Network Solutions

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Computer networks, including the Internet, play critical roles in business and communications. Without them, it would be impossible for companies to engage in e-commerce and the vast majority of business systems would come to a complete standstill. Therefore, by enabling real-time relationships between many parties, networks in many ways become synonymous with the individuals and businesses they connect. Networks provide speed, connectivity, and ultimately value to their members and provide solutions to business challenges and problems that otherwise would not be possible.

Over time, businesses make large investments in computer systems used to manage different functions, such as accounting, human resources, customer service, purchasing, inventory management, and so on. These hefty investments make it difficult to totally replace old systems with new ones. Beyond the purely financial costs involved, doing so often requires retraining thousands of employees and making changes to long-established systems and processes. Therefore, it is common to find patchworks of older legacy systems connected together within large companies.

Integrated, networked systems are at the very heart of e-commerce. In a perfect world, companies would be able to network all of their underlying computer systems, both new and old, together in a seamless fashion. Employees, customers, and business partners would have instant, real-time access to the information contained in these systems and would be able to access and share it easily. Unfortunately, many legacy systems were not designed to be used with other systems, or to be accessed via the Internet. One of the biggest challenges facing businesses and entire industries is connecting applications and networks together at the company and industry level and getting them to work reliably.


In the early 2000s, companies relied on in-house technical employees, consultants, and a variety of information technology-based tools (hardware and software) to plan, execute, and manage network solutions at both the technical and the strategic levels. While the largest organizations had the luxury of employing staff devoted to exclusively to information technology, smaller and medium-sized organizations often found it more cost effective to contract with third parties for many network-related services. Larger companies also followed this approach in situations where services were highly specialized and hiring or training in-house staff was deemed too expensive. For example, a study conducted by People3 found that among 104 different information technology (IT) jobs, network architect positions took the longest for companies to fill (4.2 months). For reasons like these, outsourcing was a popular option. According to a CommerceNet survey, in early 2001 almost 75 percent of e-commerce firms outsourced some of their work or were considering doing so.

In order to obtain expert advice quickly, companies and industries often turn to large consulting firms. Such consultancies are able to use their vast, broad experience and resources to help clients plan and implement network solutions that they can't affordably develop in-house. This not only involves a tremendous amount of specialized knowledge and experience, it also requires continually staying current about the latest developments in technology. KPMG Consulting was one leading consultancy in the early 2000s. One of KPMG's clients was the Union Bank of California, for whom it helped build a large, company-wide network solution. As InformationWeek explained, KMPG helped the bank "build and implement a retail sales, marketing, and relationship-tracking application for the bank's 250 branches. The application, which will link more than 1,000 sales and support personnel via Web browsers, will let bank employees instantly access consumers' financial profiles, as well as deposit, investment, and loan-account data."

Although consultants were a powerful resource for many organizations, there were disadvantages to using them. Published accounts of consultants relying on unethical business practices were not uncommon in the early 2000s. One approach used by some consultants was to draw out projects and continually recommend additional services or devices. Another approach was known as the "bait and switch." In this scenario, consultancies secure IT projects by sending in bona fide experts to close deals with clients. Companies are willing to pay handsomely for this expertise, and expect the consultants to be directly involved in their project. However, instead of the experts, recent college graduates are sent in to perform the actual work, at a lower cost to the consultant. Consultants also have been known to overcharge clients for a variety of reasons. Although some of these practices have resulted in highly publicized lawsuits, many go unreported when discovered by clients, who remain silent instead of revealing the expensive blunders to senior management or the company's board of directors.

Like any system or tool that provides value to users, networks require monitoring and maintenance. In addition to the advice of consultants, network management software and systems were powerful tools organizations used to keep their solutions up and running. These were useful for avoiding network problems and inefficiencies that cost companies large sums of money, including traffic bottlenecks; down-time; poor Web site, application, workstation, and server performance; and compromised security. In the early 2000s, network management systems varied in cost and complexity, depending on their range of capabilities. Such systems were able to issue wide varieties of reports and notify network administrators of problems. Historically, one challenge administrators faced was finding a way to tie multiple network management systems together so they had access to one streamlined view of all activities. However, special software packages eventually were developed to address this issue, which stemmed from networks that were growing in complexity and sophistication.


One company that was highly successful at leveraging the power of networked systems as a business advantage was Walgreen Co., which in 2001 was the largest U.S. drugstore chain with 3,446 stores operating in 43 states and Puerto Rico. The company began using networks as a solution to business challenges in 1981. At that time, it connected its pharmacies together via satellite and unveiled a computer system called Intercom. Since then, its computer systems and networks have continued to evolve. The next generation of Intercom was Intercom Plus, which Walgreens described as an advanced "pharmacy computer and workflow system."

Intercom Plus provided a variety of benefits to staff and customers. One of the system's features allowed patients to request prescription refills and pickup times by phone and have the data fed directly into Walgreen's system. Consumers also could access Intercom Plus via Walgreen's full-service online pharmacy. Because the same system is used via the Web, telephone, or at physical store locations, Walgreen always has one consistent, real-time view of its operations, and is able to realize benefits through increased efficiencies.

In August of 2000, Walgreens took advantage of its seamless network to make e-commerce even easier for its customers when it gave them the ability to register for its online pharmacy by simply providing their e-mail address to staff at any physical retail location. Staff then took the address and integrated it with information that was already on file for that customer in Walgreen's database. This eliminated the need for customers to re-key the information online. Once their e-mail addresses were added to Walgreen's system, customers automatically received a username, password, and PIN number via e-mail, allowing them to use their new online account.


Botelho, Jay. "The Latest Look in Systems Management." Telephony, June 5, 2000.

"KPMG Adapts to Being On Its Own." InformationWeek, April 30, 2001.

Liebmann, Lenny. "Network Management Goes Open Source." Communications News, April 2001.

Nash, Kim S. "Users Say Consultants Play Role in IT Disasters." Computerworld, November 6, 2000.

Walgreen Co. "Background on Electronic Prescriptions." Walgreen Co. July 28, 2000. Available from

SEE ALSO: E-commerce Consultants; E-commerce Solutions