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By Paul Korzeniowski
Network World, 4/27/98

You don't often find an intranet effort driven by top executives, but that's exactly what is happening at global engineering conglomerate Kvaerner ASA.

Equally as unusual, Kvaerner has actually calculated what it'll likely cost to build the intranet. The Lysaker, Norway-based company expects the intranet project to rack up bills totaling as much as $18 million by the time it's completed early in the year 2000.

What's more, head honchos at the engineering giant embraced Web technology for internal use well before most corporate executives had even heard of the word "intranet." Kvaerner's chief managers recognized an intranet's potential back in early 1995 when they were spurred to think about alternative means of disseminating information to a vast work force. In a survey conducted that year, 85% of employees viewed timely access to easy-to-use data as important to their jobs.

Top executives were willing to help employees on their quest for valuable, job-related information, but making such information readily available would be quite a challenge. Electronic communications were limited for a couple of reasons.

Diversity was one. The corporation has shipbuilding, construction, metal, oil and gas, pulp and paper, and environmental engineering business units. It employs 65,000 people who work out of 450 offices in more than 100 countries spread across five continents.

A decentralized IT structure was a second problem. Each business unit selected its own software and computers, resulting in a hodgepodge of disparate systems that couldn't be tied together electronically. So Kvaerner relied on a costly and inefficient mix of postal mail, courier services and fax to disseminate information.

"We did not feel the organization was as efficient as it could be; disseminating information took time and employees had to sift through a lot of data to find items of interest to them," says Bjorn Stuedal, Kvaerner's group manager for electronic information services.

Talk of intranets was just beginning, and Kvaerner's top management found the possibility intriguing. So with marching orders from the CEO, the company began formulating a plan to replace the mishmash of communications systems with an intranet.

Corporate management would test the emerging technology at headquarters, says Jorgen Piene, the vice president for IT at Kvaerner. "By working directly with these systems, top management would gain firsthand knowledge about an intranet's benefits and drawbacks," he explains.

Wanted: Web experience

Kvaerner decided to outsource its Web project as a way to keep IT costs low, so it searched for a systems integrator experienced in building intranet applications. Elit Logik AB fit the bill, and in the fall of 1995 Kvaerner began working with the Stockholm, Sweden-based consulting firm on developing its intranet.

Identifying suitable products for the intranet was not easy, given that the few tools available were for Unix, not the Windows NT operating system favored by Kvaerner, says Magnus Bornow, a principal at Elit Logik. But the team did find Purveyor, a Web server for NT from Process Software Corp.

Kvaerner's desire to give employees the ability to draw dynamic information from corporate databases posed yet another challenge. "Kvaerner understood that its data would constantly change and a [database management system] offered it more flexibility than static pages," Bornow says.

Also, the intranet needed a distributed design so employees in one business unit could update information, then relay it to other sites.

The project team tinkered with Oracle Corp.'s DBMS, but because the product didn't have a 32-bit Open Database Connectivity driver, it opted for Microsoft's SQL Server. It then picked DB Web, a product Microsoft eventually purchased, as a programming tool for working with the DBMS.

In January 1996, Kvaerner began a pilot for Web-based distribution of basic information, such as press releases, human resource materials and memos. The program involved 2,000 employees in the company's Norwegian offices.

By that April, the company completed the pilot and identified a handful of additional intranet applications to develop. Using internal information sources, the company decided to post a corporatewide employee directory, an e-mail system and a file transfer application on the intranet.

In addition, the engineering firm decided to feed some external information into its intranet. It designed an application for providing clips from a Norwegian news service and a Reuters-based application that lets employees get financial data such as up-to-the-minute currency exchange rates. Because the initial results were positive, Kvaerner decided the next step would be to roll out the applications to corporate offices in London, Houston and Sydney, Australia. But the company didn't want to do the systems integration and support work, so in April 1996 it sent requests for proposal to major systems integrators, including Digital Equipment Corp., Hewlett-Packard Co., IBM and Sun Microsystems, Inc.

The Digital factor

Digital, by virtue of its relationship with Microsoft, won Kvaerner's business. Digital's proposal included provision of and support for Microsoft's Internet Information Server (IIS), SQL DBMS and Exchange, Bornow says.

Microsoft products play featured roles in the computing infrastructure Kvaerner has been building for its intranet. Windows NT remains the operating system of choice, IIS has replaced Purveyor as the select Web server, Exchange supports corporate e-mail services and Internet Explorer is the browser of choice, Kvaerner's Piene says.

Kvaerner anticipates that intranet applications will increase corporate efficiency because business units will be able to share information more readily, and corporate policies can be outlined more easily. The company is building a number of applications for business basics such as pension funds, employee discount plans, corporate procedures and travel policies so departments can function in a more consistent manner.

Minds of their own

But having departments fall in line with corporate management wishes is never easy. Many business units have chosen other browsers, intranet servers and e-mail systems. These groups will have to trade in those products in order to access the corporate intranet.

The company is taking many steps to help convince the various business units to support the switch, Piene says. For example, the central IT group formed a council of IT managers from different business units. The council keeps the managers abreast of the project's progress.

Kvaerner also is providing the Web systems, software and technical assistance free to the various business units. That means business units provide the content, and the outsourcing firms handle the rest.

But in addition to these carrots, the central IT group is wielding a few sticks. Kvaerner has decreed that business unit IT groups cannot spend money upgrading any nonstandard products - for example, anything other than the Microsoft suite. Also, the company has established Jan. 1, 2000, as the deadline for all business units to complete their migration to the new infrastructure.

Kvaerner has extended the intranet to its Houston and London offices, and this spring plans on bringing Singapore (rather than Sydney, as originally intended) online to complete the rollout to corporate offices.

Employees access the nearest intranet server using local dial-up, leased-line or frame relay connections. An international frame relay network links Kvaerner's worldwide offices. Millions spent, millions saved Kvaerner already has invested millions on its intranet. But the engineering behemoth has determined that the changes will save the company money and improve employee efficiency. For example, the company faxes a daily financial report to all offices at a cost of $2 million per year; moving the application to the intranet should slash that cost dramatically.

"We've spent the last few years laying the groundwork needed to support intranet applications," Kvaerner's Stuedal says. "This year, we expect to start realizing rewards from those investments."