerce has redefined and changed how businesses and customers interact in buying and selling. Through the platform, customers have the opportunity to compare products online, remotely place an order, and receive a delivery of their products, all without physically visiting the shop or the outlet (Harris 2000; Metafuse Inc. 2013).

The importance for the Apparel Company in adopting an e-Commerce system is therefore evident. In preparation for the implementation of this system, a preliminary survey to shed light on internet usage and online shopping in Abu Dhabi has been done. Further, a detailed design highlighting the goals, tasks, specifications, and responsibilities has been developed. The schedule of implementation of the e-Commerce application and a detailed stage-by-stage discussion of each phase has been discussed.

Defining

The main of the project discussed in this paper is to implement successfully, an e-Commerce system for Apparel Company in the city of Abu Dhabi, the UAE.

Goals

The main goals of the e-Commerce project are as follows:

  1. To augment the sales and the revenues of the company by 15% or more.
  2. To raise the company’s market share by up to 20% or more.
  3. To upgrade the company’s systems and technologies to support effective and efficient services to customers.
  4. To diversify the range of services that are offered by the apparel company.

Specifications

The following are the specifications for the successful implementation of the e-Commerce application:

  1. To develop, test and successfully launch an e-Commerce application and system for the company.
  2. To develop the application, carry out pilot trials, test for errors, fine time the application in response to results of pilot trials and test results for errors, and successfully launch a fully functioning e-Commerce for the company.
  3. To develop and carry out a one-month training program for employees to implement and use the application successfully.

Project Stakeholders

Project stakeholders refer to those persons and institutions that have an interest in a given project or institution and can influence the implementation and execution of a program (Caniels & Bakens 2012). They are key in the process of defining the goals and objectives that relate to all stages of the project cycle. The following are the key stakeholders:

  1. Customers: The e-Commerce application is specifically made with a focus on improving customer experiences and shopping options. Hence, they are the major stakeholders.
  2. The Apparel Company/Owners: The company and its owners are major stakeholders of the project since they expect to get good returns from the e-Commerce application (PMBOK 2013).
  3. Project Managers-These are the people who are bestowed with the responsibility of ensuring that the e-Commerce application is developed and implemented according to the agreed specifications (Hooley et al. 2007).
  4. Departmental bosses-These people are important in ensuring that the project runs effectively to serve the needs of customers and the organisation (Raymond & Bergeron 2008).

Tasks

The definition of the activities or their sequence of implementation in project management is referred to as work breakdown arrangement (PMBOK 2013). Consequently, the following is the work breakdown configuration:

Work Breakdown Configuration for the Development and Implementation of the e-Commerce Application Project
Preliminary Study/Survey
  • Understanding the Apparel Market and its trends in marketing and selling
  • Evaluation of the existing marketing processes
  • Identification of Innovative programs such as e-Commerce for improving existing or implementing new processes
Project Definition and Planning
  • Definition of the Objectives of the Project
  • Definition of project specifications
  • Preparation of a list of important tasks of the project
  • Assignment of roles and responsibilities for project personnel
  • Development of project implementation schedule
  • Development of resource plan and budget
Project Development and Implementation
  • Carrying out feasibility analysis of the project
  • Development of the e-Commerce application
  • Launch and testing of the pilot application
  • Testing for bugs and errors and correction of issues found
  • Rebuilding the final and working e-Commerce application
Project Delivery/Completion
  • Launching the Application and rolling out of the application for all customers
  • Training of employees on the use of the application
  • Preparation and submission of project report

Project Personnel and Responsibilities

The success of a project is highly dependent on the personnel and the execution of their different tasks (Caniels & Bakens 2012). The process of project management is a collaborative process where each party to the process has a specific role and works as a team members for the overall completion of the project.

For the e-Commerce application project, the personnel who will be involved and their respective roles are summarised in the table below:

Task Project Manager Developers Functional consultant Costing & Budgeting Manager Tester
Understanding the Apparel Market X X X
Evaluation of the existing marketing processes X X X
Identification of Innovative programs such as e-Commerce for improving existing or implementing new processes to improve the existing process X X X
Definition of the Objectives of the Project X X X
Definition of project specifications X X X
Preparation of a list of important tasks of the project X X X
Assignment of roles and responsibilities for project personnel X X X
Development of project implementation schedule X
Development of resource plan and budget X X X
Carrying out feasibility analysis of the project X X X
Development of the e-Commerce application X X X X
Launch and testing of the pilot application X X X X
Testing for bugs and errors and correction of issues found X X X X X
Rebuilding the final and working e-Commerce application X X X X X
Launching and rolling out of the application for all customer X X X X X
Training of employees on the use of the application X X X X X
Preparation and submission of project report X X X

Planning

Project planning refers to the process of stating how a given project will be completed as guided by a given project schedule, stages, and appropriated resources (Kahura 2013). The table below shows the milestone timelines and budgetary appropriation.

Work Breakdown Structure

The following diagram is a detailed work breakdown configuration for the completion of the e-Commerce system:

Work Breakdown Structure

Milestone Timeline Table

The milestones of a project indicate the various stages through which the project implementation passes. These milestones include preliminary study, definition and planning, development and implementation, and delivery stages. The following table gives the approximate milestones timelines:

Task Time Interval Dependency
Groundwork 22 days autonomous
Defining and setting up 33 days Post groundwork survey
Expansion and execution 70 days Post defining and preparation
Delivery 13 days Post expansion and execution

Project Budget and Financial Impact

The project budget includes the estimated financial resources that are expected to be used for the successful implementation of the projects. On the other hand, the financial impact is a measure of the net present value of the project at 15%internal factor and internal rate of return for the project.

The table below gives a breakdown of the estimated project budget for the e-Commerce system:

Item Predictable charges (AED)
Groundwork Survey 10000
Interior work 275000
Exterior work (Contract) 50000
Assortments and Admin 15000
Total predictable expenses 350000

From the above table, the project will cost approximately 350000AED, which will be funded partly through equity and partly through debt in the form of loan. The table below shows the sources of funds:

Sources of Funds Percentage
Equity 100000 28.6%
Debt 250000 71.4%
TOTAL 350000 100%

In calculating the financial impact of the project, NPV, and IRR models are used where several assumptions are made as follows:

  1. The average unit price of a product is 90 AED escalated at 2% per annum
  2. The number of units per month is 500 units growing at 5% per annum
  3. Maintenance expenses are estimated at 30% of the total revenues, where 10% covers administrative and miscellaneous expenses
  4. The project manager’s cost is an expense for the overall duration of the project at an escalation of 5%
  5. The interest rate is the average of the opening and closing debt calculated at 10% interest rate
  6. The depreciation and tax rates are at 0% as the project does not involve capital assets
  7. The financial impact of the project is estimated at15% discounting factor as detailed in the table below:
Price escalation 2% 1.02 1.04 1.06 1.08 1.10
Escalation 5% 1.05 1.10 1.16 1.22 1.28
Year 1 Year 2 Year 3 Year 4 Year 5
Revenues
Average Unit Price 90 92 96 101 110 121
Average no. of units sold 6000 6,300 6,946 8,041 9,773 12,474
Total Revenues 5,78,340 6,63,380 8,14,949 10,72,231 15,10,900
Expenses
O & M Expenses 1,73,502 1,99,014 2,44,485 3,21,669 4,53,270
Salaries 3,78,000 3,96,900 4,16,745 4,37,582 4,59,461
Admin expenses 57,834 66,338 81,495 1,07,223 1,51,090
Total expenses 6,09,336 6,62,252 7,42,725 8,66,475 10,63,822
EBIDTA -30,996 1,128 72,225 2,05,757 4,47,079
Depreciation 0 0 0 0 0
EBIT -30,996 1,128 72,225 2,05,757 4,47,079
Interest 22500 17500 12500 7500 2500
PBT -53,496 -16,372 59,725 1,98,257 4,44,579
Taxes 0 0 0 0 0
PAT -53,496 -16,372 59,725 1,98,257 4,44,579
Add: Depreciation 0 0 0 0 0
Cash Profit -53,496 -16,372 59,725 1,98,257 4,44,579
Repayment -50,000 -50,000 -50,000 -50,000 -50,000
Initial Equity infused -1,00,000
Net cash flow -2,03,496 -66,372 9,725 1,48,257 3,94,579
NPV @15% 60195.68
IRR 23%

Project Resources Plan

The table below gives the staffing plan and the costs involved in compensation:

Interior Manpower
Position Cost Per Month Total Cost by the End of the Project
Project Manager 30000 150000
Functional Consultant 25000 125000
Total 275000
Exterior Manpower
Position Cost Per Month Total Cost by the End of the Project
contract for 3 months 50000
Total 50000

Project Communication Plan

A project involves different people and information. Hence, it is important to identify the communication channels and processes that will ensure that the decision-makers and all involved people are on the same page. The following is a table indicating the communication plan for the project:

Item Frequency Individual(s) Documents Media
Run Through Daily Project Manager NONE Voice Call
Progress Monitoring Weekly Project Manager Weekly monitoring report Conference and Sharing of through Email
Detailed progress Monthly Project Manager Budget and current progress reports Conference and Email
Review Presentation Once in 45 days Project Manager Presentation Conference and Email
Evaluation Once at the end of the project Project Manager Presentation Application Delivery
Training Once after project implementation Staff Members Live Training Live Demo

Risks

Each project has its risks that relate to finances, schedule, resources, and market (Laudon & Guerci 2002). It is important for an organisation to identify these risks and take the necessary actions through a risk response plan as discussed below:

Methodology and Risk Identification

It is important to keep on reviewing the project progression to identify any eventuality (Caniels & Bakens 2012). In this case, daily progress discussions by the project team is an important aspect of ensuring that risks are identified as they arise. Secondly, the project manager and financial managers must be alert to notice any deviation in budgeted costs and schedules and act accordingly through discussions with the top management during monthly reviews. In reviewing project progress, it is important for the project team and the top management to discuss any risks relating to resources, finances, schedule and budget.

Risk Response Plan

The following table shows the risk response plan adopted for the project:

Type of Risk Strategy Adopted Details
Resource Risk Mitigated
  • Contracts to important persons such as Project Manager to ensure committed for the project duration
Financial risk Mitigated
  • The use of external debt and equity funds to cushion the organisation against any losses
Schedule risk Avoided
  • Frequent meetings to identify any risks and paving way for the immediate address
  • Contingency time is set aside to cover unforeseen delays
Budget risk Mitigated
  • Frequent meetings and budget reviews to ensure that the project is within budget all the time

Execution

Execution is also referred to as the project development and implementation phase. It denotes the period of putting plans into reality (PMBOK 2013). Project execution requires the development of progress reports, meetings, and quality assurance to ensure the project is successful.

Submission of Progress Reports

It is important to ensure that all members who are involved in the project share the project progress with each other for input, risk reviews, and quality assurance. As such, it is important after every review meeting to share progress reports to all members. Secondly, during the review, it is important to have a follow-up on issues identified in previous review meetings and a discussion of the actions taken.

Changes

In each review meeting, a discussion of issues that have been identified in the previous meeting and the respective action allows members to acknowledge and approve any changes on the project before current issues are discussed. Major changes such as those that touch on budget or schedule must be addressed to the top management for approval or any other appropriate actions.

Quality Assurance

While implementing the project, it is important to ensure that every process meets the set quality expectations (Raymond & Bergeron 2008). Such an approach ensures that the final product is of the highest quality as required by the company. This goal can be achieved by applying the quality measurement parameters set during the project planning and generating quality report as required. The table below is a sample report t testing the quality of the e-Commerce application:

Action Standard Stage Frequency
Software Deliverable The Cost and Timeframe required for the successful implementation of the Application Evaluation At the Start of project
User Friendliness of application Easy to use application Implementation Monthly during review meetings
Errors and bugs in using the application 0% margin for errors or bugs after completion of the project Post implementation During the maintenance of the application

The following is a Quality Assurance and Quality Control logbook samples for the application:

Sample Quality Assurance log:

Date Process Req. value of success Actual Acceptable (Yes/No) Recommendation Date of Resolved
18/8 Placing order 100% 85% No This process must be rechecked and resolved to achieve 100% success 10/10/2015
20/8 Billing 100% 90% No This is an essential process and must be maintained at 100%. It must be solved immediately 14/03/1015

Sample Quality Control log:

Date Process Req. value of success Actual Acceptable (Yes/No) Recommendation Date of Resolved
18/8 Placing order 100% 100% Yes Tested and Accepted 11/10/1015
20/8 Billing 100% 100% Yes Tested and Accepted 16/03/2015

Delivery

Delivery is the final stage of the project management cycle and involves activities such as training, resource and staff releases, documentation and reporting.

Training

This involves the training of staff members on the key aspects of the application for its successful execution.

Documentation

This stage involves the development of a manual concerning the use of the application and/or a transfer all the necessary documents from the project staff to the organisation.

Release Resource and Staff

The stage involves termination of contracted resources and staff.

Lessons Learned

This stage involves taking a record of lessons learned from the risk response plans, progress meeting and reports on the project for future use to avoid same problems in future projects.

References

Caniels, C & Bakens, J 2012, ‘The effects of Project Management Information Systems on decision making in a multi project environment’, International Journal of Project Management, vol. 30 no. 2, pp. 162-175.

Harris, L 2000, ‘Librarians and E-Commerce: Making E-Commerce Work for You’, IFLA Journal, vol. 1 no. 1, pp. 129-131.

Hooley, G, Saunders, J, Piercy, F & Nicoulaud, B 2007, Marketing Strategy and Competitive Positioning, Prentice Hall/Financial Times, New York, NY.

Kahura, N 2013, ‘The role of Project Management Information Systems towards the success of a project: The case of construction projects in Nairobi Kenya’, International Journal of Academic Research in Business and Social Sciences, vol. 3 no. 9, pp. 104-116.

Laudon, C & Guerci, C 2002, e-Commerce: business, technology, society, Addison Wesley, Boston, MA.

Metafuse Inc. 2013, . Web.

Nielson, M 2014, Global e-Commerce Report, Project Management Institute, New York, NY.

PMBOK 2013, A guide to the Project Management Body of Knowledge (PMBOK), Project Management Institute, New York, NY.

Raymond, L & Bergeron, F 2008, ‘Project management information systems: An empirical study of their impact on project managers and project success’, International Journal of Project Management, vol. 26 no. 2, pp. 213-220.

Annexes

Weekly Progress Report Template

Date 30-08-2014
Participants Project Boss
Developer 1
Operational Manager from the Company
Last meeting points Actions taken:
1 Process Definition
2 Module Draft Design
3 Output presentation
4 1stDraft presentation
Action Item Description/ Status Responsibility Due date
Process Definition Changes on Billing Changes on Inventory System Developer Project Manager 06/06/15
Module Draft Design Preparation and presentation of draft modules System Developer Project Manager Completed
Output presentation Approval of basic project layout Project Manager Completed
1st Draft Presentation To be made by the 3rdweek of April Project Manager 10/10

Vendor’s Evaluation Criteria

Criteria Weight Vendor A Vendor B Vendor C
Cost 25 20 22 17
Time 25 21 20 23
No of modules 20 19 21 19
No of quality checks 15 13 12 14
Maintenance Period 15 12 14 11
RANKING 2 1 3

Review Presentation Agenda

  1. Introduction.
  2. Project Status.
  3. Modules Developed.
  4. Percentage progress.
  5. Project budget.
  6. Modules to be developed.
  7. Quality assurance log.
  8. Quality control log.
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