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Oct

Who believes in Core Business Today?

Escrito el 18 octubre 2009 por Jesus Guerro en General

The concept of core business emerged at the beginning of 1980s when Tom Peters’s and Robert Waterman’s book “In Search of Excellence” suggested that organizations should stick to the knitting and avoid diversifying into areas beyond their field of expertise. So, the authors tried to prevent companies from their hopes to reach new horizons doing different things. Indeed the concept is contrary to evolution. If every organization had focused on their “core business” nothing had ever changed and many of them had died.
IBM had always been a well reputed hardware manufacturer. Today is the biggest consulting firm worldwide. Stick to the knitting? TATA was known in the west as a cheap automobiles manufacturer. Currently is one of the most important service companies in the world- Stick to the knitting?
The Core Business theory called for the concept of outsourcing to delegate all activities that fell down out of the “core business”. Then trends like reducing the supplier base or sharing the information (encouraged by the birth of EDI and later on internet) arrived strongly in order to optimise integration. The management model was biult on a centred core business orientation while measuring the level of service suppliers were able to deliver. The empahys on vertical integration has grown during the last decade not only upwards but also downwards towards new realtion models in the distribution.
Nowadays products become commodities faster than ever and the Know How are arenever a secret treasure for a long. The information is available at all levels, Knowledge is boundaryless through social networks, forums and blogers groups.
The challenge for the companies today is to be properly embeded in the network. Vertical integration has become a very narrow scope. Partners are wherever direction we look at. Even at both sides.
The key for success in this century will be far from keeping core business but based on the Companies ability to organise networks to work together by projects. Maybe we are assisting to the birth of Enterprises 2.0- Core Business belongs to pass.

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