Friday, 27 May 2011

The Impact of Social Commerce on Ecommerce

Venture specialist Dave Beisel first coined the term “social commerce” to refer to the integration of e‐commerce with social networking. According to PR executive and blogger Steve Rubel, “Social commerce can take several forms, but in sum it means creating places where people can collaborate online, get advice from trusted individuals, find goods and Ideation services  and then purchase them. It shrinks the research and purchasing cycle by creating a single destination powered by the power of many.”

Wikipedia describes social commerce (also known as social shopping) as a subset of  e‐commerce solution in which the active participation of customers and their personal relationships are at the forefront. The main element of this new trend is customers’ involvement in the marketing of products being sold, e.g. their recommendations and comments through blogs and shopping lists. This phenomenon enables customers to interact with one another in order to make better buying decisions by capturing and structuring “word‐of‐mouth” around product recommendations and reviews.


Social Networking sites are a key target for online advertising, as SNS users say peers and colleagues hold more influence over their purchases than any other source of information. Furthermore, Compete, Inc. reports that SNS users spend nearly 25% of their disposable income on online purchases. The recent boom in online advertising has also provided social networking sites a way to convert website traffic into dollars without charging members a subscription fee. The advent of Google's AdWords advertising program has been an especial boon, as it allows sites to place keyword based ads alongside content like users profiles. “Networking sites provide some of the most powerful word‐of‐mouth‐marketing opportunities there have ever been,” says Nancy Costopulos, Chief Marketing Officer at the American Marketing Association. “It's past the fad zone and into the reality zone.”

Another survey by AMA found that 47% of consumers said they would use social networks to discuss and find holiday gift ideas; 29% would buy products through those sites; 51% would look for discounts on social networks; 51% would download coupons; and 18% would read or write product reviews.

According to online marketing firm The ClickZ Network, “‘Brand Advocates’ spread opinions via word of mouth, as well as over social networks, instant messaging, chat, photo sites and blogging. Such advocates have at least a two‐to‐one rate of converting an actual friend or family member to buy the same exact product or brand they support, according to the report.” E‐Consultancy’s Social Commerce Report 2007 found that 67% of online retailers say that a social networking strategy is a medium‐to‐high priority for investment.

A recent study commissioned by social networking giant MySpace reported that business‐to‐consumer messaging could create considerable value when combined with consumer‐to‐consumer messaging. Following up on this study, MySpace recently introduced a hyper targeting program that allows advertisers to pick "enthusiast" audiences from ten categories of interests: music, movies, personal finance, gaming, consumer electronics, sports, travel, auto, fashion and fitness. Similarly, Facebook allows “endorsements” on its site and encourages members to subscribe to brands. Forrester Research observes, “As these ‘Fan‐Sumers’ share their affinities, brands can advertise using trusted social relationships.”

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Saas Application Development, Product engineering services

Friday, 6 May 2011

Outsourced Product Development Myths and Realities

Outsourced Product Development Myths and Realities

Outsourcing software development has been in place for some time now, with companies having overcome the initial hiatus to embrace this new trend. Both small startups and fortune 500 companies have saved millions of dollars outsourcing their software needs offshore to locations like India, China and Russia and acquired a definitive edge over their competitors who chose to go without software or ramp up an information technology team in house. Whereas traditional software outsourcing has been by brick and mortar companies whose core competency was not in writing software, a new wave has recently arrived where even the Mobile application development companies are now looking out for coalitions or partners who can manage their product development offshore. This is in stark contrast to the normal principle of outsourcing where companies used to outsource tasks which were not a part of their core competency. One must say competitive globalization has arrived.

Choosing an offshore product development partner
Myth: When it comes to choosing a development partner, there is no difference between a one-off software development company and a company focused on Software Product Engineering Services
Reality: You couldn't have been farther from the truth. There is a world of difference between one-off software development and creating a software product. One-off software development is more of a 'Get it working somehow approach' while companies focused on software product engineering live by making strongly architected, portable, maintainable, secure, adaptable, highly configurable and installable software. For more details on the difference between traditional outsourcing and outsourced product engineering,

Project Management Ownership
Myth: Keeping project management onsite with just retaining the team with the outsourcing partner would lower the risk by reducing the number of unknowns.
Reality: Managing the project from onsite is a tricky affair. 70% of the projects can be run successfully by just keeping tab of the deadlines and the deliverables. For another 30%, specially, the pressure cooker ones, it is important to have a pulse of the team and to keep them motivated. This is difficult to achieve when the manager sits at a different location than the team. Moreover, if the manager is co-located with the team, he/she can resolve project/people issues better and keep a closer watch at the quality and the deadlines.

Protection of Intellectual Property
Myth: Our IP would be stolen if we outsource
Reality: Since product engineering is all the Saas application development vendors do for a living, they realize the importance of the partner's intellectual property and use legal and technological measures to ensure the same. Hence they take extreme steps to ensure that the most of the cases, these vendors have separate seating areas and sub nets to ensure safety of the partner's IP. All magnetic media taken in and out of the premises is accounted and the entire premises are under biometric access control. Employees of these vendors sign Non-Disclosure Agreements (NDA) with the partner and confidentially agreements with their employers.

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