Overview
What is an intranet?
An intranet is a network within an organization that uses Internet technologies to enable users to find, use, and share documents and Web pages. Corporations use intranets to communicate with employees.
In some large companies intranets are used as the primary way for employees to obtain and share work-related documents, share knowledge, collaborate on designs, access e-learning and learn about company news.
Intranets use traditional Internet protocols, TCP/IP and HTTP to transfer data. They usually reside behind firewalls, for security, and are not limited by physical location—anyone around the world can be on the same intranet. Intranets also link users to the outside Internet, and with the proper security in place may use public networks to transfer data.
What if people outside our organization use our corporate intranet?
Then it is an extranet. Extranets are networks that connect companies with customers and partners. When it comes to extranets, a company has to work with the other organizations on the network, so that it’s available to specific people or groups outside of an organization. Extranets require more security and technical consideration because they have to send private information securely over public networks.
Why would you use extranets?
When done correctly, extranets provide a safe way to allow transactional business-to-business activities and can save your company some serious time and money. The automotive industry uses extranets to cut down on its redundant ordering processes and keep suppliers up to date on parts and design changes, allowing quicker response times to suppliers' problems and questions. Suppliers can receive proposals, submit bids, provide documents, and even collect payments through an extranet site. An extranet has restricted (password-protected) access, so it may be connected directly to each party's internal systems.
Case Study
Most intranets conserve time and money. True winners generate innovation
as well. Here's an under-the-hood look at some of the best.
Broad Operational Site
There's a clear intention in many organizations for the intranet to become
the sole desktop utility of record. At Chrysler Corp., the place to be is
Dashboard (gotta love that name!). Sponsored jointly by HR, IS and corporate
communications, Dashboard has Swiss Army Knife ambitions: Its goal is to
increase the productivity of 40,000 or so salaried employees by simplifying
information access. Through this straightforward interface, users can get at
competitive intelligence, collaborative workgroup support, HR self-service
apps (including records administration), financial modeling tools, company
news, a dynamic stock feed and mutual fund quotes, a vehicle-build tracking
system, manufacturing quality statistics and other tools and resources.
Narrow Operational Site
"Not 2 couches and 10 lamps...I said 10 couches and 2 lamps!" Simply stated,
Allied Van Lines' Agent Notification System is intended to make sure that
the right trucks pick up the right stuff at the right time. And that means
enabling Allied's network of 500 independent agency locations to receive
the most current information about customer shipments. In dealing with
independent affiliates, there's no stick, only a carrot. So the challenge
for Mary Mancuso, manager of agent support services, is to win over the
agents' hearts and minds with the vision of higher productivity—and the
associated ROI. Once fully deployed (as of April, only 15 percent of the 500
agency sites were on board), Mancuso projects that the flow of timely order
information will save agents a total of more than $6 million annually. For
Allied corporate, the anticipated benefit of improved information quality
will be more—and more satisfied—end customers.
Intranet/Extranet Hybrids
Toshiba America Information Systems Inc.'s Electronic Imaging Division
(EID), a maker of fax machines and copiers, interacts with employees,
dealers and distributors over Internet FYI, bundling in one big tent the
company's business-to-business e-commerce, transaction processing and
internal information sharing. But the bread-and-butter role of this site
is to support EID's independent dealer network. And in a hotly competitive
office-equipment market, strong dealer relations are a decisive competitive
advantage. Under the direction of Lisa Richard, Toshiba EID vice president
of business planning and operations, the site saves dealers time and money
and simplifies complexity, speeding up the spare parts replenishment process
and allowing dealers to trim parts inventories. That's no small achievement,
since EID offers 40,000 spare-part SKUs.
Customer-Care Extranet
IntelSat is a global satellite communications provider with a base of corporate
customers spanning more than 200 countries. The IntelSat Business Network
(IBN) gives customers real-time access to available satellite inventory and
enables easy online ordering of service. In a business where the available
capacity can fluctuate rapidly (and where there are quite a few competing
alternatives), this is a very good thing to be able to do. But IntelSat goes
farther, offering customers online content to foster a sense of participatory
community. For instance, it recently presented live streamed video coverage
of a satellite launch, prefaced with lots of behind-the-scenes information on
what goes into preparing for the launch. Such "special events" help create
a more loyal customer relationship in what might otherwise be thought to be
a commodity industry.
Internal Information Sharing
Delayered decision support is the aim of intranets from both The Dow Chemical
Co. and electric and gas utility company Houston Industries Inc. (HI). HI's
EMSweb (for Energy Management System) has strong operational components,
feeding real-time data to facilities managers for their use in power
generation and transmission, and fuel-buying activities. The availability
of this operational information has created a flatter process-management
structure that delivers improved efficiencies. The Dow Intranet aims to be
a unifying information gateway for the thousands of geographically dispersed
employees of this highly complex company. Perhaps most interesting in Dow's
approach is its apparently successful use of "information stewards" to
push down decision making about intranet content to the most knowledgeable
levels. Use of the Dow site is widespread, with 42,900 employees accounting
for between 40,000 and 75,000 accesses daily.
Advanced Knowledge Management
This is our "rich getting richer" category of intranet excellence. Several
of this year's winners are recidivists touting impressive updates to sites
that wowed us last year. Perot Systems offers some interesting ROI metrics
based on productivity enhancements enabled by TRAIN, its knowledge intranet:
customer proposal development time cut 60 percent, proposal development cost
cut 45 percent, travel time for business development cut 35 percent, time to
market for new product/service offerings cut 40 percent. This year the site
has added benefits enrollment and online procurement support. It collects 2.1
million hits a week and is used by 4,800 employees.
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ROI
One way to make it easier to gauge extranet ROI is to establish simple,
well-defined targets. Most companies get into extranets because they
want to link to customers and other business partners. But extranets eventually evolve into
mission-critical systems that can revamp an organization's way of doing
business.
Rob Laudadio, director of collaborative computing at Entex Information Services
Inc., a $2.5 billion computer systems integrator based in Rye Brook, N.Y.,
recommends getting a head start by identifying which business processes the
extranet will target before embarking on development. Laudadio based his
extranet ROI plan on a 1995 study conducted by KPMG Peat Marwick LLP that laid
out Entex's costs of selling and distribution activities. Laudadio first
established baseline measurements for 12 activities highlighted in the
report—including quote generation, order entry and cash collection—and then set
out to design an extranet that would impact those areas.
For example, Laudadio learned from KPMG's findings that 18 percent of the cost
of Entex's sales organization—from phone reps at its customer account center in
Mason, Ohio, to general managers in the field—was spent on writing up price
quotes for simple computer packages. So in 1997 when he drew up the spec for an
extranet to take orders from wholesale customers, Laudadio made sure it
included functionality for quickly calling up frequently ordered
configurations. The result? A 13 percent reduction across the organization in
the cost of generating a quote. "We can either put that money into our pocket,"
says Laudadio, "or take it in increased productivity of our employees."
Overall, Entex anticipates seeing 161 percent ROI on its extranet investments
in both 1999 and 2000. To track down all the numbers that add up to this
impressive projection, Laudadio gathers input from various Entex departments
and sometimes hires outside consultants to do the analysis. A visit to the
finance department helped him prove that—with invoices available
online—customers are paying bills faster, thereby reducing financing costs for
accounts receivable. Then Laudadio calculated the effect of ordering over the Web. Key-word
searching and preapproved bundles slash the cost of price lookup to around $1.
Order spreadsheets are now generated automatically, so from the customer's
perspective the cost of that task disappears completely. Overall, Laudadio
estimates that the average cost to his customers for placing an order drops
from $196 to $126 when they buy through the extranet.
Laudadio admits that devising a yardstick against which to measure
extranet return is still more art than science. Yet he's willing to take the
time to paint a picture of extranet benefits, even if his strokes are broad.
"It's very easy for me to sit down with my executives and say this is a good
thing, but for me to go back to the well for next year, they need to see
something tangible. They need to answer to shareholders."
Disaster!
Would anyone tell you if your intranet was in real trouble? Well you don't have to wait. Mark Allen, Director of Internet Services for Andersen's Experience Design points out some of the warning signs that your intranet is going downhill fast.
Employees are recreating solutions for the same problem over and over again—Solutions and best practices are not being shared.
Innovation takes too long—When employees are actively sharing information, the innovation curve goes up steeply because they are building on one another's experience and ideas.
Access to legacy data is too difficult—Information needs to be organized into a logical and easily navigable structure.
Different business units are doing the same thing differently with varying results—Political issues surrounding the intranet often occur when different departments are sticking with their own products and solutions and are unwilling to conform to enterprisewide standards, or when such standards do not exist.
There's no consistent mission or glue from corporate culture—Companies need to ensure that the site's design and information architecture meet consistent standards.
When employees leave, information is lost—Often companies will need to offer incentives in order to get employees to contribute or face the constant draining of their intellectual capital.
Intranet content management is out of control and disorganized—Sites need an established framework that dictates what kind of information will be posted, how and by whom.
It costs too much to maintain the site—While the cost will vary with the size of the organization, an improperly managed site can quickly overrun its budget.
Buzz Words
Intranet
An internal website offering content and services to employees. Although it may link to the Internet, an intranet cannot be accessed by the general public.
Extranet
A network of controlled-access Web resources that are available only to specific users, such as customers or trading partners.
Corporate Portal
An internal Website that provides proprietary corporate information to employees as well as access to selected websites, such as those of suppliers. Individuals or user groups are given the ability to customize the portal page, which includes a search engine for internal documents.
Groupware
Software that helps groups of people who work on a network communicate electronically and share data, such as email, meeting scheduling and file distribution applications.
Intranet/Extranet continued (page 2) ->
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