Companies are increasingly turning to portals to exploit internal information and increase productivity, and they are taking up an increasing share of software expenditure.

But with the average cost of implementation now over €1m (£640,000), firms without a true portal strategy could be making a costly mistake, according to a new report from Forrester entitled Portal Success Requires Adoption Incentives.

The report underlines the importance of taking user needs into account. Companies too often get carried away with adding functionality and data that the end user just does not need, explained David Metcalfe, co-author of the report.

Once they have built their portal, they need to entice employees and consumers to use it by providing value-added information. They also need to keep implementation costs down by building a single portal infrastructure.

Three distinct portal models have emerged, according to the report:

Pure-plays focus on managing content and are the speciality of software companies such as Plumtree and Vignette.

Application portals, which integrate the portal with underlying software from the same company, are the speciality of large vendors such as SAP and PeopleSoft.

But the report says that platform portals are the most exciting developments. Served by the likes of BEA Systems and Vitria, platform portals offer strong support for third-party applications and business process management.

Companies need to ensure that their portal strategy is aligned with their overall IT strategy. If a company uses mainly SAP applications, for example, they should use SAP software for their portal, Metcalfe advises.

But if they use a wide range of systems they are better off with products specialising in integrating diverse applications.

But what is the difference between a portal and an intranet/extranet? Portals could be viewed as 'turbo-charged' developments of the former.

Rather than offering a page of links, portals hold out the possibility of single log-on, role-based access, with intelligent systems recognising the level of the user and configuring themselves accordingly.

Single log-on does come with an increased security risk, but Metcalfe suggested that the danger is less from ingenious hackers than from users being careless with their passwords.

A well-executed portal, as well as increasing productivity, also holds out the prospect of serious cost savings.

As the portal becomes the core IT infrastructure, changes to underlying software can be carried out with little disruption to the end user, resulting in greatly reduced training costs.