Chapter 14: Extranets

Overview

Author: Frank Pappas

• Designing modern extranets

• Planning the extranet

In the earliest stages of the commercial development of the Internet, companies rushed online, moving large segments of their marketing operations to the digital stage. This was a good way of reaching customers, as they could access a much larger audience with smaller capital investments, and enjoyed more flexibility than in broadcast or print channels. Soon e-commerce began to flourish, showering companies with even greater returns. Since public web sites were having such a positive impact on the corporate balance sheet, businesses decided to search for other ways to benefit from the lessons and technologies from their early Internet initiatives.

As Internet-based technologies matured, the second phase of Internet commercialization found managers focusing on internal corporate operations. Functions from just about every discipline within a company were moved within the domain of the intranet. Document repositories were created, basic transactions (timesheets, leave requests, etc.) were moved online, and collaboration tools were created. In many cases, corporations became more efficient and realized significant cost savings. Not surprisingly, executives couldn't leave well enough alone: after all, they had just fostered amazing successes with public Internet and private intranet sites.

Enter the extranet - well, extranets as they were envisioned back in the mid- to late-1990s. Extranets were to be "the next big thing", vast business-to-business electronic marketplaces in which multiple companies could bid to buy or sell raw materials, provide services, and so on. The vision was grand, the investments even greater. Suppliers, manufacturers, and random intermediaries all created super-sized, complicated (and hugely expensive!) electronic bazaars in the hopes of realizing windfall profits from these new business channels.

Unfortunately no one came. This was in part because the extranet model (at the time) was disjointed and focused on limited transactions that did little to streamline or facilitate the broader needs of enterprise supply chains. The disappointing performance of the first generation of extranets was also due to another important factor: most executives and analysts failed to notice what was to be the actual "next big thing", the collapse of the Internet economy.

Thankfully, the global economy has started to improve somewhat in the last year. Companies have once again become more aggressive in investing in e-business services. And extranets - though not quite receiving the same fanfare they did their first time around - are quietly working their way into the e-business strategies of companies around the globe, with a renewed focus and much greater success.