Inside Job

Want to find one area where Internet technology is delivering more than expected? Look within. Intranets are boosting efficiency and creativity, and changing work patterns. Here are seven steps to the ultimate intranet.

Diane Watkins has a lot to teach about her specialty selling car and homeowners' insurance. As a senior marketing specialist for State Farm Insurance in suburban Philadelphia, Watkins helps agents make the most of their sales territories. Last spring, she put her 10 best tips in writing — and posted them to a discussion board on State Farm's nationwide intranet.

What happened next was every sales manager's dream come true: Within a few days, a dozen agents had added tips of their own to the in-house Web site. A State Farm rep in Flushing, New York, for example, explained how to get referrals in the Asian community. Other agents discussed ways to get auto-only customers to consider buying other types of State Farm insurance. By early June, more than 40 agents from across the United States had joined the discussion, and hundreds more had read the postings. Strikingly, State Farm used no gimmicks and offered no rewards to get its agents chatting. It simply created the heading "Best Practices," posted Watkins's initial remarks — and then let its agents take over.

"Everyone wants to help out on something like this," says Owen Townsend, a technology specialist at State Farm's headquarters in Bloomington, Illinois. "People like seeing their names in print. When you contribute to something like this, you elevate yourself to the status of an expert."

Such online brainstorming may be the digital economy's most important success story this year. If there is one area where Internet technology is actually delivering more than people expected — rather than falling short of lavish boasts — it is in improving communications and collaboration within an enterprise. Take a peek at the intranets of the most progressive companies, and you will see a remarkable number of ways that they are using that technology to become smarter, faster, and more efficient.

In May, for example, IBM convened 52,600 of its employees online for what it called WorldJam. Using the company's intranet, IBMers everywhere swapped ideas on everything from how to retain employees to how to work faster without undermining quality.

It's not just IBM-like giants that are taking advantage of this technology; smaller enterprises are doing so as well. At organizations of almost every size, well-run intranets are transforming clerical chores and making it possible to accomplish routine tasks faster, better, and cheaper. Internal Web sites are also making it easier than ever to transmit up-to-the-minute company and industry news to employees. And they are opening up new ways for business associates in far-flung locations to brainstorm together.

So how do you build a great intranet? Fast Company spoke with smart corporate users and fast-growing builders of intranets. Here are seven crucial items that they identified.

Sweep Away Paperwork

Of all the ways to invest in technology, few beat the rapid paybacks from putting employee record-keeping online. Need to file an expense report? Turn in a performance appraisal? Add a new baby to your health plan? If you're using paper forms to do any of that, then you're getting things done in a cumbersome way that has barely evolved since the 1920s. Go online, and you'll find that all sorts of paper-processing drudgery will go away.

Holding down incidental costs in this fashion isn't going to land anyone on the cover of Time magazine. But it is a crucial first step toward integrating a robust intranet into a company's basic way of doing things. Before a company can reap the benefits of intranet-based collaboration technology, it needs to make sure that most of its employees are committed to working online — and that its budget chiefs are willing to bankroll intranet initiatives at a time when most technology spending is being squeezed. Otherwise, bigger dreams may never happen.

In a widely cited 1997 study, American Express found that at a typical company where paper still predominated, the average cost of handling a single expense account was $36 or more. According to the same study, switching to a fully automated approach could reduce that cost to as little as $8 per account.

The payoff for employees, in terms of time saved, can be just as striking. Online systems can harvest charge-card billing data and fill out much of the expense form automatically, so that your browser already "knows" that you were in Chicago on the 14th and that you stayed at the Drake Hotel. You needn't type that in yourself. By American Express's tally, employees can fill out highly automated forms in 15 minutes apiece — compared with the 55 minutes that it takes to complete each old-style form.

A case in point is J.P. Morgan Chase & Co., which is rolling out an intranet-based expense-account system for its U.S. employees. The financial-services firm already had achieved some efficiencies by switching from paper to a computerized system based on client-server architecture a few years ago. But Tom Nolan, project manager for fixed assets and expense services, says that the firm can trim costs by an additional 20% to 30%. Managers will be able to approve expense reports electronically — instead of needing to sign them the old-fashioned way. Auditing can be done electronically as well, saving time and money.

What's more, the new system should be much easier for the firm's 103,000 employees to use.

"It was a struggle to get two-thirds of our employees onto the client-server system," says Nolan. "With the intranet, there's no reason not to be at 90% usage or higher." Software compatibility stops being a problem, he notes.

Create a Forum for Best Practices

Step back a moment and ask yourself: What made the public Internet take off? The answer: Users benefited from being connected to so many people, businesses, and ideas at once. People love to share what they know, what they care about, what they're proud of. A large intranet can capture some of that magic as well.

Sevin Rosen Funds, a leading VC firm based in Dallas and Palo Alto, recently created an intranet whose purpose is to share best practices and contact lists with 70 young companies in a wide range of high-tech industries. Take something as crucial as how to run a board meeting. A year ago, Sevin Rosen partners noticed that they were spending too much time discussing and ratifying stock-option plans at their startups. As partner Steve Domenik observes, the faster a board can deal with option-plan formalities, the more time it has to talk about how to build the business. Thanks to Sevin Rosen's intranet, even the newest CEOs at the VC firm's portfolio companies now arrive at board meetings fully versed in the firm's thinking on this subject. "At last," says Domenik, "we're getting rid of this long learning curve where it was taking up to 10 board meetings before we were really working together efficiently."

Another part of the Sevin Rosen site caters to startups that want to get their executives out on the speaking circuit, so they can raise their companies' profiles and perhaps find new customers. Conferences are plentiful, but there's an art to finding the right one at the right time — that is, in time to lobby for a speaking slot. Sevin Rosen subscribes to a conference-listing service and puts detailed information from that service on its intranet. That's been a happy turn of events for ComSpace Corp., a wireless-systems startup in Coppell, Texas and a Sevin Rosen portfolio company.

Annette Gieseman, head of marketing at ComSpace, says that the Sevin Rosen intranet pointed her to a communications conference in Monterrey, Mexico that is scheduled to take place in October. Mexico is a large potential market for ComSpace, so once she heard about the conference, she immediately began to lobby organizers to include a speaking slot either for her company's CEO or for a key ComSpace customer. Without the intranet, she says, she never would have known about that opportunity.

Share the Limelight

One purpose of an intranet is to tell employees what's going on at your enterprise. But who should do the telling? It's easy — and tempting — to give your CEO a never-ending showcase on your home page. The CEO generates a ready supply of intranet-adaptable content: monthly memos, speeches to investor groups, and so on. And on big strategic issues, employees naturally look to the CEO for the decisive word.

But there's an argument for spreading such visibility around. If a new brand launch is a big hit, let the product manager in charge of it explain what the team did right. If three geographic regions are teaming up on a project, let people from each region discuss how turf battles were set aside. Such reports may not be of interest to every employee — but they can be vital for, say, 10% or 20% of your workforce. Reports from the front lines also "make it a lot easier for young managers to feel that the site is relevant to what they do," says Kevin Salwen, president of dash30, an Atlanta-based intranet-development company.

All the News That Fits

To be sure, most of the content on your intranet will focus on intracompany news. But in an ever-more-interconnected world, employees also need help with navigating the daily torrent of news about the business scene at large. You can outsource that function to vendors such as Dow Jones, Moreover.com, NewsEdge, and Thomson Financial. They will cull through headlines from newspapers, magazines, and wire services, and sort them by industry, geographic region, or keyword. Sign up, and your intranet can display stories that are relevant to your business — while weeding out the chaff.

In its simplest form, automated news sorting comes on a one-version-for-everyone basis. But vendors will usually customize your news feed, so that your research department might get a feed that's full of articles on technical subjects, while your sales force might get a diet that's rich in updates about competitors.

News filtering isn't perfect, at least not yet. Nick Denton, the founder and CEO of Moreover.com, estimates that when employees want information about a new topic, they rely on their intranet in only about 30% of cases, while using an all-purpose Internet search engine in the remaining 70% of cases. An especially thorny problem involves the tendency of employees' interests to change over time, as new business opportunities arise and old ones peter out. The winning strategy at some big companies: Use automatic news filters, but call on the services of a human editor as well. That way, news digests on your intranet will reflect an insider's informed judgment about what matters to your company right now.

Don't Settle for Just One Intranet

At many companies, there's an almost unstoppable desire to centralize anything that is working well, including internal Web sites. Overcoming that urge may be the hardest part of building a thriving intranet. But different functional or regional divisions of an enterprise often have needs that are best served by separate, quasi-independent sites.

State Farm, for example, has set up region-specific sections of its intranet and has made them available to its agents nationwide. Now agents in Florida can follow insurance-law developments in their state's legislature, and agents in California can plan a spring meeting in their state — in each case, without distracting their counterparts elsewhere in the United States.

Of course, State Farm officials do screen content to make sure that nothing embarrassing or disruptive finds its way onto a site. And they have standardized a few basic navigation elements to help users stay oriented as they hop from one State Farm site to another. But site managers tolerate a wide range of typefaces, presentation styles, and even site missions. (Kelly Thul, intranet manager at State Farm, says that he has imposed just one unbreakable rule about Web-site gimmickry: "If you use animation on a site, it has to stop at some point. People just can't concentrate if something keeps blinking at them.")

Keep on Searchin'

What good is filling an intranet with a wealth of information if people can't find any of it? Like the public Internet, a well-run internal Web site depends on the effective use of search technology. But according to Robert Geib, a business-development specialist at PeopleSoft, companies should focus both on improving technology and on changing people's habits. Document creators, he says, need to understand how important it is to tag their work properly — that is, to include invisible "metatags" that identify the major themes in a document.

Geib and others at PeopleSoft, an enterprise-software company based in Pleasanton, California, have given this matter a lot of thought. The company not only develops intranet technology — it also relies on such technology in its own operations. Geib points to a recent white paper titled "Selling to the Government Market," which PeopleSoft posted to the company intranet. The document carries metatags that incorporate the keywords "federal," "education," and "public sector" — words that correspond to the way that PeopleSoft organizes its sales force. Thus, if people in the federal-accounts group type the word "federal" into a search window, they will find that white paper easily, and they won't need to press on with related-word queries.

PeopleSoft is also attempting to address a shortcoming of current intranet technology: In most cases, a document that's posted to an intranet is available to anyone who turns it up in a search. Next-generation intranet technology will have the ability to shelter documents so that only an intended group of people can access them. That way, for example, managers who type "hiring guidelines" or "2002 budget planning" into a search engine will be able to see documents that are off-limits to rank-and-file employees. By reducing security risks, this layered approach will enable companies to use their intranet as a tool in high-powered decision making.

Make Your Intranet Irresistible

Talk to intranet champions at big enterprises, and you'll soon hear a familiar, poignant lament. "If only our employees would spend some time getting to know our site," they complain. "Our intranet is packed with useful material. But people just skim the home page, and they don't even bother to explore what else we've got."

The solution to that problem, of course, is to make your intranet an undeniably essential part of every employee's workday. And there's no better place to start than the site's home page. When people log on to the site, they should see more than just a company logo and a message from your CEO. Give them news they can use right away, such as links to information on medical deductibles or vacation pay. For a factory site, something as simple as a cafeteria menu or an update on parking spaces might be the hook that snags employees. For a research-center site, up-to-the-minute competitive intelligence about major rivals will often keep users coming back for more. In any case, whatever the audience, your home page should offer something of immediate value.

At PeopleSoft, executives have gone a step further by putting pay stubs on the company's intranet — and only on the intranet. Getting rid of old-fashioned paper statements can save the company thousands of dollars in printing and mailing costs each pay period. But just as important, that simple decision has been a fiercely effective tool for driving intranet usage. "People care about their paychecks," notes Robert Geib. "And if they want to see what they're getting paid, they need to come to our intranet."

George Anders (ganders@fastcompany.com) is a Fast Company senior editor.

Sidebar: One-step Intranet

Your intranet is for internal use, but that doesn't mean it has to be an inside job. For small and midsize companies, outsourcing may be the way to go. Enter Intranets.com, a company in suburban Boston that offers a stripped-down but serviceable version of a corporate intranet. Intranets.com does not try to match the way big multinationals use intranet technology. But it does provide a few killer apps from the Intranet world: basic calendaring, company bulletin boards, tools for managers to update employees online instead of firing a nonstop volley of email blasts. For companies like Premier Print Holdings, a Huntsville, Alabama outfit that employs 1,100, that's an appealing package — and affordable to boot.

Affordable, but not free. In June, Intranets.com phased out a free service that had attracted a lot of attention — and as many as 750,000 active users — in favor of a pay version that costs roughly $5.95 per user per month. Like most free online services, the company's hope of bringing in meaningful revenue from advertising and commerce was mostly a mirage. "If something is free, people don't take it seriously," says CEO Steve Crummey.

Crummey expected about 90% of customers to walk away when the service was no longer free. So far, around 100,000 users have decided to remain as paying customers, Crummey says. As a result, Intranets.com has become a much better business. "I want to put my energy into reaching business customers that are prepared to pay for services," he says. "Getting out of the 'free' business model is the best thing that we've done. I only wish we had done it sooner."

Visit Intranets.com (www.intranets.com) on the Web.

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