INTRANET/EXTRANET

The first global electronic network was the Internet,
which is actually not one network, but a collection of
smaller networks. This collection of networks is available
to everyone who is connected to the Internet. The term
intranet, however, refers to the type of private connections
that are authorized only to persons who work within a
particular organization. An extranet refers to connections
that combine an organization’s private network with partners,
suppliers, or other outside agencies. What the
intranet and extranet have in common with the Internet
is that they all use Internet protocols. This means that
user-friendly browser software—such as Internet
Explorer—is the front end which links to all of the
resources and requires little specialized training to use.
Intranet and extranet are classifications of networks and
few end users would know these terms. The distinctions,
however, may be important to organizations.
While the typical computer user at home would have
access only to the Internet, at work that same person
could be using all three types of networks. The structure
is invisible to users who know just that they are connected
to the Internet and go about doing their daily tasks on the
computer. At a workplace, access to the different channels
or systems is granted by a background script when users
log on and supply a password.
DEFINITIONS AND RELATIONSHIPS
To aid in understanding the different network classifications,
here is an example: Maria, who is an administrative
assistant in a local Ford automobile dealership, uses the
Internet to access expedia.com to make travel arrangements
for the dealership’s owner to attend an upcoming
sales meeting in Detroit. On the computer screen, Maria
can also see the dealer’s vehicle inventory and number of
tires on hand. This would be classified as using the
intranet. When Maria checks with a Firestone tire distributor
for availability and pricing, however, a source clearly
outside of the dealership, she would be using an extranet
type of connection. Thus, Maria makes daily and seamless
use of all three electronic networks without necessarily
being conscious of the structural differences. It should be
noted that many connections are not both ways. That is,
the Firestone distributor cannot see how many cars are on
hand at the Ford dealership, and the dealer cannot see the
distributor’s price on tires. Further, within an organization,
not everybody would have access to the same information.
Typically, access is granted on an as-needed basis,
with appropriate authorization.
Internet. Although the Internet was initiated in the
1960s, its use in business has increased enormously since
the 1990s. The CMP Media TechEncyclopedia defined
Internet as:
(1) (Lower case “i”nternet) A large network made up
of a number of smaller networks.
(2) (Upper case “I”nternet) The largest network in
the world. It is made up of more than 100 million
computers in more than 100 countries covering
commercial, academic and government
endeavors. Originally developed for the U.S. military,
the Internet became widely used for academic
and commercial research. Users had access
to unpublished data and journals on a variety of
subjects. Today, the Internet (also known as the
Net) has become commercialized into a worldwide
information highway, providing data and
commentary on every subject and product on
earth.
Intranet. The same work defines intranet as “An inhouse
Web site that serves the employees of the enterprise.
Although intranet pages may link to the Internet, an
intranet is not a site accessed by the general public.” The

434 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION
Intranet/Extranet
encyclopedia adds additional clarification as “The term as
originally coined in the preceding definition has become
so popular that it is often used to refer to any inhouse
LAN [local area network] and client/server system rather
than an HTTP-based Web server infrastructure.”
Note the important difference: The intranet contains
information that is available only to those who are
“inhouse” (but not necessarily physically “in-house,” the
organization could have offices on multiple continents)
or some type of corporate partner. Some additional typical
uses of an intranet include access to production schedules,
inventory, meetings, and training. The earlier
example of Maria working at a Ford dealership is meant
to be typical of a smaller organization. An establishment
with global locations, however, could have a very complex
intranet.
INTRANET USES
An organization’s intranet may be used in many different
ways. Besides data, ordering, and other uses that may well
have been used prior to using Internet standards, today’s
intranet is frequently used for training and videoconferencing.
Employee Training. The American Society for Training
and Development noted that classroom training was rapidly
changing to electronic learning (e-learning) as corporations
strove to meet widely scattered training needs
(“Online and Corporate Universities,” 2003). E-learning
spans the range from training to operate call centers all the
way up to learning corporate leadership skills; intranets
are often used for this purpose.
Videoconferencing. An article in PC Magazine in January
2004 reported that while business travel had decreased,
videoconferencing (also called Web conferencing or Webcasts)
was increasing by leaps and bounds. The author of
the article, L. Erlanger, went on to state:
Yet we live in a global economy, and people in farflung
locations still need to meet. Increasingly,
they are doing so via Web conferencing services,
which lets both small and large groups of people
share presentations and documents in real time
over the Web. The services also deliver handy
tools for collaboration, including chat rooms,
whiteboards, document annotation, application
sharing, Web polls, and Web tours.
This type of use would not be practical or cost effective
without using the commonly available Internet standards
on a firm’s intranet.
EXTRANET
The CMP Media TechEncyclopedia defined extranet as:
A Web site for customers rather than the general
public. It can provide access to research, current
inventories and internal databases, virtually any
information that is private and not published for
everyone. An extranet uses the public Internet as
its transmission system, but requires passwords to
gain entrance. Access to the site may be free or
require payment for some or all of the services
offered.
While companies may allow public access via the
Internet to their Web site, this does not include links to
sensitive information, but an intranet connection may
allow access to much, but not all private data. According
to Sanna Kallioranta and Richard Vlosky (2004), “An
extranet serves as a bridge between the public Internet and
the private intranet.”
As an example, Company A manufactures computer
monitors using liquid crystal displays (LCDs) made by
Company B. Company A no doubt keeps an exact inventory
of how many it has in stock; and it is possible that
Company B is asked to monitor these numbers so that it
can automatically ship LCDs to Company A when
needed. As noted previously, Company B would not be
granted access to other online data belonging to Company
A. In another industry, construction, it is common for
large construction projects to share information between
contractors, architects, and engineers on schedules,
progress, and drawings over is be classified as an extranet.
Kallioranta and Vlosky also pointed out that using Internet
protocols with an extranet is considerably less expensive
than any other method.
ACCESS
Individual employees access to the Internet, intranets, and
extranets varies with their need and is commonly assigned
when they log on to the network. A top-level supervisor
may have access to all levels of all systems. A network specialist
is the person who assigns the correct codes to each
employee. Since virtually all of a company’s information is
available via computer, who has access to what is an
important issue in any organization. Further, every computer
system on a network is a possible target of either
hackers or spies from competing corporations. A hacker
could destroy sensitive data, and a rival company could
steal corporate secrets. Thus, every intranet and extranet
has multiple layers of firewalls to ensure that access is
obtained only by authorized people. Nevertheless, security
is an ongoing concern.

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 435
Inventory Control
DIGITAL ECONOMY
The Net has become an indispensable tool for businesses
small and large. In 2004 Professor D. T. Quah from the
University of London noted that “digital goods” take on
increased meaning in the global marketplaces. Companies
must embrace the Net and take every advantage to grow
their businesses and remain viable in the twenty-first century.
“Embracing the Net” includes using all aspects:
Internet, intranet, and extranet.
IMPLICATIONS AND IMPACT
Net access to information has already drastically altered
the way organizations communicate and conduct business.
An employee does not need to know if the connection
is via the open Internet, the private intranet, or the
shared extranet. Access by unauthorized individuals is,
however, a continuing issue. Nevertheless, Robert Moon,
chief information officer of Micros Systems, said, “In less
than three years, we’ve gone from the Web being a novelty
to a critical application. It’s now our main focus” (Booker,
1999, p. 32). Indeed, the worldwide Net concept will
continue to alter the way organizations function both
internally and externally in the twenty-first century, and in ways that could not be imagined in the twentieth century