This paper looks at the benefits of Intranets to organisations, both potential and measured, and includes information on what you need to get one started in an organisation.
Let's look at two companies - company A and company B. Both are thriving, customer focused businesses, with offices in all the capital cities. However, both have come to the realisation that they need to enhance their use of Information Technology to maintain their competitive advantage.
They contract two different consulting groups to help them determine their requirements and plan a new IT based strategy. Company A use consultants from a very traditional firm, with a long track record of implementing large scale IT solutions. Company B use consultants from a much younger company, with some radical new thoughts on IT implementation, but with an equally impressive track record of implementing large scale IT solutions.
Both groups of consultants come up with the same set of requirements. Below is a summary of their recommendations:
The consultants came up with the following scoping and design summaries:
Consultants for Company A:
Project will take 9 months to deploy. It will require significant
custom software development. It will cost around $220,000. There will be
an ongoing maintenance contract of $4000 per month to keep it running.
Consultants for Company B:
Project will take 2 months to deploy. It will require no significant
custom software development. It will cost around $22,000. There will be
no ongoing maintenance contract - all maintenance can be performed in-house.
How do you account for the difference between the reports of the two groups of consultants?
The answer is simple - the second group of consultants are aware of the Intranet, and have the skill set in place to deploy the tools and infrastructure necessary to take advantage of all that the Internet offers.
How are Intranets different? Not all of the features of an Intranet are new. There are various products available commercially which perform some, if not all of the functions of an Intranet. Intranet solutions are different in that:
Many, well-known multi-nationals have already implemented extensive, enterprise-wide Intranets. These include Mobil Oil, Sun Microsystems, Oracle, Digital, EDS and many others.
In Australia, Optus, the Attorney General's Department, BHP and AMP all have significant Intranets already in place. Many other organisations in Australia are evaluating Internet technology for internal use and are piloting Intranets to varying degrees.
The sheer weight of numbers going down the Intranet path would seem to indicate that Intranets of great benefit to organisations. Certainly, on the face of it, Intranets do provide a compelling solution.
But getting the benefits quantified and getting hard facts is not so straightforward. In the next section I will outline some of the benefits that Intranets have delivered to companies.
The most significant and measurable savings are in the area of paper-related expenses, such as:
| ITEM | UNITS@PRINT/
PROCESS/MAIL COST |
SAVINGS* |
| Company news and information
published on-line to 14,000 employees |
28,000 docs @ $0.74 | $20,720 |
| Marketing product updates published
to 40% of employees |
235,200 docs @ $0.66 | $155,232 |
| Job listings published weekly to enable
employee recruiting |
52,000 docs @ $0.74 | $38,480 |
| Employee benefits information maintained
and updated on-line |
14,000 staff @ $8.00 | $112,000 |
* Versus same information distributed on paper, IS expense excluded.
SBC Warburg are a leading stockbroking firm in Australia. Their research arm was spending six figure amounts every year to produce a daily bulletin for their clients and staff. This bulletin was being distributed using a system which involved collating 15-30 MS Word documents into a common directory, producing a cover page, printing, photocopying, faxing and couriering the final document.
We developed a process for putting this bulletin online, enabling the staff and clients to view the bulletin from within a desktop browser. Because the bulletin changed daily, the process we developed had to be run on a daily basis. Basically, at the point of producing the cover page a series of macros would be run by the operator which would extract summary information from each of the documents and produce an online cover page. Links in each of the summary pages would point to the full document, with options for downloading it in html, Adobe AcrobatTM or in the original (Word) format. This process added around 10 minutes to the operator's daily workload.
We estimate that the client will reduce their distribution costs associated with the daily bulletin by around 80% by the end of this year. These savings will come from staff and clients electing not to continue recieving the bulletin in paper form.
Central management of HP's TCP/IP network has also proven to be critical for cost savings. Ensuring that users are using the same databases, tools, and information has been key. Central management has also reduced support costs. HP's (Common Operating Environment) COE applications (including Web browsers on over 70,000 desktops) initially provided reliability savings of over $10 million. With more than 82,000 PCs today, these savings have reached $25 million. Because HP can manage and support PCs from a central location, it no longer needs hundreds of people supporting these PCs for ongoing tasks such as upgrades.
SOFT BENEFITS:
Some soft benefits include:
The soft benefits are harder to assess and value, but this tends to be where the higher return comes from. What is the monetary value to the organisation of having a more informed and self-sufficient workforce? Or of more effective workgroups and project teams? Sometimes organisations should assess the cost of NOT having these things, eg. where a bad decision was made due to lack of information. Such things can then be treated as costs which the new technology will help to reduce.
The essential infrastructure requirements of an Intranet are as follows:
Get a pilot going .
Get management interested and supporting your project. Ideally, get a someone at a senior level to sponsor your project.
InfoWEB Pty Ltd©, 1996. The authors assigns to Southern Cross University and other educational and non-profit institutions a non-exclusive licence to use this document for personal use and in courses of instruction provided that the article is used in full and this copyright statement is reproduced. The authors also grant a non-exclusive licence to Southern Cross University to publish this document in full on the World Wide Web and on CD-ROM and in printed form with the conference papers, and for the document to be published on mirrors on the World Wide Web. Any other usage is prohibited without the express permission of the author.
| Abstract | Conference Presentation | Papers & posters in this theme | All Papers & posters | AusWeb96 Home Page |