Take Your Intranet an Extra Step

Net Speak 101
To keep you abreast of what has been going on in regard to technology, here is a refresher course.

The Internet is a global Web of computer networks sharing a common standard called TCP/IP. An intranet is a company's internal network, which uses the same standards as the Internet but is used to distribute information and speed up data within a corporation.

An extranet is a hybrid--part intranet and part Internet. It is what results when a company opens up its intranet to selected business partners such as suppliers and distributors so they can connect to the company's network and view company data. An extranet allows a company to give its business partners access to select areas of its intranet--and sometimes to operational data through client/server systems over the Internet.

	Internet	Intranet	Extranet
Access	Public	Private	Semi-Private
Users	Everyone	Company Employees	Business partners of a specific company.
Information	Fragmented	Proprietary	Shared in closely held circles.

Extranets are the logical evolution of Electronic Document Exchange (EDI) technology, which has existed for more than 20 years, connecting companies to their suppliers and distributors. EDI has traditionally been used to coordinate manufacturing and warehousing operations, or to foster applications such as just-in-time inventory and manufacturing, in which products are manufactured and shipped to a retailer on an as-needed basis.

An extranet provides a powerful way for an enterprise's customers and vendors to gain anywhere, anytime access to its constantly changing information databases and support functions. Even a basic extranet can enable a business to put transactions and communications online that used to require phone calls, memos, multi-part paper forms, mail service and express delivery.

"The goal is to move customer and vendor transactions into a cost-efficient, appropriate support channel," said Claus E. Schmidt, president of Alpine Data Systems of Newark, Del. "Often, simple transactions previously handled either over the telephone or in person can be handled more efficiently through an extranet."

A 1998 survey of 1,400 chief information officers by consulting and placement services firm RHI Consulting found that 38 percent of respondents expect the popularity of extranets to increase significantly during the next three years. Another 44 percent said they expect their popularity to increase somewhat during the same period.

Many Advantages
Intranets and extranets can help a company reduce costs and improve operations. Intranets make it faster and easier to distribute company procedures, policy manuals and employee news. Extranets make it easy and less expensive to distribute online catalogs and price lists.

Both can help a company lower its administration costs through their interactive capabilities, as users can complete many tasks themselves that once required another human being. Both intranets and extranets allow companies to form "virtual" teams to complete projects and various tasks without the added expense of travel, on-site conferences or overnight mail service.

According to a recent article in the Intranet Journal, Lockheed Martin's implementation of an intra/extranet resulted in a 1,562 percent return on investment. Cadence, Inc. boasted a 1,766 percent return on its investment. And US West reported more than a 1,000 percent return on its investment.

Michael Harnish, a CPA and CIO of the law firm of Dickinson Wright PLLC in Chicago, recently received the American Institute of Certified Public Accountants' 1999 Innovative User of Technology Award for an extranet that he developed for a client.

The operation of the extranet has effected the complete automation of loan transactions, from inception to approvals and legal work to closing and follow-up for the client, according to an AICPA press release. It has also reduced loan transaction processing time by more than 400 percent and increased the number of loans generated by the same number of employees by 500 percent.

The extranet designed by Harnish utilizes a complex series of nationwide servers, remotely and locally linked to partners, including Dickinson employees, connected via dedicated Internet lines through firewall buffering. In addition, Harnish's extranet makes use of word processing, GroupWare, document assembly, workflow automation, digital signature recognition and advanced authentication.

Few Disadvantages
As organizations move toward intranets and extranets, it is imperative that they implement a robust security system. Although most intranets and extranets can be easily protected from hackers, the concern with security is more toward a disgruntled employee or a supplier or distributor lacking business ethics.

Two of the most common security precautions in use today are firewalls and passwords. In addition, a set of technologies has been developed that are well suited for extranets and intranets. Public Key Infrastructure (PKI) allows organizations using open networks, such as intranets and extranets, to replicate or even improve on the mechanisms used to ensure security in the physical world.

For example, sophisticated data encryption methods have replaced secure couriers and envelopes as messages can only be read by the intended recipient. Physical signatures and seals have been replaced by digital signatures. Identity documents, such as employee ID cards, have been replaced by digital certificates, which allow intranet and extranet servers to implement the Secure Sockets Layer (SSL) protocol, the standard technology for secure Web-based communications.