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January 15, 2001

The Enterprise:
Portals Tie Problems To Solutions

The power of E-business is the ability to link employees, customers, partners, suppliers, investors, and even competitors

By Judith S. Hurwitz

Judith S. Hurwitz eople use the term portal relatively frequently in relationship to an intranet or the Internet, and listeners often nod knowingly. However, a portal is an abstraction used to describe a number of business, economic, and technological situations related to the Net. It appears that the meaning of the word is in the mind of the beholder.

A portal is a Web address destination to which people with some common set of characteristics, interests, or needs go to gather information, interact with data, experience entertainment, exchange thoughts, or conduct transactions. Portal is a term like database or network, all of which provide a sense of what kind of technology is involved, but none of which say anything about what the portal, database, or network is used for, who uses it, or why they use it.

Businesses initially used portals for a single function or constituency. It's not uncommon for large companies to have dozens of separate, unconnected portal applications. Now, corporatewide portals, also called enterprise information portals, are in development, composed of content and applications used by employees, or, more specifically, knowledge workers, to perform their jobs. Think of this type of portal as a "Webtop" for knowledge workers, analogous to the Windows desktop that provides personalized, role-based access to the knowledge workers' tools. Corporate portals offer broad functionality to a broader constituency.

Portal vendors tout phrases such as "improved efficiency," "improved productivity," and "leveraging the value of enterprise applications" for this type of portal. These value propositions may be compelling to large enterprises, where the portal provides the new desktop to accomplish E-business for thousands of employees around the world. However, do enterprise information portals solve a critical business problem?

The next generation of corporate portal implementations will leverage information, applications, and business processes outside the organization. Look at the rush to improve customer relationships. Customer-relationship management vendors talk about the integrated customer view, or allowing anyone in the company a complete view of all customer relationships. Portal software offers a way to provide this consistent view to sales, customer support, and all other customer-facing employees.

As companies focus on core competencies, virtual business will increase. Cisco Systems is the classic example of this trend. It focuses on engineering, marketing, and customer satisfaction, outsources 90% of its manufacturing, and 80% of its sales come through its reseller channel. Thus, Cisco's ability to exchange information and integrate business processes is increased dramatically, and portal software offers a way to achieve this goal.

The power of E-business is this ability to electronically link employees, customers, partners, suppliers, investors, and even competitors. And more important, this linking is under way. Hurwitz Group recently completed a primary research opportunity study of E-business by surveying 581 companies regarding their E-business initiatives. According to this study, in 2000 and 2001, a majority of E-business spending will focus on customer-facing initiatives: customer service, selling more efficiently, understanding customer requirements, or integrating suppliers and distributors. Portals can provide the mechanism to link the enterprise with its external stakeholders. These initiatives should have a dramatic effect on the purchasing and implementation of portal software by tying portal systems to these real business problems.

It's critical that companies provide these inward-and outward-facing portals. However, because a portal is designed to offer personalized and relevant information based on the role of the user, portals supplied for employees, customers, and partners will require different content. Much like a product manager deciding which features and functions to include in a product, portal managers will need to establish critical content. Following an 80/20 split will let the portal manager offer approximately 80% of content through access to 20% of the content sources. This will be a good start to ensure that the portal is used. Over time, additional content can be added as the portal grows with the E-business initiative.

Judith S. Hurwitz is president and CEO of Hurwitz Group, a research and consulting firm focusing on E-business applications and services. Reach her at jhurwitz@hurwitz.com. James C. Smith contributed to this column.

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