Service The Use Of An Extranet example essay topic

Introduction In an era of intense competition, those companies with the best partner communication win in the marketplace. The Internet enables companies to communicate better with employees, customers, suppliers, and distributors. Companies have discovered the benefits of the Internet, and now are expanding its use in two directions -- -Intranet and Extranet. Extranet is viewed as the "third wave" of the Internet revolution. First there was the original Internet, and then companies began creating intranets for transferring information within organizations.

Finally companies extended the Intranet to the Extranet. Each step was based on the previous one. An Extranet is a private network that uses the Internet protocol and the public telecommunication system to securely share part of a business's information or operations with suppliers, vendors, partners, customers, or other businesses. An Extranet can be viewed either as a part of a company's Intranet that is made accessible to other companies or as a collaborative Internet connection with other companies. Unlike the Internet, an Extranet is not wide open.

Unlike an Intranet, it is not restricted to internal use. An Extranet allows companies to increase their competitiveness by providing service opportunities, decreasing data processing times, reducing costs, and allowing companies to work better with partners and suppliers. How the Extranet can benefit the organization Communications Quick communication with customers and partners is an advantage in the market. Within the organization, there are no barriers to communication and knowledge sharing at all levels; outside of an organization, the channel of coordination with suppliers is improved; they are even allowed to enter the internal system to view the inventory and replenish the products without ordering. Also companies can monitor their suppliers' performance.

Having feedback from customers may speed product development and make it possible to provide better customer service, which can increase customer satisfaction and loyalty. The Extranet makes their relationship closer and stabler. Cost Since an Extranet uses the Internet's open standard, there are no compatibility problems. An organization does not need to spend extra money to buy the unified equipment to run the system. There are still some standard tools and software, so there is no need for training. All information is shared on the extranet, so information exchange can be completed throughout the net.

This reduces the cost of access to information and distribution and time spent traveling, meeting, and telephoning. According to a survey, 40% of worker time is spent in processing documents and 40% of worker time is spent communicating. So an extranet is a good tool for saving time and money. Effectiveness An Extranet makes the company more effective. The user can instantly view the information that is created on the Extranet, what eliminates misunderstanding throughout the organization and improves the speed of information exchange.

Efficiency The Extranet members can be on line at their most convenient time. They can find what they need when they need it. All of them are able to collaborate without time or geographic constraints. When developing a new product, collaborative Extranet enables manufacturers, suppliers and customers to connect, which gives engineers direct access to customers' and suppliers' ideas for improving products.

A quick response is important to shorten product cycles dramatically and increase productivity. Applications areas Extranets are being used to achieve cost reduction, effectiveness, and efficiency in all parts of the business, from suppliers to operations, marketing and customer service. Government Electronic filing of tax documents is an example of Extranet usage in the government. The requirement for this kind of filing will continue to increase over the coming years, and the Extranet will help cut distribution costs and minimize data entry errors.

Transportation More and more transportation companies are now allowing their customers to tap into the availability schedule for their truck, rail and air fleets, and even place an order directly, such as e-tickets. After customers select a flight schedule on site, they just need to fill in their credit card numbers and click "confirm", and then the money will be transferred automatically from their accounts to the airplane companies' accounts. A letter of confirmation will be sent to their e-mail boxes. Only showing the copy of the letter and ID card can they board a plane. This technology makes people's lives more convenient and efficient.

Pharmacy Many pharmaceutical firms are gathering test data from different sources via an Extranet. This is especially useful for drug testing that is conducted by researchers worldwide. Service The use of an Extranet provides access to corporate knowledge bases and account information to improve customer service. For example, financial services provide account status, bills paying, investments tracking, and transfer of funds to their customers. Manufacture The most popular applications of an Extranet in manufacturing include order status, warranty program management, and on-line order placement by customers.

Telephone Many telephone companies are now providing account status and each call status to their customers. For example, AT&T online billing permits customers to view, sort and print out their monthly statements anytime. Another website named Big zoo provides worldwide telephone service. After signing up and charging the PIN number given by the site, customers can use it like a telephone card. The status of each call can be viewed and the PIN number can be recharged anytime. The rate is cheaper than any other companies, and there is no purchase tax.

It attracts a large number of customers to enjoy its services. Examples of applications As more advanced technology for Extranets becomes available, many business firms are implementing Extranets successfully; here are some examples of firms that have seen the benefit of Extranets. The big three automakers The big three automakers, Chrysler Corp., General Motors Corp., and Ford Motor Co., build a collaborative Extranet that links them to their suppliers through designated ISPs called the Automotive Network eXchange (ANX). It's estimated to drive billions of dollars in costs from the supply chain. ANX replaces 50 to 100 direct dial connections to the automakers, reducing telecommunication costs up to 70%, but the real payoffs are in speeding and easing communications between suppliers and manufacturers. ANX is used to electronically route product shipment schedules, order information, CAD files for product designs, purchase orders, and other financial information.

ANX is designed to be a single, secure network for electronic commerce and data transfer, allowing the Big Three to collaborate in real time with their suppliers over secured areas of the Internet. It also enables engineers to run analysis software, solid modeling CAD packages or even high-speed prototyping with the fastest communications links. The network not only provides CAD / CAM but also provides applications such as advanced videoconferencing and three-dimensional virtual reality design sessions. The new network is used to cut the cost of doing business, but more importantly, it speeds new automotive designs. Automakers have struggled with a five-year design cycle, but they have knocked that down to less than three years.

Federal Express The most famous example of an Extranet is Federal Express' Tracking System (web). Through the Web, customers can access FedEx's public site, enter their tracking number and locate any package still in the system. In a single session customers enter all the information needed to prepare a shipper form, obtain a tracking number, print the form, and schedule a pick up. How much does an Extranet cost? The development cost of an Extranet is proportional to the cost of web pages, because Extranet is built based on the Internet. The sites can be divided into three groups according to functions: The first one is called a promotional site that focuses on a particular product, service or company.

Its cost is $300,000-$400,000 per year, of which 17-20% pays for hardware and software, 5-10% for marketing, and the balance for content and servicing. The second one is called a knowledge-based site that publishes information that is updated constantly. Its cost is $1 to $1.5 million annually, of which 20-22% is spent on hardware and software, 20-25% on marketing, and 55-60% on content and servicing. The third one is called a transaction-based site that lets surfer shop, receive customer services or process orders. Its cost is $3 million per year, of which 20-24% is spent on hardware and software, 30-35% on marketing, and 45-50% on content and servicing. Issues to overcome Security A disadvantage when talking about an Extranet is the issue of security.

A system that runs over the Internet is more vulnerable than a proprietary one. Also the type of information transmitted over extranet, financial data, development of new products, makes the network an appealing target for hackers. Human factor The technology is different from what people are used to, and it requires a new set of skills to understand and master the technology. For the salespersons who work on commission, the implementation of an Extranet can cause dissatisfaction, because customers complete their purchase directly and revenues become more widely distributed within the company.

So changes should be carried out carefully because of the cultural problems and resistance. Cost From the preceding part discussing the costs of Extranets, the idea that the costs of establishing an Extranet is expansive can be obtained. An Extranet is constructed on the base of the Internet and the Intranet. It evolves large areas to support, so a huge amount of money is needed. Conclusion The Extranet likes a bridge connecting the Internet and the Intranet together.

With integrated information sharing through this channel, costs spent on information exchange can be reduced, service can be improved, and value provided to the customer can be enhanced. Now we can see more and more organizations utilize an Extranet in their daily information exchange. Successful Extranets are designed to produce benefits for the organizations. More effective communications enable operations to take the advantage in the market, and less time and money spent on an Extranet makes organizations do business more efficiently.

Although security is the biggest drawback of an Extranet, with the high-speed improvement of web security, the extranet will be a secure network in the future. Customers and corporations can keep in virtual contact with each other constantly.

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