An intranet, or in-house information network, only works when companies are disciplined about what they put on it.
We haven't had long to get used to intranets. The idea of building an internal information network based on internet technologies is still young.
But despite their tender years, intranets are growing rapidly in popularity with companies that want to distribute information quickly and securely to 'members only'. At the end of last year, 38% of European companies used an intranet, as did 59% of US companies, according to International Data Corp (IDC). By the end of this year, IDC predicts a take-up of 75% and 77% respectively. By 2001, it foresees 133 million users.
Yet while many companies have enthusiastically embraced the intranet, others have quickly allowed it to wither on the vine. The most common problem seems to be that a company decides that it wants an intranet without thinking about why - or what to put on it. The result is that all too often an intranet simply becomes an unwieldy and confusing mess of irrelevant material. According to a survey of 300 of the UK's top 1,000 companies, compiled by market researcher The David Lewis Consultancy, two-thirds of managers say that only a small amount of the information available on their intranet today is useful to their work. The survey identifies the problem as being 'infojunk' - data that is not useful, out-of-date or just wrong. Almost seven out of 10 companies surveyed complained that their intranets contained moderate to high levels of junk.
According to Samantha Bowles, marketing manager for FT Electronic Publishing (FTEP), the online news service that commissioned the survey, 'many corporate intranets aren't doing much more than replacing the office pinboard'.
This may be attractive at first, she says, but unless a company intranet actually serves a purpose, it will soon become irrelevant. 'If you have content that's of value which you didn't have before, then that changes the way you work,' she says.
FTEP itself is a good example of a thoughtfully developed intranet. It is now redesigning its online news service to provide news, 'pushed' on to users only after they decide what type of news they need. The intranet automates a simple, albeit expensive process, but at least avoids the pitfall of putting every piece of information online for users to search. Lloyds of London is attempting a similar intranet-based information system for its brokers. The reason? Content has to be controlled and relevant if it is to be of use.
According to Charles Lowe, British Telecom's intranet manager, the surest route to success is to pick an achievable, small-scale project and make it succeed. The first task of BT's 30,000-user intranet was to replace its internal publishing effort. Only then did it gradually increase the number of applications on the intranet. One unforeseen side effect has been that the company has had to be more flexible about its reporting and management structures. For example, BT chief executive Sir Peter Bonfield has taken to browsing his intranet for good ideas, bypassing middle management entirely. Occasionally a surprised employee's phone rings: it's Bonfield, offering his congratulations on a project he would previously never have seen.
Indeed, organisational structures can hinder the development of intranets. Tim Carrigan, who oversaw the creation of Unilever's intranet by developers NoHo Digital, and is now repeating the task for the London Electricity, thinks many companies simply fail to spot the potential uses of an intranet and try to duplicate departmental and managerial hierarchies. 'Users shouldn't have to think about "what department does that?" That's not the point. We talk to users and spend a lot of time thinking "who needs the information, and when it will go out of date?" Then we design something functional, with the really useful things at the top of the pile.' A classic mistake, he says, is to have a company organisation chart on your first page, which is useless to employees who want to find information. A phone directory, he says, is quicker to produce, and much more valuable for that sort of thing.
The experiences of the first wave of intranet users show that many companies have failed to appreciate the impact of a company intranet on the way they work. According to Hewlett-Packard's e-commerce marketing manager, Jolanta Pilecka, who counsels customers building intranets - as well as having assisted in the construction of HP's own 120,000-user intranet - a culture where users are rewarded for sharing information is a prerequisite.
'It's about information-sharing and people will not use the intranet unless they have an incentive to do so,' she believes.
Companies need to think beyond their current organisational lines. 'There are a lot of hierarchical, conservative organisations in the UK where there is no incentive to share information.
They are just deploying intranets because they think they have to,' says Pilecka. An intranet will certainly fail, she says, unless it is driven by a clear commitment from management that it will be the primary means of sharing information in a company. 'We made a lot of mistakes when we built our intranet,' she adds, 'but it was the only route to go. Previously we had 52 divisions, each with its own IT strategy. This was the only way we could communicate.'
Controls also need to be exercised over how the content is developed, says Nikos Drakos, a research analyst who tracks the use of intranets for Gartner Group. Early intranet users believed that individuals should be allowed to contribute whatever they thought was relevant to the business. The result: infojunk. Imagining that an intranet can develop haphazardly is, he says, 'a misconception'.
'The companies that promote this method are in for a big surprise,' he says. 'There will be a lot of duplicated effort and problems administering these intranets. Building an intranet should be controlled and delegated. Is everyone going to build security controls, and back up their information otherwise?' Drakos looks forward to a time when the intranet routinely gives access to company databases or transactions. These tasks, he says, begin at board level, whether they involve the intranet or not.
Gerald Chertavian, managing director of IT consultants Conduit Communications, has helped build intranet applications for both Shell and American Express.
He is in favour of 'licensing' certain users to create content, who then are responsible for updating it. This creates an alternative management structure - the information management hierarchy, which can be tasked with keeping the process moving forward. 'Sure, money can be saved by not having to publish paper directories which go out of date,' he says, 'but this is only the tip of a huge iceberg when it comes to making use of an intranet.
To stop there is to miss the whole point.'
An example of a company that has reached the next stage of its intranet development is, not surprisingly, Microsoft. Enterprise director Simon Brown, who works with Microsoft's 600 largest customers, admits that 'only a handful of organisations have gone to the next stage'. That next stage, he says, is to integrate an intranet with existing applications: eventually the intranet is the way in which users access databases, and communicate with suppliers and customers. Microsoft's manufacturing and administration use a system based on a mainframe. Only 400 of Microsoft's 25,000 staff have direct access to it, while the other 24,600 access it through the intranet, which allows them to make all their internal purchasing, monitor head counts, and all other financial and human resource activities. This information can be obtained directly by every manager up to Bill Gates himself.
Even though some organisations such as Nissan, BT and Microsoft are developing their intranets so that they literally could not function without them, most companies are failing to exploit their benefits. The risk is that the intranet, like many IT projects before it, will be considered a failure for many users. But the message from the people who are building successful projects and those who have made such mistakes in the past is that this time, it's not a failure of technology as much as a failure of imagination, and ultimately, a failure of management.
Almost every company that has used an intranet extensively has found it has changed the management process, even though that has been uncomfortable for some middle managers to accept. 'Lots of organisations will put £100,000 into a one-time investment,' says Microsoft's Brown, 'And the intranet is not a one-time investment. This is a way of life.'
Ten key points to consider before setting up an intranet
1 Allow all your staff access ...
Basic intranet technology is cheap and easy to set up. Restricting access means it can never be the primary means for communication in a company, and so will become neglected
2 ... but don't ignore security
You don't need to show every piece of information to intranet users. Establish who can see what, so that you don't compromise security or confidentiality. An example: employees can only see their own personnel files
3 Don't clutter it with junk ...
The temptation is to put every written word on the intranet. This is not the best approach. You need to think about how much of the information you have is worth keeping up-to-date
4 ... because the intranet won't update itself
Content has to be reliable and current and someone has to be in charge of keeping it that way. If users don't trust the intranet, they won't use it
5 Keep your suppliers and customers on board
Building links to your intranet means that suppliers can gather information cheaply and quickly, or respond more quickly. Alternatively you can use your intranet to let your biggest customers see how much they are spending, and where, and change their pricing to save money
6 Don't try to do everything at once
Start small, with a project that delivers a measurable result in six months. Only when this has been achieved should you attempt more ambitious projects such as building electronic commerce into your intranet
7 Don't ignore design
Information on a computer screen needs to be presented in a way that users can read, so just typing in company documents will not work. Use small amounts of text, with clear headings. If mobile users have palmtop computers, make sure they can read the pages too
8 Don't miss out on the best of the world wide web
The intranet can be used to funnel external information sources, like relevant web pages, news sources or technical support. Using an intranet in this way can solve the problems of unrestricted internet access
9 Expect changes in the way your company works ...
Managers whose job was simply to channel information may become disenfranchised overnight. Be prepared to undergo some 'accidental' Business Process Re-engineering
10 ... because intranets are much more than an IT issue
The real goal of an intranet is to bring about the organisational change required to share information. Technology is not the solution itself
Instant credit for car buyers at the click of the dealer's button
'When you're working with car dealers the first thing you have to do is make your intranet user-friendly and intuitive,' says Andy Norton, the IT manager of Nissan Finance, a new division set up by the car manufacturer to provide credit for car buyers. If designing technology for 264 dealerships was not hard enough, spreading an intranet over that number of sites might seem like asking for trouble. But according to Norton, it was a way to make Nissan Finance secure, accurate and accessible for dealers to choose it above competitive finance companies.
'We have to make our application run anywhere,' Norton explains. 'The only way to do that is an intranet.'
Nissan needed a system which would give accurate price and product details, both of which change every few weeks. It needed to be able to run across different types of hardware. It also had to be written in three months and deployed in four weeks. Building an intranet was clearly the best solution to the problem, Norton says.
Dealers access the intranet from Nissan's own software. When they click on the 'finance' button, the computer dials the intranet server and the dealer logs on with a password. As well as supplying an online credit check and pricing details, the intranet can approve a loan immediately, and even provide a press-clipping service. For Nissan Finance it also captures the customer details for future direct marketing.
With a total cost of around £2 million, set against Nissan's target turnover of £200 million for the next nine months, the system is not expensive.
But it's the cheap maintenance costs that Norton values. As well as constantly updating the intranet's content, he can add new features without having to send out disks or compact discs to the dealers, as would have been the case before. Instead, he simply updates the intranet server at Nissan's Watford headquarters.
Nissan Finance's 15 account managers are constantly checking that dealers are comfortable using the application as part of their job.
Norton has to make the intranet work, because they would otherwise be overtaken by rivals. 'It's the system that gives us an advantage over the competition,' he says.