If you break down the word “extranet,” you get “extra,” which is an organization’s case that means anything crucial to your organization but existing outside of it. Such entities include vendors, suppliers, and clients.  With this in mind, then the extranet is just a highly secured private network specifically designed to allow these individuals in your organization’s communication virtual space. It is often defined as a private network that leverages internet technology and public telecommunication system to share part of a business’s information or operations over a secure system with suppliers, vendors, partners, customers, or other businesses. An extranet is often considered part of a company’s intranet extended to authorized users outside of the organization.

It provides controlled access to authorized people outside of the company. Much like the intranet, it allows for private communication, document and knowledge sharing, and transfers between crucial external partners and an organization. A good example of an extranet network would be Sharepoint.

The Use of an Extranet

Extranets act as a system of engagement for your business’s prospective clients. Just as intranets can increase employee engagement, extranets expand to engage individuals outside of your organization too.

Generally, organizations will use extranets for:

• Customer service by distributing personalized information to customers in a more efficient way
• Training and education for new employees
• Communicating and connecting with customers in a more controlled setting
• Easing project management tasks by providing a workspace with access to common online documents for teams

The Advantages of an Extranet

Extranets offer a range of key benefits to businesses and organizations. It helps them:

• Communicate and collaborate more effectively with their stakeholders and clients via a secure network.
• Integrate supply chains like consolidated processes.
• Reduce costs by making relevant documentation like manuals available online to all the relevant parties.
• Improve their business relationships through collaboration within the extranet.
• Simplify their internal processes by using a single interface.
• Secure company communication in a controlled environment.
• Work flexibly as the extranet allows people to work remotely and be more mobile. More so, people are given 24/7 access to the core business information irrespective of their location.

The Disadvantages of an Extranet

• If hosted internally instead of via an active server page, implementing an extranet within an organization tends to be quite expensive.
• Extranets can reduce personal contact (face-to-face meetings) with customers and business partners. This could cause a lack of connections made between people and a company, which hurts the business when it comes to its business partners and customers’ loyalty.
• The security of extranets can be a big concern because it deals with valuable information. Systems, therefore, need to be carefully controlled to avoid hacks or misuse of data.

To answer this common question, an extranet is a controlled private network that provides businesses and organizations with a platform to organize communication within an organization between internal and external parties.