To show where the current map area fits into the big picture, one of the best solutions is an additional (side) ArcGIS data frame showing an extent rectangle. The extent rectangle lies within the side data frame and surrounds the area shown in the original (main) data frame.
Setup of the side data frame is straightforward. From the Insert menu, choose Data Frame. Add any desired layers (e.g. streets, highways, counties, rivers) to the side data frame, making sure that the layers are suited to display at a small scale (e.g. 1:20,000). Right-click the side data frame and choose Properties. On the Extent Rectangles tab, choose to Show Extent Rectangles for the main data frame, then adjust the frame (meaning extent rectangle) and leader formatting as desired (by default, the extent rectangle will appear outlined in red). Click OK. Make sure the main frame displays the intended area and scale (typically a large scale, e.g. 1:1000). If necessary, pan and adjust the scale of the side data frame until it includes the area shown in the main data frame, now identified by the extent rectangle.
Extent rectangles are mostly self-maintaining. As you change the scale or area shown in the main frame, the extent rectangle will change size or move automatically to remain accurate. However, if the extent rectangle moves outside the area encompassed by the side data frame, you will need to pan or zoom in the side data frame until the extent rectangle is visible again.
