The Tao of Intranets

Want to build an intranet? The technology is the least of it.

  • TECHNICALLY, INTRANETS ARE WEB SITES with access limited to an entity's employees. However, this reduces them to mere technological devices. A truly useful intranet is a tao—a way to organize the information for a company, firm or client, not a product.

  • EVERY COMPANY HAS AN INTRANET ALREADY: all its reports, manuals and spreadsheets. A true intranet uses technology to organize already existing systems.

  • MOST COMPANIES HAVE MANY DIFFERENT SYSTEMS; an intranet can tie them all together and make daily cash receipts and customer information, for example, easily available to all.

  • A COMMON SET OF TECHNOLOGY STANDARDS makes intranets possible. Companies should keep to certain standards, too, in their move to a paperless office with open databases and generic programming languages.

  • CPAs CAN BEGIN AN INTRANET with minimal skills and resources. They should build it slowly, with continually changing content tied to their organizations' databases.

  • SECURITY IS AN ISSUE BUT not a major problem. The advantages of connecting to the Internet outweigh the risks.

  • A CPA's SKILLS ARE IDEAL FOR CREATING and managing his or her own organization's intranets and those of others.

CHARLES HOFFMAN, CPA, is a manager at Knight, Vale & Gregory, in Tacoma, Washington. He was the 1997 winner of the AICPA Innovative User of Technology Award. His e-mail is

How to Read This Article

In Chinese philosophy, the tao is the "way"—a path to harmony. Think of intranets as the tao of your office—not a boxed solution you buy off the shelf. You probably have heard the standard definition: "An intranet is a Web site a company creates that is accessible only to its employees. Its power lies in its ability to allow departments with different systems to share information."

But this reduces them to mere technological products. To create a truly useful intranet for your company, firm or client, you need to look at them as a process. It's true you need some technical skills (even if only to speak with a consultant intelligently), but first you must investigate the problems of managing information. Only if you examine the philosophy behind intranets can you create one that is a profitable investment, not an expensive toy.

Your company already has an intranet of sorts: its papers, filing cabinets, policy manuals, reference books, spreadsheets and reports, all interlinked by three-ring binders, sticky notes, file folders, telephones and even people running all the information around the office—the so-called sneaker net. Apply technology and you have an intranet. But no intranet will magically organize information. That's something you have to do yourself, and it has nothing to do with the difference between Java and ActiveX. If your organizational thinking is fuzzy before you develop an intranet, you'll end up with a fuzzy intranet. That's because an intranet is not really about technology automatically solving all your problems; it is about using the features technology offers to logically organize and make easily accessible all the information you and your firm or company need every day to keep your customers and clients happy and your employees effective and efficient in ways that were never before possible.

The first thing you need to do is ask yourself how you do what you need to do to get your product out the door. Consider the whole process, including your tools and all methods of conveying information: paper, pencil, phone calls, faxes, copiers, spreadsheets, filing cabinets, meetings, reports, e-mail, voice mail, express mail, snail mail, policies, procedures, accounting systems, billing systems and payroll systems. Ask yourself the following questions:

  • How efficient is your process? How effective is the result? Is there any room for improvement? Measure your responsiveness, which equals your competitiveness.

  • Are certain long-held beliefs clouding your expectations of how efficient these processes could possibly be?

  • How well do you recognize and deal with the planned and unplanned events of your daily business life?

  • How much does it cost you to achieve the quality level you and your competition demand?

  • Are different collections of information locked tight inside proprietary databases, stored on computer systems that do not talk each other? How many different copies of the same information do you have and are these different copies in sync?

The way you answer these questions tells much about how your company handles the management of knowledge, which has become as important in business as capital, natural resources and labor. Knowledge makes your employees more competent, more innovative and therefore more responsive to your customers. So, if you can answer these questions, you'll have an idea of just what kind of information you'll need on your intranet and how to organize it.

Consider the following: Imagine one of your customers is contemplating switching to a competitor. Would you be able to identify this problem and quickly respond? Or consider this—how much time and how many people would it take to let your employees (1) know their 401(k) contributions, balance and earnings, (2) determine whether they are investing in the right fund to help them achieve their personal goals and (3) change their investment? A good intranet could help you handle such processes efficiently.

You will not change the foundation of your information infrastructure overnight. Creating your intranet is the path you must take to this goal. Where is this path and which way does it go?

Two Info Central
Welcome to make-believe Two Info Central. The company isn't
real—but its intranet is.

Payroll uses one system. Accounts receivable uses another. The sales force keeps track of customers this way and the production department that way . An intranet places everyone on the same platform—when it is complete, such problems disappear. (See "The Genesis of Your Site" section) But that does not mean it gives you an instant solution. Rather, you develop the solution after examining your organization and its communications issues.

Take a look at the demonstration intranet at Can you see how a site like this might improve your organization? Study this example and feel free to steal these ideas! Just imagine it: All this stuff in one place, with one similar interface. See the demo site for examples of these suggestions.

  • Daily flash reports: What is the information that every business cares about? Current cash position, current accounts receivable (preferably aged), current accounts payable (preferably aged), who is on the payroll. This information can be pulled directly from your accounting system and displayed, in real time, in an easy-to-read format that you can drill down into for details. Why should you have to ask people for this information?

  • Review of daily cash receipts and checks: You can get a quick list of today's cash receipts and checks written without bothering the clerical staff.

  • Customer information: Post everything everyone knows about your customers, not just demographic and billing information, but who the decision makers are, the company's important successes and failures and directions to all the customers' locations.

Production - Compare Dollars
How am I doing? With a few mouse clicks, you can see who's going
to be employee of the year, and who's going to need some help.

  • Personnel manual: Printed manuals are obsolete as soon as they roll off the copier. Not only is an intranet version easy to change at any time but also it is searchable and can contain audio and video clips.

  • Lists: Compile phone lists, addresses, employee skills inventory, contacts, clients and an events calendar.

  • Project tracking: Project participants can see the details and managers can view the big picture whenever they want to.

  • Employee communication: Create a page that allows employees to suggest intranet additions.

  • E-commerce: Use your intranet to order office supplies or to coordinate express mail package pickups and track the packages ( Order a book ( or a pound of fresh coffee beans (

This last bulleted item introduces an additional dimension: keeping your employees connected beyond the company. An Internet link invites your staff members to get information not available internally. An extranet (see the explanatory sidebar) would allow them to exchange information with trading partners located next door or in another country with little worry about different systems that refuse to talk to each other.

Remember the standard definition from the first paragraph? It may be true but it's very limiting. As you view the demo site, note that it is not merely a ream of Web pages but, rather, the product of thoughtful organization and customization for each individual who uses it.

Accounts Receivable - Aging
New twist on an old function: Intranets organize accounts receivable
information and make them accessible wherever you are.

You have identified your organizational problems, some of which may be long-standing. Fortunately, technology—in this case the Internet—offers new, more functional and cost-effective ways to solve these old business problems. The Internet is really a set of commonly accepted standard technologies that allow different computers to share information. The intranet is an offshoot that makes use of these same commonly accepted standard Internet technologies within a company. Microsoft's Bill Gates refers to these systems as a "digital nervous system" (see This is part of the "information at your fingertips" vision for which he has been striving. IBM refers to this as "e-business" (see Others use the term e-commerce.

This "nervous system" can work universally because it is based on commonly accepted standards. Their acceptance made the inter/intra/extra-networked world possible. Although a detailed discussion of the underlying technologies is beyond the scope of this article, you should know about two of the standard technologies involved: TCP/IP and the browser—two fundamental components of the Internet.

TCP/IP is a set of communication protocols (instructions) used to transfer data ("packets" of information) from one computer to another. It has become the standard network communications protocol worldwide. In fact, AT&T announced it will change its entire existing telephone network infrastructure to this standard protocol. This change will cost AT&T millions of dollars and shows just how important TCP/IP is.

If you've ever been to the Web, you've used a browser, probably either Microsoft's Internet Explorer or Netscape's Navigator. A browser is a standard information "appliance" application. Because of the power of universal connectivity, many, if not all, applications probably will run through a browser in the future. (Currently, Excel, Lotus, Word and WordPerfect, for example, each operate independently, without the need for a browser.) In fact, a browser will likely be a cornerstone of future operating systems, running most or all computer workstation applications. That is, all digital information you get will come to you through your browser—hence the intense competition between Microsoft and Netscape.

Below is a brief summary of the important foundations—some strategies and guidelines to help you plan your intranet evolution:

  • Kiss paper goodbye. Digital information is incredibly flexible, can be available to many employees at the same time and can be transferred anywhere in the world in minutes. Digital information is easy to sort, summarize and organize or reorganize. If you maintain customer information on paper in five different places and an address or contact name changes, you need to change the information in each of those five places. But with an intranet, the information is stored in one place accessible to all. Paper will never disappear entirely, but you can reduce it significantly.

  • Learn about the data model. Take time to understand your business "meta data" and "object model"—that is, information about the containers that hold your data. All that information is stored somewhere! It is truly amazing what you can achieve if you understand some basic information about where the data is located. Most applications—such as accounting systems—have databases that are poorly documented, not very well organized and just not very user-friendly. The more you know, the more you will realize how important this documentation is, and the more you will pressure system vendors to improve their documentation.

  • Know database basics. You will need to organize and store information in open, relational databases, when possible, or other structured formats. A SQL server relational database is a very efficient, generic data storage system that programs use to store and retrieve data. Programs and users "talk" to these databases using an industry standard language called SQL, or structured query language, another widely accepted standard. An open database is one that supports another widely accepted industry standard, ODBC or open database connectivity. ODBC creates a common way to talk to a variety of different databases. Using ODBC and SQL together, you can use all of your data throughout your organization in a consistent manner. This makes getting information from your different systems easy. With nonstandard or proprietary (private) databases, getting at your data can be very difficult, making integration—putting data from one application into another application—nearly impossible. Databases may not work for storing every piece of data; sometimes a spreadsheet, word processing document, e-mail format, audio or other file may be a better fit. But because databases are open and easy to use, you should use them as much as possible. Of course, this is not everything there is to know about databases, but this should enable you to talk to a consultant intelligently. Also bear in mind a new technology, extensible markup language (XML), which shows promise of adding database-type structure to unstructured information such as word processing documents and HTML Web pages. Watch XML closely.

  • Use common connectors. Put data sources on servers that offer universal connectivity. As noted above, since TCP/IP is the common currency of our networked world, your servers should support this protocol, even internally. Windows NT, NetWare and UNIX are all battling to play the network server role. Take a good look at Windows NT. It has a good balance of cost, ease of use and functionality.

  • Remember: one company, one system. Use one universal e-mail system—not one for internal e-mail and another for Internet e-mail—and strive to make it a primary communications tool for your organization. Your e-mail system must be able to handle attached binary files so employees can send and receive word processing and graphic files, for example.

  • Share with everyone. Use common, up-to-date user productivity tools. Everybody in your organization should be able to share documents, spreadsheets and databases with other staff, vendors and customers. Microsoft Office has an 80+% market share and would clearly not be a wrong choice.

  • Get with the times. Use up-to-date, generic programming languages. Newer programming tools are easier, faster and feature-rich, meaning programmers will be more productive. Visual basic, Java, SQL and HTML are a few examples of universal, widely used programming languages. Again, watch XML. It is not standard yet, but it will be.

  • Hold the middle course. Use industry standard, up-to-date PC hardware and operating systems and keep them current. You do not want to be on the "bleeding edge"—it can be tough being the first on your block to try something new. However, don't cling to outmoded technologies. Gateway (, a major computer vendor, has an interesting new program where you can lease a PC for about $50 per month and get a new PC every two years. This could be a new model for business computer use.

Summary by Preparer
No matter how large your firm's tax practice, intranets help keep
track of who's doing which returns, and how long they're taking.

  • Consider support problems. The day a problem crops up is not the day to forge a backup strategy. Develop backups, documentation, security, equipment redundancy, contingency plans, training and updates. And don't organize your intranet team so the loss of one employee or consultant brings the project to a halt.

  • Plan for the future. You aren't going to build your intranet overnight. Don't be seduced by the hype about the next big thing and don't go too far out on the leading edge. The more you use technology, the more you will understand its powers and limitations. Be prepared to evolve your systems and incorporate what you learn along the way into future versions.

  • Avoid deviation. It is rare that an organization, particularly a smaller one, needs to deviate from the mainstream—the types of servers and programs noted above. Keeping the foundation solid will be the smartest long-term move. Although a Band-Aid may seem the easiest and cheapest short-term solution, it usually proves to be an inferior choice over the long haul. Deviations should be a conscious choice for a specific reason, not the result of an oversight or a good sales pitch to an ill-informed buyer.

It takes very little money to start an intranet, although, depending on the technological knowledge available in-house, you may need a consultant for hardware and software configuration. If you have reasonably up-to-date technology, you can start an intranet in just an hour or two. Take note of these dos and don'ts:

  • Don't build an intranet; replace with an intranet the tasks you currently handle in other ways. That is, don't look at an intranet as a new system, but as a replacement for old systems. The goal is to be more effective and efficient, not to throw away money on flashy technology.

  • Do hire a consultant to get you started. This is a good plan if you want to "jump-start" your efforts or if you just can't find the time to figure out the tools for yourself. But don't let the consultant do all your work. Do let the consultant teach you and bring the skills into your organization. Learn about your system's full potential.

  • Do install a Web server. As noted above, Windows NT, NetWare and UNIX all run Web servers. A quick way to start is to use the personal Web server that comes with Windows 95 or Microsoft FrontPage 98. Windows NT's Web server, Internet Information Server, is a strong player and has a good balance of cost, power and ease of use.

  • Do start with a prototype—a scratch-pad intranet—to experiment and help you plan. You can have a prototype up and running within an hour or two at a very low cost if you have only the most fundamental building blocks. This should give you some sense of what you can achieve and what you need.

  • Don't connect your intranet to the Internet until you have a security plan in place (see the "Security" section, next page).

  • Do remember: You cannot buy an intranet. It is the weaving together of your information infrastructure. You can buy the tools, but actually creating your intranet takes effort.

  • Do gradually move your systems onto the intranet. Draw up a plan. When you implement new systems—new accounting systems, contact managers, whatever—make sure they fit into the long-term plan.

  • Do keep your information current. Dynamic content—continuously changing data such as that found in accounts receivable or project management databases—makes it more difficult to build your intranet. However, in the long run, ongoing maintenance and updates will be much less costly. Pull information from continually updated databases, such as your accounting system. For example, an intranet phone list created from the employee list in your accounting system always will be current—you know all employees are there or they wouldn't be getting paychecks!

Know Your Net

The internet is all about standards—commonly accepted and worldwide. TCP/IP, HTTP, HTML, FTP. These "internet technologies" work behind the scenes to make networks work. For more on these technologies, see "Top 10 Technologies Stress Communications," JofA, Feb. 98.

An intranet applies Internet technologies to the management and distribution of internally used information. Outsiders cannot see any of the "for internal use only" information on your intranet. Internet and extranet resources probably also will be available internally via an intranet.

An extranet is the networking of business partners—you with your suppliers, customers or other trading partners, or internal and external participants on a specific projects. It allows intranets to interact. Security provides the apporipriate level of access to users.

The key point is that all three "nets" use the same technology. The only difference between the internet, an intranet and an extranet is who has access to what. The goal is to have access to what you need no matter where your are at any time of the day or night. And no matter where you are when you log in, things should work the same way.

  • Do hook your accounting system data to the intranet using ODBC and SQL. A wealth of information is locked inside your accounting system. Set it free! Most of the reports you create today should be pages on your intranet. Use accounting systems that support ODBC, preferably SQL server databases (see the discussion above).

  • Do use the right tool-the right computer program-for the right job. The right tools and training can cost hundreds of dollars but save you thousands of dollars in time, consulting fees and reworking because you did things the wrong way. If you need technology training, get it now.

  • Do steal ideas from others. The Internet is loaded with ideas. The Journal and many other business magazines have lists of the best sites; read about them and check them out.

  • Do work with others; share ideas. Make use of each person's strengths.

  • Do connect external resources to your intranet; don't reinvent the wheel if you don't need to. For example, why post a list of IRS forms when the IRS has already done it? Just link to the IRS site (

  • Do look around at what is on your desk, what you use every day. It all belongs on your intranet: lists you've taped to your walls, Yellow Pages (, FASB references (, dictionary (, airline schedules (, office supplies (, your favorite search engine (, the AICPA ( and your state CPA society. These are useful and you don't have to build them.

  • Do get upper management support or your project will be dead before it begins.

As you plan your intranet, these are some problems you may run into:

  • Maintenance costs will be disappointingly high if you do not create as much dynamic, database-driven content as possible. Assembled correctly, intranets save money.

  • Don't believe that once you build your intranet people will flock to it. Employees will want to keep using their old familiar systems; you'll have to give them some basic training so they understand how much more efficiently they can work with this new tool.

  • Integration may seem difficult at first. Over the next few years, you may need to change many backend applications, such as your accounting system, billing system and server operating systems, because it is too difficult to get information from them onto your intranet. (For example, older data structures, such as Btrieve and Ctree, are very difficult to work with.) Buy the best new applications, always thinking of common standards .

Security is an issue—but that's all it is, not a nightmare. And it's fairly easy to resolve. Charles Schwab ( and Wells Fargo (, among many other financial institutions, provide financial information to their customers online. If they can secure their sites, you can secure yours.

Can hackers get into your site? If they want to, they probably will. Banks still get robbed. Hackers have broken into NASA, which has security resources you'll never match. A networked community is not without risk. But through well-designed security software you can create an environment of trust so the benefits will far outweigh the risks. Hire security consultants that understand security. (See "The Electronic Frontier," JofA, May98)

Once you use and understand the technologies available, you will be able to offer advice to clients and customers. Your new skills will be especially powerful when combined with your knowledge of financial information systems.

IBM and the U.S. Chamber of Commerce unveiled a study on U.S. small business and technology ( It said that small business owners appreciate the value of technology, but they are unsure about where to buy and to whom to turn for help and advice. Who better than the conservative, trusted CPA to provide information systems advice? Usually, a small business's first step in technology is to automate the accounting process. Once the proper infrastructure is in place, a business can do a lot more than accounting for very little cost.

Accountants could assume full responsibility for their companies' and clients' intranets and not limit themselves to financial information. In fact, it's dangerous to stick to the old ways: In an integrated environment, traditional accounting functions will become automated. (see "The Future of Finance,", JofA, Aug.95, page 47, for more details.) What will accountants do then? CPAs have for decades honed their internal control skills on their companies' accounting systems, which, as a result, typically have the best internal controls of any organization's information systems. In an automated environment, CPAs will be able to apply those controls to all the organization's information. Auditing security and access to information could be an accounting function. Keeping the data synchronized could be an accounting function. Building reports could be an accounting function. Why audit only once a year when you can audit every day and be notified via e-mail of an indicator of a possible impropriety? Internet technologies can make all this happen.

As you study the sample site, reflect on how intranets blend smoothly with prickly packets of data, as if they were made for each other. Intranets are truly your information tao, which is defined in the dictionary as "the art or skill of doing something in harmony with the essential nature of the thing."

General Ledger Transactions
How do you want to see your data? Intranets give you a variety
of options for handling your general ledger.


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