Examples of Excellent Extranet Designs

Experience tells us that when you centralize data, pool common resources, and make data easy to obtain, efficiency increases. And as business owners will tell you, efficiency and profit can too often be synonyms. Intranets and extranets have become just the efficiency-boosters the business world needed. But while there are plenty of great examples of intranets, where are the examples showing that extranets, too, can be just as profitable?

First we’ll take a look at big corporations that created extranets, and created them right. After all- when someone else does something extraordinary, we tend to take note. Lastly, we’ll wrap it up with exactly why these companies were successful in their implementations- and likewise learn from them.

Federal Express – The Leader of Innovative Extranet Design

We all remember that an extranet is a type of network that allows certain users access a company’s internal information. Federal Express, commonly referred to as FedEx, is one of the world’s largest parcel delivering services in existence. So how does a delivery service use an extranet, much less become the poster child of great extranet use?

As human invention still lags human curiosity and anxiety, there was a time when convenient package tracking services weren’t available. You might be able to call FedEx for a checkup, however - wasting both FedEx’s employee labor hours and money. But alas, the invention of innovation came in the form of an online tool, which allows internet users to track packages via accessing internal company data. This innovation was made possible by- you guessed it, the extranet.

Arcadia Group – The Fashionably Late UK Business That Could

Arcadia Group is one of the largest clothing retailers in the United Kingdom. This industry giant has been known to pass the $2.7 billion mark in annual sales. But what can a clothing retailer do with an extranet?

Apparently, a lot. Arcadia obtained an extranet design that sped up order process times, gave shipping and supply partners of Arcadia access to booking and shipping requests, and provided confirmation requests that could check inventories. These few upgrades eliminated faxes, phone calls, paper, and man-hours.

So what kind of return on investment can this provide? While the numbers weren’t released, it was stated that 100% of the investment was returned in profit in the following year. And since the technology empowering an able extranet isn’t cheap (many extranets totaling several hundred thousand), this is clearly quite a feat.

RadioShack: Can One Extranet Save Millions in Mail and Print Costs?

Much like the clothing retailer Arcadia, RadioShack was looking to centralize ordering and processing operations. The total cost of the RadioShack extranet: over $100,000. With the previous return on investments seeming quite large, could RadioShack pull of the same feat?

RadioShack claims that past the initial investment, they don’t keep track of cost savings. But from looking at mailing costs and savings alone, it is estimated a smooth $10 million is saved each year. And while mailing costs were indeed a big money saver, printing costs turned out to be just as beneficial. At one point RadioShack was printing a 20 page newsletter each week, sent to thousands of employees. Now? They get it online, doing their part in cutting over 70% of outbound mail.

Extranets – Where do the Savings come from?

Savings obtained via extranets revolve around several key factors:

• Labor costs – If customers can avoid calling customer support, businesses can save on unnecessary labor costs. The viable solution may be via online support ticket systems, FAQs, or even message boards.

• Printing Costs – Paper, ink, and printing hardware doesn’t come cheap. Take RadioShack’s example- they were sending massive newsletters to thousands of employees. If you can eliminate the need for tens of thousands of pieces of paper and ink, you can also save a ton of money in saved expenses.

• Mailing Costs – Mailing costs go hand-in-hand with printing costs. If a company can eliminate the need to send paper documents or related material, a lot of money can be saved from otherwise expensive mailing costs.

• Automation – Automation can be observed when suppliers and shippers automatically receive requests and orders. This cuts down on response time, making a business faster and more efficient.

• Telecommunication Costs – It costs money each and every second a customer busies a telecommunication line in customer service. While many times companies will offer free customer service, the money is coming out of their pockets to pay for it.

Closing Comments

If ever there was a need for an extranet, it was with big businesses and organizations. The level of savings is too appealing not to pursue upgrades in technology.

There comes a time when every organization must sit back and realize: when you have maximized your capability to sell a service or product, you must go back and maximize your efficiency to continue proper growth. This type of efficiency, as we have seen, can be had with extranets.