[8] 2002 e-business-strategies-for-virtual-organizations
[8] 2002 e-business-strategies-for-virtual-organizations
[8] 2002 e-business-strategies-for-virtual-organizations
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e-Business Strategies <strong>for</strong> Virtual Organizations<br />
it can really achieve preeminence. It is worth noting that at least<br />
one of these areas should be in the domain of understanding<br />
and managing the customer relationship, since this is so<br />
important to <strong>business</strong> competitiveness and survival.<br />
Finally, core competencies are likely to be embedded in<br />
organizational systems, routines and practices thus not only<br />
rendering them difficult to imitate but also difficult to identify,<br />
understand and cultivate. Nonetheless core competencies are<br />
vital capabilities that are important to nurture, evolve and grow.<br />
In common with the PriceWaterhouseCoopers thinking introduced<br />
in section 9.1 above, this thinking stays with traditional<br />
thinking that there must be a single dominant player leading or<br />
controlling the consortium. This thinking is at odds with the<br />
more flexible models introduced in Chapter 3 and tacitly<br />
assumed throughout this text.<br />
9.7 Linking outsourcing to strategy<br />
198<br />
It is important that an enterprise’s external sourcing decisions are<br />
aligned to its strategy. Insinga and Werle (2000) present a<br />
planning guide to help in this matter. The guide is structured<br />
around two basic dimensions. First, the activities of the firm are<br />
considered <strong>for</strong> their potential to yield a competitive advantage,<br />
and are assessed as either key to producing a competitive<br />
advantage, emerging towards being the key activity, basic to the<br />
firm or simply commodity activities. Second, the activities of the<br />
firm are rated in terms of the firm’s capability at undertaking<br />
them, and assessed as activities in which the firm has a strong,<br />
moderate or weak capability. The planning guide is shown in<br />
Figure 9.2.<br />
Generally speaking as one moves down and to the left of the<br />
matrix in the Figure 9.2 it is recommended that there be less<br />
investment in the activity, less knowledge of the particular<br />
<strong>business</strong> domain nurtured in the company, and less direct<br />
control over the day-to-day operations involved. Core competencies<br />
are thus located in the upper right of the matrix and<br />
commodity activities, suitable <strong>for</strong> outsourcing to a <strong>business</strong><br />
service provider, are located in the lower left. However, when<br />
activities are examined in this way there may be significant<br />
differences between the recommended position of the activity in<br />
the company and its historical and present reality. Such<br />
differences require the attention of senior management, since<br />
these differences indicate other than the sensible and optimal<br />
allocation of resources.