The need for portals

The current interest in portals is a direct reflection of the frustration caused by a discontinuous, disorganized desktop. The Microsoft Windows paradigm, which dominates the corporate desktop, separates applications and functions that are intuitively part of the same business process. Its single-tasking application architecture isolates application processing and makes inter-application information difficult to assemble into meaningful working views, resulting in decentralized and difficult-to-manage information sources. User expectations from their IT systems are changing dramatically from acquiescence in a task-isolated Windows environment to enthusiasm for an integrated environment that provides information access, delivery and work support across multiple dimensions of the enterprise.

The need for integration In fact the portal is just one response to several integration problems that exist in corporate IT. Today’s IT systems are complex, consisting of many different elements, and are increasingly overwhelming users in the range of applications and information that they support. In short, they do not make sense to the users they are intended to support.

The need for enterprises to integrate disparate application systems, knowledge and information sources is acute and growing for a variety of reasons--some of them not IT-focused. In certain cases, enterprises are re-engineering their business processes to accommodate customer-focused views that require close co-operation between previously stove-piped applications. In other cases, the motivation is a corporate merger, acquisition, divestiture or other change in ownership structure.

Several new IT trends point to an overwhelming need for the integration of applications and information at different levels. For example:

• Internet-based business models are highly dependent on their ability to provide tight integration between applications and information sources.;

• E-business demands speed of response--it does not allow any time for manual integration.;

• A knowledge management system requires integration of not only databases and applications, but also people--that is, relationship integration.;

The need for application integration is a major problem for corporate IT. Having invested millions in enterprise systems such as ERP applications, intranets and data warehouses, organizations now realize that a wealth of vital business information still lies untapped--but face the problem of integrating those systems.

The rise of enterprise application integration (EAI) software is a direct response to the fact that modern companies have gathered a multitude of unintegrated enterprise applications and systems. Integrating applications behind the portal--whether manually or using EAI software--is an ideal solution, but is complex and expensive. Portals, however, offer the possibility of cheaper and easier integration scenarios, which in many cases may offer the best trade-off between cost and value.

The portal market itself is evidence that business applications are not going to become homogenized in the foreseeable future. Most organizations will continue to rely on a mixture of packaged and custom-built applications and systems, and many of the organizations that buy packaged applications will end up with packages from multiple suppliers.

Portals can make a difference

A new generation of enterprise portal development tools, appearing now on the market, address the complexities of providing portal support for a range of organizational goals. Those goals include:

• the communication of corporate objectives and promotion of common understandings;;

• the development of professional and business unit best practices;;

• the establishment of effective collaborative working environments (both inside and outside the organization); and;

• the ability to extend enterprise security, application information and business intelligence into new knowledge management and e-business practices. The specific areas where an enterprise portal can make a difference will depend largely on the portal strategy. Enterprise portals can be implemented as:;

• part of a knowledge management initiative--where support of group working and collaborative environments is the main objective;;

• a corporate intranet--targeting corporate information such as customer or financial data for decision-making environments; or;

• part of an e-business strategy--focused externally on customers, partners and suppliers.;

The problems of calculating ROI

Despite all the promises of business benefit, calculating a return on investment (ROI) for knowledge-related technologies such as enterprise portals is notoriously difficult. The costs for implementing a large-scale enterprise portal deployment are high and can easily escalate. But the benefits can be great if done correctly. Corporate portal start-up costs (including the software to build customized interfaces and aggregate enough data to make portal projects worthwhile) usually range from $150,000 to $300,000. But to build a project to full scope over two years, companies should be prepared to spend more than $1 million--primarily on aggregating data from multiple sources.

The costs are almost the same, whether a company builds the portals for 50 or 5,000 people, so the per-employee cost drops sharply with the number of users. Building a portal for fewer than 500 users is useful but not economically advantageous; with 700 or more people to reach, the portal becomes economically desirable, but when 2,000 or more people use the portal, the costs become less than other ways of reaching people.

Customers also need to consider long-term and ongoing maintenance as a standard cost of deployment. If the enterprise portal is to be a reflection of changes within the business, it seems inevitable that a management infrastructure must be put in place to gauge and make sure the portal adapts to constantly changing business needs.

Portal payback—where is the value?

Despite the costs, early adopters give credence to the claim that corporate portals are useful for helping exploit and exchange valuable knowledge that exists in multiple forms and in multiple locations. The ROI for an enterprise portal relates directly to the size of the data reservoir and the value of the data it contains. The ROI for a portal will therefore come from increased productivity, and perhaps reduced personnel costs. Enterprise portals offer efficient communications. The most visible benefit is to cut down, or even eliminate, the need for employees to waste time searching through internal repositories or the Web for the information they need. Portals can aggregate information relevant to employees’ individual roles, making them more productive, and at significantly less expense than other information-sharing methods such as paper documents, meetings and training sessions.

Other savings can accrue from a portal by providing a self-service environment--especially in an e-business environment where the portal is extended to the extranet for partners, suppliers, customers and/or distributors. That “externalization” phase often follows internal portal projects. Many users try an internal intranet-based portal project to test its value and become comfortable with its security mechanisms, before either extending it or creating a second portal outside the firewall.

After portals start interfacing outside the enterprise (exchanging data outside the corporate firewall), the potential applications and benefits will increase significantly. Outsiders can view corporate information, and organizations can open themselves to more feedback on improving goods and services. Although extending portals to external partners should lead to higher returns, the value of a portal can also be enhanced by tapping into more IT resources over time.

The role of portals in knowledge management

One area in which enterprise portals can provide considerable value is knowledge management. Portal applications are bringing an entirely new toolset to highly unstructured problems of knowledge work. The challenge of knowledge work is not so much dealing with the pace of the work, but more importantly, dealing with the pace of knowledge workers.

From a knowledge management perspective, the main function of IT is to create a connected environment for knowledge exchange. That connected environment is the technical embodiment of the “corporate memory”--a complex web of knowledge that includes the skills and experience of people, intellectual capital assets and information resources in an organization. The corporate memory acts as a vast potential resource that users can draw on for decision making and problem solving. The enterprise (or knowledge) portal is a key element of an integrated knowledge management architecture. As knowledge management software brings together the resources of the corporate memory, the portal’s main role is to provide a common view on the corporate memory for knowledge workers, for easy access to the shared services and knowledge resources—it is where they are at “home” in the network. It achieves that by making available many of the functions and facilities provided by other technology layers of the architecture--collaboration services, discovery services, knowledge repository and knowledge map.

The role of the knowledge portal

In summary, most forms of knowledge work require collaboration between workers—a prerequisite to successful knowledge management. Enterprise portals can effectively support collaboration through shared workspaces, which provide a platform to support communication, information sharing and knowledge exchange with co-workers. In its ideal form, the enterprise portal can act as a common interface to help knowledge workers cope with the wide range of resources and services offered via the corporate network. For those users, it becomes the way to “see and live” in the corporate network.

Alan Pelz-Sharpe and Chris Harris-Jones are senior consultants at Ovum, e-mail aps@ovum.com or chj@ovum.com. Angela Ashenden is a consultant in Ovum’s knowledge management group, e-mail aca@ovum.com.