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The Missing Piece to a Company's Information Technology Puzzle

Essay by   •  February 2, 2011  •  Research Paper  •  1,678 Words (7 Pages)  •  1,423 Views

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An extranet is a private network that uses Internet technology and the public telecommunication system to securely share part of a business's information or daily operation procedures. More specifically, an extranet is an intranet that is partially exposed to customers under strict security. Extranets can be considered as password-protected areas on the Internet. Extranet applications are typically run on or accessed by an Internet Protocol (IP) network either using a Virtual Private Network (VPN) or the Internet. The distinct advantages of an extranet would include direct collaboration on projects, customer self-service call centers, encouragement of loyalty between businesses, streamlined business processes between suppliers and customers, and cost effective Extranet applications.


Abstract 2

Contents 3

Purpose of the Report 5

Background of Topic 5

Internet 5

Intranet 5

Extranet 7

Extranet Security 8

Discussion Area 8

Collaboration 9

Discussion of Current Issues 9

Exchange Information 9

Current Business Model 10

Company Security 10


Recommendations for Managers of IT 11

Information-Sharing 11

Information-sharing applications 12

Decision Making 12

Cost 13

Summary 13

Reference page 14

The Missing Piece to a Company's Information Technology Puzzle

Purpose of the Report

The purpose of this report is to provide the strategic implications of an Extranet on my company's business model over the next three years. It is understood that the present business model utilizes an Intranet system.

Background of the Topic

When discussing Web-based technologies, we need to consider three distinct variations: the Internet, the Intranet and the Extranet.


The Internet is a public, global network of networks which is based on Internet Protocol (IP) and related standards ( The Internet was designed to provide a standard means of interconnecting networks so that any system could communicate with any other system, regardless of physical location. It operates as a confederated network of networks (an "internet"), and offers universal accessibility (


An intranet is a private application of the same internetworking technology, software, and applications within a private network, for use within an enterprise. It may be entirely disconnected from the public Internet, but is usually linked to it and protected from unauthorized access by security firewall systems ( An intranet provides access to data across all functional areas of an organization. These functional areas including Sales and Marketing, Manufacturing and Production, Finance and Accounting, and Human Resources. Addtionally, Intranet applications have been developed for each of the aforementioned functional areas (see Figure 1 Above).


While an intranet is private and is protected from public visits by firewalls, an organization can create an Extranet to allow authorized suppliers/distributors and customers/shareholders to have limited access to its internal intranet. An Extranet, or extended Internet, is a private business network of several cooperating organizations located outside the corporate firewall. An Extranet service uses existing Internet interactive infrastructure, including standard servers, email clients and Web browsers. This makes the extranet far more economical than the creation and maintenance of a proprietary networks. It enables trading partners, suppliers and customers with common interests to form a tight business relationship and a strong communication bond (see Figure 2).

Extranet Security

A typical Extranet site is partitioned into open and secure segments. Access security is the corner stone of the Extranet concept. Secure connections using Virtual Private Networks (VPN) between computers create a virtual tunnel, using inexpensive and ubiquitous public lines (see Figure 3). (Management Information Systems, pg. 291) Tunnel technology can also be used to individualize the Extranet site, providing access only to the features that a particular user is entitled to.

Discussion Area

A typical Extranet site also offers a private Discussion Area (Industry Network) and member feedback means, which permits the members to exchange ideas and to share information. The Discussion Area facilitates collaboration in solving joint problems and in continuous service improvements. Members are also able to provide valuable feedback though email links, questionnaires, surveys and guestbooks, and use patterns.


Close collaboration among Extranet members typically results in a better definition of a product or service, higher degree of cooperation and improved efficiency. An extranet extends a company's network beyond its boundaries to predetermined business partners, customers, suppliers and others. Companies have the ability to leverage key information residing on their Extranet. In 2003 Aber determined that "Given the fact that the average small business deals with 35 to 45 vendors three to four times per month, efficiencies gained through online collaboration can cut costs and



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