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Build a business case for smart portals

Portal technology, when combined with content management systems and an application server, is the wave of the future, says one researcher. Here's how to make a business case to justify the cost.


The next wave of intranets and extranets will have you building fully customized Web portals, à la Yahoo or Excite, that will give employees individualized information and applications based on their job and security clearance. Employees will be able to publish information to the company intranet or extranet themselves. And you’ll be able to archive all of this new information in existing databases and storage networks.

How? By combining portal technology, content management systems, and an application server, according to Andrew Warzecha, a vice president with the Massachusetts-based research firm META Group.

“We believe it’s not a question of if you will invest in this technology. It’s a question of when you will invest in this technology,” Warzecha said during a recent e-seminar cohosted by META, Corechange (a portal vendor), and Stellant, which produces content management software.

But the technology surrounding enterprise portals isn’t cheap. Smart portals are built using a combination of technologies: portal, content management systems, and application servers. In one META case study, the cost over four years was nearly $14 million, but the productivity and cash flow benefits reached over $29 million in the same period.

But touting the efficiencies of smart portals won’t be enough to sell upper management on the investment, Warzecha said.

“If you’re building a case for this technology, you’re going to want to categorize this into three different buckets: those being benefits associated with strategic imperatives, those that are associated with cash flow, and those that are associated with efficiencies,” said Warzecha.

Here’s how to build a convincing business case for a smart portal.

The push toward smart portals
For more on why companies are moving to enterprise portals, check out "KO your agency’s information disorganization."

Think strategically
The first step in building your business case is to make sure your executive ducks are all in a row: You'll need participation and buy-in throughout the organization if the portal is to succeed.

“Make no mistake: The higher up you can get executives surrounding this technology, the better off you will be,” Warzecha said. “The main reason for this is that a third or less of what it takes to be successful is technology-related. The business side controls the people, and the process changes. You have to have the support from the business managers, who are going to have to motivate their employees to deal with these people and process changes around the technology.”

Most CEOs or company presidents will have eight to 10 strategic goals for the company each year, Warzecha said. Start your business case by tapping into those goals and identifying how the smart portal will help the company reach them. Given the breadth of impact a smart portal can have—including increased efficiency, reduced travel expenses, global collaboration, and improved information access both internally and with business partners—you shouldn’t have a problem identifying at least one way a smart portal will support at least one of the company’s strategic goals.

Another way to gain executive buy-in is to sell content creation as a cost of doing business. This is already true in many verticals, including high tech and pharmaceutical, he said.

“Justify the creation, publishing, aggregation, and personalization as a cost of doing business,” he said. “It will increasingly be looked at that way from your senior execs, and to tie into that, find out what your competitors are doing.”

Build alliances
But chief executive buy-in alone won’t be enough to build the business case. The second step is to build alliances throughout the organization. This strategy involves more than politics. Working with the business units early on will help you identify the company’s needs and inefficiencies. During this step, you should identify the sources of content throughout your agency and understand how that content is created. Then, you should consider how the portal will help you aggregate and filter this content.

Look for the big picture
It’s also important that you consider how the technology will work throughout the enterprise before you invest, a step organizations often fail to take, Warzecha said.

“In many cases, we see this technology getting bought tactically, but you have to take a look at how this will roll out to the enterprise,” he said. “You will find [that] the technology will grow inherently within your organizations in an organic fashion. It is absolutely critical to understand the high-level requirements across the enterprise.”

Go for the quick ROI
If you’re going to convince anyone this technology is worthwhile, you’ll need to find some quick return on investment (ROI) examples to offer executives, Warzecha said. While you’re lining up allies within the company, be sure to look at how this technology will benefit them in both the short term and long term.

“Rolling technology out for technology's sake generally has a poor adoption rate,” Warzecha said. "If you can show on a group-by-group basis how the technology can help them perform their day-to-day business function, this is how you gain success; this is how things move through the enterprise.”

In particular, you’re searching for key spots where the technology will reap the greatest benefits for the least investment. Warzecha calls this "identifying the low-hanging fruit." From an IT perspective, this means searching for where you can get the biggest business benefit for the lowest cost and the least risk, he said.

“This has actually become a huge, huge issue for getting approval for this technology,” he explained. “So looking at this, you have to try to minimize your risk from an IT perspective.”

He recommended that you examine how to leverage existing infrastructure investments, gain access to knowledge that already exists within the organization, use the technology to share that knowledge with business partners and consumers, and leverage the technology fully. Remember, this infrastructure can be used both within and without the company, for internal communications, business-to-business interaction, and business-to-consumer sites.

According to META, some of the typical ROI benefits you can expect from portals are:
  • Increased sales
  • Print/mail cost savings
  • Travel savings
  • HR benefits enrollment
  • Customer contract management

But, while you’re building your business case and looking for savings, remember that whatever sum you throw out is likely to reappear in your budget next year—as a reduction.

“If you tell me that Web content management system you’re going to deploy is going to save us seven full-time equivalencies, your budget next year is going to be reduced by seven full-time equivalencies,” Warzecha said. “So you need to be prepared for that and the associated cash flow benefits or savings.”

Translate efficiency into real numbers
Efficiency is an often-touted quality but is difficult to demonstrate. While smart portals can provide any number of efficiencies, including solving the much-ballyhooed Webmaster bottleneck, don’t expect executives to hand you a check based on efficiency alone.

Executives are typically more concerned about the bottom line than the efficiency you can gain through using an enterprise portal. Efficiency can, however, affect the bottom line. In particular, look for reduced travel costs, increased sales due to a quicker response time, improved customer satisfaction, and other areas where efficiencies translate into real numbers.

The promise of smart portals
Do you think smart portals can really deliver what Andrew Warzecha says they can? Drop us a line or post a comment.

 

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