Plugging Into Portal Returns
Whatever your view of enterprise portals-and there are as many opinions as there are IT infrastructures-the concept of centralizing the location of pertinent information and transactions is a solid one.
Portals can be valuable tools for enhancing business processes.
Anadarko Petroleum Corp. in The Woodlands, Texas, uses software from Pleasanton, Calif.-based PeopleSoft Inc. to make pay stubs available to employees electronically, thus cutting its postage and processing fees.
AmeriKing Inc., the largest independent Burger King Corp. franchisee in the U.S., uses a portal from San Francisco-based Plumtree Software Inc. to give its dispersed employees access to corporate performance data.
At Westchester, Ill.-based AmeriKing, inventory reports, sales and finance data, human resources information, e-mail and corporate documents are all available on a personalized, Web-based desktop. Indeed, company officials estimate that the portal saves the firm about $500,000 per year on reduced printing and distribution costs for things such as physician directories, employee profiles and employee contact information.
The portal also allows AmeriKing employees to change personnel information about themselves to their employment and benefits files-thus helping to cut the company's human resources costs.
But to extract these kinds of returns from a portal requires specific planning on the part of business managers-not just IT personnel.
"There are three overarching components to a portal strategy," says Laura Ramos, research director at Giga Information Group Inc. in San Jose. "First, you have to define who is going to use the portal, then you need to look at what you currently have in the way of IT infrastructure, and finally, you need to measure the payback-the before and after."
The Breakdown
But while companies may know what they want their portals to deliver and may even have a concrete assessment of their IT structure, they're still grappling with how to measure their returns. A study published by Cambridge, Mass.-based Forrester Research Inc. in August 2001 revealed that 41% of 49 portal managers from Global 3,500 firms using portals weren't measuring their benefits at all, and "20% don't know if they are," says Frank Gillett, a Forrester analyst.
Keeping measurement in mind, portals by definition need to identify specific user groups that will benefit from their content or available applications. Once a portal use is identified, there are four basic categories of portal products to consider.
Companies such as BEA Systems Inc., IBM, Sun Microsystems Inc.'s iPlanet division and Oracle Corp. all offer tools for building portals, because some users see the need to modify existing applications or need additional customization in order to meet the portal's requirements.
A second category includes traditional enterprise resource planning vendors, such as PeopleSoft, SAP AG and Siebel Systems Inc.
A third category is defined by knowledge and content management vendors, such as Redwood City, Calif.-based BroadVision Inc., Microsoft Corp.'s SharePoint Portal Server and Austin-based Vignette Corp.
Finally, there are pure portal companies, such as Plumtree and San Francisco-based Epicentric Inc.
Keys to Success
The technical challenge of assembling the power of many back-end applications and information at one location doesn't appear to be a major factor in the success of enterprise portals. Instead, the problem right now is a leap of faith.
"[For] large corporations [that] have started their portal efforts, it's a competitive advantage," says Nate L. Root, an analyst at Forrester. They have to "get very detailed about who goes to use it and why," he says.
Those issues are supported by a Web-based survey of Fortune 2,000 companies conducted in December and January by Redwood City, Calif.-based Enviz Inc. Of the 156 IT leaders who responded, 70% acknowledged that they couldn't measure where and why visitors leave a business process at a portal. And when asked how they measure the return on investment of their portals, the majority of respondents said they don't measure it.
The key, say analysts, isn't to focus on the technology but to evaluate current business practices to see what kinds of information are delivered and where a process can be made more efficient with self-service techniques. Without this approach, enterprise portals will end up as rudderless IT projects.
Portal Payback
How are you measuring the benefits of enterprise portals?*
- We aren’t - 41%
- Don’t know - 20%
- Cost analysis - 16%
- Web site/log files - 8%
- User surveys - 6%
- ROI analysis - 6%
- Measure latency of a task - 4%
- Number of IT requests- 4%
What is the total cost-products, staff, consultants-of your initial portal effort?*
COMPLETED PORTALS
- Maximum spent - $2.5M
- Mean spent - $657,368
- Median spent - $300,000
- Minimum spent - $20,000
PLANNED PORTALS
- Maximum budget - $5M
- Mean budget - $2.03M
- Median budget - $1M
- Minimum budget - $25,000
What information, news, data and activities are in the portal?*
- Benefits information - 82%
- Company news - 78%
- Employee directory - 53%
- Education and training - 49%
- Departmental information - 37%
- Personnel info updates - 35%
- Company forms - 33%
- Financial news - 27%
- Sales information - 24%
- Payroll adjustments - 24%
- Industry news - 20%
- Collaborative tools - 16%
- Online IT help desk - 16%
- Travel booking - 14%
- E-mail - 12%
*Multiple responses allowed
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