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Chapter 7

Intranet and Extranet

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Intrabusiness E-Commerceat Toshiba America

ProblemIntranet doubled as dealer extranet300 dealers needed parts quicklyOrders placed by phone or fax by 2:00 in order to have next-day deliveryShipping fees expensiveCumbersome order-entry system created in 1993 with no significant improvement

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Intrabusiness E-Commerceat Toshiba America

Solution1997, Toshiba created a Web-based order-entry system using extranet/intranetDealers lace orders for parts until 5:00 for next-day delivery—matter of hours to shippingPhysical warehouse in Memphis, TN near FedEx headquarters ensures quick deliveryDealers also:

Check accounts receivable balancesPricing arrangementsRead service bulletins, etc.

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Figure 7-1Toshiba’s Customer Service Process

Source: Compiled from Jones(1998). Used by permission.

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Intrabusiness and Business-to-Employee (B2E) E-commerce (cont.)

Between and among corporate employees

Large organizations have classified ads on the intranet where employees can buy and sell products and services from each otherEspecially popular in universitiesInterconnect their intranets to increase exposureEmployees collaborate and communicate using EC technologies

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Architecture of the Internet, Intranet and Extranet

THE INTRANET— is a public and global communication network that provides direct connectivity to anyone over a local area network (LAN) or Internet Service Provider (ISP). The Internet is a public network that is connected and routed over gateways. An Intranet is a corporate LAN or WAN that uses Internet technology and is secured behind company’s firewalls.

THE EXTRANET: An extranet, or “extended intranet,” uses the TCP/IP protocol networks of the Internet, to link intranets in different locations.Extranet provide secured connectivity between a corporation’s intranets and the intranets of its business partners, materials suppliers, financial services, government, and customers.

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Characteristics of the INTERNET, Intranet and Extranet

Network Type

Typical Users Access Type of Information

Internet Any individual with dial-up access or LAN

Unlimited public: no restrictions

General, public, and advertorial

Intranet Authorized employees only

Private and restricted

Specific, corporate, and proprietary

Extranet Authorized groups from collaborating companies

Private and authorized outside partners

Shared in authorized collaborating groups

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Intranets

Intranet—network architecture designed to serve internal informational needs of a company using Web concepts and toolsTo build an intranet, we need Web server, browsers, web publishing tools, back-end databases, TCP/IP networks (LAN or WAN), and firewall.Provides:

Internet capabilitiesSearch enginesTools for communication and collaboration

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Intranets (cont.)

Cost of converting an existing network system to internal Web is relatively lowFairly safe within company firewalls

Employees can get out on the Web easilyOutsiders cannot get into the intranet

Change organizational structures and procedures, help reengineer corporations

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Figure 7-2Architecture of an Intranet

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Intranet Functionalities

Intranet functionalitiesCorporate/department/individual Web pagesWeb-based database access for ease of useSearch engines, indexing engines, directories assisted by keyword searchIntegration with EC: interface with Internet-based electronic sales and purchasingInteractive communication

ChattingAudio supportVideoconferencing

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Intranet Functionalities (cont.)

Document distribution and workflowWeb-based downloadingRouting of documents

Groupware includingEnhanced e-mailBulletin boardsScreen sharingOther group support tools

Conduit for computer-based telephony systemExtranet: linking geographically dispersed branches, customers, and suppliers to authorized sections of intranets creates happier customers, more efficient suppliers, and reduced staff costs.

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Electronic Commerce Technologies

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Intranet Applications

Intranet application areasElectronic commerceCustomer serviceSearch and access to documentsPersonalized informationEnhanced knowledge sharingEnhanced group decision and business processes

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Intranets Applications (cont.)

Intranet application areas (cont.)EmpowermentVirtual organizationsSoftware distributionDocument managementProject managementTrainingEnhanced transaction processingPaperless information deliveryImproved administrative processes

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Intranet Functionalities

Industry-specific intranet solutionsClassified by industry instead of technologyDevelopment of business models is a critical concern for managerial success of intranetsTop 100 intranet/extranet solutions classifications

Financial servicesInformation technologyManufacturingRetail

Services

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Intranet Application (Case Studies)

Intranet case studiesMoen-connected ERPCompaq Computer Corp.—investment assistantSilicon Graphics, Inc.—share huge internal Web sitesCoopers & Lybrand—share knowledge among corporate employees

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Extranets

Extranet combine the privacy and security of intranets with the global reach of the Internet, granting access to outside business partners, suppliers, and customers to a controlled portion of the enterprise network. Extranets are becoming the major platforms for B2B EC replacing or supplementing EDI.

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The Structure of Extranets

ELEMENTS OF EXTRANETExtranets are comprised of a wide variety of components and participants, and there are several possible configurations. These include intranet, Web servers, Firewall, ISP’s tunneling technology, interface software and business applications. The tunneling means that data transmission across the internet can be made secure by authenticating and encrypting all IP packets.

Extranets are configured by two basic methods:They can be implemented using a direct leased line with full control over it, linking all intranets.A secure link (tunnel) can be created across the Internet, which can be used by the corporation as a VPN, usually at a much lower cost.

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Extranet Products and Services

Four Categories of extranet products and services.

1. Extranet development tools: to design extranet servers, a client-base, security, EC applications, and electronic catalogs.

2. Extranet hosting and network connectivity: provide secure ISP connections to Internet back bones and host extranet services for corporations.

3. Extranet services provide extranet design expertise with proprietary tools or turnkey services for building and operating extranet-based services for corporate clients.

4. Virtual private networks: provide components specifically design for connecting remote operators and creating IP WANs for corporations

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Extranet tools and Services Providers

1. Consultants

2. Developers

3. System integration

4. Internet service provider

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Applications of Extranets

BENEFITS OF EXTRANETS1. Enhanced communication

Improved internal communicationImproved business partnership channelsEffective marketing, sales and customer supportCollaborative activities support

2. Productivity enhancementsJust-in-time information deliveryReduction of information overloadProductivity collaboration between work groupsTraining on demand

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Applications of Extranets BENEFITS OF EXTRANETS (Cont.)

3. Business enhancementsFaster time to marketSimultaneous engineering potentialLower design and production costsImproved client relationshipsNew business opportunities

4. Cost reductionReduced errorReduced travel and meetingImproved comparison shoppingReduced administrative and operational costs

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Applications of Extranets BENEFITS OF EXTRANETS (Cont.)

5. Information deliveryLow-cost publishingLeveraging of legacy systemsStandard delivery systemsEase of maintenance and implementationElimination of paper publishing and mailing costs.

INDUSTRY SPECIFIC EXTRANET SOLUTIONSThe application of extranets are classified by industry. The popularly applied industries are information services, computers, financial services, travel, Industry/ manufacturing, business and professional, real estate and customers.

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Managerial Issues

Find business opportunities by utilizing the intranet and extranetAnalyze whether the connectivity requirement suits the intranet or extranetPlan the most secure and economical choice for implementationSelect the best outsourcers for implementationSelling the intranetFinding intranet applications