Portals: an E-Business success story

Software Magazine, Spring, 2002 by Chris Pickering

Portals help organizations take advantage of the information and processing capabilities they already have, and therein lies their power.

Portals are one of the leading success stories of e-business. When it comes to e-business applications, only e-commerce and e-procurement are used by more companies than portals. Companies utilize portals in many ways, including human resource (HR) portals on intranets, customer-facing information portals, and supplier-facing information portals, and users include employees, customers, and suppliers.

According to Strategic Trends in Information Technology, a recent industry survey conducted by systems Development Inc., Overland Park, Kan., portals stand out as one of the leading e-business applications. Nearly one-third of companies use portals today, and another quarter of them plan to use portals within a year (see "Status of Portals," p. 23). Another 18% are either investigating portals now (7%) or planning to use them sometime (11%).

The combination of this established base and the active interest in portals should produce strong continuing growth in adoption. Portal implementation among respondents began in 1997, then increased significantly in 1999 and 2000. Portals lend themselves to implementation through an experiment-pilot-production implementation cycle. Most of those using portals today are already using them in production systems (71%). Another 14% of respondents are conducting pilot projects, 7% are experimenting, and 7% are using portals for review only.

Portal users tend to be either very successful or very unsuccessful (see "Portal Success Rate," p. 24). Nearly two-thirds of those using portals (64%) claim a success rate of 76% to 100%, but the remaining 36% have a success rate of 25% or less. Some of the reasons behind this bifurcation are addressed below.

There are a lot of portal packages available today. (See "Representative Portal Packages," p. 24, for a partial list.) This encourages the assumption that most portals will be based on a package. So it was a surprise when survey results showed that in-house development was far and away the most common source of portal applications. Just 20% of respondents use portal packages, while 87% of respondents use in-house development to deliver some portion of their portal capabilities (see "Source of Portal Application," p. 25).

Regardless of how companies source portals, the initial investment required to implement them tends to be small. Two-thirds of companies spent less than $500K to install their portals; 25% spent between $500K and 51 million; and only 8% made an initial investment greater than $1 million.

Companies' cost to maintain and enhance their portals tends to be less than the cost of implementation. A large percentage (82%) of companies using portals spend less than $500K annually to maintain and enhance them; 9% spend between $500K and $1 million; and 9% spend more than $1 million.

Expanding Functionality

The original purpose of portals was to provide a point of consolidation for disparate data, enabling convenient access to that data. Since then, portal functionality has expanded to include transaction processing, analytic processing, and other functions. From a complexity standpoint, portal functionality started with the simple and expanded to the complex.

Today, the simple functions are still the most popular (see "Portal Functions: Simplicity Prevails," p. 25). Nearly everyone uses portals for Web access (which, in this study, could mean either retrieving or publishing Web data), and almost three-fourths of companies use their portals to access corporate data. Data consolidation and transaction processing have both been implemented by 40% of those using portals, and one-third of users have implemented some type of analytic processing in their portal applications.

Customer-facing information portals are the most common applications (see "Portal Apps: Putting on a Good Face," p. 26). Other popular portal applications are self-service HR systems, supplier-facing information portals, and self-service time-and-expense systems. Transaction-oriented systems like online sales and purchasing are used far less frequently.

Portals' information-management capabilities produce significant benefits for users (see box, this page). Since the most-used portal application is customer-facing information portals, it is not too surprising that survey respondents rank improved customer satisfaction as the most significant benefit. Portals provide internal benefits as well, such as better decision-making, improved productivity, reduced costs, and improved quality.

Turning to the most significant costs of using portals (see box, p. 25) reveals the underlying challenges of achieving the benefits discussed above. The foundation of portals is data integration and distribution, yet leading respondents rank data access and integration costs ahead of all other costs of using portals. In a related vein, the second most significant cost is difficulty of integration with other applications, followed by cultural and organizational factors. Not surprisingly, given the modest financial investments most portal users have made, cost appears fairly far down the list. Staffing for portals and using them with an existing IT infrastructure represent relatively insignificant costs in most portal implementations.