Companies start to recognize the need to achieve an integrated perspective. That is within and across organizational boundaries to address complicated challenges. That is why the concept of enterprise transformation kept getting popular. But, the thing is, what makes up an enterprise is not very clear. Enterprise transformation has little clarity, too. A lot of people tried to look at why this holistic unit of analysis has become critical to businesses. So, what forms an enterprise? What is enterprise transformation? What characteristics distinguish this kind of change from more incremental changes?
What is an enterprise?
An enterprise has several definitions. It is a project, a willingness to take on a new project, an undertaking, or a business venture. A new start-up business is an example of an enterprise. Another example of an enterprise is someone taking an initiative to start a business. There are different types of enterprise.
- Sole traders
Sole traders are the life-blood of a market economy. This kind of enterprise is common in retailing and local services. These include catering and plumbing. The scope for expansion has limits because local services demand has limits, too. The sole trader makes all the business decisions, owns the assets of the business, and bears all the risks. Of course, he or she also retains all the profits.
This type of enterprise has a small number of partners as owners and managers. Each of whom has a specialty in a particular aspect of the business. They come up with a decision as a group. They also share the risks and rewards. There are types of partnerships where not all partners bear equal risks. Some partners have limited liability for debts sustained by the businesses. This type of enterprise is common in professional and financial services. These include solicitors, accountants, and estate agents.
- Private limited companies or Ltd.
Limited companies are also legally-incorporated firms. That means that they have their own legal identity. Shareholders who have limited liability for the firm’s debts own these companies. These companies take advantage of the principle of limited liability. That is unlike sole traders and ordinary partnerships. Private limited companies are standard in all areas of economic activity. Shareholders appoint directors to make critical business decisions. The directors are often shareholders, too. Directors make decisions as members of the Board of Directors.
- Public limited companies or Plc.
Public limited companies are like private limited companies that are legally-incorporated. They are both owned by shareholders with limited liability for the firm’s debts. The difference is that public companies can sell shares to the general public. Going public and listing their shares on the stock exchange is demanding. They have to meet strict criteria set by law covering several things. These include the liquidity of the business and the publication of financial accounts. The number of previous years trading is also essential. The main advantage of being a plc is the ease of raising funds. Some investors also resell their shares to the public via stock exchanges. That makes regaining liquidity easier for investors.
- Public corporations
Public corporations are organizations owned by the state. The funds come from license fees, government grants, and subsidies. Also, from charges for supplying their service. Instead of a Board of Directors, a Board of Governors control public corporations. They make a surplus rather than a profit when their income is higher than their costs.
- Not-for-profit organizations
Making a profit is not the goal of all organizations. Some sometimes earn revenue and run on commercial lines, though. Charities, universities, and government-sponsored organizations are examples of non-for-profit.
What is an enterprise transformation?
Enterprise transformation is a fundamental change in the way an organization operates. Enterprise transformation describes the change that takes place in large companies. These changes usually make customer experiences better. This transformation needs a different approach versus past typical innovation projects. Investments revolve around providing exceptional customer service. A lot of companies look for new technology, solutions, or data to deliver what customers want and need. Lasting changes in the mindset, people, and processes of the business make it a success. A clear strategy and a multi-year plan to get there is what this level of change needs.
The reality is that there is no one-size-fits-all approach. A unique opportunity drives every transformation and brings its own set of challenges. Companies need to take on an enterprise transformation in today’s dynamic markets. These changes improve customer experiences and improve how they operate the entire company.