Resource Sustainability
When thinking about building your business model, you will need to evaluate your key resources through the lens of sustainability. You will be working towards your end game, and, therefore, need to balance your thinking between what your resource needs are now and what they will likely be in the future.
The key activities and key partnerships building blocks in this toolkit help you decide whether resources should be developed by your organization or by a partner. There is a direct link between the key activities of your business and the key resources needed to deliver them.
Insourcing vs. Outsourcing
Decisions made about key activities will define which key resources your organization holds and which your partners hold. The insourcing and outsourcing of activities has a strong bearing on which key resources you hold in house and which are held by other organizations. (See Cost Reduction Strategies). This applies to the four types of key resources: physical, human, intellectual, and financial.
As your digital solution and organization grow and mature, there will be changes in the activities that you carry out and those you rely on partners to carry out. In-house development or insourcing means building capacity within your organization, while outsourcing means having tasks performed or resources located outside of your organization. The pros and cons of each approach are referenced below.
| Pros | Cons | |
|---|---|---|
| Insourcing |
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| Outsourcing |
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When thinking about outsourcing, evaluate the dependability of the partner organization, the availability of the resource in the long run, and its adaptability for scaling your digital solution if this is what you are aiming to do.
Ultimately, if your end game involves another organization taking over the ongoing maintenance and development of the solution, you will need to ensure that all the resources required for this are held by that organization or there is a plan to transfer them. Resources should also be readily available in the context where your digital solution is used wherever possible.
Capabilities as a Key Resource
Deciding where a resource is held is not just about delivering on current activities, it is about building future capabilities. As you develop your organization, the decisions you make on activities you carry out and resources you build can have a significant impact on the capabilities you are building. Capabilities are the mixture of resources and activity know-how you generate.
Resources can often be used for multiple purposes. For example, human and intellectual resources can be deployed for different purposes once they have become core capabilities of your organization. This can pave the way for developing new revenue streams or finding new ways of creating impact for BUTI segments.
Case Study: GEM Hub as a Core Capability
Southern New Hampshire University’s Global Education Movement (GEM) set up an assessment center in Rwanda to reduce the cost of its online degrees for refugees. The center recruited previous graduates, providing employment opportunities for refugees in Rwanda. The assessment center was a success in reducing the cost of the degree and enabling GEM to enroll more students on scholarships.
Realizing that they had developed a strong capability from these resources, GEM then offered the assessment services to other North American educational institutions, creating a significant income stream from it.
Sustainability
Understanding the sustainability of the resources you use—both socially and environmentally—is also important. If your digital product or service requires resources that cannot be found easily and cheaply in the local environment (e.g., software development skills or a particular piece of hardware), then it cannot be considered sustainable. The environmental sustainability of all your physical products, including what you purchase or how things are disposed of, should be a key consideration (see Section 1.1).
Key Takeaways
Choosing to insource or outsource activities has an impact on the key resources you develop as an organization.
Key resources can be turned into key capabilities that can reduce costs or deliver new revenue streams.
Ensure that your key resources are sustainable for your proposed end game and environmentally friendly.
Complete the following in your Business Model Sustainability Canvas:
- Identify your key resources and determine whether they are yours or a partner’s.