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The use of internet, extranet, and intranets in Business & Management

Word Count: 2500
22
nd
April, 2011

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Table of Content

1. Executive Summary 3
2. Introduction 4
3. Literature Review & Research findings 6
a. Definition, history and impacts of networking technologies 6
i. Internet 6
ii. Intranet 7
iii. Extranet 7
4. Conclusions and recommendations The future of networking 9
5. List of References 11
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Executive Summary
The use of internet, extranet and intranet combined has been witnessed at an increasing
rate over the past decade. Since technology has paved its way to modern businesses, many are
looking forward to adapt to the ever changing market conditions and utilize resources to get the
job done quickly without any possible communication barriers. Internet, extranet and Intranet are
defined as revolutionary methods of communication that have had significant impact upon
business & management. This report aims to cover various aspects of these three systems in
pages to come.


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Introduction
Due to the undoubtedly rising speed, flexibility, & efficiency at which businesses are
operating globally, the combined use of internet, intranet and extranet have led to the explosive
growth in online transactions between buyers and sellers. Now, these buyers could be customers
or business organizations that purchase their raw materials. Either way, the transactions are being
carried forward due to various benefits it has over the traditional methods of transmitting
information. Using this method, the internet has paved way for many emerging markets and
economies of the world to secure a good place in international market for various products and
services. Search Engine Optimization and content writing services have been increasingly getting
outsourced to Indians, Pakistanis, Bangladeshis, and Philippines, etc. All transactions are now
being carried forward online.
Gone were the days when businesses had to communicate using traditional methods of
communication like letters. The revolution of intranet an interconnected network of computers
within an organization or a private home network has revolutionized the way big
multinationals and companies are communicating with their employees and other stakeholders.
The use of intranet has big impact on managerial job performance amongst various
organizations. Companies are growing and expanding at the speed of light globally, due to which
they need to have a strong communication system in order to share sheer amounts of information
with their employees, clients, suppliers, & customers. Gone were the days when sharing
information had been a pain in the neck. Emails, intranet messengers, and cloud computing has
solved all of those problems by making easier than ever for businesses to transmit information
using highly sophisticated technology.
An extension of intranets, also known as extranets is a method of communication that is
used to control a network of systems without the use of internet, but only from external sources.
Extranets have been increasingly getting popular by military and various intelligence units to
access data centrally located that never gets public by connecting to the internet. This essay aims
to shed light on how the use of intranet, internet and extranet has had impact on business
performance and management at organizational and global level. Businesses now need to
actively get up to date with the latest market happenings and events as they unfold. Slow and
steady concept is not there to work for businesses anymore. The competition is so stiff that if any
business fails to adjust to ever changing dynamic market trends and consumer expectations, it
would eventually become a big failure.
The combined use of this technology has led wonders to take place in todays world,
however not without its costs. The increased usage of e-commerce, online transactions, extranets
and intranets has exposed systems and IT infrastructure at the highest possible level of cyber
crimes including identity thefts, credit card thefts, and hacking & cracking into the most secure
databases of business intelligence. This has led to amplified losses of companies by unauthorized
access to secret data of organizations and various public sector agencies including the CIA FBI
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and Pentagon. Although steps are taken to reduce the number of cyber attacks including
designated task force to catch these thieves, yet there is a long way to exchange information
securely & safely online. This paper aims to discover the benefits and costs of using high tech
communication technology to meet consumer expectations and its impact upon business
performance.

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Literature Review & Research findings
a. Definition, history & impacts of networking technologies
i. Internet
Internet can be defined as a system of interconnected networks across the world to rapidly
access information at all levels. The history of internet can be traced back to 1960s when ARPA
Net was developed by the US military in order to exchange classified information amongst a
system of interconnected computers at the facility. It worked quite well and since then a
revolution took place that is now known as the internet. Since 1969, internet started to get
developed with more and more computers being interconnected giving a wide range of access to
information. Emails, messengers and websites started to get developed where now people could
buy and sell various items online. This revolutionary concept was termed as e-commerce and it
all started back in 1994.
The advantages of using internet to conduct online operations outweigh any other methods.
This is because internet enables companies and businesses to save cost by directly engaging with
the customers and launching an e-commerce business online. This helps businesses to directly
sell their products & services online via safe method of performing transactions. Big businesses
have saved tremendous costs while shifting their technical support and customer service online
(Dieter, 2001). The best example can be quoted for Cisco systems, a multinational networking
equipment manufacturer that saved $125 million and increased productivity by as much as 200%
by practicing the method of online customer support. The decision-making process by managers
and seniors has been drastically shortened due to ample availability of data that can be
researched for any problem online. Managers therefore, nowadays spend more time in crafting
and implementing strategy; an inevitable aspect of business that requires consistent dose of effort
and time.
Internet has had great impact upon business relationships, form suppliers to customers (Jerry,
2001). The internet has made is easier than ever for businesses to engage directly with their
customers and suppliers and communicate quickly than ever before.
However this change is never without any costs. Although Asian countries have become no
less than IT hub, yet there are number of challenges businesses are facing with the deployment of
latest IT services. Enterprise Content Management and safety of e-commerce are the two biggest
challenges that can be mentioned here. The rapid development of sophisticated internet
technologies has forced many businesses to invest heavily on their IT infrastructure in order to
get in line with competitors, failing in which may result rising costs in the long run. Businesses
are finding it increasingly difficult to adjust to the ever changing market trends (Dieter, 2010).


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ii. Intranet
Intranet is defined as an internal networking system through internet technologies that is
only accessed by the company itself to transfer files and share information with its workforce
(Noor, Noorzaida, & Intan, 2010). Just like internet, intranet also makes use of Web browsers,
FTP clients, LAN messengers and email messaging system to share information throughout the
corporation (PennState, 2008).
Over the past few years, the use of intranet has seen explosive growth paralleled to internet
usage. This is because as businesses grow and expand their operations, they need a safe and
secure networking environment to share files & information limited to the reach of
organizational members, including all staff members. The intranet can become a big cost if
employees are not willing to adapt to ever changing market trends and get used to it at their
organization (Malhotra, Galletta, 1999). In the past it was very difficult for businesses to
distribute company information; however intranet had been solving that communication problem
to impact businesses with profitability and competitiveness (Martha & Marco, 2010).
All systems owned by the companies are connected either wireless using routers or network
hubs to connect many computers at a time. Due to the large physical size of an average
organization today, businesses have shift from using wired LAN cables to connect systems with
each other to using a wireless networking system. This has directly impacted upon the level of
communication in organizations. Intranets have now gone warless thereby enabling businesses to
overcome the physical barriers of size when it comes to sharing information (Sadaf, 2008).
Various methods exist to interconnect corporations numerous departments for efficient and
effective communication e.g. Virtual Private Networking (Blurtit, 2011). Virtual Private
Network is a system of interconnected computers of an organization that makes up its own
network to be accessed only by employees, staff members and authorized personnel. There are
numerous business impacts of corporate level intranet implementation (Margo, 200). It allows
cost efficient dissemination of information at lightning fast speed, improves efficiency of
manufacturing operation (Margo, 2000), archives sheer amount of data on several server
computers, and unifies the process of storing and sharing information (Margo, 2000).
iii. Extranet
There has been quite a good level of discussion upon internet, and intranet but the importance
of extranet should never be underestimated. An extranet can be defined as a collaborative use of
internet and intranet to access data of an organization form outside the physical access of a
system. The word extranet is coined by the Ethernet developer Bob Metcalf (Richard, Renee, &
Lydia, 1998). The most common definition of extranet according to Bob is a network that links
business partners to one another over the internet. Extranet is an extended version of intranet.
The main difference between intranet and extranet is that the former is confined to the physical
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access of the organization, whereas the latter goes well beyond the geographical reach accessing
data safely & securely.
Extranet had not been witnessed until the 1990s and 2000s saw many companies using this
term to connect business departments with each other across the globe. Although extranet runs
using internet, in order to prevent unauthorized access to the secure data, the systems are
password-protected and can only be accessed by authorized personnel including staff workers,
key executive members and employees. Many companies use extranet in order to stay abreast of
the ever changing market dynamics. An extranet provides a secure and safe method of
transmitting top classified data from one business department to the other (Richard, Renee, &
Lydia, 1998). Ford Motor Company gets benefitted from this system that gives access to
thousands of workers at various locations across the globe to access sheer amounts of data
quickly and efficiently regarding car market.
Extranet does not get implemented without costs. Since it is a much complex and bigger
system of interconnected networks, it takes much more time, effort and investment to deploy a
proper working extranet environment to share data. Firms specializing in deployment of extranet
need to be hired as it require technical staff that can understand the complex details of setting up
a secure data sharing environment.
Many authors and acclaimed critics have agreed to the fact that extranet implication is
synonymous to reduced costs and improved performance (Sanna, 2004). The importance of
extranet in supply chain management is clearly inevitable, according to Vlosky & Fontenot
(Sanna, 2004). Since extranet has the ability to reach beyond physical capacities of an
organization, multinational companies involved in large scale manufacturing process can reap
fruitful results from its implementation by communicating with vendors, customers, clients and
raw material suppliers; a practice that was witnessed way before extranet had been developed.
Many companies including P&G, Unilever and Johnson & Johnson had had extranet integrated
in their supply chain management to get benefits from this system in todays highly competitive
global business environment.
Security can always be a big concern for business units. Although recent advancements in the
field of IT has led to better security for transactions and online data sharing, yet it is very risky to
transfer valuable files over extranet as external threats like cyber-attacks from intruders and
hackers can always damage the system and corrupt data transferring process. Better measures are
currently being deployed for safety over data transfer using extranet, yet there is a long way to
go. Business partners are connected behind a secure firewall to get access to information and
data (Sanna, 2004).

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Conclusions & Recommendations The future of networking
With business development taking pace and companies in effort to gain their slice of the
cake are moving ahead with competitive strategies, it seems that the future of networking is very
promising in the long run. However, there are many challenges and questions that need to be
resolved and answered along with this progress of improved data transfer. Expectations are
always on the rise with more and more consumers, suppliers and businesses are hitting the online
world (Gigabit Ethernet Alliance, 2011). Use of fiber optics and satellite communication would
become more common but issues like security concerns need to be resolved before any progress
can be made. Security, despite taking all measures of well protected firewalls and complex
systems to ensure data protection, is still the biggest concern of IT policy makers in the future.
The next generation IPV6 internet TCP/IP protocol is a promising opportunity to make
data transmission faster and secure than ever before (Roger, 2004). Although IPV6 has now been
fully deployed and is use by many latest handheld and portable gadgets, yet its wide scale
implementation needs to be done in order to witness more efficient data transmission methods.
Cloud computing and virtual private networking is now emerging as popular means of storing
and sharing large amounts of data. Companies usually do not take the risk of setting up their own
cloud environment within the organizations. Instead, organizations outsource this process to
different companies that are specialized in providing safe & secure cloud computing service. In
exchange of reasonable fee depending upon the bandwidth and data storage options selected, big
organizations can easily access and share data by using this system.
While combining the use of internet, intranet and extranet for organizations would
definitely open doors to new opportunities in emerging economies, it should be noted that these
benefits would never take place overnight. Instead it takes a steady dose of time, effort and
investment to get adjusted to the market conditions (Dieter, 2001). Legal differences in
institutions and organizations at their levels of implementation of the latest data transferring
methodologies can place stress and constraints on the dissemination of knowledge globally. A
big hurdle in the development of latest communication methods is big chunks of investment and
technical expertise required to deploy and reap benefits, which in todays world shows the
inability of many firms to keep up to the ever changing market trends. Not all organizations are
ready to adapt themselves to the ever changing market trends and scenarios taking place at the
speed of light.
However the potential of IT as a method to sustain competitive edge in todays stiff
global business environment can never be underestimated. Although the implementation of latest
technology requires heavy investment, yet the benefits far exceed the costs in long term. There
are more costs associated with poor and improperly planned intranet, internet and extranet
implementation than a properly planned strategy. Businesses can always start from zero and
reach to the heights of success by slowly integrating each component of communication one at a
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time in their business units. This would not only save cost, but also time in the short run. A
proper model should be established for the implementation of proper networking solutions.

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References
1. Blurtit, 2011. 1. What Is Extranet? What Are Its Example? 2. What Is Intranet? And Also
Its Example? [online] Available at http://www.blurtit.com/q773534.html [Accessed 20
April, 2011]
2. PennState, 2008. Lesson 2: The impact of the internet on Business and Industry, 2008. E-
commerce times, [online] May 2008. Available at
http://www.personal.psu.edu/glh10/ist110/topic/topic09/topic09_03.html [Accessed 20
April, 2011].
3. Martha & Marco, 2011. The business impact of intranets. [online] 2011. Available at
http://www.sbaer.uca.edu/Research/mma/1999/23.pdf [Accessed 20 April, 2011].
4. Dieter, 2001. The Internets effect on business organization: Bane or Boon for
Developing Asia? [online] East-West Center. Available at
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2011].
5. Sanna, 2004. A model of extranet implementation success effects on business
performance [online] Available at
http://www.lfpdc.lsu.edu/publications/working_papers/wp66.pdf [Accessed 21 April,
2011].
6. Richard, Renee, & Lydia, 1998. Extranets: Impacts on business practices and
relationships [online] Available at http://isbm.smeal.psu.edu/library/working-paper-
articles/1998-working-papers/20-1998-extranets-impacts.pdf [Accessed 19 April, 2011].
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and Internal Relationship Building [online] Available at
http://www.impgroup.org/uploads/papers/41.pdf [Accessed 20 April, 2011].
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April, 2011].
9. Jerry, 2001. The Internets Impact on Business Relationships. InformationWeek. [online]
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10. Sadaf, 2008. The Total Economic Impact of Cisco Unified Wireless Network Migration
[online] Available at
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EI_of_cisco_unified_wireless_network.pdf [Accessed 19 April, 2011].