conservatives are

[SirGalahad]

If the business is not achieving their 'core business' they will not survive as a business.
Which is why they decide they may want to put their energies into their 'core business'.

The issue is where does a company create and sustain value which can be captured by it. You seem to be focusing on nebulous concepts of core business which is totally missing the point.

Under your 'strategy' builders will be constructing their own cement mixers, building their own ladders and scaffold.
One can outsource, or buy in the required expertise as and when it is needed without losing sight or control of one's core business.
One of the fundamental advantages of buying-in expertise is that one takes advantage of similar applications.

You really don't understand the issue at all. You keep mentioning this nebulous concept of the 'core business' when it has not basis in economics and is simplya management construct. You want businesses simply to retreat to this nirvana of core business well many companies did this and they ended up focusing on the wrong areas.

Why not supply some reference to support your claim.

http://www.cio.com/article/2926435/...g-strategy-created-two-giant-competitors.html

https://www.forbes.com/sites/panosm...-destroyed-their-pc-advantage-piece-by-piece/

There are many more examples and the fact you do not know this I assume you don't know much about the IT industry. Which Industry is your experience.

You mean Coase's Nature of the Firm, written in the '30's? He was more concerned with economic decisions, than strategic ones.
Christensen's Innovators Dilemma is about development of systems and not applicable to this discussion.

Now I know you are totally not understanding the issue and mixing everything up. What is a strategic decision as compared to an economic decision ?

The innovators dilemma is relevant. See below

'Contract manufacturers’ evolving situation encourages them to develop their own brands. It happens as follows: As CMs reach efficient scale, their cost levels converge. At the same time, the products they make begin to commoditize. In response, CMs will attempt to regain a sustainable competitive advantage by undertaking the value-adding activities that their patrons had handled themselves, such as R&D and marketing. In a variant of the innovator’s dilemma, OEMs cede particular functions to their CMs and, by doing so, give CMs room to develop the capabilities they may later use to threaten the OEMs. By that point, the CMs will have become OEMs themselves. Lenovo and China-based contract manufacturers Haier (household appliances) and TCL (televisions) have become three of the world’s leading companies in their industries in just this way.'

https://hbr.org/2006/09/when-your-contract-manufacturer-becomes-your-competitor

Did they? Security?
Why not ask them?

Again you really don't seem to know much about this industry or economics. What is your background?

 

[SirGalahad]

Lets get back to this one Kankerot, i'm interested to see how you view things. Is there a valid argument for spending more to extend the economy, or are we living beyond our means. And if we are, why are we; are any of those that have been in power over over the last 15 years, actually capable of doing the job.

Governments run deficits and debts - even the worlds richest like the US.

https://tradingeconomics.com/country-list/government-debt-to-gdp

So what do you mean living beyond our means? You should only spend money you earn and have no debt? I assume you own your own home,, did you get a mortgage then according to you, have you been living beyond your means?

So on an annual basis there will be deficits which then feeds into the overall debt.

The question that needs to be answered really is how do we allocate our resources in an efficient manner to achieve the greatest utility / welfare.

Tell me what services should be provided by the Gov and what should be provided via the market?

 

[IWalkLikeHimaMartian]

The issue is where does a company create and sustain value which can be captured by it. You seem to be focusing on nebulous concepts of core business which is totally missing the point.

Everyone else seems to fully understand the concept of 'core business'.

The primary area or activity that a company was founded on or focuses on in its business operations. Many market leaders aim to maintain a strong position in their core business areas, but they usually remain open to developing new areas of activity as perceivedbusiness opportunities arise.

http://www.businessdictionary.com/definition/core-business.html

You really don't understand the issue at all. You keep mentioning this nebulous concept of the 'core business' when it has not basis in economics and is simplya management construct. You want businesses simply to retreat to this nirvana of core business well many companies did this and they ended up focusing on the wrong areas.

Once an organization has made the strategic decision to outsource their operations – irrespective of the industry

http://www.cio.com/article/2926435/innovation/how-apples-outsourcing-strategy-created-two-giant-competitors.html (your source)
Outsourcing is a strategic decision. It is not a 'management construct'.

http://www.cio.com/article/2926435/...g-strategy-created-two-giant-competitors.html

https://www.forbes.com/sites/panosm...-destroyed-their-pc-advantage-piece-by-piece/

There are many more examples and the fact you do not know this I assume you don't know much about the IT industry. Which Industry is your experience.
Now I know you are totally not understanding the issue and mixing everything up. What is a strategic decision as compared to an economic decision ?

It is you that is creating mission creep. Nothing about innovators dilemma refers to outsourcing, or the NHS IT system.
Outsourcing is a strategic decision. See above.

The innovators dilemma is relevant. See below

'Contract manufacturers’ evolving situation encourages them to develop their own brands. It happens as follows: As CMs reach efficient scale, their cost levels converge. At the same time, the products they make begin to commoditize. In response, CMs will attempt to regain a sustainable competitive advantage by undertaking the value-adding activities that their patrons had handled themselves, such as R&D and marketing. In a variant of the innovator’s dilemma, OEMs cede particular functions to their CMs and, by doing so, give CMs room to develop the capabilities they may later use to threaten the OEMs. By that point, the CMs will have become OEMs themselves. Lenovo and China-based contract manufacturers Haier (household appliances) and TCL (televisions) have become three of the world’s leading companies in their industries in just this way.'

https://hbr.org/2006/09/when-your-contract-manufacturer-becomes-your-competitor

This has absolutely no relevance to the NHS IT system, or its failures.

Again you really don't seem to know much about this industry or economics.

 

[JohnD]

Your core business might not be what you think it is. If you are in the telephone or energy business, your core is sending out bills and collecting money. You don't need to own or maintain a network or any power stations or exchanges, or even any pipes or wires.

If your core business is sending out bills and collecting money, you are an IT business.

 

[IWalkLikeHimaMartian]

Your core business might not be what you think it is. If you are in the telephone or energy business, your core is sending out bills and collecting money.

Unless you are supplying a service, then your core business is that supply, metering it, ensuring it continues and customer service. You can outsource the sending of bills and collecting money.
I think in kankerot's reference about Apple, some organisations make mistakes about identifying their 'real' core business.

You don't need to own or maintain a network or any power stations or exchanges, or even any pipes or wires.
If your core business is sending out bills and collecting money, you are an IT business.

As the discussion was originally about NHS and its IT system and failures, we are in danger of mission creep about what constitutes 'core business'.
I am reasonably confident that the core business of the NHS is the treatment of patients.
Even the general health of the population is not their 'core business' but the business of other organisations.

 

[SirGalahad]

Everyone else seems to fully understand the concept of 'core business'.
http://www.businessdictionary.com/definition/core-business.html



http://www.cio.com/article/2926435/innovation/how-apples-outsourcing-strategy-created-two-giant-competitors.html (your source)
Outsourcing is a strategic decision. It is not a 'management construct'.



It is you that is creating mission creep. Nothing about innovators dilemma refers to outsourcing, or the NHS IT system.
Outsourcing is a strategic decision. See above.


This has absolutely no relevance to the NHS IT system, or its failures.

How many times must I say it the concept of 'core business' is an idealised construct - does it have basis in accounting or economics - no! It came to the fore in management speak.

You mention the core business of the NHS is to provide healthcare - can you tell me if IT is core to that provision - health records, data exchange?

The point about the concept of core business you seem to fail to understand is that it makes management focus on the wrong issues and encourages outsourcing to retreat to our core business. I provided examples of companies have used this approach and got into difficulties.

The Innovators dilemma highlights how suppliers then become competitors. When did I make the claim in regards to the NHS IT.

So you are conflating issues together.

In economics the only 2 theories you could argue in regards to outsourcing are resource theory or the transaction cost theory of the firm and in reality neither make a great case. This does not mean outsourcing is not beneficial but it does mean the benefits that are usually costed are hardly realised.

 

[IWalkLikeHimaMartian]

How many times must I say it the concept of 'core business' is an idealised construct - does it have basis in accounting or economics - no! It came to the fore in management speak.

I do not really care how many times you say it, it does not make it true or accurate.

 

[IWalkLikeHimaMartian]

You mention the core business of the NHS is to provide healthcare - can you tell me if IT is core to that provision - health records, data exchange?

No, obviously not, It is a facilitator of the core business.
Otherwise the core business could not have been delivered without IT, (since 1945).

 

[SirGalahad]

Nothing about innovators dilemma refers to outsourcing

https://www.forbes.com/sites/steved...s-innovation-and-the-us-economy/#6d01312828eb

So the guy who wrote the book on Innovators dilemma the professor at Harvard disagrees. I think you don't understand nuance.

 

[IWalkLikeHimaMartian]

The point about the concept of core business you seem to fail to understand is that it makes management focus on the wrong issues and encourages outsourcing to retreat to our core business. I provided examples of companies have used this approach and got into difficulties.

It is possible, and there are examples, as provided by you, that occasionally the identification of the core business was mistaken.
But I would suggest that is the exception not the rule.

And it has nothing to do with NHS and its IT system, which we were discussing.

 

[SirGalahad]

I do not really care how many times you say it, it does not make it true or accurate.

From Clayton Christensen.

The thinking is systematically taught in business and followed by Wall Street analysts. Christensen even suggests that in slavishly following such thinking, Wall Street analysts have outsourced their brains.

"They still think they are in charge, but they aren’t. They have outsourced their brains without realizing it. Which is a sad thing."

Again can you provide me with your reference to the economic theory in regards to core business.

 

[IWalkLikeHimaMartian]

The Innovators dilemma highlights how suppliers then become competitors. When did I make the claim in regards to the NHS IT.

So you are conflating issues together.

You did not make the claim, in regards to NHS and its IT system, but you did introduce it into the discussion about NHS and its IT system.
It has nothing to do with NHS and its IT system.

 

[SirGalahad]

https://www.forbes.com/sites/steved...s-innovation-and-the-us-economy/#6d01312828eb

So the guy who wrote the book on Innovators dilemma the professor at Harvard disagrees. I think you don't understand nuance.

We were discussing outsourcing and an example was the NHS IT.

 

[IWalkLikeHimaMartian]

From Clayton Christensen.

The thinking is systematically taught in business and followed by Wall Street analysts. Christensen even suggests that in slavishly following such thinking, Wall Street analysts have outsourced their brains.

"They still think they are in charge, but they aren’t. They have outsourced their brains without realizing it. Which is a sad thing."

Reference please.

Apart from that Christensen disagrees with Wall Street analysts, and you agree with Christensen.

So open a thread about Christensen rather than wrangle a discussion about NHS and its IT systems onto Christensen's ideologies.

 

[SirGalahad]

Reference please.

Apart from that Christensen disagrees with Wall Street analysts, and you agree with Christensen.

So open a thread about Christensen rather than wrangle a discussion about NHS and its IT systems onto Christensen's ideologies.

Its from the article I posted earlier re forbes from his talk.

I am still waiting for my reference as to the economic theory regarding core business. Who wrote it. You have provided nothing so far.