Map Out Your Value Network
To understand your value network, the first step is to fully map it. Ensure that you identify all of the key actors in your value network. These can be individuals, loose groups of individuals, organizations, umbrella groups, businesses, government agencies or departments, and civil society actors. The one thing that they all have in common is that they have a direct or indirect impact on the development, adoption, and impact of your product or service.
Case Study: FOSS Value Network
During the Ebola response in West Africa, Save the Children International identified the need for medical data collection in the Ebola treatment centers. It reached out to OpenMRS, which quickly called upon experienced medical informatics people to volunteer and create proof of concepts that included UI mockups, analyzing clinical forms, and extending a shared data dictionary. OpenMRS provided the needed structure so those volunteers could come together through hackathons and the already existing online community. Most importantly, OpenMRS leadership connected Save the Children with a service provider, ThoughtWorks, which put together a dedicated team to move from proof of concepts to a production application.
Ultimately, volunteers and staff from ThoughtWorks, Save the Children International, the London School of Hygiene and Tropical Medicine, the University of Leeds, Elsevier, and the OpenMRS community, along with leaders from Kerry Town, Sierra Leone, and Kampala, Uganda, and contributions from teams spanning Brazil, China, Canada, Australia, the United States, and the United Kingdom, built an innovative EMR using OpenMRS 2.1, a modular open source electronic medical record platform used in more than 60 low- and middle-income countries. The shared research and development present in the open source system, which had undergone more than 12 years of active development, allowed an urgent response to Ebola to quickly take flight.
Identify Your Inner Value Network
Once you have identified all of the actors in your value network, you can start to identify those that you should consider as being in your inner value network. These will be partners and stakeholders that have at least one of the following attributes.
- They are directly involved in the development of your service or product (e.g., a software development partner).
- They have a signed memorandum of understanding (MOU), partnership agreement, or some form of written contract with you.
- They perform a function that you may traditionally have held in your organization.
- They are involved in joint planning and strategizing with your organization.
Once you have identified the members of your IVN, then decide how you will work together, particularly addressing the common issues outlined below.
Interactive Tool: Inner Value Network
- Methodology: Group or individual exercise
- Time estimate: 90-180 minutes
Use the Value Network Tool to identify your stakeholders, what you need to provide them, what you need from them, and which should be part of your inner value network.Go to the tool
Common Issues to Work Through With Your IVN
There are a number of common issues that will need to be worked through with members of your IVN, including formalizing working arrangements, creating funding flows, and managing power dynamics.
For more information on value network analysis, see:
- Value network analysis and value conversion of tangible and intangible assets
- Collective Decision-Making Tool
To develop and assess partnering agreements, use:
To evaluate decision-making in your IVN, use:
The following groups have a number of useful resources and training courses:
Establish Partnership Agreements
The first issue to consider is how your IVN will be governed and managed. Some IVNs are partnerships of equals, where each member has a significant stake in the product or service and they all interact and have interdependencies with each other. These types of IVNs are what could be termed as decentralized networks or horizontal networks.
In this type of IVN, agreements should be made regarding the roles and responsibilities of each of the partners as a group. A typical example of an IVN that is decentralized in nature is distributed networks, while examples of horizontal networks include joint ventures, strategic alliances, and strategic partnerships.
Other IVNs have a more centralized hub-and-spoke type model. Examples include:
- Consortiums with a lead agency
- Single organization-led networks
- Multiple bilateral relationships with a central organization
You will need to develop some form of partnering agreement for the partners in your IVN. There are many types of agreements, so it is best to work out which type is most suitable for your partnership. The key areas to cover in any agreement are outlined in the Designing Comprehensive Partnering Agreements Tool.
This external tool, created by the Partnerships Resource Centre of RSM and the Partnering Initiative (TPI), will help you understand the key elements of an agreement that enable the creation of a strong partnership. The key to the success of any partnership is often in the clarity within the agreement that is developed at the start of the partnership.
This exercise can be carried out even if there is already an agreement in place. In that case, the group will score the current agreement using the Partnering Agreement Scorecard to assess how comprehensive and clear it is. If there isn’t an agreement, going through the scorecard as a checklist will provide the group with the right questions to ask and topics to cover in the partnership agreement.
Map Funding Flows
Another common issue is how funding flows across your IVN. When revenue streams are grants, funding can determine the IVN form, as grants and contracts from funders and donors often require a lead agency. This agency will then subgrant or subcontract with the other members of the IVN, which effectively creates a hub-and-spoke model. Although not very creative and often riddled with power dynamic issues, this model does have the benefit of forcing clarity of roles and responsibilities and determining how funds flow across the IVN.
A common issue for FOSS (free open source software) products and services, is securing funding for core code development. Where a number of organizations build business models from products and services that are based on that code, there is often a gap in funding for the ongoing development and maintenance of the code itself once any initial grant funding for it dries up.
With FOSS products and services, it is important to plan out with your IVN what happens after the initial funding ends. You should address the following issues with partners as early as possible:
- How will the source code get updated and managed once the core software is built?
- How will the community that helped build the core software be managed?
By addressing these issues and creating a partnership agreement across the IVN on how the ongoing development of the code and management of the IVN (community)is carried out. You should be able to avoid ending up with partners using the core software for their own digital products and services and creating sustainable business models for them, but not being able to support the management or updating of the source code. Which creates a hollow core of code that isn’t being updated or maintained by anyone but is relied on by multiple organizations, creating a critical area of risk for the sustainability of all the organizations that have built their products and services and business models on top of it.
Address Equity in Decision-Making and Power Dynamics
All partnerships can struggle with power dynamics across the IVN. This is particularly the case with a hub-and-spoke model of IVN. However, it can occur in horizontal partnerships, too. The more powerful members, whether due to their size, their political mandate, or the funding and resources they have provided to the partnership, can sometimes trample over the weaker partners, often without realizing it.
Your IVN is the key to developing a successful business model for your product or service. Ensuring equity across your IVN is not only the ethical thing to do, it’s the most commercially smart thing to do.
Power is usually exerted during decision-making. Therefore, identifying key decision points and assessing how power is or isn’t being used during the decision-making process is important. To assess decision-making in your IVN, use the Power Awareness Tool with your partners to identify where the key decision points are and assess the level of power being afforded to all the partners in the process.
There are also tools available online, such as Loomio, to help address and organize inputs, conversations, information, proposals, and outcomes in one platform. This is especially helpful in the context of remote working or in organizations in which IVN is dispersed in different locations.
Each business model has a value network that supports it.
Within the value network, there is an inner value network where some form of tangible and explicit coordination is required.
Establishing agreements across your IVN, mapping funding flows, agreeing on decision-making processes, and monitoring power dynamics are all crucial components in fostering a healthy and effective IVN for your business model.
Complete the following in your Business Model Sustainability Canvas:
- Outline each partner in your IVN and the role they play.