4.4 Communication Networks and the Business Value

4.4.1. Business value of telecommunication networks

Telecommunications has become an important factor of an organization’s success and is
considered a strategic resource. Telecommunication infrastructure enhances connectivity.
For example with the cellular network sales personnel can be in constant touch with the
customers and the managers. Telecommunications not only support voice communication
but also supports data communication. For example with increased telecommunication
infrastructure more users will get connect to the Internet and the organizations will get
involved in e business.



4.4.2. Business value of the Internet

The business value of the Internet is evident from the numerous web sites that are
engaged in e-business and e-commerce. Ref. 2 identifies 6 major business values, which
companies engaged in e-business and e-commerce strive for. They are,

(1) Generate new revenue from online sales
(2) Reduce transaction costs through online sales and customer support
(3) Attract new customers via web marketing and advertising and online sales
(4) Increase the loyalty of existing customers via improved web customer service and
support
(5) Develop new Web-based markets and distribution channels for existing products
(6) Develop new information-based products accessible on the web.



4.4.3. Business value of Intranets

Intranets have become an essential ingredient of day to day work in organizations. By
providing an Internet-like environment inside an organization, they enable better
communication and information sharing. Management becomes easier and the
responsiveness of the business processes improves as a result.
Intranet applications can be organized as follow.

(a) Communications & collaboration
Intranets help send and receive e mails and communicate through voice mails. They
further enable virtual meetings and group discussions through e mail and video
conferencing.

(b) Web Publishing
Things like company newsletters, project plans and technical drawings can be published
as attractive web pages having multimedia content. These can be stored in a server which
could be accessed through any computer on the intranet. This has become an efficient and
a cost effective alternative to share information in an organization.

(c) Business Operations and Management
Ann intranet can be used to support business activities such as order processing, inventory
control and sales management.



4.4.4. Business value of extranets

When connecting to external parties, an organization has two options. Either it could use
a dedicated private link or it could use a virtual private network. A Virtual Private
Network (VPN) is a set of secure links over a public network such as the Internet. A
firewall is a computer which stands between a company’s intranet and the extranet and
does data filtering. For example a firewall may encrypt data and ask for passwords to
access a company’s intranet. A firewall can be used to implement a VPN.

Extranets link an organization with its suppliers. This reduces delivery time and
consequently the storage costs.By enabling online collaboration with customers, extranets
enable interactive and customer focused product development and marketing. The
company can increase its competitive advantage by introducing new types of products
that have information value to the customer. For example consider software having online
product support over the Internet. They also enable faster decision making by enabling
faster communication with the business partners of the company.