How to Beat Corporate Alzheimer’s

For as long as people have been keeping records, they’ve struggled to find efficient ways to file their work. Ancient Assyrians, who scratched records on clay tablets, stored documents in pigeonholes in the walls of libraries, writing a list of each room’s contents on the wall — a kind of primitive database. While modern technology has advanced well beyond clay tablets, databases still require that information be stored away in precisely defined fields, the digital equivalent of those pigeonholes.

Once data gets stored, how do you find it again? If it’s in a structured database with lots of neatly organized fields, it’s not hard. But in most companies, there are valuable stores of data tucked away on employees’ hard drives, on Web servers, and on the company intranet: Word documents, PowerPoint slides, spreadsheets, e-mail, and so on. Such files represent, by some estimates, as much as 80 percent of a company’s information assets. Good luck finding much of use in this heap of unstructured data.

To mine these documents, many companies are turning to so-called knowledge management (KM) technologies. If the term arouses skepticism, your instincts are good: Large consulting firms touted half-baked KM software as a panacea for enterprise information management in the late 1990s. Early KM software required employees — or a cadre of librarians — to carefully organize and annotate information before it could be managed. That approach proved too labor-intensive and expensive to be worthwhile.

Today, KM is making a comeback on the strength of better solutions — namely, the humble search engine. In the last few years, search engines, originally developed to comb through the sprawling expanses of the Web, have become remarkably effective at finding bits of data wherever they lie. That’s because new technologies largely automate the processes of categorizing and summarizing documents. For instance, Autonomy (AUTN), a company based in Cambridge, England, offers an engine that provides a statistical analysis of word frequencies and concepts and automatically groups related documents. You may need a Ph.D. to understand the technical details, but not to grasp the benefits, especially when you’re delivered a handful of highly relevant documents instead of 32,873 “related” ones.

The current market leaders for enterprise KM software are Autonomy and Verity — industrial-strength search engines equipped with the bells and whistles that corporations want, such as the ability to integrate databases and CRM systems and to restrict access to sensitive documents. But don’t discount the technologies offered by Web search engines, such as AltaVista, Google, and Inktomi (INKT), all of which offer corporate products. Which solution works for your company will depend on your infrastructure and how well-suited a search technology is to your data types — something you may be able to determine only with hands-on tests.

The impact of KM software can be profound. For example, Deloitte Consulting uses a KM system based on a search engine from Verity (VRTY), along with an Oracle (ORCL) database and content management software from BroadVision (BVSN), to provide its nearly 20,000 employees with access to a repository of more than 250,000 documents. Deloitte chief information officer Larry Quinlan says the $2 million system provides an “essential” means of sharing information about consulting practices. “Deloitte is all over the world,” he says. “Without [the KM system], we just wouldn’t be able to function.”

Large-scale KM initiatives such as the one employed by Deloitte can cost millions of dollars and may take 18 to 36 months to bear fruit, according to French Caldwell, research director at Gartner Inc. Smaller corporations with shallower pockets should start with modest KM projects that will have a more immediate impact, such as making customer-service records searchable.

Still, a KM system, like most enterprise software, takes work to get right. You still need to make sure the search results are well-organized. In most cases, that means using expert help (i.e., librarians) to ensure that results are grouped logically and to hone the engine’s search capabilities.

Ultimately, the biggest KM issue may simply be getting employees onboard. According to Gartner’s Caldwell, 90 percent of Fortune 500 CEOs believe that their KM initiatives are running smoothly, but less than 50 percent of their senior managers agree — a significant disconnect that demonstrates the difficulty of changing the way people work and share information with one another.

One surefire way to encourage employee participation is with bribes. Integra, a European provider of managed hosting services with 1,900 employees, offers cash rewards for staffers who contribute information and add their profiles to its AskMe-powered KM system. But the biggest incentive, says VP for engineering Aldo Pomponi, is being able to get help when you need it: “It’s about not wasting two days and getting frustrated.” Integra’s tactics have worked: One month after the launch of a pilot project, all 355 employees in the test group were using the system.

Knowledge management technology won’t revolutionize commerce, but it might reduce the likelihood that employees will waste time searching for misfiled information. That sure beats tucking clay tablets into pigeonholes.

The Search Experts

PRICE* ENTERPRISE CUSTOMERS AltaVista The software is particularly adept at handling vast unstructured document collections. $50,000 and up 1,200, including Amazon, Boeing, Visa AskMe Technology is aimed at connecting people with experts who can answer their questions. $300 per user, plus service fees 40, including Integra, Procter & Gamble, 3Com Autonomy A market leader; automatically profiles and categorizes documents based on statistical analyses of their meanings. $90,000 and up; average is about $250,000 450, including AT&T, General Motors, Lucent Google Ranks documents based on how many other documents link to them. $10,000 to $100,000 120, including Cisco, Palm, Yahoo Inktomi Searches through a variety of enterprise data and databases. $2,995 per 3,000 documents 2,500, including CNN, HP, Sun Verity Dominant corporate search engine; incorporates a variety of sophisticated indexing and ranking technologies. $40,000 and up; average is about $200,000 1,000, including AXA Financial, Deloitte Consulting, Home Depot

*Prices are variable. Most listed here are starting points for a small collection of a few hundred thousand documents.

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Internet Emerges as the Most Reliable Way to Communicate

In the hours and days after the Sept. 11 terrorist attacks, millions of phone lines went silent, but e-mail and the Web continued to work.

For years we’ve been hearing about how the Internet was designed to withstand nuclear attacks. Well, at least we know it can resist terrorist bombardment, as was proven on Sept. 11 when the World Trade Center’s collapse took out a massive chunk of Manhattan’s telecommunications capability. Internet service continued uninterrupted after the disaster.

A Verizon switching office that handled 200,000 telephone lines and 3 million data lines was severely damaged by the attack. Its office represented 40 percent of lower Manhattan’s phone lines and 20 percent of the New York Stock Exchange’s phones, according to Associated Press reports. WorldCom and Sprint, which operate much of the Internet’s “backbone” infrastructure, also lost hundreds of high-bandwidth data lines that had passed under the World Trade Center.

But the Internet itself remained strong, as data was routed around the damaged switches and transmission lines, taking alternate paths exactly as its designers intended. The Net’s fundamental communications standard, the Internet Protocol (IP), was created so that packets of data always take the optimum route. If data such as e-mails and page requests can’t take the usual route from point A to point B, they’ll find another way. It may take longer to get there, but the message will still arrive.

The result: In the hours and days after the attack, I found — as did many others — that while phone lines to New York were jammed, people could be reached by e-mail and instant messaging. And while major news sites suffered crushing levels of traffic, the Internet as a whole wasn’t crippled by the surge in usage, according to network monitoring company Keynote Systems. Keynote reported that the performance of the 40 biggest websites was about twice as slow as usual during the week of Sept. 11, but the basic infrastructure of the Net remained sound.

For businesses, that amounts to a ringing endorsement of Internet-based communications. Executives who pooh-poohed instant messaging in the past may find themselves relying on it now, particularly in emergencies where other forms of communication have been shut down or damaged beyond immediate repair.

In the long run, the events of Sept. 11 likely will push more and more companies toward Internet telephony. Voice over IP (VoIP) technologies, which let you place telephone calls using the Internet’s infrastructure, now look better than ever. I’m talking not about consumer-oriented Internet phone services but about full-blown corporate telephone systems (from the likes of Cisco (CSCO), Lucent (LU), Nortel (NT), and 3Com (COMS)) that are based on IP and route voice calls through your existing data network. With the right setup, you could still place calls to co-workers even if one or two or a dozen major telecommunications lines are broken.

Companies also are already conducting an increased amount of business remotely, using teleconferencing and videoconferencing systems. That bodes well for streaming-media technologies, which digitize video and audio streams for real-time transmission over the Internet (corporate vendors of these technologies include Microsoft (MSFT), PictureTel (PCTL), and Polycom (PLCM)). With air travel increasingly inconvenient — not to mention nerve-racking — it’s a good time to take a hard look at whether in-person meetings are really necessary. When they aren’t, why not do a videoconference instead? This could also be useful on those days when employees can’t make it to the office: With video-ready laptops, they can teleconference from their homes instead.

These are expensive systems, to be sure, and with IT budgets in limbo you probably won’t be rushing out to buy one tomorrow. But when spending picks up again, VoIP should be at the top of your shopping list. For one thing, it is a smart addition to the investments in Internet infrastructure that you’ve been making for the past five years. VoIP systems will also be easier to integrate with the IP-based networks that the big telecommunications companies are building right now. And they promise to cut long-distance charges as well as introduce a new level of reliability into your phone system. Internet-based videoconferencing offers similar cost and reliability advantages, although for most companies it will be a lower priority.

But one thing is certain — companies will be renewing their interest in communications technologies that are robust enough to keep working during a crisis. Suddenly the Internet’s messy, decentralized infrastructure is looking pretty good.

Has your company’s Internet communications strategy changed since Sept. 11? Write to me at

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Are You Overspending on That App Server?

To do business on the Web, you need an application server. Too bad you’re probably paying too much for it.

In e-business, an application server is the functional equivalent of the guy who stands on a shipping dock loading and unloading boxes all day long. It’s not a glamorous job, but it is totally essential to many businesses. No shipping dock means no product deliveries, no supply chain — in short, no bricks-and-mortar business.

Now imagine that you’re paying that loading dock employee half a million dollars a year — 10 times the going wage. Sound crazy? That’s the scenario that’s playing out in the application server world, according to a recent report by Gartner Inc., a research and consulting company in Stamford, Conn.

Application servers do the heavy lifting of e-business. They provide the essential services the Web applications need, such as managing transactions, keeping track of customers as they browse through your website, and connecting to the databases at the heart of your company. Using application servers, your techies (or hired consultants) can integrate customer and product data with webpages. The result: Web applications — the programs that do functional things on your site, such as validating credit card numbers, managing customer shopping carts, or delivering personalized webpages to site visitors.

In theory you could build an e-business website without using an application server, but it would be pretty hard going — sort of like trying to build a house by chopping down trees, milling your own lumber, and forging your own steel tools. It’s much easier and faster, and usually cheaper, to build your website using the prefabricated tools that application servers provide.

The problem, according to Gartner, is that companies are grossly overpaying for high-end Web application servers that cost $100,000 and up, such as IBM’s WebSphere (IBM) and BEA’s WebLogic (BEAS), when they could make do with cheaper, midrange servers that cost a 10th as much — in the neighborhood of $10,000. In all, Gartner estimates that companies have overpaid by $1 billion since 1998, about 25 percent of the total expenditure for application servers since that year.

Gartner VP for Internet research David Smith told me that many companies are simply confused about what kinds of application servers they need — and how to build their websites accordingly. “Even though companies may have a legitimate need for high-end application servers, that doesn’t mean their entire infrastructure needs it,” he says.

The top-tier application servers include features that might be needed in some parts of your Web infrastructure, but don’t need to be built into every single server. For example, high-end application servers usually include support for Enterprise JavaBeans (a Java standard that facilitates communication between different computer systems). According to Smith, only 20 percent of Web application servers actually make use of EJB, though many more include — unused — the capability to do so.

Instead, Smith recommends that you install such high-end features only where they are needed — at the point where your website communicates with the rest of your company’s IT architecture, such as your central databases (known as the “back end” in IT parlance). Use cheaper application servers elsewhere on your site. When those cheaper servers need access to the back end, they can use the high-end servers as intermediaries.

IBM and BEA both offer cheaper versions of their Web application servers. Application servers are also built into so-called integrated development environments, such as SilverStream (SSSW) and Macromedia’s Jrun (MACR), which include the tools for developing Web applications as well as the servers for deploying them. And, finally, there’s Microsoft, which has built application server capabilities into Windows 2000. Any of these servers would be well-suited for those places in your architecture where you don’t need a full-fledged high-end server. The key is not to reflexively buy the top-tier application servers, and instead cast a closer eye on your website’s architecture and operating budget.

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