Intranet, Extranet, EDI & VPN Contents : Intranet Advantages Application Areas Security Extranet...

Intranet, Extranet, EDI & VPNIntranet, Extranet, EDI & VPN

Contents: Intranet Advantages Application Areas Security Extranet Supply Chain Management VPN Relevant Sites References Case Study

1 Intranet Definition

Provides a uniform environment for information processing and information distribution.

The implementation of Internet technologies within a corporate organization.

The company does not have to be connected to the internet to take advantage of internet tools.

Intranet is like a private internet.

The paperless office.

2 Advantages It enables the vast informational resources of an organization to be It enables the vast informational resources of an organization to be

delivered to each individual's desktop with minimal cost, time and delivered to each individual's desktop with minimal cost, time and effort. The intranet allows employees to call up internal data such effort. The intranet allows employees to call up internal data such as customer profiles and product inventory, information once as customer profiles and product inventory, information once hidden in databases that could be tapped only by technicians.hidden in databases that could be tapped only by technicians.

Employees don't have to worry about where the information is Employees don't have to worry about where the information is actually stored.actually stored.

Using a browser, a new employee with no training could get Using a browser, a new employee with no training could get detailed information about the company.detailed information about the company.

Interoperable.Interoperable.

2 Advantages Intranet affects a firm's operation, Intranet affects a firm's operation,

efficiency, development and even its efficiency, development and even its culture.culture.

Consider the case of a company with Consider the case of a company with global offices employing say 1,000 global offices employing say 1,000 persons who need timely access to persons who need timely access to company news, corporate policy company news, corporate policy changes, and simple, but crucial, changes, and simple, but crucial, documents such as phone books, documents such as phone books, product specifications and pricing product specifications and pricing information.information.

Printed material is both expensive, Printed material is both expensive, environmentally unfriendly and time environmentally unfriendly and time consuming. consuming.

2 Advantages

Question of distribution and dissemination.Question of distribution and dissemination.

The direct cost of preparation, typesetting, production, The direct cost of preparation, typesetting, production, distribution and mailing can be saved.distribution and mailing can be saved.

The hidden cost of people verifying the accuracy and The hidden cost of people verifying the accuracy and quality of the printed information can also be saved.quality of the printed information can also be saved.

The Intranet is centered around the corporate LAN.The Intranet is centered around the corporate LAN.

2 Advantages Essentially, intranet:-Essentially, intranet:-

4. Allows the information to be maintained by the people who would normally maintain and prepare the

original information.

2. Can guarantee that the information is

the latest and most accurate available.

3. Ensures that information can be held at a single source

(although, there is no need for that source to be the source of

all information).

1. Can deliver information on

demand.

2 Advantages All in all, intranet helps:All in all, intranet helps:

4. Facilitates virtual corporations, collaborative

product development.

2. Meet customer's

expectations for

responsiveness and

personalised support.

3. Facilitates adaptation to market changes.

1. Reduce cost and improve

productivity.

3 Application Areas

3.1 Corporate Communication

3.2 Corporate / Department / Individual Pages

Sales and MarketingSales and Marketing

1.1. Product literature, sales guides, presentation materials, sample Product literature, sales guides, presentation materials, sample proposals, etc... proposals, etc...

2.2. To announce product updates or changes especially for software To announce product updates or changes especially for software house. house.

3.3. Customer information.Customer information.

4.4. Price lists.Price lists.

3 Application Areas

Sales and MarketingSales and Marketing

5. Product specifications.5. Product specifications.

6. Competitors' data.6. Competitors' data.

7. Searchable directories of marketing and sales personnel.7. Searchable directories of marketing and sales personnel.

8. Questionnaires for market research.8. Questionnaires for market research.

9. Sales forecasts.9. Sales forecasts.

10. Frequently Asked Questions.10. Frequently Asked Questions.

Human ResourcesHuman Resources AdministrationAdministration Various other departmentsVarious other departments

3 Application Areas3.3 Other Applications

Software distribution and sharing of macros developed by Software distribution and sharing of macros developed by individual staff.individual staff.

Mail and WWW.Mail and WWW.

Companies are also looking at ways to open parts of their Companies are also looking at ways to open parts of their internal networks to customers and suppliers who have Internet internal networks to customers and suppliers who have Internet connections. Federal Express customers, for example, can connections. Federal Express customers, for example, can already track their parcels by logging onto FedEx's homepage on already track their parcels by logging onto FedEx's homepage on the Web.the Web.

Online chat rooms to exchange documents, opinions and Online chat rooms to exchange documents, opinions and discuss ongoing projects.discuss ongoing projects.

Electronic suggestion box.Electronic suggestion box.

4 Security 5 Extranets

Similar to an intranet, except that …

A group or alliance of organizations is involved.

Share information between participants.

May support business transactions.

Customers may have access to it.

6 Supply Chain Management6.1 Introduction

A supply chain is a network of business operations that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. The complexity of the chain may vary greatly from industry to industry and firm to firm.


A global logistic network needs to take into account:

1. Location of customers and suppliers.

2. Location and availability of inexpensive skilled workers.

3. Transportation time and costs.


A global logistic network needs to take into account:

4. Location of tax havens.

5. Offset trade: value of goods and services purchased in a country may be balanced by sale of products in that country.

6. Export regulations, duty rates.

7. Trade-offs between many conflicting factors are required.


Traditionally, organizations and even departments within these organizations along the supply chain operated independently.

Supply Chain Management increases inter and intra organizational coordination.


Cooper and Ellram (1993) compare supply chain management to a relay team. Such a team is more competitive when each player knows how to be positioned for the hand-off. The entire team needs to make a coordinated effort to win the race.

6 Supply Chain Management6.2 EDI

Electronic Data Interchange (EDI) facilitates supply chain management.

Procurement is a ripe area in the supply chain for electronic commerce.

Estimates varied, but for a single shipment of goods as many as 40 multi-copy documents were exchange among up to 28 different organizations.


The cost of preparing, processing: estimates ranging from five to eight per cent of the value of the goods being traded. Much of the same information was used on all trade documents, with most data originating from the buyer and the seller.

The trade documents and associated procedures that existed were the result of practices which evolved over hundreds of years of international commerce. The documents and procedures had become an ingrained way of doing business.

Key documents and participants in Hong Kong’s Trading Sector.


Major benefits of electronic data interchange

1. Cost Savings: Manual, paper document preparation can cost on the order of $50 per document; costs for preparing and sending electronic documents are estimated to be as little as $12.

2. Speed.

3. Reduction of errors.

4. Security.

5. Integration with other office automation applications.

6. Just-in-time deliveries.


EDI differs from other forms of electronic commerce such as e-mail in that they exchange data not just between computers, but between computer applications.

EDI enables large parts of the trade documentation process to be completely automated.


EDI is the key to the quick-response supply chain and to 'Just-In-Time' manufacturing techniques.

EDI required complete trust from both parties.

Uses dedicated communication lines. Very secure.

Meaningful savings were often realized in the areas of purchasing, accounting, shipping, inventory and production planning.


Beyond this, EDI was said to result in strategic benefits due to the closer business relationships which developed between trading partners.

When EDI started in the 1960s, formats were agreed upon between individual companies, However, as the number of trading partners using different formats increased, organizations found this ad hoc approach to be increasingly problematic and expensive. This situation led to the development of industry standards (e.g., auto, chemical, retail) to meet the needs of wider communities of interest, then national standards and finally with the explosion of global commerce, international standard for EDI.


The UN/EDIFACT standard was developed under the auspices of the United Nations, and was recognized by the International Standards Organization (ISO) as the international standard for EDI messages. While many organizations in North America and Europe were still using their respective national or industry EDI standards in 1992, the use of EDIFACT for international transactions was becoming widely accepted.

Each organization had to have a computer and to acquire EDI software. Such software, which translated an organization’s data to the appropriate standard (and vice versa) could range from being very simple, operating on a stand-alone PC with manual data entry, to very sophisticated, being fully integrated with the company’s in-house computer systems.


The integrated EDI approach was really what EDI was all about, eliminating the need for human intervention. However, as it involved more time, skill and expense to set up, some organizations found a stand-alone solution more justifiable, at least initially.

The next step was deciding how the EDI message would be communicated between trading partners. There were two principal ways: via a direct (point-to-point) connection; or via a value-added network (VAN).

A direct connection was often used when there were large volumes of messages among only a few organizations or when there was one large organization with many smaller trading partners.


A VAN allowed an organization to access many different trading partners for many different transactions. A VAN provided a measure of independence between trading partners, allowed asynchronous communication (i.e., the VAN would hold a sending company’s EDI messages until receiving company’s computer called in to collect them) and provided added security and service features.

EDI had tended to develop by major industry.

There was also a tendency for EDI to be adopted first by larger organizations, and for these larger organizations to ‘promote’ the use of EDI in their smaller trading partners.


The use of EDI has grown rapidly since the late 1970s, especially in North America and Europe where it is becoming a prerequisite of doing business with many multinational companies. Port and customs authorities around the world are also now adopting EDI.

The Asian region, a later entrant into the EDI world, had been making up for lost time in the early 1990s. In Singapore a number of EDI services, including TradeNet, MediNet and LawNet, had been launched successfully by Singapore Network Services (SNS), leading to claims that Singapore operated one of the most advanced EDI systems in world.


Hong Kong: TradeLink.

Many larger companies in Hong Kong - notably the banks, cargo terminals and air/sea carriers - are already using EDI to exchange trade information with each other.

Despite the presence of EDI and other technologies, electronic procurement is still in its infancy. Obstacles to growth for electronic procurement include fragmented systems, the high cost to implement truly integrated solutions, a lack of standards, and no effective leadership yet (Sollish, 1998).


E-Marketplace constraints: How they vary by

country

Australia ChinaHong Kong

Taiwan India Japan South Korea

SingaporeSEA

Internet usage/ adoption

1 3 1 2 3 1 1 2 3

Long-Standing/deep business relationship

2 2 2 1 2 2 2 1 2

Lack of capable human resources

1 2 1 2 3 2 1 2 2

Hierarchies that slow change

0 2 1 2 1 2 2 1 1

Entrenched business practices

1 3 1 2 4 3 3 0 3

Internal IT management systems and process

1 2 2 1 3 1 1 1 2

4 Substantial barriers; 0 No barriers

7 VPN The Internet and World Wide Web-based applications promise alternatives

that are cheaper and easier to set up than EDI. In fact, they have the potential to trigger even more radical changes.

Purchasing can be divided into three basic steps: information, negotiation, and settlement (Zenz and Thompson 1994).

The Internet's unique features such as fast growing rates of diffusion and connectivity, immediacy and interactivity, multimedia capabilities, search engines, and a universal interface (Web browser), make it a very powerful platform to support all aspects of procurement.

A VPN is a network that makes use of the public Internet for both intra-company and inter-company communication while still providing the security of the traditional private, self-administered corporate network.

7 VPN

Source: Murchammer M. W. et. al. 1998 A Guide to Virtual Private Networks, Prentice-Hall

7 VPN A VPN is an extension of an enterprise's private intranet across the

internet, creating a secure private connection through a private tunnel so that information can be transmitted securely to remote users, branch offices and business partners.

It was estimated that savings from 20% to 47% of wide area network costs can be achieved by replacing leased lines to remote sites with VPNs.

Security considerations for VPNs: the data path may contain machines not under the control of the corporation (eg. routers).

The IPSec (IP Security Architecture) protocol is the basic protocol for VPNs.

7 VPN

Source: Murchammer M. W. et. al. 1998 A Guide to Virtual Private Networks, Prentice-Hall.

7 VPN

• VPN Infor on the WWW.

8 Relevant Sites

•Federal Express package tracking •Building a Corporate Intranet •Intranet surroundings •Corporate Intranets •Intranet Journal •The Complete Home Office Guide •Intranets Released

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