Inside Job

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.