Up to 70% of the UK's big companies already have some kind of intranet, but many of these are still in the pilot phase. Countless smaller firms have not even got started.
On the face of it, the figures are surprising because there is no doubt that intranets can achieve what years of struggle by IT departments have failed to achieve. By integrating companywide data and systems, user organisations can unlock treasure troves of information, or what the authors of management books rather grandly refer to as "knowledge". These are the keys to commercial success, enabling managers to take better decisions, empowering staff at all levels of the organisation, shortening communication lines, removing long-ossified layers of management, improving response times, and transforming customer service.
As usual, manufacturers, consultants and management gurus (and occasionally journalists) may be guilty of overstating the case, but even a modest intranet can bring improvements in business processes and significant cost savings. It may be something as simple as cutting down on the printing and distribution of company documents - the internal phone book, the staff newsletter, expense-claim forms and purchase orders - but the benefits are demonstrable and worth having.
All the usual causes of corporate inertia are to blame: lack of a clearly defined business case, the absence of a sponsor with clout in the boardroom, the tendency to defer investment decisions to some unspecified future budgetary period, or simply a feeling that there is already too much to do simply to keep the business running without embarking on further organisational disruption.
Yet the evidence is that the late-starters are worrying unnecessarily.
What looks like yet another bloody revolution is much less traumatic than it appears.
The infrastructure for corporate intranets is already in place and staff to run it already on the payroll. The whole point of intranets is to extract the value from existing systems, not that they demand vast investments in new ones. The technical challenges facing the organisation are the challenges it faces already.
It is true, though, that it may mean more of them. "Web servers attract graphics - everyone wants pretty pictures, which means bandwidth on the LAN increases. If you are talking about running CGI scripts or SSL or anything else that eats processor cycles you will face capacity planning issues," says Peter Houppermanns, an IT infrastructure consultant with PA Consulting.
Not that these are necessarily new issues. Many companies have watched their Email systems grind to a halt as users overload the network with hefty document attachments. In BT's case, when its intranet got underway, the load on the Email system was dramatically reduced.
"Some companies may be agonising about who runs the internal Web servers, but the answer is clear. This activity has to be rolled into standard IS functions - after all, these are just computer systems which need to be watered and fed just like any other," Houppermanns says.
There is another side to running an intranet, however, which has little or nothing to do with the technical infrastructure. While much of the information it will carry already exists within the organisation, and some of this information can be released simply by by tweaking internal systems, most intranets also carry a great deal of data that is new. Someone has to pull this information together, organise it and make it presentable.
The company may constantly generate news, but if it wants to share the news with staff, someone will need to write it.
"In that respect, running an intranet requires as much effort as publishing a magazine," Houppermanns says.
If responsibility for the infrastructure has a natural owner in IT, responsibility for the content layered on top does not. According to Neil Mellor, head of Internet and Ecommerce marketing at British Telecom, this will often be a job for the human resources department (at BT, it is handled by Employee Communications, a branch of human resources). For organisations which do not already employ people to do some form of internal marketing, other content managers will need to be found.
"People are usually willing to help if you give them the chance, but it must be easy to contribute to the system; you have to give staff a format to work in," Houppermanns says. This might be a two-stage process that begins with the design of page templates and forms, and for this most experts recommend bringing in an external consultancy except in those rare cases where design skills exist in house.
Stage two is to ensure that once the boxes have been drawn, staff are finding things to put in them.
The requirement to keep content up to date and of an acceptable quality may have implications for the design of the system. "At BT we started with a distributed approach but rapidly centralised it," says Mellor.
"It was partly a matter of control - we needed to be able to see where there were pockets of dead content, we needed to ensure consistency of style and we needed to make sure that the whole effort was properly supported."
Security fears are another common cause of inertia, but while it is true that wider access to information carries risks for the organisation, some of these are exaggerated. "First you have to understand the nature of the challenge," says Mellor. "Eighty per cent of that information is of no interest whatsoever to your competitors."
Even when security concerns have been addressed, there are still doubts about the value of increasing information flow. "A potential drawback, particularly when you scale up the system, is that you are making a lot of information available to people and that they may not know how to use that information properly," Mellor says.
Many companies understand the short-term benefits of implementing an intranet, but not the longer term ones. Return on investment, the key to getting the project off the ground in the first place, is often seen purely in terms of cost savings and these will not necessarily last long.
BT was able to save hundreds of millions of pounds in the first two years of the life of its intranet, but the savings have been less dramatic since.
"There is a limit to how much you can cut costs, but there is no limit on the amount by which revenue can grow," says Mellor.
Mellor says cost is only one of three potential benefits. The others are increased management efficiency ("freeing up people to do more interesting and useful things") and revenue leverage. "With better informed sales people, for instance, an organisation can become more responsive," he says.
Houppermanns agrees that the return on investment argument can be difficult to sustain, but says that once companies have been persuaded to make the initial investment, getting the ongoing funding required to keep the network running may not be as hard as it appears: "The best way to convince management to keep investing in the intranet is to turn it off for a few days."
INTRANET DEVELOPMENT ISSUES: A GLOSSARY
Comes in two basic flavours: management and end-user. Management buy-in is essential if intranet projects are going to get off the ground in the first place. A sponsor, preferably at board level, will ensure that the project gets the attention and the funding it needs. User buy-in is perhaps even more important to the long-term success of an intranet. Securing user buy-in initially is about communicating the aims of the project and soliciting views about what it should encompass, discovering what information users would ideally like to see made available and how they would like to see it organised.
It is also about keeping them involved. It is no good giving the user community a policy setting or content management role if you are not prepared to act on their recommendations.
Feedback is one of the most important elements in securing buy-in. Mechanisms that allow the users to respond with comments and criticisms should be built in from the start. All the corporate rant about knowledge sharing, more open management and flatter organisational structures will come to nothing if you give the users a voice then fail to listen to what they have to say. Those supporting the technical infrastructure need feedback; so do those managing the content.
An intranet is a network just like any other. The volume of traffic, the data types carried and the number of users will all affect the bandwidth requirement. Growth in the number of users and the increased complexity of the applications they will be using need to be planned for, as these will determine the load on the servers. The network designed to provide nothing more than simple Email services is unlikely to cope with full-motion video. Certain applications, such as CGI scripts, SSL security and anything that makes the company's databases work harder, will increase demand for processing power. A simple rule to bear in mind is that when you build new roads you provide new reasons for people to travel. A successful intranet could soon become the networking equivalent of the M25. It might not make sense to start with a 6-lane motorway, but if you can't add extra lanes later, you could be in trouble.
If you start from the point of view that information is something to be controlled, then an intranet is probably not for you. Wherever access to information is increased, control is relinquished to some degree. Sensible controls can still be built in. Information sharing may become more democratic but this is business, not democracy, and some users will be more equal than others. Access privileges can be assigned that make certain information available only to authorised users. The other aspect of control worth considering has nothing to do with information but the infrastructure used to carry it. A highly distributed intranet in which everything goes and data and applications are being added willy-nilly on all sides will quickly turn into a support nightmare for the IT department. Many organisations which started down this route have quickly reined in their networks. Centralisation isn't always a vote winner but it can make for an easier life.
Professional designers may already work somewhere in the organisation, but for many companies it may be worth engaging the services of a Web consultancy to design pages and advise on the user interface. The internal network should aspire to the same design standards found on the Web, where the number of slick, professional-looking sites is increasing all the time. The same users who cast a critical eye on the company intranet will also be surfing the Web in the course of their jobs or in their spare time. They will soon notice if the intranet has been designed by a junior programmer with a copy of HTML for Dummies.
Cost savings are only part of the story. Any intranet worth the name will have much more subtle effects on organisational life and some of these are almost impossible to measure. Improved morale will ultimately have a bearing on employment and training costs but can't be quantified.
Better customer service will benefit the bottom line but won't occupy a line on the finance director's spreadsheet. There are, however, some straightforward ways to measure an intranet. How much use does it get?
Web servers have administration tools that allow organisations to measure the number of "hits" made on information living on the network. In simple terms, the number of hits tells you how many pages are being read, how much information is being accessed. Look at where the hits are occuring.
The total might be going up, but some areas of the intranet getting more use than others. If several departments or individuals are updating the information, find out which bits are working and which aren't. If the measurements tell you the network is growing, share the good news with the users, who can only be pleased to be associated with a success story.
The IT skills to develop intranets are largely in place. Internet-specific skills in languages such as HTML are easily acquired, even if the aesthetic instincts to use it well are not. Knowledge of Web servers may also be scarce and expertise in database integration thin on the ground. Intranets demand other skills, which have nothing to do with the technical infrastructure. Essentially they are publishing skills: the ability to select, source, edit and present information in a way that suits a particular audience.
The graphical user interface has probably done much to reduce the cost per head of IT training. The problem is that the GUI coincided with (and helped cause) an unprecedented explosion in the use of computers, so the overall training bill for most companies went up. The browser represents the second wave of the ease-of-use revolution, only this time the prospect of cheaper training is real. The Web browser makes the underlying differences in computing platforms transparent to the user. It introduces usage conventions that only need to be learnt once which means that basic skills in additional applications are more easily and swiftly acquired. Even Microsoft has acknowledged the design logic of the browser interface - it is no coincidence that it has adopted a browser metaphor for Windows' Active Desktop. Even more significant, perhaps, is that in Windows 98 the company has replaced the counter-intuitive double click with a single click to launch an application - the same way hyperlinks are invoked. Intranets will not eliminate the training bill, but they should increase learning time for new applications and generally improve the computer-fluency of the user population.
As with many IT decisions, embarking on an intranet raises a number of "make or buy?" issues. In many cases, large parts of the infrastructure - the network, application servers, desktop computers - will already be in place. Others, such as Web servers, may not be. If there are no HTML and Java hacks in the IT department, some of these skills may need to be bought in. It is possible to outsource the entire development and ongoing maintenance of the intranet, in the same way it is possible to outsource any IT operation. Many of the same caveats apply, however. Organisations for which the security of information is a top priority tend to be averse to outsourcing of all kinds. Parts of the infrastructure might well be outsourced, but the provision and management of content will be done in house. Some information can be bought in. A pharmaceuticals company might pay the publisher of a specialist newsletter for the rights to redistribute the publication on the internal network, for instance. By and large, though, intranets exist to liberate the information companies don't need to pay for because they already own it.
It is vitally important to establish ownership of the intranet because it is going to take considerable effort to maintain. The network will have two sets of owners: the IT staff who manage the infrastructure, and the staff who are told - or better still, who ask - to manage the content.
For the IT department, running the network goes with the job. For other staff, most of whom will be employed to do something else, updating the intranet will be an additional responsibility. They will need to feel this extra work is worth their while: the rewards need not be material, they may be measured in increased job satisfaction or productivity. Like an untended garden, the network may grow without owners, but not in any particular direction.
While no two intranets are exactly alike, there are enough similarities to encourage manufacturers to provide big pieces of the equation in off-the-shelf form. Some offer what amounts to an intranet in a box, ready-made applications designed to sit on top of existing infrastructure software such as Lotus Domino. Web server software is becoming increasingly sophisticated in what it can deliver to the browser on the user's desktop, but also in its ability to deliver management information to those running the network. Various tools are available to help dig information out of the corporate nooks and crannies in which it resides. TCP/IP networks and Web browsers go a long way to mask the differences between the disparate platforms which hold a company's information, but where higher levels of integration are required - the ability to bring together data from multiple databases, for instance - it will often make more sense to buy in a solution than to embark on a substantial reprogramming effort. Generally speaking, though, the great appeal of intranets is that the technology needed to run them is familiar and already in place. Intranets are about making the most of what is already there, not making massive investments in new systems.
An alternative heading might be "quantity control". Any network that circulates the same information for long enough will wither and die. Just as on an external Web site, the information on the internal network needs to be regularly refreshed and updated. It also needs to be reliable and well presented. Advocates of intranets argue that they liberate the latent creativity of staff, stimulate new ideas and have a generally "empowering" effect on all concerned. Intranets also have the potential to be enormous repositories of corporate guff, filled with stuff that is neither interesting, informative or in any way useful. Someone needs to make sure not only that there is enough, but that it is good enough.
See all of the above for details. Return on investment (ROI) is a very slippery fish indeed. Very few intranets are likely to get off the ground without some sort of cost/benefit analysis being done first. In many cases the intranet will result in cost savings, though this is by no means the only reason to have one. Cost savings are likely to be short-lived, however, and certain to be finite. The most obvious savings to be made are in organisations that distribute large numbers of documents that require frequent updating to large numbers of staff. Occasionally, as with British Telecom, the savings to be made from publishing electronically are phenomenal (more than #700 million in the first year, in BT's case).
It is universally true, however, that the savings will decline in subsequent years - if not in year two, then almost certainly in year three. As time goes on the company will need to think of ROI in different ways, either by a greater appreciation of the soft benefits of the system, or by finding new ways to increase its impact on the bottom line - as a revenue generator, perhaps.
The risks of making more of a company's information available to a wider audience are obvious, but they need to be balanced against the benefits of a better informed, more productive workforce and management. It goes without saying that everything intended only for internal consumption will live behind the firewall. A sensible approach to assigning access rights will also help. But this is where the technology stops. The rest of the security issues raised by intranets are human.
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