People talk about the ‘enterprise’ all the time, particularly in IT. There are enterprise solutions, enterprise architecture, enterprise portals, enterprise security, etc. In this context the term enterprise is more often meant to mean all encompassing, across business units or geographies, the whole of our business operations.
Just because we say something is enterprise level that does not mean that it applies to the entire company. When that happens you have to ask yourself the question – are we an enterprise?
Its an important question because if the company is not an enterprise, then enterprise solutions, architectures and the approaches either will not be effective, waste money and resources, or worse relegate IT to the role of glorified staff administrator.
You are an enterprise if the majority of these conditions apply:
- The business strategy is based on the results of the different parts of the business working together. If you have separate strategies for different parts of the business, then the company is more of a holding company, and it is less likely that you are an enterprise.
- The people in the business think of themselves as belonging to a company that is bigger than their individual team or operating unit. If people identify with their organizational unit more than they do the entire company, then it is less likely that you are an enterprise.
- The business operates out of a common set of financial resources – meaning underperformance in one part of the business adversely effect the other parts of the business. If the parts of the business are financially independent with separate P&L, capital expenditure and investment plans, than it is less likely that you are an enterprise.
- The business serves different customers and success does not require the customer to buy products and services from different parts of the business. If you separate customers, either by geographic lines or by product or business lines and you do not expect them to cross those lines then it is less likely that you are an enterprise.
- The business uses a common set of information, metrics and measures to run the company. You do not have to have all of the same rules, but there is a core of rules that apply equally across your operations. If the different parts of the business play by different rules and are graded differently, then it is less likely that you are an enterprise.
- The business shares common systems for similar functions. If you have different systems for the same functions across parts of the business it is less likely that you are an enterprise.
So what does if mean if I am NOT an enterprise?
First, it does not mean that your company is in anyway at a fundamental disadvantage to those that see themselves as an enterprise. There are examples of highly successful companies that are not enterprises – most energy companies are not enterprises under these rules, General Electric is not an enterprise, neither is the Virgin Group in Europe.
Companies that are not enterprises, however, will find it difficult to implement and get benefits out of enterprise based strategies, solutions and approaches because they do not operate as an enterprise. This is often the case with enterprise processes such as IT Enterprise Architecture. So if you are not an enterprise, take a critical view to those things that are billed as ‘enterprise solutions’ or that deliver ‘enterprise value.’
Enterprise type solutions may be applicable, however they will be more likely than not applied to individual parts of the business – business lines, geographies, and operations. This is because many business units can be enterprises in their own right, without being part of an enterprise as a whole.
So what does if mean if I AM an enterprise?
Do not assume success because of your structure. While there are many successful enterprises, there are just as many who are challenged to remain an enterprise.
Recognize your enterprise nature in terms of leading and governing the company. IF you are an enterprise, then there should be enterprise level mechanisms with corresponding fewer mechanisms in the individual parts of the business. This consolidated leadership; management and governance approach is possible, as you need to make decisions that benefit the entire enterprise.
Put the customer at the center of the company, because it is the one thing that you all share. That sounds trite but its true. Look to reduce barriers or impediments to internal operations that reduce customer service or make it harder for the customer to engage all parts of the company. After all as an enterprise you economic model rests on the ability to engage and serve the customer across your entire operations.
Invest in enterprise level solutions to gain scale cost and service efficiencies. You are an enterprise so look to take advantage of this. Local customizations and uniqueness still matter – but you do not put those customizations and their complexity in core systems. Studies of companies that have this level of digitized platform indicate that they enjoy 20% higher margins than their competitors.
Take advantage of your enterprise status by managing the entire company from the perspective of bringing more resources to bear on high potential and growth opportunities. Competitors that are not enterprises will spin-up a separate business unit, often with out the scale to dominate an early forming market. As an enterprise
Are you an enterprise? Don’t assume that because you all share the same stock symbol, or get paid by the same company that you are. Does being an enterprise matter? Yes, particular to the extent that you are able to use enterprise solutions and approaches.