In a digital age due to increase in communication technology there is a huge demand of information security. Data is frequently transmitted via computer networks. Data compression is a technique which makes the communication faster. Transmission of information across untrusted network raises the issue of security of information. Encryption is one way to translate data so that unapproved person cannot recognize its content. For solving network bandwidth and security problem compression and encryption technologies need to be combined. Theoretically it is believed that encryption and compression are two independent processes. But independent compression and encryption of data are slow to meet the demand of many applications. And encrypted files are incompressible due to their randomness and most compression algorithms fail to isolate such redundancies. So compression has to be performed before encryption. The idea is to push encryption operation into compression process and perform them in a single step. Especially by means of dictionary based encoding compression and encryption are addressed simultaneously as a single simplified process. Adjusting encryption into compression process is preferable.