The heavily weighted argument toward building the corporate intranet puts enormous pressure on information technology executives to deliver. IT executives must deliver a quality intranet that reduces cost and increases revenue by thousands of dollars. As a company begins to plan for intranet construction, it must decide which portions will be handled internally and which portions it should outsource.
Deciding what portions of intranet development it should outsource and what it should not, is not an easy call, even for Palmer. "In all, I feel that systems management (server, network security, standards, and basic programming) should be handled internally. Design and innovative application development should be outsourced."
According to Palmer, whether or not to outsource "depends on in-house capabilities. Some companies act as content managers but look to outside resources for back-end development and design: purchasing and maintaining the server, handling, tracking and designing the Web site."
Palmer notes that market position impacts this choice as much as capabilities. "This also depends on the company's marketing mix and attitude about intranet use."
In one of her previous jobs with an ISP and IT services vendor, Palmer notes, "We wanted to keep our internal audience (sales force) on the cutting edge - after all, (they) sell Internet access and other high-tech products. Therefore, (they) look for innovative means - with visuals and applications - to deliver information and make day-to-day operations accessible. That type of attitude fosters an internal intranet group with depth (programming, project management and design). It also fosters some dealing with outside developers to maintain that edge."
Outsourcing
The reasons to outsource intranet development vary little from the reasons to outsource any information technology project. The Outsourcing Institute has defined 10 reasons why companies will choose to outsource. These 10 reasons can easily be applied to intranet development. The reasons to outsource, in reverse order according to their strategic significance as set down by the Outsourcing Institute's 1995 Trend Report, are:
1. Function Difficult to Manage or Out of Control: Most IT managers do not have experience in managing intranet production. Many managers may feel overwhelmed by the prospect of hiring, training, and managing internal employees to build an intranet. Outsourcing moves the day-to-day management to those presumably more experienced with this function.
2. Resources Not Available Internally: A company must have a strong technology background and a strong understanding of the Internet to build an intranet. They must have the resources such as networking specialists, HTML programmers, database programmers and network administrators. Physical resources such as Web servers, content creation tools, communication cabling and Internet security software must also exist. The rush to build a corporate intranet can put many companies in quite a bind. Does the corporation have time to build these resources from within or should they look outside the company to fill in intellectual and physical gaps?
3. Reduce and Control Operating Costs: An intranet vendor is in the business of building intranets. It should have developed a lower cost structure to do so than you would have if you were to build it yourself. It is its core business not yours. The intranet vendor has already incurred the research and development costs of intranet production.
4. Cash Infusion: Often, outsourcing an intranet may involve transferring assets such as Web servers and development equipment from the customer to the vendor. The vendor is then to exchange these assets for intranet services over time. This exchange of assets can create a cash infusion into the department controlling intranet development.
5. Make Capital Funds Available: Outsourcing can free up investment capital for more core business activities such as sales and manufacturing. With great competition for capital inside a corporation, it can be understood why IT executives are moving portions of intranet development such as application development to outside organizations.
6. Free Resources for other Purposes: Resources, just as capital, are a limited commodity to organizations. According to the Outsourcing Institute, most companies' biggest resource is people. With employees not learning how to be HTML programmers and network administrators they can focus more of their time on company customers.
7. Share Risks When a company sets out to build an intranet by itself, it assumes all the risk. Outsourcing this development can be a way of spreading the risk among many companies. The intranet vendor has a personal stake in seeing your intranet succeed and has taken a risk in making that investment. It is betting its business on it!
8. Accelerate Re-engineering Benefits The development of an intranet can have a tremendous positive re-engineering benefit. Employees can better communicate and collaborate via the intranet. These and other work flow enhancements can be achieved faster by outsourcing the development of these systems and applications to outside companies. Intranet vendors can normally delivery intranet applications faster than a company could build them in house.
9. Access to World-Class Capabilities This is perhaps one of the greatest reasons to outsource intranet development. Most companies want to be cutting edge but do not want to invest the resources to do so. Partnering with a cutting-edge intranet vendor can give a company's employees access to new technology, tools and techniques involved with Internet technology. The intranet vendor chases new technology and better methodologies while the corporation reaps the benefits.
10. Improve Company Focus With the day-to-day issues of "how" to build the intranet taken over by an intranet vendor a company can focus itself on broader business issues such as how to use the intranet to gain revenue. For example, a company can focus on how to better service their customers using new technology instead of focusing efforts on how to build that technology.
Outsourcing the Intranet
Many functions of intranet development can be outsourced. These range from design and planning to the database scripting of mission-critical application. I have listed a sampling of possible outsourcing points below.
- Intranet Design and Planning - Consulting on what is to be built and how it is to be built
- Networking - Laying of the physical network over which intranet traffic will flow
- Site and Application Development - Design and construction of intranet web sites and web application that will facilitate communication and move business processes into a web environment
- Web-Database Integration - Integrating legacy databases to the intranet
- Maintenance of intranet - Upkeep of network, web servers and web applications
- Hosting of intranet - remote hosting of intranet applications and sites
Picking a Vendor
Selecting among vendors is not easy. Palmer places importance upon "understanding marketing to some extent and an ability to translate content objectives , as well as branding presence to the Web environment." "Most companies now, which bill themselves as multimedia, offer intranet development capabilities," Palmer notes, but that does not make them all good vendors. "I have found a small core of vendors in Atlanta, which offer both sides of the house- creative and technical."
As it is with sourcing most IT services, there is no substitute for the "old-fashioned" networking. Palmer's sources: "referrals, and meeting them at business functions."
Many factors affect the decision to choose an intranet vendor. Some top considerations are listed below:
- Match your capabilities - Complement your intranet skills with the skills of your vendor. If you have strong creative skills but need help with networking or Web design then seek those needs out. A company's intranet vendor should keep you on the leading edge of areas where you do not have the resources to invest.
- Look for long-term relationship - Find a vendor that will grow as you grow. Find a vendor that has the same commitments that you do whether that is in technology or philosophy. Make sure that the vendor will be around in six months and can support your long-term needs.
- Check experience - Because the industry changes so rapidly intranet vendors often make claims they cannot back up. Ask to see a reference list. Talk to their customers and ask to see their Web sites and applications.
Intranet Rewards
There are great rewards to be gained from constructing a corporate intranet. Information technology executives must weigh internal resources against the cost of outsourcing. These resources and costs are both short and long term.
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