Home.front: more than just internal Internets, intranets and extranets are tying companies together - and blurring the boundaries between them.

For the CEO accustomed to surfing the Net, venturing onto the turf of his local intranet or extranet may seem all too familiar. After all, the language, the icons, the links appear to be the same. But the similarity is only superficial. For while each of these three species of electronic network are accessible by means of a Web browser, their content is quite another matter.

The World Wide Web has all the decorum of the Wild West - marked by exponential growth in content ranging from the sublime to the obscene to the ridiculous - but its intranet and extranet cousins must be far more restrained, because they are designed to suit the specific knowledge- and information-management needs of enterprises or groups of enterprises.

Succinctly put, an intranet comprises a wholly private network that is designed to disseminate information and knowledge within a company. An extranet moves information in and out of secure, walled-off sections of the public Internet and is designed to connect trading partners electronically and seamlessly. More important than distinguishing between these two phenomena, however, is examining how both can and should work together as part of a company's technology strategy.

The wild and woolly nature of the World Wide Web - with all its excitement, innovation, and massiveness - is what we have come to expect from that global behemoth. While experts say one should strive for innovation in the intranet environment as well, its framework must be carefully controlled in order to facilitate the knowledge sharing for which it is designed.

Internal Affairs 

"You don't want your intranet to be an internal Internet," says Susan O'Neill, a partner in PricewaterhouseCoopers's Global Knowledge Management group. "You want to encourage innovation but you want it to fit within a cohesive content architecture. You want to categorize information in such a way that it is useful to the end user." The intranet, in other words, should not be allowed to develop willy-nilly, as has the Internet.

PricewaterhouseCoopers is creating a global intranet that is designed to give the firm a competitive advantage by keeping its people well informed. "What we are trying to do is to leverage what we have captured and have more people use it," she says. "We make accessible the knowledge we gain from solving problems for our clients in an effort to apply it to other situations. That way, our people don't have to start from square one when they begin work on a new assignment." PwC's intranet also facilitates internal communications and this, too, helps with client relationships. "We may have 400 or 500 people in 40 countries working on a single client's business," says O'Neill. "Our intranet enables us to tell each other what each of us is doing on behalf of that client. The client expects us to know this."

For PWC, the merger last summer of Price Waterhouse and Coopers & Lybrand has been a driving force behind its knowledge-management strategy. As Ellen Knapp, PwC's chief knowledge officer and global CIO, explains, "You've got two mega-global organizations of roughly speaking 70,000 people each in some 148 countries, and these two organizations have to come together. The most critical challenge we have in this merger, particularly because we are a knowledge-based organization, is to know what we know. One of the tremendous advantages here is that it brings us not just more people, but new areas of practice, new skills and competencies we can bring to our clients. But we have to know they're there. Our partners have to know what's available. We also use different methods in our various practices. We have to quickly learn each other's ways of doing things so we can quickly work together. And of course, beyond the 'know what' and the 'know how,' there's the 'know who'-with more than 140,000 people, how do you know who the expert is in mining in Australia?"

For O'Neill, what makes for a good intranet - and what clearly answers the questions Knapp raises - is global seamlessness. However, she cautions, with an eye toward the types of organizational changes that have restructured corporations around the globe, "It is something that should get past company silos," she says. "Some companies have different intranets for different divisions, and they are not connected. That is not effective knowledge management."

An E-Commerce Application

The original knowledge-sharing purposes of the intranet have given way to commercial applications as well. For an information retrieval company like The Dialog Corp., intranets have begun to play an increasingly important role in its overall business strategy. The London-based Dialog, which owns the world's largest information database and retrieval system, was formed last year through the merger of Knight-Ridder Information and M.A.I.D.

"The intranet is the corporate portal for both internal and external information," says Daniel Wagner, Dialog's chief executive. "We want to be that portal." Dialog is attempting to accomplish that by marketing e-commerce applications as well as information sorting and retrieval systems that address themselves specifically to the intranet environment.

Until KRII's merger with M.A.I.D., retrieval of information from Dialog's databases was the province of librarians who were specially trained in the language and codes required to communicate with the system. Dialog's original competency was in the accumulation of an enormous amount of premium information, a total of nine terabytes of information, or 50 times that accessible over the Web. This comes in the form of 470 databases; complete texts or extracts of articles from more than 100,000 publications; profiles of over 13 million corporations; and details on more than 15 million patents. Dialog also accumulated a list of premium clients that include over half of the Fortune 500.

M.A.I.D., a much smaller company than KRII, cultivated an expertise in developing user-friendly interfaces and a proprietary indexing technology called InfoSort. One result of the merger has been to remove Dialog from the province of the library and put it on the corporate desktop by marrying Dialog's databases with M.A.I.D.'s retrieval methodologies. "Infosort is an electronic application of the process of tagging folders in a filing cabinet in the analog world," says Dialog CEO Daniel Wagner. "A folder that is properly tagged is easy to find. The InfoSort system does the same thing electronically. It automatically structures and tags the documents for storage and retrieval on the company intranet. The search process is enhanced by the fact that the tagging is done on all of the documents going into the system. It is a structure that enables the searcher always to get an accurate result."

Retrieving information, thus, is accomplished by firing up the Web browser. "Each user's machine can be configured to limit the depth and breadth of access that the user is entitled to," says Wagner.

Dialog very recently introduced a new product call LiveIntranet, an indexing system and structure for internal databases that is based in InfoSort. "It provides an applied level of skill which makes documents accessible with a simple search," says Wagner. "It enables one to add documents from one's own PC to the corporate intranet. It is capable of taking a document from the Internet or from a partner over an extranet and post it on the corporate intranet." The key is that the document is automatically read, categorized, and filed away in the network so that it is easily retrievable.

A little over two years ago, John Birt, CEO of the British Broadcasting Corporation, signed off on a corporate strategy that called for replacing the BBC's manual clippings service with an intranet. The BBC issued a tender for the business, which was addressed by a number of Dialog's competitors within the on-line industry.

Having won the BBC tender, Dialog custom designed a product for the BBC, which incorporated InfoSort. "InfoSort was a part of a much wider product that was designed to archive and index a selection of daily, weekly, and monthly titles, accessible via their intranet," says Emma Hacon, Dialog's BBC account director. "Info-Sort has enabled the construction of BBC-specific classifications. In essence, the means by which the BBC used to classify documents manually, through a cuttings service, can be reproduced electronically." As a consequence, journalists and researchers can search across an archive of selected titles and retrieve relevant articles used for research purposes and program development within the BBC.

Dialog's e-commerce product illustrates the emerging relationship between intranets and extranets. The company's office-supply shopping service, located at www.officeshopper.com, is an aggregated database that includes 80 suppliers of office products. The catalog of products from which buyers choose is a Web page on the public Internet, which represents a gateway, or linkup, to the suppliers' extranets. "But the rules for company purchasing, such as budgets, user and department spending levels, and so on, sit in the company intranet," says Wagner. "The system is configured in such a way so that the authority of each particular user is limited by spending levels, product category, or whatever other criteria the company chooses."

Across Network Lines

The increasing level of business process integration within enterprises as well as among supply chain partners means that information will be increasingly moving across network lines from intranet to extranet to intranet. Thomson Consumer Electronics (see sidebar), the world's fourth largest manufacturer of TVs, VCRs, satellite dishes, camcorders, and the like, has made use of a classic intranet for a number of years which allows employees access to the company's data warehouse.

"The data are brought in and everything is loaded into the warehouse," says Debra Eberhart, e-commerce manager at the company's Americas headquarters in Indianapolis. "Then it is extracted for use in different applications."

When the company began a supply chain re-engineering process earlier this year, Thomson realized it needed additional capabilities in the gathering of sales-forecasting information. The solution it adopted incents customers to communicate anticipated product orders over an extranet. This information is then dumped into Thomson's data warehouse and pulled out for use in its supply chain system or elsewhere on its intranet.

The advent of new technologies which allow databases and applications written in different languages and platforms to collaborate with each other will further enhance the relationship between intranet and extranet. Symbol Technologies, Inc. of Holtsville, NY, originally a pioneer in the development of hand-held scanners and bar-coding technology for the retail industry, recently introduced a product called LOMAS which is designed to allow diverse logistics-management systems to work together. LOMAS was demonstrated for the first time last October at the Food Distributors International trade show in Nashville. There, LOMAS had warehousing, yard, and dispatch management systems, each written on a different software platform, working together.

"As a database architecture, LOMAS could be focused on any industry," says Wayne Parkin, Symbol's Atlanta-based vice president for logistics systems. "The product enables applications and databases to collaborate with each other. It allows real-time information to move through and across networks. It enables information to be exchanged within a company or between companies, within an intranet or across an extranet. It allows data to flow between a host computer and an internal user within a company or outside of the company to a customer who can pick up the information over an extranet."

The essence of LOMAS' innovation involves the implementation of a server technology that acts as a data collaboration host. LOMAS is able to evaluate activities as they occur within any supply chain application and provide workflow integration dynamically within any application.

Inter-application communication is handled via small, configurable software components known as collaborative interfaces. This replaces the historic database-level integration between applications.

The ubiquity of the Internet has meant that technology companies have few excuses not to adapt their applications for use in conjunction with the ever-present browser. Dialog switched from the mumbo jumbo of arcane and proprietary codes to search-friendly utilities. The National Transportation Exchange went from a system of phone, fax, and pencil scratchings to an extranet application that works as smoothly as the Nasdaq. NTE is a Chicago-area company that electronically matches shipments with truck capacity in the spot market. Experts say that utilizing the spot market strategically can provide significant transportation savings because carriers offer their excess capacity at deep discounts. The system has 350 members and moves nearly 200,000 loads annually.

NTE is a members-only organization. "In our extranet, all traders are prequalified," says NTE president Greg Rocque. "Shippers must be prequalified for freight and credit. Carriers must be prequalified for equipment, freight, insurance, safety ratings, and operations. All members are bound by a master membership agreement." To trade in the system, the member goes to a limited-access portion of the network. There, shippers tender their loads and carriers offer their capacities. The system automatically identifies potential matches based upon each member's preset parameters.

"Once the system finds a possible match, it communicates with the trucking dispatcher telling him of an opportunity," says Rocque. "The dispatcher clicks on the box and is able to evaluate the load based on revenue, freight, and profitability. If the dispatcher accepts the load, the system arranges the pick up, confirms the delivery, and provides shipment status visibility every step of the way."

PricewaterhouseCoopers also has its extranet strategy. "On the extranet side, we focus on how best to create virtual communities where we can link up with clients and prospects," says O'Neill. "It enables us to strengthen our client relationships by creating a means for us to communicate with clients 24 hours a day." PwC's extranet emphasizes the exchange of knowledge and ideas within virtual communities. "For example, our Tax News Network extranet is targeted at senior tax executives of Fortune 500 companies," says O'Neill. "It provides them with analysis and insight from our experts on the latest tax developments and allows them to interact on-line with our experts. The service also gives participants a place where they can interact with their peers. We have set up bulletin boards and discussion groups, and it has become a robust virtual community."

A comparison of extranet strategies shows that the technology can be tailored to a broad spectrum of needs. Thomson Consumer Electronics uses an extranet to gather a specific category of data while PwC strives to integrate a global community of experts. For O'Neill, one approach is not necessarily superior. "The important thing to remember about extranet strategy is that you can take it and tailor it to your specific needs," she says. "We are focused on the virtual community because we believe they are critical to our client service and marketing strategies. Extranets allow you to tie back to your customers and suppliers. The more specific the tie in, the more effective the management of knowledge." And that, in a world made increasingly more virtual through just these kinds of strategic alliances, not only strengthens the ties, but helps blur the lines that determine where one company ends and another begins.

Vocabulary Builder

Intranet: a private, local area network that uses technical protocols and user interfaces similar to those employed on the World Wide Web.

Extranet: a Web site on the public Internet that requires penetration of security barriers to access the site.

Collaborative interface: a piece of software that allows more than one application to work together.

Content architecture: the structure by which information is linked together and thus made accessible over an electronic network.

Data collaboration host: a server that provides the common ground for data from diverse databases to work together.

Data warehouse: a database that aggregates together all of the information pertaining to an enterprise for retrieval into, and use in connection with a variety of applications throughout the enterprise.

RELATED ARTICLE: The Missing Link

At some point after Thomson Consumer Electronics invested a significant sum to acquire an i2 supply chain management system, it realized something was missing. "We wanted to use the system for sales forecasting," says Debra Eberhart, e-commerce manager at the company's Americas headquarters in Indianapolis. "We wanted to be able to provide each of our customers with the products it believes it will need."

But the i2 system does not provide a means of gathering this information. "None of these software providers helps you get the data," says Eberhart. "They assume you already have it."

Eberhart knew what she wanted to accomplish but decided not to try and develop a solution in house. "We didn't have the people or the expertise internally to do it quickly, and we wanted it done right away," she says. "Besides, our IT department is burdened with getting the Y2K problem out of the way. This was an afterthought in the supply chain process."

So Thomson approached a number of technology providers for a solution. The successful candidate was TranSettlements Network Services, Inc., an Atlanta-based company that, back in the 1970s, was one of the early providers of electronic data interchange (EDI).

"The solution was to develop an extranet accessible by Thomson's customers," says Jeff Hill, TranSettlements' vice president for sales and marketing. "The customer logs into their specific area on the system and is able to access a form for each of the products that they order. The customer indicates the number of units they will need for each product for each of the next 26 weeks. They are also able to go in and change their projections as their requirements change over time as well as to change a forecast to a firm order." Once the data are transmitted through the extranet, TranSettlements automatically formats the data and uploads it into Thomson's sales-forecasting and order-processing systems.

Thomson's acquisition of this sales-forecasting technology is part of a comprehensive supply chain re-engineering process that the company is undergoing on a global basis. Owned by the French government and based in Paris, the company has worldwide sales of $4.5 billion. Thomson makes televisions, VCRs, satellite dishes, audio equipment, DVDs, and camcorders under the GE, RCA, and Proscan brands. Thomson's customers include major retailers such as Sears.

Eberhart says that her boss, Jim Meyer, Thomson's CEO for the Americas, has been actively involved in this process. "He believes the company should reduce its supply chain cycle and that this technology helps us do it," says Eberhart. "He also believes it gives us a competitive advantage in the marketplace because we get the information timely and accurately and we are able to use it easily."

Customer feedback, according to Eberhart, has been positive. "We have been told we are the only consumer products manufacturer that actually uses the projections that customers supply," she says. "Once loaded into our data warehouse, we combine the information with use history and can discern demand patterns. For our customers, all this means they are more likely to get the product they need when they need it."

Since its implementation last August, Thomson's extranet strategy has achieved dramatic results. "We have improved forecast accuracy and have become much more efficient," says Eberhart. "Since we make what we know our customers want, we have been able to reduce inventory levels by $100 million. We have also increased inventory turns from four or five annually to the eight to ten range. Since we have less need to transport parts to manufacturing facilities, we have saved between $5 million and $10 million in transportation costs." Most spectacularly, Eberhart says that, thanks to the smooth flow of data from the extranet into i2, Thomson has been able to save on i2 software implementation costs to the tune of $100 to $1 50 million.