Enterprise-An Overview

INTRODUCTION
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 TELCO or Hindustan lever. An enterprise is the group of
people with common goal. which has certain resources at its disposal to achieve
this goal(see Figure 1.1). The enterprise acts as a single entity. 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 departmen, sales and
distribution department, finance department, RnD department and so on. These
departments are compartmentalized and have their own goals and objectives,
which from their point of view is in line with the organization's objectives.
These departements function in isolation and have their own systems of data
collection and analysis. So the information that is created or generated by the
various departments, in most cases is available only to the top management
(that too as summary reports) and not to the other departments(see Figure 1.2).
The result is that, instead of taking the organization toward the common goal the
various department end up pulling it in different directions. This is because one
department does not know what the other does. Also sometimes the
departmental objective 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 and until all the departments know what
the others are doing and for what purpose, these kinds of conflicts will arise thus
disrupting the normal functioning of the organization. But in the enterprise way
the entire organization is considered as a system and all the department are its
sub-systems. Information about all the aspects of the organization is stored
centrally and is available to all departments. This transparency and information
access ensures that the departments will no longer be working in isolation
pursuing their own independent goals. Each sub-system knows what others are
doing why they are doing it and what should be done to move the company
towards the common goal. ERP systems help to make this task easier by
integrating the information systems, enabling smooth and seamless flow of
information across departmental barriers, automating business process and
functions and thus helping the organization to work and move forward as a single
entity.
resources, etc. Each functional area comprises a variety of business functions
and business activities within that functional area of operation. Earlier basiness
systems functioned as if what happens in one functional area is not closely
related to what happens in others and one area's information systen has no
impact on those of the other functional areas Recently managers and
organizations have started to think in terms of Business processes rather than
business functions. A business process is a collection of activities that takes one
or more kinds of input and creates an output that is of value to the cusuomer.
Thinking in terms of business processes helps managers to look at their
organizations from a customers perspective. For example for a person who wants
to buy a car, the important things are the information about the product, choices,
quick and efficient service, fast order processing and delivery availability of
finance and completion of other formalities like registration, insurance, etc. With

mininum trouble. The customer is not bothered about who is speaking to him,
what the policies of the company with regards to employee selection are, where
the raw materials are purchased and for what price, and so on. The customer
wants a good quality product, delivered to him at a competitive price as fast as
possible with minimum hassles.
The difference between a business function and a business process is that a
process cuts across more than one business function to get a task done. Suppose
the car was damaged during delivery It is a business function of customer
service to accept the damaged item and depending on the severty of the
damage replace the car or repair it. The actual repair or replacement of the car is
a business process that lavolves saveral functional areas and function within
those areas. Thus, the customers are looking across the company's
functional areas in their process of buying and obtaining a car. Business
managers are now trying to view their business operations from the perspective
of a satisfied customer. For a company to provide customer satisfaction. it must
make sure that its functional areas of operation are integrated. For example the
people in sales and marketing should now the up-to- date details of the latest
products, their prices, their features and so on so that they can provide this
information to the customers. Similarly, the people in the manufacturiug plants
should know which models are being ordered in large quantities so that they can
buy the necessary materials and start manufacturing those items to deliver to
the customers. Sharing data effectively and efficiently between and within
functional areas leads to more efficient business processes Information systems
can be designed so that accurate and timely data are shared between funcional
areas. These systems are called integrated information systems.
INTEGRATED MANAGEMENT INFORMATION An information system is an open,
purposive system that produces informati using the input-process- output'
cycle. The minimal information system consists of three elements-people
procedures and data. People follow procedures to manipulate data to produce
information. In today's computer world, the definition information systems
has undergone a slight change. Today an of information system is an organized
combination of people, hardware, software, communications networks and data
resources that collects, collates, transforms and disseminates in an organization.
Management Information systems also called information-reporting systems
were the original type of management support systems, and they still are a
major category of informatior systems MIS produce information products that
support many of the day-to- day decision-making needs of the management.
Reports, charts, graphs, displays and responses produced by such systems
provide information that managers have specified in advance. Such pre-defined
information satisfies the needs of managers at the operational levels of the
organization who are faced with the structured type of decision making.
But the prcblem with these information systems is that they operate at a
departmental level and they give only information that has been pre-defined. So
each department will have its own database and information systems. These
systems will produce various reports of varying detail that was specified when
the systems were built. This method of information gathering has two major
disadvantages. One the people in one department do not have any information
about what is happening in the other departments. May be at the top
management level the summary reports are being circulated to other
department also, but these summary reports often fail in capturing the real
picture. The second drawback is that these systems give only the information
that they are designed to produce at the time they were built. Suppose a

manager wants some information, which is not in the reports, then these
systems are of no help. As mentioned, these systems lack the integrated
aproach. There will be an accounting system for the finance department, a
production planning system for the manufacturing department, an inventory
management system for the stores department and so on. All these systems will
perform in isolation. So, if a person wanted some information, which has to be
derived from any of these two systems, he has to get the necessary reports from
both systems and then correlate and combine the data.
Because the systems work in isolatic collecting and analyzing the dataneeded for
func of one department, as I have nentioned carlier, and getting information
about some aspect that is dependent on more than onc department, is a difficuli
task. t no business executive or decision maker can take good decisions with this
isolated data that he can get f the various reports produced by individual
departments. Fven if he co tes the data and produces the information that he
requires, he will have lost vaiuable time that would liave been vetter spent in
aking In reality, a organization cannot function as islands of different
departments. The production planning data is required for the purchasing
department. The purchasing details are required for the finance department and
so on. So if all the information islands, which were functioning in isolation vere
integrated into a single system, then the impact of that would be dramatic. For
example, i the purchase department can see the production planning details, the
it can make the purchasing schedule. If the finance department can see the
purchase details as soon as it is CI tered into the system, they can plan for the
cash flow that will be necessary for tile purchases secr: today's competitive
business environment, thu ey resource of every organization information. If the
organization does not have an efficient and effective mechanism is that enables
it to give decision-makers the right information at the right time, then the
chances of that organization succeed e very remote

The three fundamental characteristics of information are accuracy, relevancy,

and timeliness. The information has to be accurate, it must be relevant for the
decision-maker and it must be available to him when he needs it. Any
organization that has the mechanism to collate analyze and present high-quality
in to its employees, thus enabling them to make better decisions will always be
one step ahead of the competition. Today, the time available for an organization
to react to the changing market trends is very short. To survive, the organization
must always be or its toes, gathering and analyzing, the data internal and
external. Any mechanism that will automate this information gathering and
analysis process will enhance the chances of the organization to beat the
cempetition. So, what is needed is a system that treats the organization as a
single entity and caters to the information needs of the whole organization. If this
is possible, and if the information that is generated is accurate, timely and
relevant, then these systems will go a long way in helping the organization to
realize its goals.