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New Growth

You could be forgiven if you read the popular press in assuming the whole Internet phenomenon is about electronic commerce. Daily there seem to be stories about how the Net has facilitated some new way of doing business. Yet IDC research shows that while e-commerce may be the glamour side of the Internet, the growth area is intranets. According to IDC Australia's annual "Forecast for Management" study, two years ago hardly any organisations had heard of an intranet. Today more than half (51 per cent) have built one and a further 37 per cent expect to do so by the end of 1999. Furthermore, when the survey looked at where the intranet was used, it found in all business areas at least a 40 per cent growth in intranet use over the last 12 months. Even in this short period of time there was evolution inside the intranet revolution.

Initially organisations used intranet for internal publishing of newsletters or manuals. Then the intranet's workflow potential was recognised; it could accelerate "necessary bureaucracy" such as purchase requests or leave applications. Today organisations are looking to intranets as an avenue to integrate remote or travelling users, as well as long-established trading partners.

IDC's Australian Intranet Market report asked respondents whether they envisaged replacing key business applications with intranet-based systems. Over 50 per cent of respondents reported they did. In addition, just under 40 per cent of study replies believed that intranet applications were more cost-effective to develop than traditional applications. Surprisingly for an embryonic technology, the study showed that intranet systems were quite modest to implement. A third of those responding to the survey spent less than $20,000 establishing their intranet while another third, in primarily the top 1000 organisations, still only spent between $60,000 and $200,000. Of these amounts around 50 per cent was taken up by the server hardware and software and around a third was consumed by programming time. Another interesting revelation was the diverse skill sets that CIOs believed are needed to develop and maintain their intranets. On the one hand, there is the need for technical skills in areas like Java and HTML. On the other hand, there is a recognition that a successful intranet must be attractive to read. Survey replies stressed the importance of presentation skills such as page design and layout.

With intranet usage mushrooming, IS staff who can combine Web development and design skills will be much in demand. The goals CIOs had for their intranets centred largely around greater productivity of staff through increased information sharing. This perhaps reflects the thoughts of those who have been the earliest adopters of the technology. Only 8 per cent were looking to improve access to legacy applications and databases. However, the study also showed that only 3 per cent of CIOs reported their intranet had already achieved its intended outcomes. We might find the projected growth for intranets could well depend on how well current systems deliver against expectations over the next couple of years.

Peter Hind is the manager of User Programs, which includes InTEP, at IDC Australia

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