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Modern Business Tools: |
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Modern Business Tools: |
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The Internet is one of the key technological developments of the 20th Century. It has allowed for the development of an unprecedented amount of information sharing. As with most new technologies, business have been creating new methods and systems which would leverage these developments for strategic business advantages. Some of the most useful systems have centered on the creation of computerized information networks known as "intranets" and "extranets." These networking concepts trace their routes to the global information infrastructure known as the Internet.
In July 1961, Leonard Kleinrock of the Massachusetts Institute of Technology published a paper which addressed this need for fault tolerance by proposing a "packet switching theory." According to this theory, information would be transmitted from the source to the destination in a series of discrete "packets." These packets would contain at a minimum a small portion of the data being transmitted, the source address, and the destination address. Since each packet contains a source and destination address, the packet can be routed through the most direct route. The perfect analogy for this theory of communication is the postal system. In this system, a letter travelling from New York to Los Angles can pass through several different cities. If a certain city is not receiving mail, then the letter can be rerouted through an alternate facility onroute to its final destination.
In 1967 Lawrence G. Roberts published a plan for a packet switched network which would be known as ARPANET and by the end of 1969 four host computers had been connected together to form a functioning network. This early network marks the first creative stage of the modern Internet.
The second stage essentially begins by 1972 when Robert Kahn introduced the idea of "open-architecture" networking. This idea was founded on the concepts of reliability, simplicity, and independence. The aspect of reliability was addressed by the allowing communication to take place on a "best-effort" basis. Under this method, if a packet failed to reach its proper destination, then it would be promptly retransmitted from the source. The concept of simplicity was engaged as a result of basic engineering logic. If a device is simple, then it has a better chance of functioning with out error due to the fact that there are fewer things which can go wrong. Finally, the directive of independence stated that distinct networks should be able to connect to the Internet without needing "internal" modifications. The idea of "open-architecture" networking led to the development of a common protocol that eventually came to be known as the Transmission Control Protocol / Internet Protocol (TCP/IP). By 1980 the military adopted this protocol as a "defense standard," and on January 1, 1983 the ARPANET was converted from the original network control protocol (NCP) to the common TCP/IP.
The third stage of the Internet's development came in the mid 1980's when the U.S National Science Foundation (NSF) began to develop a computer network which would serve the general academic and research community through the application of "open-architecture" policies centered around the TCP/IP protocol. This network was officially called NSFNET. As the network expanded, the NSF began to encourage regional providers of network services to expand beyond academic and research institutions to the commercial sector. The intent behind this expansion was to engage private funds into the expansion and support of the networking facilities. As the number of private companies investing in the network increased, the cost of connecting to the network should decrease. By April of 1995 the NSF's privatization policy allowed the government to stop funding of the NSFNET backbone. At this point the "modern" Internet was born.
The computer network which started as a project funded by the Defense Department has undergone a tremendous explosion of growth in the few years since the NSF's privatization policy was completed. Companies such as Netscape and Yahoo! which didn't exist a few years ago are now among the leading technology companies being traded on the stock market. Corporations such as IBM and Microsoft, which have dominated the computer industry for the past ten years, have been forced to completely realign their entire product line.
The cause of the changes which have reshaped the computer industry in recent years revolves around the concept of simpler access to information. Just as the development of radio and television allowed the public to be instantly informed about events on the other side of the planet, the Internet has allowed people to instantly uncover any information that is pertinent to a particular topic. For example, instead of "comparison shopping" by physically going to a number of stores, a consumer can now perform a price based search on the Internet from the comfort of their home. This translates into a significant time savings and convenience for the consumer. The technological developments that allow people to comparison shop from home also give corporations the ability to leverage their information stores to gain a competitive advantage.
As "internet" technologies were evolving in the spheres of the educational and research institutions, corporations began to utilize computer technology. This technology began with small numbers of mainframe computers and slowly progressed to vast numbers of mini and personal computers that were connected into "local" and "wide" area networks. Throughout this progression, companies focused on the task of collecting and storing information and data which was relevant to their core businesses models.
In order to leverage the stored data for an economic benefit, corporations needed to develop distributed applications which allowed for the sharing of data. The drawback to these early systems, however, was that they were centered on custom developed applications which would only work for a given business environment and networking architecture. Thus, if a workgroup wanted to leverage and utilize the stored data, then they would have to conform to very strict hardware and software requirements. An example of such as system would be the early airline reservation systems. Information on airline flights was available to travel agents only if they used the specialized computer system. Although these systems served the purposes of simple data exchange, they did not allow for the unrestricted flow of information which was being made possible by the developing Arpanet and Nsfnets.
Greater openness in data sharing became possible with the increased popularity and cost-effectiveness of personal computers and the "client/server" model of computing. The client/server model allowed information to be stored in a central location while the processing power was distributed to many "nodes" on the network. The personal computer, popularized by IBM, allowed for a seemingly inexpensive and widely supported platform.
One of the first companies to take advantage of the potential of client/server information sharing was the Lotus Development Corp. Lotus released a product called "Notes" which was designed to allow users to have quick access to the unstructured information stored in an organization's database. Employees could use the product to send and receive electronic messages, access multiple databases of documents, facts and figurers, and to create virtual workgroups. As the product gained popularity, companies such as Novell and Microsoft attempted to enter the market with their "Groupwise" and "Exchange" products.
While these products had several advantages with respect to workgroup communications, they were hampered by the fact that they relied on proprietary networking protocols such as NetBIOS and IPX/SPX. In order for one "workgroup" to communicate with another "workgroup," computer network administrators either had to deploy identical systems at both locations or they had to install expensive gateways which were capable of "translating" the information from one protocol to another. The protocols had the additional disadvantage that they where designed for small networks of a few hundred personal computers and not for global communications. In general, wide scale deployment of proprietary "groupware" products directly translated into high expenses. Often the question would be whether or not the systems provided an adequate "return on investment."
At the same time that these commercial "groupware products were being introduced into the market place, the National Science Foundation was conducting its program of the privatization of NSFNET. The NSF's network had the key advantage of being specifically designed to allow distinctly different computer networks to communicate. From an economic perspective, a corporation could shift the funds which would have been spent on making different networks communicate to development projects that would improve the ability of a user to share information. This would be analogous to trying to improve a car's performance rather than just trying to get it to run.
By 1992 a "new" information service known as the World Wide Web collided with the NSF's privatization plan. This technology, which was primarily developed at the European Particle Physics Laboratory (CERN), uses a method known as "hypertext" for presenting information. Once the "hypertext" technology was linked to a graphical interface, users were given the ability to easily access information which was located anywhere on the network. Since the network used common protocols, the actual location, network architecture, and software design became irrelevant. Suddenly, the data content had taken center stage.
This swift transition to the World Wide Web and internet related technologies has forced companies such as Lotus, IBM, Microsoft, and Novell to change the direction of their products to conform with the new standards. Microsoft's Exchange now claims to be a fully functional Internet compliant messaging system, Lotus has converted Notes into a dynamic tool for providing and collecting data on the web, and IBM has declared that the "network is the computer." In general, due to the simplicity and guaranteed portability of internet protocols and technologies, proprietary groupware products have been forced into a Darwinian process of adapting to survive.
The merger of open architecture internet technologies and protocols with the concepts of groupware has led to the development of what is known as an "intranet." An intranet is simply a computer network which implements internet technologies such as TCP/IP, the hypertext transport protocol (HTTP), and the simple mail transport protocol (SMTP) within a single organization to create a collaborative workplace. The services which are provided by this collaborative computer network are identical to those utilized by the global "internet." The only difference between these two networks is the fact that an "intranet" is designed to serve only the internal information needs of an organization. Thus, the casual web surfer, a corporate competitor, or potential client can not gain access to the information contained with the network without special permission.
Since in its most basic form an intranet is only a set of computer network services and protocols, a corporation has a large degree of flexibility in applying this technology to the collection, storage, and distribution of information. Typically, the first step in developing this information system centers on carefully analyzing the type of information that is utilized and exchanged by various parties. Once this analysis has been completed, the internet services which are most beneficial to this data interchange can be deployed. For example, a study of an engineering company's computer department may reveal that the administrators spend a great deal of time repeatedly answering basic questions about a custom in-house database application. A possible "intranet solution" would be to develop a database that would contain solutions to the most common questions. End users would access this database with a standard web browser and HTTP services. Such an application would have two productive effects. First, end users would most likely have a quicker "technical support" response time since they could locate the information they need at the moment they need it, and second, the network administrators would be able to reallocate the saved technical support to more important projects.
During the past few years, several corporations have been deploying intranets of varying sizes to address situations which are similar to the previous example. In general these "intranet" deployments seem to fit within one of the following four categories: 1) internet based Electronic Data Interchange (EDI), 2) online corporate training and real-time knowledge transfer, 3) central organization of generally available information, and 4) instant access to corporate databases containing everything from 'news' to image catalogues.
Internet based Electronic Data Interchange provides a method for employees in 'remote' location to interact with a company's centralized database. The April 14, 1997 issue of PC Week profiled the implementation of such a system by the Mobil Corporation. Mobil wanted to build an EDI which would allow its business partners and distributors to place and track orders with the home office. The project had two basic design parameters. First, Mobil wanted to leverage its investment in the existing mainframe hardware and software system, and second, they wanted to replace the varied communication methods (ie. proprietary EDI, faxes, and phone calls) with a single standard system. The application of "open architecture" internet protocols satisfied both of these requirements.
Mobil used a combination of 'open' Java applets, HTTP protocols, and database access to develop an ordering process for over 300 distributors. The system allows the distributors to place orders, review order status and history, and to look up their account balance. It has reduced expenses by eliminating the order errors created the previous disorganized order process, and the program standardization has resulted in decreased software maintenance costs.
The internet based EDI system has the advantages of bringing a simplistic order to a formerly disorganized process. Through the use of standard internet protocols, a company can leverage existing data stores by adding a easy to use "front-end." This "front-end" is relatively easy to maintain in comparison to other 'legacy' systems and allows for an the organized display of information.
Another popular application for intranets relates to online training and real-time knowledge transfer. Due to the internet's origins as a network for allowing communication between educational and research institutions, this type of intranet is quite natural. In December 1996 and January 1997, PC Week reviewed both an educational and a commercial deployment of a learning intranet. Both of these systems were focused on making the learning process more accessible and informative.
An interesting example of the deployment of an purely educational intranet can be seen in the information network that was developed for M.B.A. students at the Harvard School of Business. This intranet was designed to be an educational tool for the 21st century. Each student would be able to access all class assignments and materials, such as the school's classic case studies, through dynamically created web pages that would be linked to the school's database servers. This information can be updated daily as the courses and schedules change. Finally, the intranet is also capable of displaying video clips and online simulations which provide real world demonstrations of both classic and modern business theories.
This educational intranet raises two very interesting issues. First, the availability of such a vast amount of relevant material in electronic form effectively eliminates the constraints of distance from the learning process. Thus, a student located in New York City or London could essentially take a Harvard Business School course without actually travelling to Cambridge, Massachusetts. While technically this would allow for the transfer of required knowledge, it does dampen the learning experience which can come from a dynamic exchange of ideas in a face to face discussion where 'body language' is as important as the verbal content.
The second issue centers on the 'cost savings' which is claimed by most intranet projects. the PC Week article claims "the Business School system has dramatically reduced printing costs; professors no longer need to make hundreds copies of material for each class." Although this cost saving issue was raised in several real world intranet deployment projects, it was never discussed whether the printing cost where being shifted rather than eliminated. In the case of the Harvard Business school, for example, this would be demonstrated if each student created a hard copy of the class material instead of waiting for the professor to print handouts.
The commercial application of a learning intranet can be seen in the system developed for the Boeing Corporation's Center for Leadership and Speaking. This commercial entity has the same goals as the Harvard Business School. The Center wanted to create a system which would allow "top executives" to learn about educational opportunities. In addition to providing basic information about these opportunities, the system would contain video and audio based training courses. Finally, the system also contained a "live chat" capability which allowed executives in geographically dispersed location to have a real-time conversation regarding main issues. Essentially, the system allowed for an inexpensive and interactive conference call.
Finally, it is interesting to note that this system seems to have been organized around the age old engineering principle of "KISS" (Keep It Simple, Stupid) due to the fact that the system designers worked with the goal of "[giving] people just enough information, just in time and just for them." In this case, the information technology was being used to distill a large data source into a targeted output.
An example of an intranet which was created to provide access to a central location of generally available information can be seen at Coopers and Lybrand. This internal network was designed to provide the company's 17,000 U.S. based employees with easy access to information sources such as Wall Street investment houses.
In general this type of intranet is not very different from the numerous "resource lists" which permeate the internet's world wide web. They key difference between the Coopers & Lybrand resource list and more general lists resides in the fact that the company is paying for real-time information. This raises the issue concerning the "value" of information. Although it is understandable that time-critical information has a value, it is difficult for the vendor to adjust the cost of the 'product' for the usage it will receive. For example, if a company owns twenty computers and needs to run a database program on all twenty computers, then it will most likely have to purchase licenses for twenty copies of the program. Although the company could install a single licensed copied on twenty machines, this would be illegal. This "legal" protection currently residers in a gray area of the usage of the Internet.
The final category of instant access to corporate information is one of the most common intranet applications. In this type of deployment a company uses information technology to keep its employees properly informed.
Deer & Company deployed this type of intranet in order to keep the employees of its eight business divisions equally informed about corporate news and company products. In addition to providing access to traditional information such as hourly updated company stock values, daily company news reports, and a tracking reports on the company's NASCAR stock car racing team, the system provides access to technologies which push both the limits and the standards of accepted practice. These applications include the availability of video streaming and a 'Photo Archive System' (PAS) that contains more than 20,000 digitized images of current and former Deere products. This digital archive fulfills the purpose of workgroup computing by taking information which was previously available only to a select group of people in the marketing department and distributing it directly to the end users of the information. This directly translates into increased efficiency in the utilization of an employee's time.
The key lesson which is demonstrated by Deere & Company's intranet resides in managements view of the business impact of such networks. The company recognizes that such a computer system doesn't deliver economic savings through the "elimination" of work. Rather, it allows employees to work more productively. The PAS project, for example, traded an increase in the work needed to enter and manage the company's digitized photos against a decrease in the effort which was required to locate needed images. Essentially there is a zero savings in worked hours. The question then arises of whether it is worth investing in such technology if the economic benefits in terms of man power seem to be negligible. Deere's internal communications manager John Gerstner summarizes this return on investment question by simply stating that "[the intranet] has potential to make the company more efficient."7 Instead of focusing on using information technology to generate "less" work, Deere & Company has decided to generate "better" quality work.
On the basis of the previous examples and categorizations of typical intranet deployments, certain generalizations can be made. Intranets represent an important evolution from the first generation of groupware products. Through their application of "open architecture" technologies and protocols, they can be easily deployed on much larger scales with a reasonable expectation of proper functionality on multiple platforms. This extensive deployment servers to increase the reach of a company's stored data, and as a result, the data provides a positive supplement to an employee's job function. Furthermore, this technology has helped to foster a collaborative computing environment where an transfer knowledge and "corporate advise" can be achieved. In general, intranets allow an institution, whether corporate or educational, to leverage its collection of stored data to improve the efficiency of communication and data sharing.
The next logical progression from deploying internet technologies and protocols within a corporate environment for the purpose of improving the business process through the leveraging of information centers on extending these systems to the 'outside world.' The most simplistic definition of an "extranet" is that of a collaborative computer system which uses open architecture networking to link corporations to customers, suppliers, and business partners that share common goals. The main goal of such a system is to increase the efficiency of the business process by opening the channels of communication between interested parties. In general, an "intranet" and "extranet" a composed of identical technologies and share common design goals. The only difference is that an "intranet" operates within the confines of a single corporation while an extranet links several corporations or entities with have mutually beneficial business interests.
Although extranets may be deployed with various configurations, ultimately they are designed to establish a strong continuing relationship between a company and its customers. Often this is achieved by making a company's central data accessible to various customers or business partners. For example, Hewlett-Packard developed an 'extended' intranet which linked more than 10,000 of it's channel partners. Through this extranet, these partners were able to manage cooperative marketing programs, check account balances, and perform monetary transactions.
An interesting example of an extranet that shares data with customers was deployed by a Denver based regional bell operating company (RBOC) called US West Communications. In 1996, the US government passed a new federal telecommunications law which mandated the opening of local telephone networks to competition. This law required RBOC's to provide access into their operational systems. This posed a special problem for US West because it had business operations in 14 western and midwestern states, and each of these operations needed to comply with different business rules.
In order to comply with the new federal legislation, US West used internet technologies and protocols to link 30 back end mainframe systems to a standard web interface. This interface would allow third parties to securely purchase telecommunications products and services at wholesale rates. In addition, the system would allow the third parties to gain access to company information ranging from customer service records to the telephone network's inventory.
The key business advantage to this type of workgroup environment is that it allows the seller or "provider" to create a full service environment where the customers needs are addressed during the phases of pre-sale information gathering, purchasing, and product support. In this manner a company can develop a mutually beneficial relationship with its customer while keeping them within a controlled sphere of influence.
Another example of collaborative computing with internet technologies is evidenced by the system which was developed by the international public relations firm of Copithorne & Bellows. The data system essentially began as an intranet that allowed users to participate in threaded discussions, transfer electronic documents, and access time critical information. As the company grew, the system was expanded so that clients could participate in the efficiency of the communication system. The system allows clients to access information related to their personal accounts 24 hours a day. In general, the system helps the company present better and faster results to its clients.
It is interesting to note that even though the system which was deployed by Copithorne and Bellow uses open architecture technologies, the company is attempting to establish a small degree of the "restraint" which was prevalent in the first generation of groupware products. The company's information systems director Chris Tabarez states that "[a client's] data is their data, but if they want to leave, they would have to build an infrastructure to continue using it."11 Thus the client/provider relationship seems to be being built more upon the threatened expense of changing providers rather than emphasizing the value added services that can be created by better and faster communications. The detrimental value which this type of policy has on the development of the relationships which are required for the creation of an extranet is dependant on the type of business being conducted. If a "client" is a supporting player to a parent corporation such as the case of Hewlett-Packard's business partners, then all communication improvements will serve to benefit the parent company as well as the partners. However, in the case of a company providing services, such as an public relations firm or an advertising firm, it is possible for the client and the provider to develop a diverging vision. If the client is effectively "locked" in to a certain "extranet" at this point, they the could be faced with very real economic loses.
In general, extranet solutions attempt to create an efficient and extensive communication process between business partners which are located in dispersed geographic locations. The direct communication established by such a system allows a company to enjoy the economies created by faster communication of data.
Corporate groupware has undergone three distinct phases since the early days of computers. The first phase utilized proprietary network protocols and software. Although these systems contained communication capabilities such as e-mail and database access, they could only communicate with similar systems. The second phase of groupware development embraced the developing open architecture standards of the internet to create systems known as "intranets." These networks allowed companies to provided organization wide messaging services, database access, and information transfer through technologies which were independent of the computer platforms involved. As a result of the establishment of a common networking technology, intranets were able to reach a much larger audience. Since more people were able to share information, corporations were able to improve the business process by streamlining the flow of data. The third and currently evolving stage of groupware involves the extension of the corporate intranet beyond the organizational structure of a single company to include business partners and customers.
The impact which groupware systems have had on the business process can be separated into the categories of "workflow" and "economics." The "workflow" aspect of the business process has been dramatically affected by these products for the simple reason that they have created a direct route between the data stores and the people who need to utilize the information. The perfect analogy for this improved flow is the contrast between early two-lane highways and modern intestates. Two-lane highways often take indirect, winding routes from their source to their destination. This type of route forces automobiles (i.e.. the information) to travel at slower speeds and often requires long periods of time for the trip to be completed. Interstate highways, however, are characterized by direct, "shortest distance" designs which are capable of supporting high speed travel. As the flow of information improved, companies were able to spend more time using the data rather than attempting to distribute it.
The "economic" aspect of groupware developments such as intranets and extranets tends to fall into a gray area which is hard to evaluate. Corporations typically discover that the funds which are saved by streamlining the information flow are simply transferred to the computer departments which enabled the "streamlining." Often the only "real" cost savings that can be identified centers on the reduction of expenditures for printing documents. The true economic benefits from the implementation of groupware products center on the increased speed with which companies can respond to market pressures and to the long term mutually beneficial relationships that can be developed with business partners.
In conclusion, the past thirty years has unleashed technology
which has had a tremendous effect on the manner in which corporations
conduct business. The next thirty years will most likely have an even
larger impact.