Each month, ordinary UK companies tell us about their experiences with the latest computer technology. What really happens when you use fashionable new technology? Which ideas are successful and which flop?
Business Computer World finds out from the country's experts in computer technology - the people who are using it on a daily basis.
This month, we look out how a specialist patent firm and two major telephone companies are using intranets. Also, how a computer storage company, a small promotions consultancy and a chain of high-street stores are handling their finances. Once seen simply as a way to automate the process of counting money and recording transactions, accounts software is now a vital element of any organisation's information management strategy.
In today's competitive environment, it is more important than ever to know how much money is coming into a business, what it costs to provide services and products, and its likely future financial position.
So accounts packages should not only be efficient at recording information accurately and consistently, but must also be good at reporting. Yet, although most finance packages come with built-in reports and ad hoc report writers, users complain that it is difficult to extract information from them.
According to recent research from finance systems' specialist Tate Bramald Consultancy, this dissatisfaction is not confined to large systems for global businesses. About 50 per cent of small companies questioned say that it is either difficult or impossible to add user-defined reports to their finance systems.
Another common theme across all three sectors of the finance systems market - entry-level, mid-range and high-end - is the trend towards standardisation.
There has been a rationalisation of suppliers, which now tend to offer similar functionality and features in their software.
According to Bramald, in the entry-level sector, most consultants say that their first port of call is a supplier called Sage. Other key vendors in this sector are Intuit, Pegasus and Megatech.
The majority of software also runs on standard platforms such as Microsoft Windows, Novell Netware, PC networks, UNIX and IBM AS/400.
Some of the leading vendors in the mid-range sector are Sage, Pegasus, Navision, Systems Union, Computer Associates, Accpac, Tetra and TIS Software.
High-end suppliers include SAP, Oracle, Dun and Bradstreet Software, Coda, Peoplesoft, Computer Associates and JBA.
In the mid-range and high-end sectors there is a trend for suppliers to offer a broader range of integrated business software. Rather than selling only a finance system, they provide human resource management, manufacturing and/or distribution capabilities.
Suppliers either adopt a best-of-breed approach and team up with other specialist software suppliers, or they develop their own packages.
Looking for a finance system can seem a daunting task. But organisations can narrow down the search by deciding which range of software is best for their business, and finding out how well it can expand to accommodate change in the future.
Subject: Virgin Our Price
Activities: sells entertainment products
Installations: Coda Financials, Science Systems' Cadenza, and Virgin's own system called ELVIS
Uses: to automate financial management
Virgin Our Price was set up when Virgin Retail and Our Price merged in 1994. The company now has 49 Virgin megastores and 269 Our Price stores in the UK and Ireland.
Julian Ghinn, financial controller at Virgin Our Price, says that a key part of the merger process was deciding how to implement common IT systems.
Virgin Retail had already implemented Coda Financials before the merger, alongside Science Systems retail applications and its own Epos Linked Virgin Information System (ELVIS). Ghinn says: 'Coda offered greater potential for expansion and integration than Our Price's existing system.'
Virgin Our Price implemented Coda, Science Systems' Cadenza and ELVIS in its stores between June 1994 and June 1995. With these new systems, Virgin Retail has been able to automate more branch processes, such as gathering retail trading summaries and providing more detailed information for financial analysis.
Before the project, each store was treated as a cost centre on a central general ledger. Now, Virgin Retail can drill down into branch accounts, analysing them either by person or by product codes.
'It's important to understand how individual stores are performing,' says Ghinn. 'Our old system didn't provide the depth of analysis we needed.'
Staff in individual stores have also benefited from the system. Not only do they have new processes for cash and stock accounting, but they have access to some of the same detailed information as head office.
Virgin Our Price encourages its stores to respond to local, as well as nationwide demand, so information about best-selling products is invaluable, says Ghinn.
'We are in the process of offering a new level of financial analysis to stores,' he says 'It means that staff are more aware of costs, and the individual profit and loss for their store. It's all part of the same process of developing financial awareness.'
Subject: Storage Tek
Activities: information storage-and-retrieval technology
Installations: Oracle Financials, Systems Union Sun Systems
Uses: to standardise finance systems in regional offices
Although Storage Tek standardised on Oracle products some years ago for its corporate database and financials, 10 of its subsidiaries around the world had implemented their own local accounts systems. So when Storage Tek produced financial reports for its US parent company, it was combining information from 11 different sources.
Kieron McGarry, IT director for international operations at Storage Tek, says: 'We had already standardised systems for order processing and inventory management. We wanted consistency throughout the business by standardising finance systems for all our subsidiaries. We were also planning to implement a series of new transaction systems, such as billing, and we needed to look at how they would tie into fiscal systems.'
The larger subsidiaries were already using Oracle Financials. Other offices had set up systems which supported local requirements, currencies and languages. The new system had to be flexible enough to support those requirements, and to suit the size and culture of each office.
Storage Tek weighed up a number of packages according to the key criteria of flexibility, international capabilities, scalability and global coverage and support. It chose Sun Systems from Systems Union, and implemented it in its offices in 10 countries between June 1995 and May 1996.
The original objectives of the project have been met, says McGarry. All 10 subsidiaries can now produce management reports in the same form. This means the head office is always working with consistent information.
Standardising the system has also made it easier for Storage Tek to set up new offices quickly. Although adjustments have to be made to fit in with local requirements, Sun Systems can be dropped into a new office with few problems. Storage Tek has developed skills around the new system, so it can move finance people around the company.
Sun Systems is portable across different hardware platforms. Although Storage Tek runs Sun Systems on Novell-based PC networks, it plans to migrate to an NT environment soon.
Subject: Promotional Consultants
Activities: promotional marketing and managing reader offers
Installations: Microsoft Office Professional and Sage Instant Accounting
Uses: to run accounts for start-up businesses
Craig McGregor set up Promotional Consultants in March 1996. It manages promotional and other offers for companies, such as publishers offering rewards to new magazine subscribers.
McGregor uses Microsoft Office Professional and Sage Instant Accounting, which run on an Olivetti PC. He opted for Sage because it is compatible with Windows. Staff who are not trained to work on accounts also find it easy to use.
'In the 1980s, you could buy either an accounts package for about u700, or a very inflexible, cut-down version for u50,' says McGregor. 'Deleting an entry was a major job. Today, accounts software has improved so much.'
McGregor chose Sage Instant Accounting after reading reviews in the computer press, and on the recommendation of his accountant, who also uses the package. He was reassured by a price tag of u128, believing it would guarantee a better level of functionality than cheaper packages.
'Sage was easy to set up,' says McGregor. 'The guide is a reprint of the help pages in the package, and it takes you through the process quite well. However, the terminology is a bit too accountancy-oriented.' Sage is a typical modern Windows package, says McGregor. It is easy to move around, and users can get to the same figure in a number of different ways: for example, by product or by transaction.
One of the main benefits of the new system is that McGregor can measure the effectiveness of various campaigns by allocating costs and revenues to different departments. He can then compare these findings and so establish the best way to tackle different projects.
Finance systems lessons:
1. Decide which sector of the market you are in: entry-level (up to u5m turnover), mid-range (u5m-u50m) or high-end. Vendors differentiate their products according to those sectors, to improve the match between customer and software.
2. Look at report-writing capabilities.
Are built-in reports enough? If not, what is supplied as a report-writing tool, and how powerful and flexible is it?
3. Make sure your software is powerful and flexible enough to deal with changes both now and in five years' time.
In case you missed the hype, intranets are internal corporate networks inspired by the user-friendly and low-cost Internet. Already, three companies have reported a payback of more than 1,000 per cent on investment, according to a recent study by International Data Corporation (IDC).
Although this is not enough evidence in itself, if surveys such as IDC's are right, it is just possible that intranets are starting to make good the IT investment many companies have made over the years.
Intranets appeal to business because they link isolated islands of investment in IT. In addition, because they are based on the simple open standards of Internet technology, intranets can adapt to almost any computer and software. At last, it seems they are making sense of the huge sums of money spent putting personal computers on every desk and building corporate databases.
Even if you cannot justify the expense of an intranet for just data warehousing, it is useful because of the added extras of killer applications, such as the company car scheme, internal telephone directory and purchase requisitions.
For some companies which have never used Lotus Notes or other groupware, intranets provide a way for everyone to get at the mundane pieces of corporate life more easily, or perhaps for the first time.
The main virtue of applications such as these is that they are easy to set up and run. The Web uses HTML (hypertext markup language), which is a straightforward code.
A page sent from a server to a browser is read by the browser, and the mark-up code is used by the browser to format the text and images you see on screen. The protocol used to shuffle documents around on the Net, HTTP, is also quite easy to understand.
Just by mastering the basics of Web publishing, you can start reaping the benefits of a company intranet. For example, it is easy for an in-house team to keep other groups informed of what they are doing, or for a company to distribute external information efficiently.
Last year, Hughes Aerospace set up an intranet to link it to 22 UK customers for exchanging email and material generated in-house. It also used its intranet to digitally distribute the 7,000 publications to which it subscribes, such as Jane's Defence Weekly and The Wall Street Journal. The cost of the intranet was $600,000, but the company saved $250,000 on subscriptions in the first year alone.
More ambitious businesses are using intranets not just to access or publish information, but to support business processes. The best-known example is Federal Express, a global parcel delivery service company. Customers can track the progress of overnight delivery packages on Fedex's in-house database which is accessed via the Internet. The cost of developing the application has been more than offset by a reduction in the number of phone enquiries staff make, as well as improved customer service.
More than half of new intranets are being set up for similar reasons.
Companies are gradually overcoming their caution to open up in-house databases to customers. This is because security issues are being addressed and it is easy to incorporate customers into the business process.
However, the Web's HTML code is not sophisticated enough to handle the more challenging applications. These require different kinds of software, new Web servers and server software and tools to help create Web pages.
They also need software controls which can download applications from the corporate intranet to run at the desktop.
The main option is to get everything from Microsoft or to mix and match from the Java brigade led by Sun Microsystems, Netscape and just about everybody else.
In the UK, Andersen Consulting and Cambridge Technology Partners both recently announced that they would promote Sun's Java-based software environments with their clients.
Patrick Kalaher at Cambridge Technology Partners says his company is encouraging clients to write new applications in Java because it is an open solution.
'Regardless of where Java comes from, you can compile it and run it just about anywhere,' says Kalaher. 'We're using Sun technology on our projects, but Sun only supplies the servers. The rest is from third-party suppliers, and we're using Microsoft's browser.'
Other developers see Microsoft's plans to link intranet solutions to its existing technology as a natural development in its dominance of the desktop PC market. They also believe it is a way for users to protect their investment in their PCs.
While it may be fascinating to watch the two camps at each other's throats, don't be distracted. The Java brigade already has solutions for creating and using intranets efficiently. Microsoft is catching up fast, although there is some doubt about the company's declared intention to supply open solutions. As Kalaher says: 'The trouble with Microsoft solutions is they lead you down a Microsoft path.'
Instead, you should focus on the users in your company who would benefit most from an intranet, and also what it can do for your customers. The initial payback comes from putting together all those isolated pieces of IT to boost peoples' productivity. Later, it might come from letting your customers know how you do business and involving them in the process.
Subject: Derwent Information Services
Activities: patent research house
Installations: Sun and Microsoft NT
Uses: to develop its own skills in-house and to help its corporate customers to set up their own intranets
Derwent, part of the $6bn Thomson Corporation, is a market leader in supplying patent information from the major national and international patent offices to companies worldwide.
The business is investing significantly in new ways of reaching its customers.
For example, in 1994 Derwent set up an Internet site running on a Sun server. It is used mainly to attract a wider customer base for patent information, and to handle one-off enquiries and searches. The company has two intranets: one runs on a Sun server and the other on Microsoft NT.
Vince Bodsworth, group infrastructure director at Derwent, explains: 'We run our main production systems on Sun and plan to carry on that way.
We have an intranet on a Sun server, on which we maintain our database.'
Derwent uses one intranet to develop its own skills in-house, and to help corporate customers set up their own intranets (see Ericsson Information Systems, below). Derwent's other intranet was set up to manage a specific project with Microsoft.
'We are working with Microsoft's advanced research team in Redmond, Washington,' says Bodsworth. 'Clearly, the company would be upset if we didn't use NT for that. And anyway, Microsoft did the original development for the NT platform.'
Derwent has commissioned Microsoft's team to transfer a client-server patent application it originally wrote for internal use to an intranet environment. Bodsworth says the contract stipulates the application must work as efficiently with Netscape's browser as with Microsoft's. He is quite hopeful about his choice of technology, and is enthusiastic about the capability Derwent is developing to work with its customers.
'Frankly, we don't care whether its Sun or NT. What's important is that it's a server and its browsable - the choice is entirely an operational one,' he adds.
Subject: Ericsson Information Systems
Activities: mobile phone manufacturer
Installation: Sun Microsystems
Uses: keeping patent information up to date
One of Derwent's clients is Ericsson Information Systems which has a company-wide intranet for 30,000 staff. The first application on its Sun server is a database of patent information which is updated weekly by a file transfer from Derwent.
Patent information is a competitive weapon in the mobile phone market.
For example, Nokia recently developed a method of peer-to-peer talk between two phones, even when they are out of the range of a base station.
Ericsson promptly patented the technology to keep other suppliers at bay. The company itself is seen as having a fairly aggressive stance in the market. It is said to want to protect its research and development spend by doubling its patent activity to the same level as Motorola's.
Patent information that used to go to an Ericsson librarian or information professional now goes via the intranet directly to the company's research and development teams. They can spot opportunities or recognise an infringement of an existing patent by a rival.
Ericsson is one of Europe's largest users of Sun workstations and servers.
The company justifies the marginal cost of the intranet because of the savings gained by using services which they would take on CD-ROM or online.
The spin-off benefit is that being able to control sensitive data in-house makes it more difficult for outsiders to see how it is being used.
Subject: Mercury Communications
Activities: telecoms company
Uses: to improve communications among workgroups in the company
Mercury Communications started small with an intranet, and is beginning to open up parts of it to provide additional services for its customers.
The company chose Netscape to supply its own intranet development, and there is now a global arrangement between Mercury's parent company, Cable & Wireless, and Netscape. Together with its own experience, this is the basis for Mercury's intranet service for customers.
Chris Jenkin, online services manager at Mercury, says the corporate intranet was initially justified in terms of cost savings because people would be able to get information faster.
It was also expected to improve communications between workgroups because they could publish details of what they were doing for their colleagues.
The next stage, says Jenkin, is to use the intranet to encourage staff to look at the business in the same way as customers do.
Jenkin says: 'The power of doing this internally is that some of the seams are taken out and you can see things in the same way as your customers see them.'
Mercury is trialling access to customer services, such as planning, this way. Jenkin explains: 'This is useful for customers which use our freecall 0500 numbers. For example, a company may want to specify where calls should terminate when it is running an advertising campaign on TV over a weekend.
It can access the call plan we hold on the intranet and make changes to it.'
Mercury's intranet is ultimately destined to cover more than 8,000 employees.
Project manager Denise Morgan says the way Mercury introduced the intranet to the organisation was crucial to its early success.
'If users access the intranet for the first time and find nothing interesting,' says Morgan 'they will be less likely to return to it.' Business areas which delivered initial sites included purchasing and logistics, human resources development and property. Jenkin enthuses about the early content.
'On one site you can access all the facilities for meeting rooms - things that you normally don't document,' he says.
Morgan organised the rollout so that people got used to the intranet as quickly as possible. The programme combined the rollout itself with a marketing campaign and visits to bring each desktop up to the same level of functionality.
The company promoted the trial with staff seminars, posters, email and giveaways such as pens and mouse mats. The rollout began with a number of trial sites, each with more than 200 users, to give a good cross-section of functions. It is now going company-wide.
Morgan offers some advice to other organisations considering the potential of an intranet. 'Start with something that is easy to manage and build on it later. Use your existing technology as a starting point, make sure there is useful content from the start and formulate guidelines that fit your organisation. Most importantly, tell your staff about it and exploit their interest. Get them to use the intranet and start contributing content.
Once you get a momentum, it will perpetuate itself.'
1. Make sure staff are fully consulted when you are setting up an intranet in your organisation. Find out what they want to communicate, and how often they want to communicate. Establish a general communication structure and find an intranet technology that encompasses it.
2. Do not expect one supplier or technology to be the answer to your intranet requirements. You may need to pick and mix technical solutions.
3. Remember your customers. Tailor the technology so that it allows customers access to useful corporate information. Make them feel part of what you do.
The intranet should be a forum.
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