The Small Business Idiots Guide to Intranets & Extranets

Author: Pankaj Taneja
Intranets, Extranets & Customer Portals Demystified

Intranet”, “Extranet” & “Customer Portal” are fashionable techie jargon nowadays, and likely to pop up in all sorts of contexts – conversations, articles or even conference talks. Yet the meaning of these words is somewhat elusive and overlapping and might sometimes leave one scratching one’s pate. It would therefore be in order to get the definitions out of the way at the very outset.

INTRANET – The term’s similarity with ‘internet” is likely to cause a little confusion.  Unlike the internet, which is public network of computers across the globe, an intranet is a private network of computers which functions only within the boundaries of an organization. It also differs vastly from the internet in terms of its audience & strategic objectives. It is true however, that an intranet might sometimes use the internet as a vehicle to connect across facilities and locations. Even so, access is still restricted and not available to the general public.

Audience & Objectives of an Intranet

Audience – Employees


  • Information Repository
  • Communication
  • Automation of Processes
  • Training
  • Team Collaboration

During early days, the main purpose of an intranet was merely to act as a substitute to the back and forth medium of mails, and act as a central repository where employees could access company information and resources.

Some Practical Uses

  • Company Policies
  • Development & Training
  • Employee Directories
  • Project Management
  • In-house Social Network

In the modern context however, intranets are a vital component of a company processes which enable real time communication across company levels, facilitate & make efficient information flows, and enable real time collaboration between groups spread across locations. This is an interesting case study of intranet use.

The audience of an intranet is primarily the staff. It facilitates and improves the efficiency of staff work, or it may act as a forum for social communication, mutual learning, or managers at the top echelons use it to communicate company objectives and policies to the lower levels.

EXTRANET – Like an Intranet, an extranet is a private network. But rather than being directed internally for staff needs, it is an outward facing network used to securely collaborate, share information or integrate operations with suppliers, vendors, partners, customers or other businesses.

Since the abovementioned parties are spread over diverse locations, extranets use the internet as a vehicle to connect to these parties. A company might have multiple dedicated extranets for different key partners or clients. It can sometimes also be seen as an extension of an “intranet” where external parties are brought into the fold of the company’s private network.

Audience & Objectives of an Extranet

Audience – Suppliers, Vendors, Partners, Clients


  • Share Information
  • Communication
  • Integration of Processes
  • Training
  • Collaboration

The possibilities created by information technology have spurred new approaches like the “supply chain” approach which have redefined attitudes towards businesses and their interrelations.

The movement is towards greater information exchange and integration with external parties. Enter extranets.

Some Practical Uses

  • Client Support
  • Product Demos
  • On-Line Catalogues
  • Joint Project Management

Like intranets, extranets enable communication, information sharing & collaboration. But the information in this case is very different from intranets and specific to the needs of the vendors, partners, or clients it is created for. One example of an extranet would be one created for a key client of a software services provider. This would serve as a space for managing project timelines, communicating specifications, sharing project resources, providing deliverables etc.

Another valuable application of extranets is to provide support to key customers. Online knowledge bases, training materials, discussion forums and an interactive help desk are a few examples of ways to serve an important client using an extranet.

A study conducted by Highbeam Research in 2001, with top Times companies showed that 38of respondents now give customers online access to information and reports. A further 23plan to implement extranets by the end of 2002.


  • Share Information
  • Joint Projects
  • Product Training
  • Customer Support
  • Cross Selling
  • Feedback Mechanism

CUSTOMER PORTAL – A “Customer portal” is an extranet built specifically for an important customer. Hence it is a subset of the term “extranet”. It is a unique environment created specifically for the needs of a particular client. The purposes may be as varied as collaboration needs of working jointly on a project for a client, to providing dedicated support and training materials to an important client, to merely a shared information area where product specification documents, contracts, reports etc are shared with a client leading to finalization of a contract.

Customer portals in addition to enhancing efficiency of customer service, also lead to more satisfied customers and offer a good opportunity for cross selling and getting feedback. A company can use its customer portal to regularly supply information on related and new products to customers and present it in a manner appealing to that particular client.

Broad Benefits of Intranets/Extranets/Customer Portals

1. Increased Productivity: Intranets/extranets enable instant access to important internal and external information; hence the lag between those who have the information and those who need it is next to nil. With just a few clicks, users can access data held in any database the organization. This allows employees to perform their jobs faster, and more accurately.

2. Communication: Intranets/Extranets are powerful tools for communication within an organization, vertically and horizontally and across organizational boundaries. This could mean anything from company policies being communicated across the organization to working together with a client of a project.

3. Auditing: Intranets/Extranets allow a clear visibility into information flows and business processes. Details of projects & files are captured at each step and responsibilities, time & changes can easily be ascertained and retraced at any stage.

4. Operations & Management: Intranet/Extranet project management tools allow companies to move to a “project based” system, where cross functional and cross organizational teams can quickly be convened irrespective of location for different tasks. It also allows managers to spend less time “being there” to personally supervise & monitor progress of activities. They need to simply log in to create projects, assign responsibilities and track progress.

5. Enhanced Collaboration: Because distance is not a constraint, teams can quickly get together and work jointly in real time in a virtual environment without actually being there.

6. Capture & Share Knowledge: Intranets & Extranets also act as forums where different people can get together, share their expertise and learn from each other in the process.

Are they a Big Business Thing?

According to a study by Modalis Research Technologies, 70 percent of small and medium-sized U.S. businesses feel that an intranet is important. 

The Hosted, SAAS Model – Going by the massive investment needed to develop a customized intranet/extranet system a few years back, it might not have made sense for a small to mid-sized company to get the system then from a cost-benefit perspective.

But in recent times, the hosted, SAAS, approach to application delivery has made available these technologies even to the smallest business at a minimal price.

Changing Environment – Moreover, the changing business landscape, even small businesses have to manage distributed teams and increasing client expectations. May it be traveling salespersons, an outsourced development team based in Asia, work-from-home executives, or a key client with special support needs – it makes sense to have an intranet/extranet portal where they can log in and share information and work together.

Possible Uses – It can be put to a multitude of uses, like displaying announcements, uploading policy documents, sharing employee directories or managing projects. Modalis Research found that one of the ways companies used their intranet was to put up their daily lunch menu!

Beats Email!Considering the fact that an intranet solution costs little more than setting up business email, it’s a logical next step compared to the cumbersome and confusing method of sharing information through mail.

(Former?) Disadvantages

1.       Expensive – Intranets/Extranets used to be very expensive to implement and maintain. This included software development costs, costs of hardware, training costs, costs of specialized technical staff etc. But the new hosted model allows companies to have a ready-made solution for a reasonable number-of-users based monthly fee.

2.       Security – Security of intranets and especially extranets can be a big concern since sensitive business information is transferred over the public medium of internet. But there are many hosted intranet/extranet solution companies which have an impeccable record where it comes to safeguarding client information. The importance of security only underlines the need to be very careful when choosing a solution provider.

Introduction to Selection Criteria


  • Features/Customizability
  • Company Background
  • Cost
  • User Friendliness
  • Security

Implementing any software in the organization involves a commitment, and especially intranet/extranet software because of its organization wide implications. It is therefore important to make an informed and well researched choice while choosing between different solutions. Companies looking to set up an intranet for the first time may not even have a clear idea of what tools might be necessary to facilitate operations.

The decision needs to be very broad based, depending upon specific factors – the feature set & costs of the solution being the most immediate; as well as general factors, such as a company’s security record, background etc.

A comprehensive list of factors to be considered for buying intranet/extranet/ software is listed below and will be elaborated in other sections of the site.

–   What features are on offer as part of the solution? Does it allow customization according to my needs?

–   What are the costs? How do the costs behave as the organization scaled up?

–   What is the company background? 

–   Is the solution user friendly? How steep is the learning curve? Will it require technical staff?

–   Is my data safe?

About the Author

The author has 5 years’ experience working with web-based technologies. His expertise lies especially in collaboration applications for the SMB segment.

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