The Core-Context model
The Core-Context model, introduced by Geoffrey Moore in 2006, is based on the rationale that the value of a company is tightly tied to the competitive advantage it has over its competitors, both in terms of Competitive Advantage Gap (CAG), which represents the difference with the competition, and Competitive Advantage Period (CAP), which defines the time this competitive advantage will be kept.
This implies that companies have to focus their scarce resources on creating and maintaining this competitive advantage, and that puts the processes in two main categories:
- Core: any process that contributes directly to the competitive advantage (CAG or CAP)
- Context: all other processes required to fulfil commitments made to one or more stakeholders in the enterprise.
The Core/Context model provides a valuable framework for CTOs to strategically prioritize and manage engineering and technological initiatives. By distinguishing between core activities that drive competitive advantage and context activities necessary for successful ongoing operations, CTOs can make informed decisions on resource allocation and innovation focus.
Aligning the Core-Context Model with Themes
A clear vision of an organizations core and context activities, and their criticality, remains a crucial support to effective decision making. The themes identified above, however, do present challenges and opportunities to re-think the implications of this model. For example,
- Advancing technology has the potential to shift the boundary between automation and outsourced services in fulfilment of context activities
- New technologies will require knowledge of, and capabilities in, new domains in core activities (for example in data-driven research).
- Market commoditization may encourage movement of activities from critical to non-critical, even as opposing pressure arises from strategic concerns and the need for robustness in global supply chains.
Gaining and maintaining clarity on the challenges and opportunities here is key. At Capgemini Engineering, we continue to leverage this approach, helping our clients achieve their strategic goals and drive sustainable growth through focused engineering innovation.
