From Intranet to Extranet
Copyright ©1997 The McGraw-Hill Companies, Inc. All Rights Reserved. Any use is subject to the rules stated in the Terms and Conditions of Use.
By Richard H. Baker
Excerpt (chapter 1) from "Extranets: The Complete
Sourcebook," by Richard H. Baker. Published by McGraw
Hill's Beta Books. Reprinted with permission.
An extranet has a lot in common with an intranet. Although
intranets have been defined as existing behind firewalls and
serving purely internal purposes, that has never really been the
case. From the beginning, when intranet builders began to apply
World Wide Web technology to specific organizational
communication needs, their applications have always included
both internal and external communication.
Take note: that's communication, with no s. We're not talking
about the technical concept of communications here, but the
singular form of communication that takes place between real
people. And just as communication is important between
members of an organization, it is just as important between
organizations. Successful businesses no longer exist as isolated
enterprises. They have come to see the value of active
communication with their supplies on one hand and their
customers on the other. These customers and suppliers, in turn,
are linked to other customers and suppliers. The result is an
interlocked chain that is something like a box of fishhooks,
interlinked in multiple unpredictable ways. Anything you do to one
fishhook affects countless others.
That's why intranets have never been confined to strictly internal
communication needs. That's also why an extranet cannot be
completely confined to external communication. The line between
internal and external communication was never strictly observed,
and it is starting to disappear entirely. As businesses form
partnerships with their suppliers and customers, there remains
only the finest of distinctions between the inside and the outside.
An extranet simply grants formal recognition to that
long-established fact. Most intranet owners either allow external
access already, or plan to soon. (Figure 1.1 and Figure 1.2).
Figure 1.1. Most Intranet owners either allow external access, or
plan to (Forrester Research).
Figure 1.2. Customers and other business partners are the main
external users.
The reverse is also true. Though an extranet extends itself to
outside communication, it should not be limited strictly to that.
The test of a true extranet is that it is equally capable of handling
internal and external information.
Figure 1.3. The differences are in the details.
How the Extranet Has Evolved
It all goes back to the Internet, a phenomenon that has
transformed the computer industry, and the way people use
computers, in many ways. As the Internet and the World Wide
Web became established, organizations have learned to use
Web technology to distribute information to their employees. By
establishing intranets, these organizations have been able to
distribute information to their employees much more
cost-effectively than older means like newsletters and memos.
That's why the earliest uses of intranets were to distribute
corporate information: newsletters, policies, employee
handbooks, and internal telephone directories. According to a
report published on the Netscape Web page, General Electric is
no longer printing a standard directory of company information.
By putting the directory on an intranet, the company is saving
$240,000 a year in printing costs. Figure 1.4 shows that in 1996,
planners were looking at familiar applications like these, though
several, like product planning and e-mail, had external uses as
well.
Figure 1.4. Early in the intranet game, corporate planners
concentrated mainly on familiar internal applications.
Nevertheless, many of these had external implications.
Results like that can provide a quick payback for the costs of
implementation, particularly when the implementation costs
themselves are low. Eli Lilly linked about 3,000 employees for a
total cost of only $80,000.
The intranet as groupware
Though the intranet is still a technological toddler, applications
like these already qualify for legacy status. In one of the shortest
reproductive cycles on record, the intranet has spawned second
and third generation applications that extend both ways from the
original corporate base. One branch of the family extends
downward from corporate-wide communication to allow
exchange of information at departmental and workgroup levels.
Some developers asked this sensible question: If the Web
provides an easy, facile way to communicate general company
information, why not extend it to other types of information and
applications? One of the first examples of this mode of thinking
was to link an intranet to information stored in conventional
databases. It was only one more logical step to extend their
thinking to information sharing within departments and
workgroups. One evolutionary path of the intranet, then, has been
in the direction of groupware.
Publishing company-wide information remains a good way to get
started with an extranet, but don't plan on stopping there. No
doubt you have much information that is unique to departments
and workgroups: information on different projects pursued by
different teams. It's been predicted that the benefits of sharing
this kind of information can be much greater than the savings you
can get from intranetting internal communication alone.
Looking outward
The same can easily be true when you look outward instead of
downward. You and your business partners also have information
to share. Product information, price lists, and delivery schedules
are only part of the picture. This need has already been
recognized in areas like electronic document interchange (EDI),
which allows business partners to place orders, deliver goods,
and process payments electronically. The Federal Express
do-it-yourself shipment tracking system (Figure 1.5).represents
yet another level of sophistication. Customers track their own
shipments without requiring intervention by someone else. In
addition, Fedex need not pay the cost of having someone there
to intervene.
Figure 1.5. The Fedex do-it-yourself shipment tracking system is
only one feature of this pioneering extranet.
There is much to be gained by sharing information both internally
and externally. The extranet gets rid of that distinction and lets
you concentrate on sharing information whenever and wherever
good communication is important. And good communication is
important just about everywhere.
New Tools for Better Sharing
That was the first generation of Intranet evolution, extending its
outlook downward toward departments and workgroups. The
departmental intranet still did little, at least deliberately, to look
beyond the firewall toward essential business partners outside
the organization.
The downward-looking generation did produce some things of
value. First, it established the point that intranet technology need
not be limited to obvious, enterprise-level applications. Second, it
brought valuable new tools into common use. These tools vastly
enhance the process of sharing information with fellow team
members, both inside and outside the organization.
Not designed for sharing
Consider the typical corporate computer today. It contains a suite
of desktop applications including, most likely, a word processor
and a spreadsheet. It is networked to a file server, often more
than one. It is also likely to be served by electronic mail.
None of these tools is truly designed to share information. The
word processor, spreadsheet, and other applications that make
up a desktop suite are designed for use by individuals working
alone. The suites have gained some communication functions in
recent years, but these have been grafted onto what are still
essentially single-use applications.
The file server? It's a great place to store files, but a horrible
place to find them. Furthermore, it has no inherent facilities for
sharing work and resources. File servers let you share disk
space but little else. It is a static sort of storage, with little to foster
group dynamics.
E-mail is closer to becoming a workgroup product - in fact, the
newest versions of e-mail are evolving into sophisticated
work-sharing applications. Nevertheless, simply trading e-mail
messages is not enough by itself to foster group dynamics.
E-mail is also plagued by problems of compatibility between
systems, challenges of directory management, and other uncured
ailments. Not the least of the problems is the prevalence of junk
e-mail that diverts attention from more important forms of
communication.
There are, of course, dedicated workgroup tools like Notes and
Exchange, and they cannot easily be written out of the picture.
Nevertheless, the advent of Web technology for internal
communication heralds the use of the same technology for
communication throughout a much-extended workgroup. In
particular, Notes is being revamped to work with the Web rather
than as a self-contained system.
Better things from the Web
First-generation intranet developers have demonstrated how you
can use Web technology, and Web page development methods,
to improve group communication, both inside and outside the
organization. Web techniques have made it easier to find your
way through the massive amounts of information on the Internet.
Surely they can help people find their way through the less
massive amounts of information you want to exchange with
employees and external trading partners.
In its more visionary statements, Netscape envisions a model in
which virtually all corporate information is stored on a Web
server. Creating a Web page is much like creating a word
processing document, and it certainly is no more difficult. Nearly
anyone can learn how to do it.
But - and here's a key element - not just anyone can read or edit
your information. A Web administrator can use modern access
control features to determine who can read, and who can edit, a
Web document.
The advantage to this approach is that anyone with information to
share can readily share it, with someone in the next cubicle or
someone in the next country. Furthermore, the information can be
made easier to find and use.
Benefits of this approach include the ability to:
Share information with less effort. A document can be
posted on a Web server and updated instantly when
necessary. You need not send e-mail to a list of intended
recipients. The recipients can come to the message.
Find information with less effort. Search tools are now
readily available that can help find information no matter
where it is posted. Unlike older forms of data storage, you
need not even know that the resource exists. The search
tools can find it anyway.
Reduce printing and mailing costs. Electronic
documents may not save as much paper and postage as
the optimists like to think, but savings still are possible.
Of course, there are potential drawbacks as well. Security and
access control are vital if you are to open information to parties
outside the organization. But these are also important in a strictly
internal intranet, so the challenges are not that much greater.
Applications emphasize the workgroup
As intranet developers concentrated their attentions on the
department and the workgroup, they created several new types of
applications. Though originally intended for internal workgroups,
these applications also have external potential:
Sharing information with cross-functional teams. It
has become a common business situation for project
teams to be formed from members of different
departments. Team members can be at different locations,
and may operate different kinds of computers. A team web
page on an intranet or extranet can be an ideal way to
share information.
Extranet potential: Project teams that extend beyond single
organizations to customer and vendor locations. In these different
firms, the differences in equipment and location will be even
greater. An extranet can help these cross-corporate teams share
schedules, product information, development plans, reference
material, and to-do lists.
Sharing information throughout departments. This
kind of sharing can be critical. People need to know what
others in their departments are doing and how they can
best get the job done. They can share resources like
document templates, standard procedures, best practices,
status reports, and technical support.
Extranet potential: Technical support is an obvious and fruitful
way to share information with business partners via an extranet.
And when working together to produce a better quality product,
multi-corporate workgroups can benefit from shared information
just as well as internal workgroups.
Sharing information between organizational levels.
Good communication with sales representatives and other
mobile workers is a major challenge. These dispersed
workers often lack regular contact with the home office. Yet
it is they who must often answer customers' questions and
shoot the customers' troubles. For them, an extranet is a
way to get accurate, timely information. The same link can
work the other way, too: customer contact employees get
some of the first and best feedback from the field. The
extranet can help them relay this valuable information to the
decision-makers back at headquarters.
Extranet potential: This kind of application already extends well
beyond the firewalls at headquarters. It would be only one more
small step to give customers direct access to important
information, and to let them send their feedback directly to the
executive suite.
Why Internal Communication Isn't Enough
The expansion of the intranet for internal communication has
been spectacular. It's been so much so, in fact, that intranet
development will soon overtake and far surpass public Internet
applications. Nevertheless, David Moschella, senior vice
president for research at Computerworld, recently wrote that that,
"Despite this apparent stampede, the industry's emphasis on
intranets can be described only as disappointing."
"Since the beginning of enterprise computing, information
technology suppliers have sold their wares based on promises of
internal productivity, Moschella explained. "Accounting, human
resources, payroll, manufacturing, and word processing systems
were designed to improve internal company efficiency. They have
often succeeded."
But, he continued, "the relationship between internal efficiency
and business productivity has never been a one-to-one
correlation, and it's ultimately subject to diminishing returns.
Unless information technology can be used to directly provide
customers with superior products and services, its potential
long-term potential will remain elusive."
Moschella cites EDI, digital cash, online banking, and of course
the Fedex shipment tracking system as examples of technology
applications that can transform major business activities. He
acknowledges that many of these applications need time to
mature and that many purely intranet applications are valuable.
Nevertheless, he believes it is wrong to focus strictly on
conventional intranet applications. "Every dollar invested in
internal automation is a dollar that could have gone to a more
compelling and useful (external) presence," he said. These
external applications could include "a useful presence on the
World Wide Web, a supply-chain EDI application, or an online
customer service capability. The sooner the industry makes
these external, customer-centric applications its top priority, the
sooner the great potential of the Internet will be realized."
More of the same to come
Expect more of this kind of commentary in the future. The same
issue of Computerworld that carried Moschella's column also
described how Countrywide Home Loans (Pasadena, CA) built a
hybrid extranet - half Internet, half intranet - that could serve as a
prototype for the kind. In fact, Countrywide was one of the first
organizations to describe its installation as an extranet.
Through this application, Countrywide can share information with
the banks and mortgage brokers who are its business partners.
At the same time, strictly internal information like financial
databases are screened from outside disclosure.
Called Platinum Lender Access, the system lets a banker who is
processing a mortgage application call up the Platinum site to
check such information as the loan's status, the account history,
and current interest rates.
A bank of firewalls restricts access to banks that can supply the
proper name, password, ID number and other proprietary
information. An access control system is designed to reveal only
information to which the specific bank is entitled.
Countrywide reports substantial savings, just in a limited initial
trial, over traditional methods that involved telephone messages,
faxes, and mailed documents.
Controlling access
The biggest risk, of course, is that someone will use the system
to obtain information they shouldn't have. Countrywide not only
worries about competitors and hackers, but it fears individual
home buyers might gain access to data that is intended for the
banks and brokers alone. Business partners share those
concerns.
To meet the security need, the firm has established several
layers of access control, the full details of which it keeps to itself.
One element is the Secure Sockets Layer encryption scheme
used in Netscape products. There are also several firewalls in
place, including some custom-built installations.
How Internal Applications can Become External
The range of possible extranet applications is almost infinite. In
particular, nearly anything you can devise for an intranet can have
external implications. Nevertheless, the early applications have
generally fit into one of these categories:
One-to-many communication between teams,
departments or entire corporations. You can post
information on a Web page, reducing paper documents
and making the information available almost immediately.
The cost savings in printing can be significant, but even
more important is the savings that come from better
communication.
Applications that require two-way interaction. If there
is such as thing as a classic extranet application, it is
technical help and support. Many computer-oriented
companies have found it easy and cost-saving to post
specifications and problem-solving information on the Web,
and to use Web e-mail as a vehicle for receiving and
answering inquiries. In other instances, an employee needs
information to prepare a report, analyze data, or learn
about suppliers and customers. Here, a Web site linked to
corporate database resources can be easier and quicker
than relying on printed reports.
Collaboration that requires many-to-many
interactions. In this category are newsgroups whose
members exchange information. Their posted messages
can form a valuable knowledge base for others. At times, of
course, you will want exchanges of confidential information
to remain within a controlled group. Even in this case,
though, it is not always necessary to confine that group to
internal members. Trusted suppliers and customers can,
and often should, be in the communication chain.
Types of applications
Within these general classifications, application development to
date has focused on several particular types:
Sales and marketing
Product development
Customer service
Human resources
Financial
Sales and marketing
The departments that sell products face a continuing challenge
delivering up-to-date reference information to customers who
often are dispersed over a large area: the nation, or even the
world.
Sales representatives know that having the right information
available at a critical moment can be the difference between
winning and losing a sale. An extranet can give them information
like this:
Product specifications and prices
Sales leads
Competitive information gleaned from the competitors'
Web sites
Calendars of sales activities
Just-in-time training
Instant sales presentations
Marketing people, meanwhile, need access to database-type
information on current and potential customers. For example,
Home Box Office (Figure 1.6) has converted its marketing
campaign materials from printed and videocasette forms to a
Web site that gives the sales force instant access from just about
anywhere.
Figure 1.6. HBO offers a host of features for its home page
viewers, but it also has internal/external features that support its
sales representatives.
Cadence Design Systems built a dynamic Web database of
sales and marketing information. This system maps out each
step of the sales cycle with links to sales support resources. It
also:
Uses web-page forms for communication with
headquarters.
Lets global account teams share information in a secure
environment.
Provides a storehouse of sales and reference materials
Offers links to key Internet sites
Provides a daily news report on industry developments
(Figure 1.7).
| 
