CoreCo or NewCo? Defining Your Digital Transformation Project

CoreCo or NewCo? Defining Your Digital Transformation Project

We (should) all know by now that lean, digital development processes can transform a business. But what a lot of our clients don’t know is how the application of these agile principles differs depending on whether your project is CoreCo or NewCo.

Our big clients at Eli5 (enterprise and corporate companies) come to us either wanting to make improvements within their existing infrastructure or ‘CoreCo’. Or they want to build an entirely new product, solution or startup outside of this, which is what we call ‘NewCo’.

What is the difference between a CoreCo and a NewCo project?

If you want to build a digital product that…

  • will form part of your core business strategy; and
  • relies on interacting directly with data contained within your core infrastructure.

…then your project is CoreCo.

If you want to build a digital product that…

  • is (at least initially) independent of your core business strategy; and
  • does not (at least initially) need to interact directly with data contained within your core infrastructure.

…then your project is NewCo.

Using McKinsey’s Three Horizons

Horizon 1 – Maintaining and Defending the Core Business
Horizon 2 – Nurture Emerging Business
Horizon 3 – Create Genuinely New Business

CoreCo

We follow the Horizons from H1, to H2, to H3. For example, if you have a complex core infrastructure with several separate tools, processes and data storage – for example a CRM, SAP and Microsoft Dynamics – you want to be able to maintain and defend all of these (H1) but work towards one way of integrating and connecting them all, like a custom dashboard (H3).

  • The Eli5 Lean Digital methodology for CoreCo…
  • Starts with ideating and validating end-user solutions.
  • Parallel to this, we design a responsive integration hub to plug this, and any other end-user solutions, directly into the core infrastructure.
  • Both the end-user solution and integration hub are built using Agile software principles.
  • The integration hub is a Kong Microservices API Gateway:
    • That is universally accessible, connecting not only our solutions but all existing and future API-centric applications to your business.
    • Once connected, the integration hub orchestrates all necessary processes within the business infrastructure.
    • Is another tier of security.

The benefits of using lean digital processes for CoreCo…

  • You can validate the solution upfront with real end-users.
  • Your product is connected with, and built around, the existing infrastructure so you can access any necessary data or functionality.
  • This means your digital assets instantly become scalable, adaptive and responsive.
  • The integration hub consolidates the complexity of CoreCo assets. Data connects and is documented through the new centralised layer.  
  • Internal systems are only exposed to the secure gateway and not directly to the outside world.

NewCo

We follow the Horizons from H3, to H2. Then if you decide to spin-out the project, we stop here. If you spin-in, we move to H1. An example of this is PingIt – an app originally developed by Barclays bank in the UK for only its customers, then spun out as a separate business to serve all UK current account holders. This would be a genuinely new business that is not part of your core business strategy, nor does it rely on integrating with the core infrastructure. Although, we build with this as a possibility for the future.

The Eli5 Lean Digital methodology for NewCo…

  • Starts with ideating and validating end-user solutions.
  • The end-user solution is built using Agile software principles independently of the core infrastructure (sometimes with one or two API’s if necessary).
  • Once the product has gained enough traction you check if it aligns with the core business and either:
    • Spin-out the project and it becomes a stand-alone product and business.
    • Spin-in the project and connect it with your core business and infrastructure via an integration hub.
  • The integration hub is a Kong Microservices API Gateway:
    • That is universally accessible, connecting not only our solutions but all existing and future API-centric applications to your business.
    • Once connected, the integration hub orchestrates all necessary processes within the business infrastructure.
    • Is another tier of security.

The benefits of using lean digital processes for NewCo…

  • Your project maintains agility by being independent.
  • You also avoid wasting time and money integrating before the solution is validated and approved.
  • You can still prepare the strategy for potential integration from the start, so you are not caught out later in the process.
Lauren Macpherson
Lauren Macpherson Director of Content, Eli5

Discuss your needs with one of our experts

Contact us →