Maximizing Benefits of Intranets: Cost-Efficient Applications and Surveys

1. Benefits of Intranets • Uniformity on all platforms • Low hardware cost • Low connection cost • Easy interface • Familiarity (confidence) • Customization • Ubiquitous connections columbusgroup.com

2. Examples of Intranet Applications • Corporate, Manufacturing, Legacy databases • Quality Assurance Systems • Human Resource Systems • Written Documentation • Research Reports • Order Entry (expense reports, requisitions) • Memoranda, Letters, E-mail From net-work.com

3. Survey: Why Intranets? • Share online policies, procedures, etc (80%) • Make available information (52%) • Facilitate cross-platform work (15%) • Support decision-making (15%) • Provide personalized information (10%) • Support mobile users (9%) • Tie together disparate systems (7%) • Re-engineer (5%) • Downsize from mainframe, mini (2%) C. Comaford, PC Week 5-20-96

4. Intranets: Annual Costs per 1,000 Users • $9,500 help desk and related activities • $6,700 hardware, software problems • $6,300 messaging management • $4,600 directory maintenance • $3,900 monitoring • $2,500 directory synchronization • $1,800 backup and related activities • $35,200 total PC Week, 4-28-97

5. Intranet Survey: Unexpected Costs • Hardware, network upgrades (59%) • Hiring a graphic designer (18%) • Hiring a content librarian (10%) • Hiring consultants for tuning, site structure, data access assistance (5%) • Training/education (5%) • Software upgrades, acquisitions (3%) C. Comaford, PC Week 5-20-96

6. IDC Intranet Survey: Big ROIs • Returns of 1,000% are not uncommon • Why? • Many firms already have infrastructure • Users already have desktop PCs • Free or cheap browser & server software • High-level tools speed development • Few hidden costs (highest: network upgrades)

7. Intranet ROIs • Meta Group study: 41 U.S. Companies • 32 published documents (18% ROI) • many provided groupware [Notes or Exchange] (40% ROI) • 3 provided database access (68% ROI) • 2 provided inventory mgmt (52% ROI) • Enterprisewide is best level to shoot for. Infoworld 4-13-98

8. Intranet Case Study 1: Nissan • In its first year, Nissan’s Intranet saved • $750K in staff time and • $72K in printing costs --> growing to $210K • 661% ROI (cost: $178,500) • Contains press releases, employee anniversaries, company fitness center schedules, up-to-the-minute internal news, management tips, databases of stories on competitors, $5 brochure, mouse pad • The 2,500 employees average 34 hits apiece/week PC Week, March 9, 1998

9. Intranet Case Study 2: JD Edwards • Focus is on Knowledge Management: “Knowledge Garden” • Serves 3,500 employees in 95 countries • Designers are non-technical, having no interest in hardware or programming • Studied the pathways to information during all phases of customer interaction • Structured content by cycle, not producer! Web Week, 12-1-97

10. The Knowledge Garden • 1. Employee Resource Center • Company News • Company Events • Library • Benefits/Career Planning • Departments & Area Offices

11. The Knowledge Garden • 2. Product Center • Worldwide Customer Support • Development • Training • Technical Messages • Client Services • Documentation

12. The Knowledge Garden • 3. Sales & Marketing Center • Marketing • Sales Force Support • Strategic Alliances & Business Partners • Analyst Relations • Competitive Intelligence

13. Bottom Line: JD Edwards • Cost: $1 million • Savings: $5 million in time saved • 36% of respondents saved 7-10 hrs/month • Chief focus: “to give easy access to frequently used documents in the sales process.” • 100 Knowledge authors update the content

14. Knowledge Management • Definitions differ, but it usually means: • Capturing/finding best practices • Retaining tacit knowledge of individuals • Enabling firms to react more quickly and decisively. • Common tools: Lotus Notes/Domino or Exchange Server + data warehousing tools • As you solve problems, type them in for storage, categorization. PC Week, 8-24-98

15. What is Knowledge? • Data = discrete chunks (facts, etc.) • Information = data with meaning (connect facts with significance) • Knowledge = information with comparisons, consequences, connections, values, beliefs, actions

16. Explicit Articulable Teachable Observable in use Schematic Simple Documented Dimensions of Knowledge • Tacit • Not teachable • Not articulated • Not observable in • use • Rich • Complex • Undocumented

17. TACIT AND EXPLICIT KNOWLEDGE • Tacit knowledge and explicit knowledge operate together in a stereo effect • All forms of knowledge have both, combined holistically and almost inseparable • Must manage both together but each in its own way. (O. El Sawy)

18. KM and KM Systems • Knowledge Management is the organizational process for acquiring, organizing, and communicating both tacit and explicit knowledge so that others may use if to be more effective and productive. • Knowledge Management Systems are information systems designed to facilitate codifying, collecting, integrating, and disseminating organizational knowledge

19. KM SYSTEMS • What is new is use of modern IT to systematize, facilitate, and expedite firm-wide knowledge management • Technologies include: • Internet • intranets • browsers • data warehouses • software agents • doc. mgmt systems

20. Approaches: Legacy Data • Four options: • Turn the mainframe into a Web server • Rewrite mainframe applications to deliver Web content • Make Web applications use old mainframe standards (eg., CICS) • Use “screen scrapers” to trigger a screen, pull data from it, then reformat it to HTML Internet World, 8-10-98, p. 24

21. Extranets: Extended Intranets • Usually link outsiders to databases • Examples: • Sales (with access to Inventory levels or service locations: Prudential) • Delivery tracking (FedEx, UPS) • Customer service (KB: Microsoft) • There are few in place • You’ll hear more about LDAP & encryption

22. Extranet Payback Network World, Feb. 16, 1998

23. Comparison of all Three

24. Business-to-Business E-Commerce • Biggest Internet successes • Roots are in EDI

25. B to B Exchange Business Models • Aggregators – offers product catalogs of many suppliers in one place/format (e-Chemicals) • Trading Hubs – build buyer & seller communities, sometimes with auctions (FreeMkts, Shop2gether) • Post and Browse – bulletin board offering postings and negotiations later (Catex) • Auction Markets – Multiple buyers & sellers bid (e-Steel) • Fully-automated exchanges – Centralized market for standardized products (e-Steel) B2B Exchanges, Scully & Woods, 1999

26. Common Features • Centralized market space • Neutrality • Standardized contracts, documents, products • Pre-qualifications & regulation of users • Price quotes, post-trade info, pricing history B2B Exchanges, Scully & Woods, 1999

27. Common Features (cont’d) • Maintenance of integrity of the market • Transparency • Self-regulation of market and pricing mechanism • Clearing & settlement or fulfilment svcs • Confidentiality/anonymity • An exchange community (meeting place) B2B Exchanges, Scully & Woods, 1999

28. Net Effects • Markets operate at fraction of physical cost • Low cost of getting connected globally • Higher pricing efficiency (auctions) and increased volumes • Automated trading and anonymity • Transparency: Centralized markets generate trading and pricing information B2B Exchanges, Scully & Woods, 1999

29. EDI and B to B Commerce • Need for B to B electronic commerce became obvious in 1970s & 1980s • EDI was the first effort • EDI over VANs: • $150 billion in ‘97 from order to payment* • $500 billion in ‘97 initiated electronically** • Now B to B is the fastest-growing aspect of electronic commerce • Procurement is an obvious area *Input survey ** Granada Research estimate

30. Procurement Costs • Why is it expensive? • Complex, multi-step process • find suppliers who meet volume, delivery, quality, price requirements • Send detailed drawings, specs to supplier • Send P.O to supplier for specific quantity • Receive confirmation • Receive notice and invoice when shipped • Try to match invoice to P.O. Some of this is from “The Emerging Digital Economy,” Dept. of Commerce, 1998

31. How to Lower Costs • Consolidate purchases • Develop relationships with key suppliers • Send all information electronically to reduce labor, printing, and mailing costs • EDI: Electronic Data Interchange

32. Analysis of Market Opportunities • Patterns of Interaction Model • Customer Decision Process • Customer Service Life Cycle

33. Patterns of Interaction

34. Customer Decision Process • Prepurchase • Origination • Information Gathering • Evaluation • Purchase – Purchase Decision • Postpurchase – Postpurchase Evaluation and Behavior Rayport & Jaworski, chap 2

35. Customer Service Life Cycle • Customers go through 4(+1) phases • (Awareness) * • Requirements • Acquisition • Ownership • Retirement Galletta/Choudhury addition

36. Awareness • Advertising (obviously) • But some customers find you through shopping agents

37. Requirements • Help customers figure out their needs • How does it look (FTD ) • Is a new one available yet? (Amazon.com ) • Will I like it? (CD Now ) • How much do I need? (Best Buy ) • Is it compatible? (Best Buy )

38. Acquisition • Help customers acquire your product or service • Locate a sales point (Penney, Best Buy) • Place an order (Alamo, Hilton) • Pay for it (Mondex, Cybercash) • Check status (Federal Express, UPS) • Take possession (Netscape, Microsoft)

39. Ownership • Support the customer while he/she owns the product or uses the service • Assembly & Installation (Bush Furn.) • Training (SUN) • Use (SW Airlines,) • Tracking (Fedex, UPS) • Maintenance (Apple, Silicon Graphics) • Upgrade, Update (Microsoft, DEC)

40. Retirement • Help customers complete their ownership and move on • Can be profitable...sometimes • Help here is rare indeed! • Retiring (AltaVista) • Returning • Reselling (Hotel Discounts) • Recycling (HP) • Accounting for