YOUR PRIVATE WEB.

• Author: BORT, JULIE

INTRANETS AND EXTRANETS CUT COSTS WHILE CREATING NEW PRODUCTS AND SERVICES. HERE'S HOW.

Every economic pundit, from the president of the United States to your favorite financial columnist, credits the Internet as a factor in our current economic boom. While the details might differ, their bottom line is the same: Using the Internet allows companies to lower costs while increasing sales opportunities.

You may think your business is in on the action if you have a web page and email access, but you may well be wrong. Even if you're engaged in e-commerce -- selling wares or services to consumers or other businesses via your website -- you still could be missing the boat. The most dramatic cost-cutting benefits of the Internet are in what the technical folks have dubbed the "intranet" and the "extranet."

The Internet is a public data network, available to anyone who pays to access it. Intranets and extranets, on the other hand, are private. An intranet is a company's own mini-World Wide Web. Content is viewed via a standard web browser, but it is available only to a company's employees, not the general public.

An extranet is essentially an expanded intranet that can be used by a company's business partners. Extranets employ various computer security methods to drill private tunnels through the public Internet. Because they employ the shared wires and computers that make up the Internet, extranets are far less costly to build than a truly private worldwide data network -- an option only affordable to the largest corporations. Once a company can network with its partners, it can build complex e-commerce, customer support, supplier management tools and more.

Extranets for the first time enable mid-sized and small companies to offer networked services to business partners that giant companies have offered for years. The cost benefits are so great that many giant corporations are abandoning their private data networks in favor of intranets and extranets.

Intranets and extranets are used to communicate instantaneously with a wide variety of people in a broad range of tasks, regardless of where in the world those people are located or what kind of computer they use. Boatloads of information can be published and personalized to a target audience, such as human resources information for internal employees and online product catalogs for customers.

Extranets, especially, can improve customer service by providing access to corporate resources seven days a week, 24 hours a day. This in turn eliminates -- or dramatically reduces -- the need for 800-number support.

So finds Factual Data Corp., a provider of credit, criminal and other background information to lenders, employers and property managers. In January, Factual Data turned its website into an extranet for more than 25,000 clients. These clients can now log on to order reports and receive them in minutes, rather than days.

"Prior to our extranet site, phone costs were our third highest expense. We don't even have all of our clients converted to it yet, and we're already seeing savings," said Rob Copp, a spokesman for the Loveland-based company.

But there are downsides. Security, while not exactly a stumbling block, is nevertheless a critical issue if you are to keep unauthorized users from getting at potentially sensitive corporate data. The initial cost to build an extranet also may be high (see sidebar) and, because the system will require ongoing updates and maintenance, there will be recurring re-investment. (See sidebar: "What will an intranet cost you?")

Still, no business can afford to ignore intranets and extranets any longer. Your competitors may already be implementing theirs, according to a new study by Infonetics Research (www.infonetics.com), a market research firm in San Jose, Calif. Roughly half of the large and mid-sized companies in the United States are deploying the enabling technology for intranets and extranets, both known as virtual private networks. Because extranets make e-business possible, the report also predicts that one third of small businesses will be using extranets by 2002, up from 16% in...