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What Is Entity Relationship Diagramming?

When it comes to managing various subsidiaries throughout an organization, an entity relationship diagram can be a key visual input. Also known as a relationship model or as generalized organizational charting, an entity relation diagram shows you visually the relationships between key places, people or systems within an organization. This can then be the foundation for additional charting, evaluating business units at a high-level or creating a database structured around positional relationships. It’s primary purpose is to create a functional representation of data that is visualized in such a way that you can easily parse your next steps. Key components of entity relationship diagrams include:

  • Various colors, shapes, and texts meant to effectively communicate information such as the size of a subsidiary or the percentage of the workforce at a specific location.
  • A detailed key that explains the denotation of the various visual elements used in the chart.
  • Lines demarcating the relationship between various concepts in the diagram

Relationship To the Board Of Directors

Through the use of an entity relationship diagram, your board and management can assess the whole business in a functional way and create strategy that is easily actionable. By creating visual pictures of each entity, the data allows a story to unfold that can help quickly analyze which units of the business may need more attention at this time than another or predict potential effects and changes.

Another example is the new US tax law, which represents a potential profits bonanza with the slashing of the corporate tax rate by 40% all at once. Many organizations originally based in the US are considering repatriation, and organizations with US operations are thinking about doubling down on their investment. Entity data visualization can help analyze the impact of transferring property, plants and equipment to the U.S. so that this unique opportunity isn’t lost, with strategic planning for these changes coming from the board down.

ERD & Organizational Charting

The business of managing various entities and subsidiaries can be difficult for organizations of any scale to effectively evaluate and plan for. Entity relationship diagramming is a visual means of seeing those entities and subsidiaries in a more encompassing manner.