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Desktop business systems at last begin to succeed in taming the profusion of Websites, cyberpasswords, and software.
John Goff, CFO Magazine
November 1, 2004
Over the past few years, the proliferation of virtual publishing tools has made it fairly easy for the average person to construct, populate, and maintain a Website. While this would seem to be a good thing, there is one minor downside to the trend: the proliferation of virtual publishing tools has made it fairly easy for the average person to construct, populate, and maintain a Website.
It's so easy to put up a Website that everyone seems to have one. According to a recent Pew Internet and American Life Project survey, fully 13 percent of U.S. Internet surfers now have their own home pages, which works out to about 7 million individual Websites, or one for every person in Massachusetts. Ten-year-olds now have their own home pages.
This desire to get something up on the Web is not confined to bloggers, either. Many businesses have a crush of external and internal corporate Websites, first spawned by the dot-com frenzy of the 1990s. Typically, the internal sites are grouped around lines of business, departments, functions, even new-product releases.
Like Oobleck, this space junk has gummed up the works. Take the case of Charlotte, North Carolina-based Bank of America. Three years ago, its senior executives began assessing the organization's explosion of internal sites. The results were startling. "We had nearly 2,000 sites," recalls Sunil Rajpal, senior vice president and associate segment executive at BofA. "Every Windows engineer thought they should have their own Website on their PC."
To get a handle on this virtual sprawl, which also diluted the bank's branding efforts, BofA turned to portal technology. Portals, which combine information, dashboards, and intranet links into a single desktop display (a la Yahoo), enable workers to access different applications, databases, and Websites from one screen. Deploying a portal developed by Austin, Texas-based software provider Vignette Corp., BofA began to consolidate and otherwise deep-six nearly 1,200 of its former intranets. By next year, says Rajpal, it should be down to about 300 internal Websites.
"Desktop of the Future"
Bank of America is not alone in its desire to eliminate 'Net flotsam. In a recent survey conducted by the Society for Information Management, technology executives listed Website-complexity reduction among their top 10 IT initiatives for the coming year. Self-service sites for benefits administration have been around for years, of course. But lately, companies have been deploying more-expansive portals in some very creative, muddle-reducing ways.
Mazda North America Operations, for instance, has rolled out a portal for sales and customer-service field managers overseeing the automaker's 700 North American dealerships. Built with applications from Plumtree Software Inc., the portal dramatically reduces the time it takes Mazda field managers to collect performance data, track sales targets, and otherwise prepare for review sessions with dealers.
In a similar vein, diversified Houston-based energy specialist Halliburton Corp. has merged several enterprise-resource-planning (ERP) functions into a customer portal serving some 5,000 registered users. Among other things, myHalliburton.com allows engineers to search a database of more than 3,000 data sheets and best practices for energy exploration and drilling. The gateway enhances collaboration between customers and employees, and allows accounts-payable staffers to check invoices and field tickets, speeding the resolution of account disputes.
As portal standards evolve, expect to see greater use of the technology. At East Hartford, Connecticut-based engine maker Pratt & Whitney, a unit of United Technologies Corp., controller Corliss Montesi says her group already uses a portal to gather quarterly reporting information.
Experts say that in time, companies will be setting up secure online communities where finance staffers can collaborate virtually with independent auditors. And once multimedia features like streaming video make their way onto portal platforms, computer-to-computer conferencing may finally catch on.
The possibilities are limitless. Says Nils Gilman, director of product marketing (WebLogic Portal) at vendor BEA Systems Inc.: "We see portals as the enterprise desktop of the future."
A Promise Revived
Until recently, portals seemed doomed to become the enterprise desktops of the past. Early content-aggregation technology, offering little more than link farms, failed to deliver desktop access to information and applications. Then in the late 1990s, vendors began extracting data from underlying programs and presenting it in a single interface. It was a forward step, but the point-to-point connection required massive amounts of coding. And users themselves generally had to complete the last mile, cutting and pasting together information gathered from different programs. The result? "You ended up with a lot of siloed portal projects," says David Gootzit, research director (applied research) at tech consultancy Gartner.
Even when IT executives got the wiring right, the set of features offered was often wrong. Not surprisingly, workers greeted company intranets with monumental apathy, quickly learning that the new portals didn't take them anywhere particularly helpful. "Companies thought they could determine what the users needed, and could push out that information," says Jim Murphy, research director at Boston-based AMR Research. "Guess what? That's not doable."
To avoid the "empty portal" phenomenon that tarnished earlier experiments, some companies now study how employees use their computers, or deploy elaborate monitoring software to glean information on portal traffic. They then apply that information when updating the features brought onto the screen. More important, the latest crop of portal products gives employees more leeway to post content on their sites. "We give each [line of business] the freedom to publish their own content," notes Rajpal. "We don't want to centralize publishing."
Still, persuading users of the virtues of portals often takes time. David Vanslette, vice president of portal services at New York financial-services behemoth JPMorgan Chase & Co., claims his team had to work hard at first to sell management on the merits of an intracompany portal. "They weren't going to go for it if [our rationale was] 'this will save 15 minutes of time,' " he recalls. But since the April 2003 start of the portal project — one that has helped the bank consolidate scores of internal Websites and reduce content duplication — Vanslette says the company's executives are looking for new ways to leverage the technology. "We have more demand than we know what to do with," he adds.
The Simple Life
That's not surprising. When done right, portals make life a whole lot simpler for employees — particularly those who process tons of documents.
Kansas City, Missouri-based Lockton Benefit Group has signed on to become part of an insurance-industry portal called BenefitPoint Aptus, connecting brokers and consultants to about 400 insurers. Lockton employees use the browser-based platform to transmit a request for proposal electronically to a carrier, getting an electronic response from the carrier as well. The portal provides Lockton employees with instant access to a huge repository of historical details, as well as real-time information on pricing and policy terms. In the old days — that is, preportal — tracking down such information took up considerable time. Raves Lockton president Mike Brewer: "If we get just a 15 percent increase in productivity, it will be worth it."
Other portal users see even bigger gains. San Francisco based Wells Fargo & Co., which maintains both a customer and an employee portal platform, will soon roll out internal portal-based credit underwriting. By allowing employees to access a portal, Wells Fargo will push manual processes online and turn credit documents into electronic data files, and the bank's managers expect to shorten the turnaround time on loan requests substantially — perhaps even cutting it in half, according to Danny Peltz, executive vice president (wholesale intranet and treasury solutions). By last year, the company's four-year-old customer portal, dubbed CEO (for commercial electronic office), had grown to 110,000 users at 23,000 companies, accounting for $6 trillion in payments for about two-thirds of the big bank's commercial customers.
Still, how those numbers translate into portal return-on-investment is hard, if not impossible, to calculate (see "Payback Is a Hitch," at the end of this article). And despite vendor promises to the contrary, portal deployments can drag on. "In the marketplace, you hear it can be done in three months," says JPMorgan's Vanslette. "Well, it's definitely not a three-month project. It's a nine-month-plus project."
Of course, software-vendor hyperbole is nothing new. In fact, customer disappointment over earlier claims from portal vendors has contributed to a sizable shakeout in the industry. The numbers paint the picture. Three years ago, there were anywhere from 60 to 100 providers in what Gartner terms the horizontal portal market. Today that total is down to 22. "There's been a bit of a backlash," notes Gootzit. "Some early providers didn't have the best vision or products. And business users thought [portal products] would be easier to install."
Even with greater interoperability, integrating far-flung applications and data onto a single desktop still requires hard work, especially if the apps are from different vendors. Experts point out, however, that portals reduce the number of IDs necessary to access a hodgepodge of programs. And that's a significant benefit, particularly when businesses look to offer a range of online services to customers.
Wells Fargo's CEO portal, which has been revised 17 times since its launch, provides credit services, treasury management, and letters of credit, among other things, to wholesale banking customers. Those products, often run off different systems within the wholesale bank, are tied together by a single log-in for each customer — helping the portal establish its popularity. Says Peltz: "Just having a single sign-on creates a huge amount of value."
Interestingly, the success of CEO got the bank's managers thinking about ways to leverage portal technology. And it didn't take long for them to settle on a new project. "The tools we were providing our customers far exceeded what we were providing employees," notes Peltz. Keen to reduce the gap, last December the bank rolled out its iCEO internal portal. Designed with technology provided by BEA, iCEO helped the company reduce the number of internal Websites. Because user desktops are customizable, employees also now can choose the applications on their computers. And there are plenty of apps to choose from: Wells Fargo operates close to 300 internal and external software programs.
Faced with the tough job of integrating applications, some businesses try to lessen the hassle by limiting the number of vendors from which they purchase software, or turning to a single vendor for the whole job. Such an approach, however, pretty much poleaxes any thoughts of purchasing best-of-breed software. Moreover, experts say even single-vendor shops generally have numerous versions of the same program running on different computers. And different versions of the same program don't always work well together. Acquisitions further muddy the picture, as companies are often forced to match legacy software with existing systems.
In some ways, though, portals can help ease the M&A pain. Consider the case of Rohm & Haas Co., a specialty chemical producer that has embarked on a number of acquisitions in the past few years, including two large deals in 1999. All told, the purchases left the company with 300 different software programs to manage. Then, in 2000, management at Rohm & Haas decided to roll out SAP's R/3. "The old systems were somewhat burdensome to use," notes vice president and global CIO Anne Wilms. "We wanted to simplify the whole interface to the back-end system."
All the acquisitions tended to make the simplification anything but simple, says Wilms. So to make the plan work, Rohm & Haas ended up deploying an internal portal. Based on SAP's myApps suite of products, the interface ties together the company's operational systems, knowledge-management systems, and external information sources, and makes it easier for workers to access back-office data. Wilms says the company believes the new platform could lead to a reduction in inventory, as well as days sales outstanding. "Without a portal," she notes, "the project would have been impossible."
The price tag? The Philadelphia-based company has spent less than $2 million to deploy the portal. Real money, sure, but loose change compared with the $300 million Rohm & Haas has invested in its ERP makeover. That's the beauty of portal technology, insists Plumtree's Jay Simons, vice president of product strategy. "For a fairly incremental cost, you can get a huge bang for your buck."
Portal Bellies Mushroom
Even small projects offer benefits. Pratt & Whitney, for instance, maintains more than 30 finance-related portals. One, an online community, is a virtual meeting place for the company's global network of controllers. Another enables the finance staffers to access important documents regardless of where they're working — no matter the size of the files. Says controller Montesi: "Portals are a great way to share documents."
Actually, the new crop of portal offerings admirably pulls together all sorts of unrelated data, both structured and unstructured. The result: companies can commingle information, such as inventory churn and customer satisfaction, that might not otherwise work together in a single dashboard. "The trick is tying five or six information sources together, so that when you pull up a view, it makes sense," says Dave Shirk, senior vice president of products, strategy, and worldwide marketing at Vignette. "Otherwise, you're just doing a link-a-matic."
The Plumtree tool at Syncrude Canada Ltd., a Fort McMurray, Alberta-based oil producer, goes well beyond a link-a-matic. In fact, the company's portal offers a glimpse of just how much information can now be distilled in a single view. Syncrude, which draws petroleum from oil sands, uses a network of some 250,000 monitors to keep tabs on activities at the company's refineries. And Darcy Daugela, leader of the company's Web-services team, says the portal enables workers to track key performance indicators — drawn from those quarter-million gauges — right on their desktops.
Daugela acknowledges that much of the information was accessible before the company rolled out its portal. But, he adds, with the voice of a man who's done his share of data queries, "it wasn't easily accessible."
John Goff is technology editor of CFO.
Payback Is a Hitch
Portals ranked as one of the five key technologies for the coming year in a recent survey by the Society for Information Management. But if IT heads can see the value of the technology, business users remain hard-pressed to quantify that value. Notes Jim Murphy, research director at Boston-based consultancy AMR Research: "It's very difficult to figure out what value they're getting out of this."
Many companies with portals point to a reduction of complexity as the technology's greatest selling point. Sunil Rajpal, senior vice president and associate segment executive at Bank of America, says the bank's in-house portal project has cut the number of internal Websites by nearly 85 percent. That, in turn, will enable BofA to pare the number of servers it operates.
Other savings accrue from the trimming of business-process activity and paperwork. Moreover, managers at the bank have used portal technology to unify the look of all company sites — a plus for internal branding. But putting a dollar sign on branding initiatives is a tricky proposition at best.
Not surprisingly, the vendors' claims of enormous savings may well be overblown. David Vanslette, vice president of portal services at JPMorgan Chase & Co., says one tech consultancy told him that some portal projects were yielding 40 percent reductions in process costs. But according to Vanslette, without cost-accounting systems for lines of businesses, business functions, even product lines, it's difficult to size up any savings. He can tell, however, that "our savings were nowhere near 40 percent."
The trend toward Web services will only complicate the ability to perform return-on-investment calculations in the future. Using Web services, companies can pull out a discrete element of an application, then grant access to the feature via a portal. While that approach is still in its infancy, the concept raises whole new questions about IT governance. "The original funders of the app aren't the only ones who will use it," points out Nils Gilman, director of product marketing (WebLogic Portal) at BEA Systems Inc. "So who pays for it?"
Hard to say. For his part, Vanslette advises portal ponderers not to overthink things. "You can try to figure out cost-savings [from a portal] for a long time," he says. So far, the company's prove-out process has taken 60 to 90 days. Vanslette says he'd like to get that down to 30 days. "Once we meet our threshold, we move on." —J.G.
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