Portals power business user profits

Halliburton, which provides products and services to petroleum and energy companies, knows what information overload is. The company has thousands of documents - technical papers, best practices outlines and product descriptions - that it uses to service customers, including Exxon Mobil, Chevron and Conoco. Until last fall it was doing things the old-fashioned way, faxing brochures and other information to customers.

But sometimes information wasn't getting to the right place, and it took employees too much time to find what they needed.

So last fall, Halliburton, based in Houston, decided to deploy a portal to better manage its flood of information. It found that the portal, which hooks into legacy systems such as SAP, did even more than manage information - it let Halliburton better service its customers and made it easier for employees to do their jobs.

The portal has led to more than $10 million in sales and created about $280,000 in internal cost savings since the company started tracking the portal in February, says Brandon Lackey, program manager at Halliburton.

He says the myHalliburton.com portal, powered by Plumtree, has increased sales by making products and information easier to find for customers. A recent survey found that 40% of customers said the portal influenced their purchase decisions, Lackey says. Internally, the portal has made information easier to find for employees, giving them access to invoices, customer proposals and work schedules in one place.

"We really anticipated it primarily as a knowledge portal, sharing technical content," Lackey says. "I don't think we anticipated how much value it could deliver in terms of other things."

Halliburton is not alone. In growing numbers, businesses are finding that portals can lead to tangible business benefits if they are used to solve specific business problems. Companies are deploying portals to streamline internal processes and reduce - even eliminate - paperwork, give geographically dispersed employees a place to collaborate, and provide customers, partners and suppliers with a centralized resource for conducting business.

Hewlett-Packard, based in Palo Alto, Calif., implemented a portal to focus its human resources department on more strategic assignments. The company was able to close an HR call center and says that a $20 million investment in its employee-focused Epicentric portal resulted in about $50 million in savings in the first year.

Whirlpool, in Benton Harbor, Mich., cut order-processing costs by 80% last year thanks to its business-to-business portal that is based on IBM technology. Because the portal lets orders be processed automatically, Whirlpool says it has been able to grow its sales from $7 billion to $10 billion without having to add staff to process additional orders.

Toshiba America Information Systems in Irvine, Calif., launched a BroadVision portal in October 2000 to provide an online storefront for its customers and estimates that it has resulted in $110 million in cost savings and incremental sales during the past 18 months.

A recent study by Delphi Group found that companies experienced a four- to sevenfold return on their portal investment by the end of three years. For the most part, though, those companies targeted specific uses for the portal before deploying it, rather than launching a massive, costly initiative for the entire business, says John Hughes, a senior analyst at Delphi Group.

"A majority of the portals were smaller departmental point solutions for specific problems," he says. "And then once that portal succeeded, companies decided to expand it out to different groups."

Frank Hood, CIO at Krispy Kreme, in Winston-Salem, N.C., talks glowingly about his company's CoreChange portal, which connects employees with the applications they need, along with linking franchise stores with the home office, eliminating paperwork, postage and headaches. But he agrees that companies need to be cautious about how they launch their portals.

"I would suggest that you not engage in a product that requires a six-month or one-year implementation period," he says. "If you've got strong Web content or solutions that leverage the Web, then wrap the portal around those."

He says what has made the Krispy Kreme portal such a success - it's accessed thousands of times per day by more than 500 employees and a majority of the 220 Krispy Kreme doughnut stores around the country - is that he was able to get it up and running quickly and then add features as necessary.

"Don't pick a solution that's going to take a tremendous amount of time to develop up front. Look what you're trying to accomplish," he says. "Have short-term deliverables so that people don't lose interest prior to the next deliverable being launched."

Whirlpool took a slow approach to its portal, rolling it out first to partners and then launching a portal in phases for employees. Whirlpool, which has had its business-to-business portal for about three years, began its employee-facing effort about six months ago.

"The first wave [of the employee portal] included Whirlpool news, e-mail, calendaring, team rooms for collaboration, corporate communications and outside news feeds," says Jim Haney, vice president of architecture and planning at Whirlpool. "The next wave will involve more transactions."

Dave McDonald, CIO at Toshiba America Information Systems, says he's also looking at launching an employee portal after seeing the benefits of his company's customer-facing site. With the customer site, Toshiba reduced the number of calls to tech support because it could put its customer support information on the Web. That accounted for a large part of the savings.

McDonald expects those types of savings will translate to the employee side when functions such as human resources administration is turned into a self-service feature for employees.

That's exactly where HP found big benefits from its employee portal.

"Lots of the savings came from the fact that I was able to eliminate the call center, the 800-number employees call," says Homer Wong, formerly HP's director of business development for business-to-employee solutions (now Siebel global alliance manager).

In addition, with the portal, Wong and his team consolidated hundreds of disparate Web sites, reducing the need to manage multiple sites.

Consulting company Perficient of Austin, Texas, found a big chunk of savings from its IBM WebSphere portal because of its collaboration capabilities. The company has consultants across the country and in Europe. In the past, consultants would have to gather in a central location before heading out to work with a client, says Andy Sweet, Perficient's CTO.

"Once we started to use these collaboration tools, we saw a dramatic reduction in travel," Sweet says. "We also used to do classroom training. Now we do weekly Webcasts."

Sweet says the company trimmed its travel budget by about 30% in the first quarter thanks to the portal.

American Productivity and Quality Center, a nonprofit organization based in Houston, launched its ATG portal this spring, giving its 4,100 members personalized access to more organized, and more easily searchable, information. That led to a jump in member retention, says Ron Webb, director of membership at APQC.

"Our retention rate has gone up about 5%, which is pretty good for a membership organization that's already at a 75% retention rate," he says.

Overall, companies seem to agree that a properly deployed portal will put applications and digital information to better use, thereby trimming costs and ultimately driving business.

"As you start wrapping your functions around one portal … you get efficiencies in how long it takes somebody to do their job," says Whirlpool's Haney. "The whole goal of this thing is we should be able to pack more work into a day, become a lot more efficient in how we work, and how we work with others, which means reduced cycle times. That equates to getting to market faster and that saves money."

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