An extranet is defined as a network that allows specific external sources. be
they individuals or organizations, to have limited access to a firm. As an example. an extranet will link a company with an approved group of suppliers. Electronic data interchange (to be discussed shortly) is a good example of an extranet. Organizations use an extranet to share classified or highly sensitive data with their business partners. For example, through an extranet,
Procter & Gamble has access to Wal-Mart's sales and inventory data. By sharing such data. these two firms both benefit through lower costs of production and distribution as well as improved levels of customer service to the consumer.