What is an enterprise? The term is often used in general business situations to describe a corporate entity, anything from a sidewalk espresso cart to an organization as large as TISCO or Hindustan Lever.

According to Mondy, Sharplil and Premeaux, an enterprise is the group of people with a common goal, which has certain resources at its disposal to achieve this goal. The enterprise acts as a Single entity. A schematic representation of an enterprise is shown in the above figure. Note that information is shown as a resource along with other physical resources. However, this view of a company or organization is drastically different from the traditional approach.

In the traditional approach, the organization is divided into different units based on the functions they perform. So we have manufacturing or production department, production planning department, purchasing department, sales and distribution department, finance department, R&D department and so on. Each of these departments is compartmentalized and has its own goals and objectives, which from their point of view is in line with the organization's objectives.

Each of these departments functions in isolation and has its own systems of data collection and analysis. So the information created or generated by the various departments, in most cases are available only to trie top management (that too as summary reports) and not to the other departments. The result is that, instead of taking the organization towards the common goal the various departments end up in pulling it in different directions. This is because one department does not know what the other does.

Also sometimes the departmental objectives can be conflicting. For example, the sales and marketing people will want more product variety to satisfy the varying needs of the customers. But the production department will want to limit the product variety to cut down production costs. So unless all the departments know what the other departments are doing and for what purpose, these kinds of conflicts will recur disrupting the normal functioning of the organization.

Information Compartmentalization in an Organization

Information Compartmentalization in an Organization

Information Compartmentalization in an Organization

But in the enterprise way the entire organization is considered as a system and all the departments are its subsystems. The information about all the aspects of the organization are stored centrally and are made available to all departments as shown in the following figure.

This transparency and information access ensures that the departments will no longer be working in isolation pursuing their own independent goals. Each subsystem knows what others are doing, why they are doing it and what should be done to move the company towards the common goal. Thus the information integration creates an environment that is conducive for the smooth and seamless flow of information across departmental barriers, automating business processes and functions and thus helping the organization to work and move forward as a single entity.

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