Introduction
Background
The considerations for Information Technology (IT) investments in an organization can be seen twofold. On the one hand, there are statistics that are not optimistic on evaluating the decision to invest in information technology. Such statistics might include the overwhelming expenditures in IT, where example in 2002 only in the United States those expenditures reach an astronomical $780 billion, with some companies such as Citigroup reporting numbers as high as $4 billion (Jeffery and Leliveld, 2004). Considering the fact that it was reported that 68% of IT projects are “neither on time nor on budget, and they don’t deliver the originally stated business goals”, the fear of wasted investments can be understandable (Jeffery and Leliveld, 2004). Some statistics numbers, outlined in an article by Jeffery and Leliveld (2004), claim that $100 billion to $150 billion of US projects failed altogether. On the other hand, there are certain driving forces and changes in the environment for which a response such as the implementation of an IT project is not only a suitable solution but also a vital step that gradually transitions from being a competitive advantage to a commodity.
An important article describing the importance of IT is the article “IT Doesn’t Matter” by Nicholas Carr (2003). The author argues that one way to evaluate a resource such as an Information Technology investment can be based on whether such resource is essential to competition and the strategy of the company. Carr argues that ” [w]hen When a resource becomes essential to competition but inconsequential to strategy, the risks it creates become more important than the advantages it provides” (Carr, 2003).
One of the IT solutions which importance is important for assessment is corporate portals or “enterprise information portals (EIPs). Globalization and IT solutions had long been considered as two sides of one coin, where both influence each other. Corporate portals in that matter is a solution that will serve needs that occurred in the borderless world of international business. Corporate portals as IT tools are defined in different ways, with definitions mostly revolving around a notion such as “a single point of access to multiple information sources” (2003). The advantages portals provide in the context of business are numerous, but whether the role of technology is acknowledged and justified is an important question to ask.
Purpose
The purpose of the report is to investigate the role of corporate portals as an information technology tool on the performance of organizations in general, and in an international context in particular. In that regard, the aim of the research can be derived from Carr’s vision on the importance of technology, i.e. assessing whether technology is essential for competition and consequential for strategy. In that regard, the determination of the use of corporate portal will stem from the benefits brought to the corporation, to emphasize the point that information technology investments are justified, changing the way business operates globally. The aim of explaining such justification will be guided by the fact that the implementation corporate portal, as an IT investment, is a costly solution, and thus, should be evaluated in the context of weighing the costs and the short and long-term benefits such investments bring to the table. To achieve such purpose, qualitative research methods will be used, in which the questions the research will address will enable understanding the context in which corporate portals are used. Qualitative data will be collected from cases on portal implementation and interviews.
Research Questions
The purpose of the research aims at answering the following questions:
- How does the technology lying in the corporate portal provide a competitive strategic advantage for international business?
- Is the implementation of the portal justified?
- How the technology serves the business goals of organizations in general? How the technology serves the business goals of organizations?
Literature Review
Assessing the position of corporate portals in the course of information technologies that became commodities, it can be stated that corporate portals are considered as the “logical culmination of technological advances in the areas of knowledge archival and dissemination, the internet, intranets and extranets and managerial innovations in the areas of shared learning and corporate experience building” (MBA Knowledge Base, 2011). In that regard, the use of all of such results of technological advancements as the internet and intranets and extranets became commoditized. The commoditized aspects of information technology are similar to transport, where its values are apparent when they are shared in a certain context with other infrastructure elements (Carr, 2003). The use of IT in business, especially post the arrival of the internet, was heavily commoditized, introducing a channel for delivery, fulfilling generic requirements of many companies. In that regard, for international business, the introduction of email, messaging, conferencing, become commoditized mainly due to that their introduction was not viewed in isolation (Carr, 2003). Thus, it can be stated that the position of corporate portals in the business today is very different than early infrastructural technologies, which provided competitive advantages to their owners, e.g. Analytic Systems Automated Purchasing (ASAP) by American Hospital Supply, “American Airlines with its Sabre reservation system, Federal Express with its package-tracking system, and Mobil Oil with its automated Speedpass payment system, used IT to gain particular operating or marketing advantages” (Carr, 2003).
Placing portals in the evolution ladder of IT infrastructure it is stated that they are a replacement of corporate intranets. At the start of their implementation, portals were described as advanced versions of intranets, wherein McFarland (2001) portals were described as “more evolved, sophisticated cousin… [which enable] to filter out the information “. At the core of the corporate portal is knowledge management foundation (McFarland, 2001). Analysis of literature covering portals at the start of the last decade outlines them as solutions, which have the potential to provide benefits to the corporation, albeit being too costly and requiring “a tremendous amount of information gathering” (McFarland, 2001, Dragan, 2002). The knowledge management approach in corporate portals emphasizes collaboration as one of the main aspects. In Muntean (2009), the author argues that the suitability of corporate portal in collaborative enterprises, which differ from other forms of businesses in a number of ways. Collaborative enterprises, in that matter, are those, in which people work in large teams, in which people establish short or long term relationships, and which evolve over time. The importance of information in such an environment can be seen through sharing it in a more effective manner, making more efficient and quicker decisions. Thus, in an organization the role of technology in the way organizations collaborate support Carr’s parallel to transport, being an enabler, in this case of interactions that comprise collaboration (Carr, 2003, MUNTEAN, 2009).
In Muntean (2009), the competitive advantage of corporate portals is created through integrating collaborative services with business, functions, stating that “[k]nowldge management is not a goal by itself” (MUNTEAN, 2009). In Elangovan (2009), the competitive advantage of an organisation is obtained by “creating, storing and applying knowledge” (Elangovan, 2009). Such statement is supported through considering knowledge management as an indicator of the success of an organisation. Thus, according to such view in which knowledge management in itself is an indicator of success, the incorporation of corporate portals is a way of increasing the efficiency of such knowledge management, serving as “gateways to streamline information access in firms” (Elangovan, 2009). The emphasis on the advantages provided by the technology is emphasized through the processes which are either introduced or performed more effectively (Elangovan, 2009).
The aforementioned statement provides an opinion different than the view introduced by Clive Holtham, a professor of Information Management at Cass Business School, London. Holtham introduced a framework for the evaluation of the way technology can benefit business and organisations. One of the main points of the framework can be utilized in the research which is the statement that “[b]usinesses do not benefit from technology, unless they are aware of how to deploy and exploit information and knowledge” (Rich, 2010).Thus, assessing the role of technology is not only about the processes that be performed with the information, but also how such information will benefit the company. As stated in Muntean (2009), “[b]usinesses don’t exist with the purpose of spreading and advancing knowledge, they exist for selling competitive products and services of high quality” (MUNTEAN, 2009).
In Collins (2001), the author –a director of architect services at Infolmage Heidi Collins, outlines several reasons for which companies might consider the implementation of such technology. Such reasons can be seen through the elimination of the chaos of the intranets in organisations, providing a consistent view of the organisations, improving search capabilities, and others (Collins, 2001). It should be noted that such reasons does not contain the advantages in economic terms, an aspect for which all businesses strive to reach. The author, however, argues that the decision of the implementation of a portal should stem from a business case that should convince the management of the decision to move with its implementation, one of which steps is gathering data on feasibility. Another way of determining the need for a portal solution can be seen through simple questions, a positive answer of which will indicate that implementing corporate portal will aid organisations in resolving hang-ups. The questions include such queries as:
- Do employees need a content flow of information to make decisions?
- Do employees need information from different systems?
- Do employees complete activities related to the company online?
- Do employees need to access corporate information from a browser?
- Do employees have difficulties finding information on the intranet? (McFarland, 2001)
Summarizing the literature review, it can be stated that the overwhelming opinion is of the benefits that such IT solution as corporate portal bring to the business. Nevertheless, there some gaps in knowledge that might require clarifications. First of all, describing the competitive advantages portal bring to companies, the general view is mainly related to improving processes related to knowledge management. It can be assumed that considering that there are several types of corporate portals, each should solve different tasks, individual to the company. Accordingly, in line with a statement such as “[a] corporate portal can either be a money pit or a big hit” (Dragan, 2002), an ambiguous answer cannot be seen. Accordingly, there is a lack of information in terms of international collaboration through corporate portals. Thus, a research question can be derived is how the technology lying in corporate portal provides competitive strategic advantage for international business? Another gap can be seen in missing information on the way corporate portals are aligned with strategic goals of a business. As stated in the review, knowledge management is one of the goals of corporate portals. However, knowledge management in itself cannot be considered a business goal. “Businesses don’t exist with the purpose of spreading and advancing knowledge, they exist for selling competitive products and services of high quality” (MUNTEAN, 2009). In that regard, the research question that can be derived from such gap is showing how the technology represented through corporate portals serves the business goals of organisations in general. Finally, the main question that will guides the research stating whether the implementation of corporate portals is justified.
Methodology
The methodology used is of qualitative nature. The exploratory nature of the research mainly aims at identifying a phenomenon and its context, rather than measuring the relation and the correlation of two or more variables, characteristic of quantitative researches. The method of gathering data that was initially proposed – interviews, was rejected due to the difficulty of finding a sufficient number of participants that will provide an authoritative view on their experience with portals. Accordingly, the data will be collected through analyzing information found in cases studies for information that will answer the questions of the research. The main condition for the resources analyzed is their relevancy to a practical, rather than theoretical, implementation of portal.
A case study of Finnish Multinational in Malik (2004) on the needs of user for corporate portals was used to gather information on the way corporate portals provide competitive advantage. Using a Norwegian Intranet, Onninen Group had outlets in Finland, Sweden, Norway, Poland, Russia, Lithuania, Latvia, and Estonia, with different intranets used by the companies in each country. The issues identified with the employees of the company prior to the implementation of a portal that should enhance their intranet experience is related to the difficulty of finding required information, with the content not available on the intranet. Thus, employees had to search for relevant information elsewhere, which was a time consuming task. Using email and telephones as the mean of communication between the different employees, it was found the level of communication is low between employees (Malik, 2004).
Another article uses three case studies of service firms in Terra and Gordon (2010). The paper examined the use of corporate portals for supporting their internal and external knowledge management initiatives (Terra and Gordon, 2010). The companies used in the study were Hill &Knowlton, Bain & Company, and Context Integration. In addition to a case study articles, the report will outline theoretical-based papers, which contribute toward answering the questions of the research. Such papers include a case study of an IT management consultancy firm, outlined in Le-Nguyen, Harindranath, and Dyerson (2008). Additionally, two papers on the use of Corporate Portal in Human Resource Management (HRM) and Supply Chain Management (HSM) provided important beneficial points to the Report.
Discussion
How the technology lying in corporate portal provides competitive strategic advantage for international business?
It can be stated that the way the technology provides competitive advantage is related to information. Enhancing efficiency of processes, information sharing, collaboration, all of those “enhancements” are targeted into being mainly faster than competitors, in “assessing the need of their customers” (Malik, 2004). The deficiencies presented in the intranet of Onninen are related to that insufficient level of responsiveness in communication does not enable the company for a faster response to changes in the environment, i.e., customers’ needs. Strategic advantage complies with the notion that knowledge is a resource, and thus, facilitating and increasing the pace for accessing such resource is a competitive advantage. With information being one of the concerns in an international expansion, it can be stated that corporate portals provide competitive advantage through enhancing “communication between employees and present all the required information that is easy to find” (Malik, 2004).
For service firms, the competitive advantage was seen through leveraging “the whole brains of … firms globally” (Terra and Gordon, 2010). In that regard, it can be stated that the main competitive advantage is also related to the company’s pursue of satisfying the needs of their companies. The logical in implementing IT as a response, can be seen as follows: the environment changes – becomes more and more competitive, people demand more, their demands become more sophisticated, and industry cycles becomes shorter, and thus, the company gains a competitive advantage through a “faster” response to such changes (Terra and Gordon, 2010). In that regard, all of the priorities of the service companies, which are reusing knowledge, mapping expertise, and fostering collaboration, provide a competitive advantage through a faster response to customers’ demands and needs. The knowledge as a competitive advantage is supported through the use of corporate portals for supply chain management. “Portals have the ability to facilitate the sharing of both tacit and explicit knowledge through their support for searching and retrieving multiform and multi-format information types, including those that attempt to codify tacit knowledge sources and locations” (Paquette and Moffat, 2005). With supply chains being knowledge intensive business processes, it can be stated that sharing such knowledge as a competitive advantage is eventually translated into business objectives such as costs and time reduction, quality increases, and subsequently increased customer satisfaction.
From a theoretical perspective, it can be stated that corporate portals provides competitive advantage through HR strategies. The aims that can be seen through the work of an HRM initiative are through recruitment, and training and development. The communication of HR information can be added to such strategies. The incorporation of such strategies through portals will integrate the functions of HRM into a single web interface. In that regard, it can be assumed from such approach that increasing the productivity of a company through learning can be seen as a competitive advantage gained by implementing HR strategies through corporate portals; “[a] company’s most sustainable competitive advantage is… the ability to learn and act on that learning” (Madhavi M). The learning factor is important as well in the case of the service companies outlined in Terre and Gordon (2010), where having the tendency to hire large number of recent graduates along with the incorporation of corporate portals enable a faster process of involving employees in real tasks (Terra and Gordon, 2010).
How the technology serves the business goals of organisations in general?
The outlined ways of achieving competitive advantage can be seen in alignment with the business goals of organisations. In Terra and Gordon (2010), the goals of the companies can be seen through creating value for consumers, employees, and investors. There is a lack of explicit information on the business goals of organisations, but in general it can be stated that the value creation and wealth maximization can be seen as a unified element, represented through various mission statements. The alignment of such goals with corporate portals can be seen through the way portals enable companies to increase revenues, reduce costs, and improve performance. Accordingly, such alignment can be seen obvious in all organisations observed.
Is the implementation of the portal justified?
The costs of the implementing corporate portals as with most technologies are constantly decreasing. A common feature in all of the addressed organisations and articles is the collaborative nature of organisations, and the reliance on knowledge sharing in their processes. In that regard, such organisations were already relying on intranets for collaboration, for which the advancement toward corporate portals became as a logical choice. In Onninen in Malik (2004), the number of employees in the organisation is stated to be 2,643, while in the service firms outlined in Terra and Gordon (2010), the number of employees varies between 300 and 2800 employees. With the costs of portal going down, it can be stated that such technology might be more feasible with larger organisations. The latter is specifically apparent through an approximate comparison of the increase in the prices of portals, where a ten times increase of the number of users in the organisation, from 100 to 1000, increases the prices of corporate portals a little less than four times, from 65,000 to 230,000 (Corporate Portal, 2010). Thus, it can be stated that the costs associated with portal implementation are more justified in larger organisations, not only through less price increase, but also due to the increase of collaboration and communication, two important processes enhanced through corporate portals.
Conclusion
The present report analyzed the role of technology in business. Technology in that matter was represented through corporate portal, a web-based interface which integrates different functions with a single access points for users. The questions that report attempted to answer are related to identifying the competitive advantages that corporate portal provide, the alignment of those competitive advantages with the goals of the company, and the identification of the overall justification for the use of corporate portals. The report found that in most cases information is a competitive advantage in itself, which aids the company provide a faster response to changes in the environment. The needs and the demands of the customers are specifically emphasized in such context. Accordingly, such advantages are aligned with the goals of the company, although not in a specific manner. Generally, the use of such technology is justified for organisations that put an emphasis on knowledge and collaboration, which can be seen as character of international business in general. In that regard, it can be concluded that such a technology as a corporate portal has an important role in leading business, which is halfway to be commoditized.
References
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