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Evaluation of the Role of ECommerce in Reducing Operational Cost in an Organization

Evaluation of the Role of E-Commerce in Reducing Operational Cost in an Organization

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Reference ID: PS-502-TM


This research material titled “Evaluation of the Role of E-Commerce in Reducing Operational Cost in an Organization” is dedicated to God for his enabling grace, and to all computer enthusiasts who contributed to make life a pleasant experience during my research documentation.


I extend my sincere gratitude to all those who contributed to the completion of this project. Special thanks to my Supervisor (Name of your Supervisor), the Head of Department (Name of your HOD), the Lecturers in the department of Computer Science (CS), Book Authors and Profound Scholars of existing or related project material on “Evaluation of the Role of E-Commerce in Reducing Operational Cost in an Organization” for their invaluable guidance, support, and expertise throughout the journey.

I am also grateful to your study area (mention any funding organizations, if applicable) for their financial assistance. This research would not have been possible without the encouragement and assistance of some stakeholders (mention any mentors, teachers, or colleagues). Additionally, I would like to acknowledge the understanding and patience of my family and friends during this endeavor. Your unwavering support has been a constant source of motivation. Thank you all for being part of this meaningful endeavor.







    • 2.1 Introduction
    • 2.2 Conceptual Review
    • 2.3 Theoretical Framework
    • 2.4 Empirical Studies



    • 3.1 Introduction
    • 3.2 Research Design
    • 3.3 Population of Study
    • 3.4 Sampling and Sampling Technique
    • 3.5 Validation of Research Instrument
    • 3.6 Method of Data Collection
    • 3.7 Method of Data Analysis
    • 3.8 Questionnaire Administration
    • 3.9 Ethical Consideration
    • 3.10 Statistical Analysis



    • 4.1 Introduction
    • 4.2 Presentation and Analysis of Data
    • 4.3 Re-statement of Research Questions
    • 4.4 Test of Hypotheses
    • 4.5 Discussion of Findings



    • 5.1 Introduction
    • 5.2 Summary of Findings
    • 5.3 Conclusion
    • 5.4 Recommendation
    • 5.5 Suggestion for Further Study



    Evaluation of the Role of E-Commerce in Reducing Operational Cost in an Organization


    1.0 Introduction

    1.1 Background To The Study

    E-Commerce is the process of conducting business electronically among various entities in order to satisfy an organizational or individual objective. A key ingredient of E-Commerce, sometimes referred to as electronic trading, is the advertisement and procurement of goods and services over the Internet (Rhodes & Carter, 1998). The success and volume of E-Commerce on the web has been widely reported. With success in establishing an environment in which E-Commerce can grow and flourish, every computer can become a window open to every business, large and small, around the globe.

    The electronic medium we call the Internet has the potential to reduce actual transaction time, processing time and operational cost dramatically, while at the same time making information available globally. Internet-based E-Commerce has been embraced as a means of reducing operational cost and as a high potential means of generating revenue (Levis, 1996). The ubiquity of the web and the availability of browsers across different platforms provide a common base upon which E-Commerce applications can be built, especially in the enterprise. This common platform has reduced the significance of issues pertaining to software distribution and software installation, thus encouraging the expansion of E-Commerce via Intranets, Extranets and the Internet.

    E-Commerce provides new channels for the global marketing of tangible goods and presents opportunities to create new businesses providing information and other knowledge-based intangible products (Rhodes & Carter, 1998). Although most E-Commerce is currently at the inter-corporate and inter-organizational level, services targeted at individual customers are evolving rapidly. The Internet is the most obvious example of this and is a major catalyst in the diffusion of E-Commerce, helping to foster a common environment for electronic transactions of all kinds. E-Commerce encompasses all forms of interactive business transactions, which are facilitated by networks of computers. E-Commerce is expanding because of the greater number of businesses and individuals who are able to use these networks and the growing number of ways in which businesses can conduct transactions electronically with other organizations and directly with consumers at a reduced cost (Bartell et al, 1999).

    At present, business-to-business E-Commerce seems still to be of greater volume than business-to-consumer E-Commerce with the primary motive of operational cost reduction, but this may change in the future. These trends are important to the global economy and to the economy of individual countries because E-Commerce contributes to economic efficiency. E-Commerce contributes to economic efficiency in five important ways. They includes shrinking distances and timescale, lowering distribution and operational costs, speeding product development, providing more information to buyers and sellers and enlarging customer choice and supplier reach (Turban et al, 2000). However, this study is focused on the role of E-Commerce in reducing operational cost in an organization.

    Furthermore, when offline stores calculate operational costs, they have to factor in countless business expenditures along with the actual number of transactions.

    When there are fewer transactions, the cost of per transaction is higher. On the flipside, transactions arriving in high quantity can overwhelm the personnel and distributors. In an E-Commerce business, the operational cost is the same across the board, whether one order or thousands come in.

    Dealdey.com was launched in March 2011and they features a daily deal on the best things to do, see, eat, and buy in Nigeria. DealDey is trying to create an easy and fun way to get fantastic deals on great experiences. DealDey.com supports local businesses and in return they support consumers with good savings. They are attempting to create a “Win-Win” scenario each and every day for local merchants who want to attract new customers, and consumers who want to save money and take advantage great services and activities in their own city.

    1.2 Statement Of The Problem

    Electronic commerce is a popular topic in business management, mass media and in informatics circles as well. Perhaps its impact is most visible in the areas of financial services and retailing. Many E-Commerce initiatives have risen in a short period of time. Those initiatives include innovative smart cards to facilitate E-Commerce, remote payments and electronic checking, online trading of stocks, bonds and related financial instruments, online banking, and online retailing (e-tailing).

    However, its effect on the reduction of operational cost of organization has been examined in a number of ways comparatively to brick and mortar organizations for instance the money received for every transaction will pay for the item; it will also contribute to the salesperson salary, credit card fees, lease on storefront, electricity, telephone, heating/cooling, taxes, displays, repairs and maintenance to the building. However, the money received for an E-Commerce transaction pays for the item, web hosting, shopping cart software, distribution and little else. The cost overall of maintaining a virtual store is far less than that of a brick and mortar store.

    1.3 Aim and Objectives Of The Study

    The aim of the study is to evaluate the Role of E-Commerce in Reducing Operational Cost in an Organization. In achieving this aim, the following specific objectives were laid out as follows:

    1. To examine the role of E-commerce in reducing operational cost in an organization.
    2. To identify other benefits accruable from E-commerce in Nigeria.
    3. To identify the limitations and disadvantages of E-commerce in Nigeria.

    1.4 Research Questions

    The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

    • What is the role of E-commerce in reducing operational cost in an organization?
    • What are the other benefits accruable from E-commerce in Nigeria?
    • What are the limitations and disadvantages of E-commerce in Nigeria?

    1.5 Hypothesis

    In order to pursue the objective of this study, the following generalized statements have been designed to guide and aids in obtaining the result for the experiment to be conducted. For this work, the null hypothesis will be represented with H0 while the alternative hypothesis will be represented with hypothesis H1.

    Hypothesis One

    • H0: There is no significant relationship between E-commerce and reduced operational cost in an organization.
    • H1: There is significant relationship between E-commerce and reduced operational cost in an organization.

    1.6 Significance Of The Study

    The outcome of this study will educate business managers and the general public on the role of E-commerce in reducing the operational cost of business organizations.

    This research will be a contribution to the body of literature in the area of the effect of personality trait on student's academic performance, thereby constituting the empirical literature for future research in the subject area

    1.7 Scope Of The Study

    This study will cover the benefits of E-commerce with special focus on its influence as regards operational cost reduction in business organizations.

    1.8 Limitation Of Study

    During the course of this study, many things militated against its completion, some of which are:

    1. Financial Constraint:

      Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

    2. Time Constraint:

      The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work


    2.0 Literature Review

    2.1 Introduction

    This chapter focuses on the review of related literature. A literature review includes the current knowledge as well as theoretical and methodological contributions to a particular topic. It documents the state of the art with respect to the topic you are writing. It surveys the literature in the topic selected. In this research work the literature review includes the …

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