Business ValueBy Gary Bolles | Posted 12-23-2002
Technology: Corporate Portals
In the real world, a portal is a door. A door by itself doesn't provide much value, nor do we call it "door technology": It's what the door provides access to that matters.
Though the definition is impreciseand what emerging software technology isn't?the phrase "corporate portal" sounds like it should let employees get their hands on everything they need from their companies. But the first few generations of portals have delivered only disconnected parts of that misty vision. As a result, the traditional problem of portalsyou built it, but they didn't comeis still an issue for many companies. Remember "stickiness"? It's back, but now it's in your own backyard.
You can blame the technology, but the fact is many companies never built what their employees really needed in the first place. Portals should streamline communications between management and employees, help employees collaborate more easily, and give employees personalized access to the information and applications they need to do their work well. And portals should do it all in a cost-effective manner that lets companies save money by consolidating both servers and applications.
But early portals were really just an assemblage of Web pageslittle more than glorified corporate newsletters, typically labeled "intranets"delivered through a plethora of individual servers that popped up all over the corporation. IBM claims that at one point it had 8,000 individual intranets. That's a lot of overhead. Analysts and users maintain that the first generation of portals didn't really provide much business value for users or management. That's because a portal is really more a management approach than an explicit set of technologies or services. If your approach is that a portal should be designed by management to do little more than communicate uninteresting information to disinterested employees, it won't work.
For a portal to provide value to employees, it has to be more: more interactive, more adaptable, and more useful, giving employees more and more of the tools they need to do their work. But that depends on exactly what services the portal provides.
Analysts say that the ability for both management and employees to manage content is a must, because employees need access to communications and critical information from management and vice versa, and they need other sources of information both inside and outside the company. Personalization is key, so employees can tailor information and services to their own needs. And integration with ERP and other applications is essential: The portal might, say, streamline a customer-support process by linking directly to the appropriate pages in a series of Web-enabled enterprise applications, such as checking an accounts-receivable ERP application, an e-business server database and a trouble-ticket database. But tight integration on the back end is also critical: Who wants to have to log in repeatedly, or re-enter a customer's information over and over again? It's like calling your bank and being asked to provide your name and account number every time you speak to someone new.
Beyond these basics, says Heidi Collins, author of Corporate Portals, full-function portals add a variety of services such as identity management, security, collaboration services and administration tools that allow portal support staff to perform tasks such as monitoring portal usage. Every portal vendor, of course, spins the list of offerings to match what they can provide. The goal? "It's to move beyond superficial user-interface integration, and go behind the scenes to make sure the elements on that screen are linked in logical and useful ways in the background," says Dwight Davis, vice president and practice director at Summit Strategies Inc., a Boston-based research firm.
Ask Your Employees:
What information from corporate management do you regularly need to do your job better?
Ask the Business Units:
What Web-based applications are your people using, and could they use them more effectively if they were better integrated?
Ask Your IT Staff:
Given the answers to the above questions, do we even need a portal?
Determining the exact business value of a portal can be devilishly hard. But don't let that stop you from trying.
Portals should make employees more effective while saving the company money. But because portal initiatives can span so many different purposesfrom simple internal communications to complex integrated business processesfor such a large number of workers, it's often pretty tough to determine specific business goals.
That may make it seem like portals stand on shaky ground, ready to be shot down or scaled back the moment IT budgets come under fire. But analysts and users say it's precisely because portals can contribute to productivity that they are worth pushing forward.
For example, streamlining corporate communications alone can mean savings for companies dependent on paper processes. Eddie Bauer's retail planning and communications manager, James Greathouse, says the retailer had 17 different ways of getting corporate information to employeese-mail, fax, voice mail, etc.with each business unit using whatever route it wanted, whenever it wanted. Employees had to sift through all the options to find a specific message, such as instructions on how to keep inventories up to date. Bauer provided a very basic portal to retail store managers and got corporate departments to agree on what kinds of information should be funneled through which media. The result: significantly increased employee effectiveness and measurable improvements in key measures like "shrinkage"the difference between corporate and store inventory statements.
IT execs need to encourage business units to define precisely the value they're striving for. "I've seen portals where the goal is to save everybody 30 minutes in a day," says Dr. William Ives, knowledge management practice leader at Accenture. "Well, that's pretty fuzzy. What are they going to do with that extra time, read magazines?"
It's essential to involve business users, frequently from every unit, in the decision-making process. Consider creating cross-disciplinary teams to establish goals for a new portal. Align and streamline, then set clear goals. But don't keep those goals to yourselves: Make sure users understand them so they can hold the company's feet to the fire if that value isn't delivered.
What kinds of goals? Author Collins separates portal objectives into three categories: performance-based objectives, or basic usage issues such as assessing the rate at which employees come to the portal; process management objectives, such as streamlining and integrating business processes like reducing the number of steps required to process a purchase order; and information management objectives, which involves the ability of employees to get the knowledge they need to be effective.
Ask Your Business Constituents:
Who needs to reach employees through the portal, and what do they want to accomplish?
Tell Your CFO:
We can justify components of our portal initiatives, but we may not be able to make all the numbers add up.
Tell Your IT Employees:
We can be the glue that holds these initiatives together, or we can be shut out if we're not helping everyone communicate better.
Today, implementation depends on what you've already done. Tomorrow, the buzzword will be architecture.
No portals in place? Your biggest decision is whether to build or buy. Many users are still implementing basic portals by developing their own applications. But there's a lot of rapidly maturing off-the-shelf software out there, and vendors are partnering up quickly to fill in the blanks in their offerings. "The issue at this stage is not determining what hammer to buy; it's where to put the nail," says Simon Hayward, a research director at Gartner Inc.
Companies with portals already in place have a different problem. Many companies have implemented portal software from numerous vendors, often away from IT's watchful eye. To avoid the risk of Balkanization, one important concept of the coming generation of portals is "federation"the idea that services and processes can be coordinated across the enterprise. That's a tall order, especially for large companies. But there's also a clear business reason: Letting separate business unitsand sometimes even small workgroupsmake their own technology decisions creates substantial costs. French Caldwell, a research director at Gartner, says one client migrated from 24 different portal applications to one, saving $8 million in the first year alone.
If you can justify the cost of rolling out a portal based on its general value to the organization, more power to you. That's the process Whirlpool followed, says Gil Urban, lead director for global enterprise management systems. The company provided a set of generic information services and self-service applications to employees, serving as the foundation for specific workgroup applications in the future.
Not everyone can make the financial case for such a broad initiative, however, so most people will have to focus more tightly on smaller wins. "It's much better to start small at the department level, find the low-hanging fruit of those who can most benefit from portals, and then grow it to a global function," says Davis of Summit Strategies.
But none of this work should occur without an overarching portal architecture for the enterprise. Even small portal initiatives need to be connected to a larger vision of how the organization intends to manage centralized user services, or they'll run the risk of creating the same kind of runaway implementations that early adopters are now saddled with.
Ask Your Staff:
Do we really know how many intranets and portals we have?
Tell Your Business Constituents:
Let's sit down and get a clear picture of what, where, and how communication needs to happen with employees.
Ask Your IT Architects:
How can we design a portal that we can efficiently expand in the future?
The next-generation portal won't deserve the name "portal," because it will provide much more than portals do now.
Portals are going through a rapid evolution toward a time when their promise of becoming doorways to a broad range of corporate services will come true. In fact, according to Gartner Inc., we're already seeing the third wave.
That phase apparently has two major characteristics. The first is that the major chores of integration are moving toward the back end, requiring much more coordination between applications, sources of data and the portal software itself. The second is that portals will be handling more and more business processesfrom updating benefits to collaborating on wide-ranging customer-focused initiatives.
Those services can be as simple as a set of Web pages that provide deep links to, say, a financials ERP system with a wizard-like interface that walks users through screens they'd only see once or twice a year, such as performance reviews. Or they could be as complex as an end-to-end set of processes connected to dozens of applications, such as a product management sequence that links everything from product development to marketing campaign automation. And it's likely that much of the knitting together of applications and data will be performed by technologies like Web services.
What's that next-generation platform called? That depends on whom you listen to. Gartner calls it a "smart enterprise suite." Accenture calls it a "workspace portal." IBM's term: "e-workplace" or "dynamic workplace." And a few portal software startups, including Vienna, Va.-based Handysoft Corp., call it a "process portal." But by any other name, the portal of the near future will look a lot more like the kind of integrated systems that developers of application suites have been trying to provide. And if the promise of such systems is realized, they should allow companies to better leverage their unique processes for business advantage. "Whether it's the way we brew our beer or the way we make our pizzas, there's something that's a competitive differentiator for us in the way we do those things," says Daryn Walters, vice president of worldwide marketing and strategy for Handysoft. And much of the same work that's being done to integrate data and applications for employees can help provide value to partners and customers.
"Our belief is that the workplace is moving online," says Pam Stanford, director of dynamic workplaces for IBM's software group, "and if the organization doesn't have a strategy and a plan, they're going to lose some of their competitive advantage."
Ask Your IT Architects:
How can these kinds of integrated services link to our future IT architecture?
Tell Your Business Users:
We can't offer these kinds of capabilities today, but you should start helping us define what those services should look like tomorrow.
Tell Your CFO:
I may be coming back your way to finance even fancier portals in the next few years.
Strategic Profile: Ameriking
Ameriking is one of the largest Burger King franchisees in the U.S., with 11,000 employees and $320 million in revenues in 2001. But the company was incurring substantial costs with its manual processes for disseminating sales and other information to its more than 350 restaurants in 12 states.
CIO: Hernando Manrique
Problem: Mission-critical information, such as transmitting profit-and-loss statements, was distributed manuallywhich would have cost about $48,500 in 2001 aloneand business calendars for activities like training schedules had to be synchronized by hand for the company's 11 regions.
Goal: Coordinate communications between corporate and the field, and speed delivery of critical information.
Strategy: Implement a companywide portal from Plumtree Software Inc. that could provide a platform for current and future communication and collaboration between restaurants.
Challenges: Manrique says it was important to get managers at both business units and restaurants on board, cementing their buy-in from the beginning. "One of the most difficult things in the portal business is to get the users to use the portal, so the more you automate critical processes, the more you're going to be able to get people to access the portal."
ROI: Manrique is counting on a conservative estimate of 255 percent ROI over three years, based on reduced costs of information delivery and other information delivery processes, and without any calculations for "soft" costs such as employee productivity.
Assessment: The portal, which was rolled out in 2001, has already generated substantial savings. "To me," says Manrique, "a portal is one of the most wonderful tools on the market today."