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Extranets: Business Opportunity Without Business Overhaul
BusinessWeek - May 12, 2003
The financial and business benefits of an extranet are clear: By efficiently connecting with partners, dealers, suppliers and employees through a secure network that can be accessed from almost anywhere, a company can generate new revenue, serve key stakeholders better, manage resources more efficiently and reduce costs. Companies like those in a recent survey of the manufacturing industry are justifying extranet development as a means to gain both measurable and meaningful business results.
Unfortunately, many companies don't implement an extranet because they fear that it will force them to abandon their existing processes and technology, disrupt their business and result in exorbitant costs. With a myriad of legacy systems in place - including those for accounting, order fulfillment, dealer accounts and product availability - companies are justifiably apprehensive about adding another system or making a process change.
But today, a company doesn't need to make substantial investments or changes to create a successful extranet. Based on sound business principles and new technologies, companies are building extranets that deliver significant returns on investment with minimal costs and adjustments to processes.
A successful extranet extends a company's business reach. Like any enterprise initiative, it should be backed by a solid business case and supported by senior management. Who will use the extranet? How will the extranet benefit them, and the company that built it? The extranet strategy should be based on the company's business strategies, revenue targets, and marketing and operational plans.
To execute its extranet strategy, a company can now take advantage of new open-architecture technologies that connect web interfaces to a company's legacy systems. These technologies eliminate the need to replace existing servers and applications. In addition, the technologies better enable a company to build its extranet on a flexible, incremental basis as value is gained and business needs dictate. For instance, meeting the top needs of dealers could be as simple as adding functionality for product availability, order status and return-goods authorization.
Today, with the lowered risks offered by open technologies and a phased implementation approach, organizations can take full advantage of an extranet to extend their business reach -- without revolutionizing core processes and systems.
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