Combine technology with new business models to become profitable and sustainable.
Implementing sustainable business models creates new ways to create competitive advantages. Going green allows organizations to cut down their energy consumption, in the process becoming less exposed to hectic energy price fluctuations and government regulatory changes (emission caps and taxation) aimed to discourage emissions. Notably, early adopters will practice business in ways that are positive for the environment by cutting emissions and implanting sustainable business models. During the “green shift” these organizations will be promoting new opportunities for differentiation as well as creating new markets through the deployment of new ideas, new ways of working and new innovations.
However, championing change to promote sustainability is a lot easier to agree with than it is to execute. Therefore, Finsys based on the sustainability experience of market leaders has found that a focus on new technologies and how these technologies interact with business models is vital for success.
New Technologies product
The development and introduction of new technologies will force a reimagining of every stage of the product life cycle. These new technologies will bring with them new ways of working as well as new value generators at every level from R&D, Input, Manufacturing, Utilization and End of Life. The businesses that fully realise the potential new technologies bring will be the ones that will reap the most rewards.
R&D
Research and development is used to advance future goals of a company through creating new solutions and addressing new opportunities. This is traditionally a time consuming and financially costly process involving prototyping and testing to gain new understandings. However, with the implementation of AI and computing it becomes possible to virtualize segments if not the totality of test builds. Enabling, more insights to be made without the need for real world tests, reducing time and costs.
Inputs
Inputs are the materials and elements used to create an end good. Technology can change the fundamental essence of materials using chemistry and biology. Through technological manipulation it becomes possible to enhance the potential and viability of new materials over natural ones. This has the primary aim of increasing compatibility, reducing costs, and improving efficiency. However, depending on companies, objectives may also be used to make sustainable alternatives more viable and reduce dependence on specific materials.
Manufacturing
The process of creating goods is manufacturing. New technologies in robotics and AI will enable manufacturers to explore new ways to cut down costs (that do not involve economies of scale). Theses technologies allow for manufacturing closer to the consumer at more reasonable costs with less negative environmental impact. Robotics makes localized supply chains become affordable, reducing the reliance on high-volume outsourced manufacturing.
Utilization
Utilization is the way the final product is effectively and actively used. By creating modular end goods, the effectiveness of induvial products to address more issues increase. This in turn increase both the end value of the good but also its environmental positive impact by reducing waste.
End of Life Cycle
The end-of-life cycle is the point where the process and the final goods intended functionality has ended. Through more advanced recycling it becomes possible to convert the end good back into material inputs. Additionally, better R&D with the use of AI will allow for products to be designed with the intent to be reused and repurposed with sustainably in mind.
Technology to enhance the Business Model
Innovation will spark the new forms of technology needed to radically adapt the business models of the future to become more environmentally positive whilst generating more value. These industry spanning changes will impact every level of a business by relying on shareability, consumer involvement, product performance and virtualization.
Shareability and Durability. Creating longer lasting products allows for business to gain more value overtime by upselling additional services later. These offerings can include, repair services, upgrading services and/or other creative ways to add value over time. By viewing a product as a service, it extends its lifetime reducing waste.
Customer. Pro consumer products prioritize the value given to and the experience had by the consumer. These types of products will be of higher quality and have a relatively lower price. Helping consumers affordability utilize the same products for longer to cut down on waste. Additionally, by focusing on providing ease to recycle goods, organizations will be simplifying the process for consumers to act green.
Product. Additional value can be introduced to products by including green value and meeting consumer priorities. By focusing on defining and outlining value forms expected by buyers it becomes easier to achieve and deliver results.
Virtualization. New forms of value can be created online by offering consumers new experiences. As projects such as the Metaverse and online games that have a strong social focus increase in popularity, ways to personalize experiences will offer more value to consumers. These virtual goods can even offer the same value as real-world luxury goods conveying status, individuality, fun, desirability and belonging to a group. All virtual goods have the ability to generate value without creating environmental costs.
Finsys Four Steps
It is not an easy task to outline ways for organizations to achieve sustainable business models using technology. Yet, Finsys has been able to put together a list of four initiatives that can be undertaken by any business that wishes to go green.
Clear Baseline
To understand how much has been achieved and what is yet to be done metrics are invaluable. However, these progress measurement tools are only useful with clear baseline to act as a starting point for data analytics.
Leverage Opportunities
The key is selecting to peruse the opportunities that will add the most value and are the most realistically accomplishable. To determine the viability of an opportunity, consider which are easy to implement? Which are easy to do? Which will have the biggest impact? Which require longer term funding? And which require development outside of the core business?
Define Portfolios
As markets and industries continuously adapt the risk of failure increases with the ability to capitalizes on new opportunities. Have a well structured and diverse portfolio will help mitigate risks as leadership explores numerous ideas that could lead to new breakthroughs and innovations.
New Operating Models
By pushing the horizon for what’s operationally possible companies can reach new peaks with new business models. Theses breakthroughs will stem form technological advancements that create new operational efficiencies. As ways of working become more efficient they will need to become faster, more agile, and leaner to fully capitalize on technology, requiring a total rethinking of how to work.
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