Ecommerce Chap 07

1© Prentice Hall, 2000

Chapter 7The Intranets and Extranets


Learning Objectives

Describe the relationship among the Internet, an intranet and an extranet

Discuss the role of firewalls for intranets and extranets

Discuss the functions of intranetsDiscuss the applications of intranetsDescribe the industries that use intranetsDiscover typical cases of intranet applications


Identify the key element of extranets Identify the key technologies for tunnelingDiscuss the applications of extranetsDescribe typical industries that use extranetsDiscuss the business models for extranet

applicationsDescribe the concept of embedded extranets

Learning Objectives (cont.)

Automotive Network Exchange - the Largest Extranet

Companies in the automotive market swap supply and manufacturing data

Involve 10,000+ companies Include CAD/CAM file transfers, Electronic Data

Interchange (EDI), e-mail, and groupwareThe network’s EDI element alone will slice $71

from the cost of designing and building each carSavings of $1 billion a year for the Industry


Chrysler will pay for fewer T1 Lines and satellite connections

Standardizing one protocol-IP will reduce support costs

The time it takes to turn around an order will be much shorter

The faster the parts come in, the faster the cars leave the assembly line, the larger the customer satisfaction and manufacturer’s profit

Business-to-business virtual private networks (VPN) are used

Automotive Network Exchange - the Largest Extranet (cont.)


The Internet

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The Internet is a public and global communication network that provides direct connectivity to anyone via a Local Area Network (LAN) and an Internet Service provider (ISP). Access to the Internet is not restricted to anyone. This lack of control may result in an information overload. Due to its vast scope and openness, the information is difficult to locate. Users need effective and efficient search engines to navigate the sea of information . There is no centralized control of network and information.

© Prentice Hall, 2000

7

The Intranets

An intranet is a corporate LAN and/or Wide Area Network (WAN) that is secured behind company’s firewalls and it uses Internet technologies. Although intranets are developed using the same TCP/IP protocol as the Internet, they operate as private networks with limited access. Only employees who are issued passwords and access codes are able to use them. So, intranets are limited to information pertinent to the company and contain exclusive and often proprietary and sensitive information. Firewalls protect intranets from unauthorized outside access.


Public/ExternalInternet Users

Intranet

Clients

ServersERP

Legacy systems

E-mail servers

Web servers

Databases

Firewalls

8

The Intranet (cont.)


9

The Extranet

An extranet implies an “extended intranet”, which uses TCP/IP protocol networks (like the Internet) to link intranets in different locations. Extranet transmissions are conducted over the Internet to save money. But it offers no privacy or transmission security. By creating tunnels of secure data flows using cryptography and authorization algorithms, called VPNs, the security can be improved.

Extranets provide secure connectivity between a corporation’s intranets and intranets of its business partners, material suppliers, financial services, and customers.


Tunneling Internet

Extranet

IntranetFirewall

Intranet

Firewall

10

The Extranet (cont.)

SuppliersVPN

Distributors VPN

Customers

VPN


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Summary : Internet, Intranet, and Extranet

Network Typical Type of Type Users Access Information

Internet Any individual with dial-up access or LAN

Unlimited, public; no restrictions

General, public and advertisement

Intranet Authorized employees ONLY

Private and restricted

Specific, corporate and proprietary

Extranet Authorized groups from collaborating companies

Private and outside authorized partners

Shared in authorized collaborating group



Firewalls

Definition of Firewall Software and hardware that allows only those

external users with specific characteristics to access a protected network

Provides potential customers with secured account, credit card, and loan information

Usually located at a gateway point and controls traffic between internal and external networks

Generic Functions of an IntranetCorporate/department/individual Web-pagesDatabase access: Web-based databases

Search engines and directory: Assist key word-based search

Interactive communication: Chatting, audio and videoconferencing

Document distribution and workflow: Web-based download and routing of documents

Groupware: Enhanced e-mail and a bulletin board

Telephony: Intranets are the perfect conduit for computer-based telephony

Integration with electronic commerce: Interface with Internet-based electronic sales and purchasing

Extranet: Link geographically dispersed branches, customers and suppliers to authorize sections of Internets. Can create happier customers, more efficient suppliers, and reduce operating costs



Categories of Intranet Application Purposes

0 10 20 30 40 50

Accounts Payable

Accounts receivable

Logistics and transportation

Sales records

Data warehouse

Document routing

Inventory

Legacy systems access

Policies and procedures

Customer records

Document sharing

Purchase orders or order entry

Product catalogs and manuals

% of respondent Electronic Commerce: sales and purchasing online

Customer Service: UPS, FedEx and other shippers have proved that information about product shipments and availability makes customers happier

Reduced Time to Market: Easy online access for product development speeds teamwork


Enhanced Knowledge Sharing: Web pages can enhance knowledge sharing

Enhanced Group Decision and Business Processes: Web-based groupware and workflow is becoming the standard intranet platform

Empowerment: All information should be available to everyone with the ability to know and act independently

Virtual Organizations: Web technology at participating companies removes the barrier of incompatible communication technology

Software Distribution: Using the intranet server as the application warehouse and avoid many maintenance and support problems

Project Management: Share reports and monitor projects’ progress

Categories of Intranet Application Purposes (cont.)


Industry Specific Intranet Solutions

Financial Services: Banking, brokerages and other financial services, insurance

Information TechnologyManufacturing: Chemicals and oil, consumer goods,

food and beverages, general manufacturing, and pharmaceuticals

RetailingServices: Construction and engineering, education,

environmental, healthcare, media, entertainment, telecommunications, transportation, and utilities


Intranet Case Studies with ROI Analysis

The cases are organized in the following format: Background of company Business challenges Before the intranet technology Intranet cost Intranet strategy After intranet technology Subjective (intangible) benefits (optional) Lessons learned Analyzing the ROI


Federal Express - Package Tracking

Intranet Case Studies with ROI Analysis (cont.)

60 internal web sites allow communication worldwide between divisions and corporate headquarters on all issues of importance to the employees and customers

The package tracking system allows customers to contact FedEx and go into the intranet to find the status of a package that they have shipped or one that they are expecting

The intranet has gone to retailers that ship products directly to customers and set up computer systems that will place and ship orders


Intranet Deployment Strategy

The intranet server platform has to meet 10 evaluation criteria

1. Scalability: The efficient transaction read/write capabilityshould be ensured as the number of users and access increases.

2. Interoperability: Enterprise Web, data warehouse, messageand mail manager, online transaction processing and othernodes will form the enterprise server platform cloud, which willrequire each node to have a high interoperability presence onthe network.

3. Configurability: Vendors just provide a broadly configurablearray of enterprise servers that do not require major box swapsas enterprise requirements change. Parts must be modular and offercommodity component substitution with other devices fromthird parties.


Intranet Deployment Strategy (cont.)


4. Compatibilityexpandable configuration requirements, but also standardindustry specifications to protect application investment.

: The server family must not only meet

5. Manageability: As the trend increases, enterprise systems must be operational from any point on the network and address the major operational management problems concerning configuration, fault and problem diagnosis and installation.

6. Availability: As enterprise servers assume a larger role in theelectronic channel and the enterprise wide Web, these systemsmust be able to sustain tens to hundreds of thousands ofaccesses and transactions with minimal downtime.

7. Reliability: The hardware reliability, data integrity, systemsintegration, and operational error immunity are essential.


Intranet Deployment Strategy (cont.)


8. Distributeability: Whether in two- or three-tier client/serverarchitectures, the enterprise server must embrace the client,assume a high degree of desktop affinity and must enableresources to be proportioned between server and clientappropriately.

9. Serviceability : The increased value placed on uptime willmandate online serviceability through the use of hot-swappablecomponents, remote diagnostics directly connected to vendorservice centers and pre-failure predictive diagnostics.

10. Stability: The generation changes in technology, andarchitecture that may include changes to instruction sets,migration from 32-bit to 64-bit computing and operating-system enhancements for clustering and advanced symmetricmultiprocessing must minimize upgrade disruption andpreserve investment protection.


Enterprise

ConsumersSuppliers

Clients

Business Partners

Distributors

VPN

Internet

Intranet

Extranet

IntranetIntranet

Intranet

Intranet

VPN VPN

VPN

VPN

RemoteEmployees

Basic Concept of Extranets Revisited



Elements of Extranets

Components of Extranets Intranets Web server Firewalls Internet Service Provider (ISP)

Tunneling technology Interface software Business application

Methods to Configure Extranets They can be implemented using a direct leased

line with full control over it, linking all intranets A secure link can be created across the Internet,

which can be used by the corporation as a virtually private network (VPN)


Virtually Private Network (VPN)

VPN is a secure network on the Internet using the tunneling schemes

The major objective of a VPN is to use the Internet as an inexpensive WAN backbone

When two sites are connected across a VPN, each must have a VPN-capable router, firewall, or VPN access device installed

When VPN is used to link mobile clients with Internet dial-up connections, the laptops must be equipped with VPN client software equipped with the addresses and associated encryption keys for corporate host sites

Four Categories of Extranet Products and Services

Extranet development tools Extranet hosting and network

connectivityExtranet servicesVPNs



Categories of Extranet Application

Enhanced Communications

Improved internal communications Improved business partnership

channels Effective marketing, sales, and

customer support Collaborative activities support


Productivity Enhancements

Benefits of Extranet Application

Just-in-time (JIT) information delivery Reduction of information overload Productive collaboration between

workgroups Training on demand


Business Enhancements


Faster time to market Simultaneous engineering potential Lower design and production costs Improved client relationships New business opportunities


Cost Reduction


Reduced errors Improved comparison shopping Reduced travel and meetings expenses Reduced administrative and operational

costs Elimination of paper publishing costs


Information Delivery


Low-cost publishing Leveraging of legacy systems Standard delivery systems Ease of implementation and maintenance Elimination of paper publishing and mailing

costs


Uses and Users of the Extranets

Information and Services on the

Extranets

0 10 20 30 40 50 60

Accounts payable

Accounts receivable

Logistics and transportation

Document routing

Data warehouse

Sales records

Inventory

Legacy systems access

Policies and procedures

Customer records

Document sharing

Purchase orders or order entry

Product catalogs and manuals

% of respondents

Users of Extranets

0 10 20 30 40 50 60

Franchises

Government regulators

All suppliers

Dealers

Distributors

Top-tier customers

All customers

% of respondents


Industry Specific Extranet Solutions

0 5 10 15 20 25 30

Customer

Real Estate

Industry/manufacturing

Travel

Financial services

Computers

Information services

% of respondent

Business & professional

Percentage of Extranet Application Industries


Extranet Cases

Connect Autodealers’ Kiosk: General Motors Case

Kiosks in dealerships and shopping malls Enable shoppers to purchase cars and

trucks from anywhere


Distribute Tax News to Experts: Coopers and Lybrand Case Tax News Network (TNN) extranet

contains tax information from numerous sources, integrating internal and external, and even competing resources

includes full text of various tax analyses, legislative tax codes, and major business newspapers

Extranet Cases (cont.)

Hospital Alliance Purchase: VHA, Inc. Case VHAsecure.net

allow members to purchase directly from supplierschose IBM as its ISP


Reduced Product Development Cycle Time: Caterpillar, Inc. Customers can use the extranet to retrieve and

modify detailed order information while the vehicle remains on the assembly line

Extranet Cases (cont.)

Link the Worldwide Chains: Kinko’s, Inc. 900 stores about 25,000 employees Developed an extranet to offer Internet access

and rental of PC computer time to its customers Each store connects to Internet with a 64-Kbps

channel of an ISDN link


Managerial Issues

Are there new business opportunities utilizing the intranet and extranet?

Consider whether the business requirements can best be met by the intranet or the extranet.

Consult the technical people inside and outside to find the most secure and economical implementation plan.

Review the current proprietary or leased network and decide whether it can be replaced by intranet and extranet.

If you are implementing the technologies of electronic commerce, find out the niche market of intranet and extranet technology, possibly with a business model.

Education

Ecommerce Chap 07