Inside four intranets.

Just when you thought you had the Internet licked, along comes the company's intranet. But can it really make your employees more productive and the paper chase obsolete?

CASE STUDY

Your boss just asked you, "What will an intranet allow us to do?" While many companies start by putting their employee telephone directory and internal memos on their intranets, others are going beyond that first step and pushing for real productivity and cost savings.

For example, Tyson Foods reports its intranet allows it to bridge the time gap between its East and West Coast facilities, making it much easier to coordinate operations. Sandia Laboratories' intranet includes a project-management tool, which lets project participants immediately find out how much is being spent on procurement, labor and other areas. Eli Lilly posts changes in laboratory procedures on its intranet, ELVIS (Eli Lilly Virtual Information Service), eliminating the need to manually insert new pages into lab books at 40 laboratories around the world.

But as with any other new tool, companies are still trying to work out the best way to use it. Take the cultural obstacles, for example. Chrysler managers now post car-design changes on the company intranet to reduce interoffice mail, but many employees still print an "official" copy. Bechtel has found that convincing employees they can benefit from the intranet is easy, but getting them to share information with one another is a bit trickier.

Still, plenty of companies find ways to get a big bang for the buck from their intranets. Here's the inside scoop from four companies.

TOOL, NOT TOY by John Gerstner Employee communications manager, Deere & Co., Moline, Ill.

Who runs it: One webmaster and one technical person to write HTML 

Who uses it: 15,000 employees out of a total of 35,000

John Deere is a decentralized company, so it's not surprising that our intranet began as a grassroots effort. But we recognized early on that having dozens of home pages with no oversight only creates a giant, mangled mess that isn't user-friendly and isn't the best use of resources and time. We felt we could really leverage our technology better if we did some things centrally, such as instilling some publishing guidelines and policies.

For example, we look at graphics as a business tool. What's the point of showing a color picture of our headquarters building, for instance, when everybody knows what it looks like? We have a standard look for our headers and footers. They're in black and white, although we allow color as an option. We chose this style to signal that the intranet is a business tool, not a toy, and we've also posted our rules through our online Intranet Resource Center.

That said, we're pushing hard to make sure our employees have equal access to the intranet. The Internet Steering Committee's goal is to deliver access to all Deere employees by April 1998. That includes our international subsidiaries; in fact, we already have intranet sites in Mexico, Germany and South Africa.

Not every employee will be able to get onto the intranet via his or her desktop, so we'll use kiosks to bridge the gaps. Also, we plan to take obsolete computers and make them web browsers to get employees connected.

One of our most unique uses of the intranet is an online photo application, which took us about two years to develop. Deere has its own photo department, and employees can now access online the thousands of photographs we take of our products every year. If you have a presentation to do on a certain product, you can download the product images to your desktop, selecting from side, front and rear views and five different printing resolutions.

The development of this application happened to coincide with a major product introduction schedule and a heavy demand for photographs. We've achieved more than 200-percent return on investment in the first year on this application alone, because it eliminates all the steps of producing a photograph from a negative, getting a print made and then scanning it into a layout. Clearly, you save time and money all the way down the line.

Of course, one of the major advantages of an intranet is the ability to share information about the organization, and that's an area in which our finance division has been very progressive. The information that finance posts on the intranet is pass-word-protected; only senior management and accounting people have access. But it's now much easier for the appropriate people to obtain unit exhibits, treasury reports, balance sheets, consolidated income statements and so forth.

This ease of use is also a boon for other Deere employees. For example, our dealers in Asia and South America used to fax their parts needs to our parts warehouse in Illinois. Then somebody here had to key in all those orders and fax back their delivery schedules. Now dealers can obtain parts and conduct transactions online. Even though the online connection is somewhat slow, it's like a night-and-day difference for these dealers. They love it!

We plan to start doing business with our suppliers in a similar fashion this year. All paperwork - inventory, billing and invoicing - will be processed online. And you don't have to be a large supplier to do business in this manner. Even if you're a small supplier with a simple computer and browser, you can interact with the company and gain all the efficiencies of online transactions.

Another exciting initiative is intranet collaboration and video. Through this technology, we'll be able to meet and work together on documents virtually. The prototype of this video program is already on our intranet. It uses the new streaming video technology: You don't have to wait five minutes for the program to download; you can click and begin viewing the video instantly.

We don't think it's unrealistic to expect to put our chairman on a live feed next year, so we can conduct a question-and-answer session with employees through our intranet. Each of our eight divisions could do its own video question-and-answer session and make that accessible on the division's intranet home page. You can reach Gerstner at (309) 7654105 or [e-mail].

REINVENTING HUMAN-RESOURCES SERVICE DELIVERY by Silvio A. Lanaro Director, information technology, HR-USA Division, IBM, Sleepy Hollow, N.Y.

Who runs it: One webmaster (human resources only)

Who uses it: Approximately 119,000 U.S. employees

% of technology budget spent on intranet: 2% (for human resources sites)

Our intranet is an enormous opportunity to change the way our company communicates with employees, and employee benefits is one of the areas with the greatest potential for efficiencies.

Leveraging the intranet and other technologies to expedite benefits and human resources transactions has enabled us to shift to a self-service mode, in which managers and employees directly input data on performance reviews, salary and job changes, and benefits coverage. In the United States, all of our managers can hire people, process salary changes and authorize promotions from their desktops. The self-service mode is becoming key for us as we increasingly manage people remotely.

It's also produced tremendous savings for us. In the last three or four years, we've cut our administrative costs in half. That's partly because employees can initiate change requests online without finding a paper form and spending a lot of time finding the appropriate person for signature and approval.

Today, via the web, our employees are able to access their own 401(k) accounts online, invest and transfer in and out of funds, in a totally secure environment through the strict standards in place for electronic commerce (using a 128-bit encryption key).

In addition to giving employees online access to their 401(k) and benefits information, we're also providing a total compensation summary for each employee that will provide information such as salary, bonuses, awards, vacation allowance, dependent information, benefit coverage and so forth.

Human resources is currently providing more than 95 percent of its transactional processes in a self-service environment with the web. An interactive web application server will "web-enable" our entire product line to allow even further convergence of this technology to provide a seamless desktop environment for the end user.

What we're doing in human resources mirrors IBM's initiatives in other areas to cut costs and achieve efficiencies. Financial executives should encourage the use of self-service technologies, because if human resources is capable of significant savings in administrative costs, there are plenty of cost-savings opportunities elsewhere.

You can reach Lanaro at [phone].

VIRTUAL TEAMWORK by Malcolm Kirby Manager, office of the intranet, Xerox Corp., Rochester, N.Y.

Who runs it: A core staff oversees the operation of the infrastructure and guides and directs applied uses, technology and development standards, but the actual operation is distributed into the business units

Who uses it: 30,000 users

Since we first began to develop and monitor our intranet almost two years ago, the environment has grown steadily at a rate in excess of 10 percent a month. Everybody with a browser - about 32,000 people - has access, including all of our international subsidiaries. The widely varying jobs at Xerox pose many challenges in making our intranet level and responsive for everybody, but we're committed to meeting that challenge.

We manage our external presence very differently from our intranet site. The external site is crucial to our corporate image and to addressing customer satisfaction issues. By contrast, the intranet is an employee empowerment tool, and the last thing we want to do is suppress people's creativity. So while we have very rigid content and style guidelines for the external site, the internal guidelines are extremely loose.

That type of approach helps encourage employees to use the intranet as a collaborative tool. One of our intranet sites is a database of "experts" that helps employees brainstorm with each other. If someone's working on a print driver with a certain protocol, he or she can immediately access three other people who can contribute some ideas.

We also use the intranet to communicate corporate objectives faster and more efficiently to our field force. Before the intranet, sending field employees pricing updates or marketing initiatives was a cumbersome and lengthy process of pushing out huge amounts of paper, or, later, using a staggered electronic-mail distribution list. Now we put all that information on the intranet, and people can pull it out whenever they need it.

Speaking of paper, online forms are another area ripe for savings. Like every big company, we have hundreds of forms, but they're all available on the intranet now. That's reduced our printing and distribution costs, not to mention the cycle time to find the form, fill it out and submit it. These savings aren't "sexy," but they're real, and they affect everybody.

On the customer side, our main hurdle in leveraging the intranet is a diverse customer population - and, therefore, widely varying needs. Certain customer groups want only general information. Other customers want to share information with one another. And some customer populations want to penetrate our firewall, look up their order status and find out when their orders will be shipped - an entirely different set of security challenges. So we're trying to focus on each group separately and develop customized solutions.

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While we haven't measured our savings yet, the returns will probably start showing up this year in the form of improved productivity due to increased speed and agility. Our controllers have been adamant about making sure our intranet has a business focus, but it's been easy to justify so far because it's very cheap to implement. Training costs are almost nonexistent because Internet technology has permeated society so rapidly. You get a huge bang for the buck in terms of faster communication and more employee productivity.

Intranets will help accelerate some of the changes that are already underway in Corporate America. By their very nature, intranets undermine traditional hierarchical command and control structures. People don't have to go through these structures to get information or to communicate with others in the organization. Intranets accelerate the development of the flatter organization. Companies that are ready to adapt to that culturally, or that already have, will benefit from it. Companies that don't will really suffer. You can reach Kirby at [e-mail].

BRIDGING THE DISTANCES by Shawn J. O'Keefe Director of administration and CFO, DHL Systems, Inc., Burlingame, Calif.

Who runs it: An average of one or two webmasters per intranet site

Who uses it: More than 20,000 employees worldwide

% of technology budget spent on intranet: 5%

DHL Worldwide operates in more than 220 countries, so the use of intranet technologies is critical to our globally dispersed organization, allowing us to communicate faster and more efficiently. We currently have approximately 15 formal intranet sites, which are expanding in functionality as well as number.

The intranet sites serve as repositories for both corporate information and information for a specific geographic area, such as a country or a group of countries. For example, the information-technology site provides technology-related data, including systems standards and technical architecture. Recently, we purchased an enterprise software license that was made available for downloading immediately to every location in the world from a central site. In the past, we would have had to distribute the licenses via electronic media to more than 220 countries, plus corporate centers, operation centers and so forth. The time and effort saved in this one example will exceed the cost of implementing this intranet site.

We also use our intranet sites to keep people better informed about corporate activities, including global programs and services, competition, internal job postings, and meeting calendars and minutes. If you're a manager who couldn't attend an important meeting in another country, you can find the meeting agenda, presentations and minutes posted on the intranet. In a similar vein, our intranet site serves as a global center of information for our "Year 2000" project.

The availability of the intranet 24 hours a day everywhere we operate is a critical benefit for us. We can immediately access intranet sites without worrying about time zone differences between countries and continents. Also, a number of our sites support non-English languages to improve local understanding and communication.

Because DHL uses an open systems approach, implementing intranet and Internet technologies was relatively simple. Organizations with proprietary systems or limited technical expertise may have a more difficult time implementing their intranets. But for many companies, intranets can be relatively inexpensive compared to their overall value.

A general misconception is that intranets are complex and expensive communications solutions only appropriate for big business. On the contrary, I've learned that intranets are very scalable. Based on my experience, the software and hardware costs can range from under $10,000 to more than $100,000, depending on your platform, functionality and usage. The cost of the site design and development will generally be greater than the software and hardware costs and will also vary significantly, from under $5,000 to more than $500,000.

To ensure your intranet information is secure, follow these two preventive measures: First, don't put your company's most confidential information on your intranet. And, second, invest in good technology that's capable of denying access to unauthorized employees, as well as to hackers who could gain entrance to your intracompany network through the Internet. Firewalls, the electronic equivalent of a security guard, are one of the most effective methods.

But perhaps the most important lesson we learned in developing. our intranet sites is the need for a strong project manager with key management support, vision and a results-oriented focus. In a technology industry such as ours, everyone naturally likes to assist in the design and development. The project manager or webmaster must be able to say, "We're considering your input, but we're pursuing this solution for these reasons," and then get on with it. If the project manager can't do that, you'll have numerous conflicts over content, look and feel, not to mention prioritizing resources.

In general, although our intranet continues to provide significant value to DHL, our focus is on the Internet. We decided we could leverage our investment faster on the Internet, which is more customer focused. As an example, the cost of tracking a package from an Internet request is a fraction of the cost of tracking it from a customer service agent request.

In the future, I see extranets - an application that allows outsiders (such as suppliers or customers) into internal information systems via specially secured web sites - as a key electronic communication method. They're less expensive than electronic data interchange, easier to build and simpler to operate. You can reach O'Keefe at [phone] or by e-mail at [e-mail].