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Computer Giants Capitalize on Intranets

January 1, 1998
by Polly Schneider
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HEALTHCARE IS STILL waiting to see the promises of the widely hailed intranet. Those who are experimenting with intranets are largely in the first phase of development: publishing large and frequently updated material such as phone directories, company newsletters and human resources policies on easily accessible internal Web pages. While this activity can create vast improvements in information sharing, it may not be considered a strategic use of the intranet. The next phase, interactive applications for say, requesting supplies or customer literature, requires a higher level of commitment and skills that many healthcare organizations just can’t yet muster. Meanwhile, the financial industry--which has always been ahead of the curve in using technology to improve services--is investing heavily in the intranet model.

When planning for the future of your intranet, the companies to watch closely are not only the banks and brokerages, but those who, through research and development, helped create the intranet concept: Sun Microsystems and Digital Equipment Corp. Both organizations have taken intranet and Internet strategies to the next level: reengineering business operations and processes.

Sun: Brewing Java-land
The Web is theworkplace at Sun. Internally alone, an average of two million emails are sent a day--that’s around 100 per employee. More than 1,000 internal Web servers provide 250,000 pages of information to Sun employees; on top of this, users download a total of 1.5 GB of data a day from the Internet. The company’s goal is to have every application on the network rewritten in Java and every employee equipped with a Webtop (browser interface to the desktop) by the end of June, according to Bruce Elder, worldwide healthcare industry manager. Today, Sun’s intranet stores and distributes all of the corporate knowledge, according to Eric Peterson, director of Web services engineering in Sun’s Enterprise Network Services Organization, Milpitas, Calif. "It is the corporate information infrastructure," he affirms. The company reports it is saving an estimated five percent annually on document distribution and workflow from the intranet--about $25 million.

So far, human resources applications on the intranet have offered the most value in helping people work more efficiently. One of the more successful is SunTea, a completely automated expense reporting system employees can file from the road and receive an expense check in a matter of days. The company reports an initial savings of $2.5 million from SunTea. Other programs for processing bonus checks and raises are also helping to drastically reduce lengthy approval cycles. Managers are using a capital assets management system to order and track department equipment; "SunU" offers online courses; and the entire corporate library is indexed and accessible online. All of this is allowing employees to work faster and get to key corporate resources from wherever they may be, Peterson says.

The intranet is also playing a hand in changing the role of the IS department. With users now creating and publishing Web pages, IS can work on providing better service, according to Peterson: "It frees us up to take care of other things than content creation. We’re now change agents." In effect, he says, IS is becoming an Internet service provider by managing and packaging the information and tool sets. The new environment is also for the first time relinquishing some of the control IS has over information management. "It’s almost impossible to place traditional controls in a Web-based environment," Peterson observes. "It’s a real challenge to let go of certain things."

An unexpected trial at Sun has been managing user expectations for the hottest, coolest features and designs--especially tough in a company where many employees are already tech-savvy and experimental. Peterson says the company limits the use of graphics, animation and multimedia to save bandwidth and ensure that employees--especially remote users--can get to information quickly.

The pervasiveness of Internet culture at Sun is tearing down the walls between the outside and inside--getting rid of firewalls in those areas not deemed mission critical--to the point where the term "intranet" may soon become obsolete. "Over time there won’t be a distinction between the intranet and the Internet," Peterson says.

Digital: An intranet pioneer
Digital’s interest in the Internet dates back to 1977 when the company linked up to the university-based ARPANet, predecessor to the Internet. "We’ve always been a networking company, so back in the old days… everyone in the company had electronic mail," says Kathleen Warner, VP of the Internet/intranet deployment office at Digital, Maynard, Mass. "It was a way of doing business for us, and we were connected to our employees around the world."

Digital brought the technology--client/server architecture, an IP backbone and the graphical user interface--in-house in the early ’90s for research. In 1994, the company launched its first external Web page, and soon after, began to build its intranet. Today the intranet has grown to one million pages and 2,000 Web servers that service some 45,000 users.

Digital dumps a lot of money into its intranet--$13 million in 1996. Yet, the company reports a return on investment of $28.7 million over the last three years, largely from cutting costs in printing, software distribution and database consolidation. The intranet has also given rise to an increase in telecommuters, which saves the company $2,500 per person.

A literature ordering system is one of the more popular applications; salespeople out in the field often need quick access to product literature for customers. "Their ability to view it online, know what’s in stock and when they can get it, is very productive for them," Warner says.