extended enterprise

Extended enterprise is the concept that a company does not operate in isolation because its success is dependent upon a network of partner relationships.

The name “extended enterprise” was coined in the 1990s at the Chrysler Corporation to explain the necessity for a collaborative relationship between supply chain members and focus attention on the competitive advantages the company felt could be gained when suppliers become partners. Information technology (IT) plays an important role in an extended enterprise, facilitating communication and relationship-building and providing each member of the supply chain with a common view of data in real or near-real time. Chrysler credited one of the first extranets, a private network for securely sharing information with suppliers over a new telecommunications medium called the Internet.

Today, an extended enterprise is driven not only by the need to share data, but also by IT consumerization, the blurring of lines between personal and work-related use of technology. Forrester Research Inc. uses the term quite broadly to define a business that functions rarely, if ever, as a self-contained workflow within the confines of an enterprise's infrastructure. Forrester proposes that IT decision-makers are shifting spending away from traditional infrastructure towards third-party suppliers that facilitate mobile collaboration, real-time customer analytics and cloud-enabled scaling. In the 1990s, Chrysler purposely set about to make their suppliers business partners. Forrester proposes that today's CIO will need to do the same.

See also: system of systems

This was last updated in March 2012

Dig Deeper on Risk management and governance