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Source: Information Builders.
An extranet allows external users to access data inside of the firewall but controls their access. For
example, part of Wal-Mart‟s ordering and logistics system allows its vendors and suppliers to access
Wal-Mart‟s store sales data stored on Wal-Mart‟s computer systems. If these transactions occurred
over the Internet, they would be referred to as extranet transactions. Another example of an extranet is
an application that allows a consumer to track an order or a delivery, such as those offered by UPS and
FedEx.
Extranets have evolved from earlier electronic data interchange (EDI) systems. EDI allowed
companies to communicate and conduct electronic commerce from one computer to another. EDI was
one of the industry‟s growing uses for data communications, and many companies used it to send
purchase orders to their suppliers, thereby lessening the time it took for purchase orders to be received
and then entered and processed by the supplier. Organizations were able to maintain lower inventories
by speeding up the turnaround time of ordering and receiving goods and materials. On the flip side,
many suppliers used EDI to send their customers advance ship notifications, advising them of what
had been shipped so that they could prepare their warehouses for the goods and materials. Some
companies used EDI to transmit their invoices and then to receive the subsequent payments. Early EDI
specifications were not standard, and a vendor working with multiple customers would have to
maintain multiple versions of EDI software. While industries used different versions of EDI in
different ways, their goals are always the same: to minimize the processing time and to lower
inventory costs and overhead expenses. EDI has been eclipsed by extranets and e-procurement
software.
Organizations have begun building portals, which are Web-based gateways to the company‟s
information and services. An organization might have multiple versions of the portal: one for those
with access rights, and one for those without access rights. Most enterprise information portals are
made up of small portlets that can be added or removed by a user. A portlet might be a link to e-mail,
company announcements, company calendar, personal calendar, news feeds, stock feeds, collaboration
sites, or areas within the company.