Determining the Value and ROI of an Enterprise Portal, Part 1

As the portal market becomes increasingly more competitive, the vendor choices grow to be even more complex. We discuss the value of an enterprise portal and methods for determining its return on investment.

As the portal market becomes increasingly more competitive, the vendor choices grow to be even more complex. In this first of a two-part series, we will focus on the value of an enterprise portal and methods for determining its return on investment (ROI).

No longer confused with a Web site, the portal has evolved into a sophisticated online resource that provides access to relevant information from a centralized point. This information can include applications, content, processes, people, and any host of productivity tools that can be integrated into the portal.

Of course, access to information is based on pre-set security definitions and the needs of the end user—an employee, customer, partner, or other entity granted access to the information. Ideally, this information is linked to business processes throughout the organization and delivered to select, targeted audiences.

Considered state-of-the-art at the time, early portals offered the ability to link from page to page, site to site, or application to application. These simple functions, available just a few years ago, were enough to spark a portal frenzy and, in turn, a crowded marketplace.

In the earliest days of what has become the portal evolution, vendors attempted to differentiate themselves by originally answering the market demand for portal technology through a best-of-breed strategy. This essentially meant that they encouraged either the customer or a systems integrator to perform the customization and integration required to deliver a true enterprise portal solution.

As time progressed, the portal evolved into an even more powerful enterprise resource. Meanwhile, as customer demands for more sophisticated portal offerings increased, many of these same vendors took their singularly focused products, and through acquisition or re-packaging, stated their claim to satisfy those enterprise requirements that demand value and ROI. It wasn’t long before customers, and the market in general, realized that the singularly focused portal does not meet evolving enterprise portal requirements. Unfortunately, however, many portal products remain at this level.

The challenge with the singular approach is that it leads to silos as well as replacement and/or abandoned portals that come with an entirely new set of obstacles related to IT management and portal use. The most detrimental of these obstacles are the hidden and potentially out-of-control costs that may not immediately surface.

Going a step beyond this elementary level is the deployment of a departmental portal. Many enterprises have deployed departmental portals to provide a more focused offering for the end user while avoiding the ‘one size fits all’ approach.

While the departmental portal is designed to eventually expand and support various business processes throughout the organization, many deployments in this phase often get stuck. This is primarily due to the issues associated with integrating all the relevant applications, content, people, and processes to ensure the portal’s success. Oftentimes, the monumental effort of such integration leads companies to scale back portal plans and leave numerous disparate parts of the user’s experience outside the portal. While this view may initially seem easier, it can have a profound effect on the portal’s future success and, frankly, its sustainability.

Yet before the silos or abandoned portals wreak havoc on the organization, what needs to be carefully considered and strategically mapped out to deliver portal value is the architecture itself. There are three primary approaches to this: pure play, application, and platform.

As Darwinian market shifts would dictate, the bulk of the pure-play portal vendors offering a simple shell have disappeared, leaving the application and platform strategies as the two main approaches.

While the application approach addresses many of the needs of an organization, it adds unnecessary layers of complexity to the integration process. These layers include the integration of collaboration tools, virtual portals, instant messaging, and other offerings within a consistent user interface. This is why the platform approach is being hailed as the most strategic and fruitful path to enterprise portal success.

The portal platform strategy allows for easier integration as well as the addition of content, CRM, ERP, third-party, and other enterprise applications in an open environment that can dynamically shift based on end-user needs. Also, the ability to deliver only the necessary parts of an application or suite provides additional cost savings while alleviating IT administrative burdens.

Additionally, when the portal architecture leverages a platform approach and brings together all the necessary content and applications across the enterprise, it represents the most evolutionary state of the portal market. This state is also known as the collaborative workplace.

The collaborative workplace allows organizations to realize much greater value in their portal investment and accelerates the adoption of the portal as the place where users begin and end their day.

Enterprise Portals: Gateway to the Collaborative Workplace

However, building such a workplace requires more than just access to applications and content. There must be access to people and expertise while enabling key business processes integrated and personalized according to each user’s role in the organization.

Also, true enterprise workplace solutions must allow companies to look at themselves as collections of business processes (financial management, product development) rather than functional departments (marketing, manufacturing, human resources) or simplified user segments (such as business-to-employee or business-to-customer). This approach is fundamental to a collaborative workplace for an on-demand enterprise.

Alternate Channels of Interaction

The portal, as it impacts other parts of the organization, can also be viewed as an alternate channel of interaction or next-generation intranet. While it doesn’t replace a human, the portal complements existing functions by providing a direct communication to a distinct audience with similar needs. For example, members of the marketing programs team can leverage a customized portal with specific application views to share information regarding an upcoming product launch and road show.

The marketing example is simple when you are looking at a relatively small subset of employees with a customized portal view. IT environments are becoming increasingly more complex when you extend the portal to support mobile devices, value chain extranets, suppliers, partners, and customers. The integration of various databases, intranets, home-grown applications, and legacy systems into the portal adds a further layer of complexity, but this integration makes the portal the start and end point of the end user’s day and delivers true ROI.

Portal Success Criteria

With this understanding of the history and evolution of the portal marketplace, it’s worth taking a closer look at the key elements of a successful, enterprise portal. The four key components used to determine the value of the portal are:

  1. Information; in other words, up-to-date data that dynamically changes according to the end user’s unique profile and business needs

  2. Applications that are fully integrated and/or contain the necessary elements required by the user and do not incur additional licensing or IT administration costs

  3. Business processes that avoid a silo approach and integrate across different functions throughout the organization securely and seamlessly

  4. Human resources (HR)—a horizontal portal offering that acts as a self-service depot to streamline many of the traditional paper-based processes

While HR may stand out from the other three aspects, the reality is that many portal projects are focused on HR self-service as a key horizontal area that impacts each end user in the enterprise. It also serves as an excellent test bed as departmental portals grow and are linked to HR and other business processes.

Still, when all the proper approaches are employed to articulate the portal’s value, there are still aspects that can delay the full portal deployment and its success, typically attributed to insufficient organization, a lack of personalized navigation, inadequate search tools, and renegade portal projects. To avoid these problems, it is incumbent upon the IT leader and business sponsor to ensure that the architecture is well mapped, end users are fully briefed on the strategy, and milestones are met and publicly communicated. When the organization feels part of the portal’s strategy and success, each end user is more likely to support its on-going growth and success.

Next week we'll explore how to calculate the ROI of portals.