What’s a resource vs. a capability?

ITIL posits that organizations have two fundamental types of assets: resources and capabilities.

Resources are money-derived. You can spend money and immediately acquire a resource. For example, a book is a resource because you can immediately purchase it. A physical server is a resource because you can buy one and have it shipped to you.

Capabilities are things that organizations develop with time. You can buy the book “Teach Yourself Red Hat Linux in 24 Hours” (a resource) but actually knowing how to use Red Hat Linux is a capability. You cannot spend money and immediately acquire a capability. Project management, service management, IT governance, and process improvement are all capabilities.

Our company’s goal is to help higher education improve IT management capabilities. IT management capabilities, though costly to develop, improve IT effectiveness and reduce IT costs. We’re here to help you learn which capabilities will help you the most now, what to keep in mind for the long-term, and how to effect the organizational changes needed.

  • Robert Burke

    Resources are the productive assets owned, borrowed, or leased for use by the firm; capabilities are what the firm can do.

    There are three main types of resource: tangible, intangible, and human resources.

    Capabilities are based upon routinized behavior. Routinization is an essential step in creating organizational capability— only when the activities of organizational members become routine can tasks be completed efficiently and reliably. It is through the adaptation and replication of routines that firms develop.

    Example:

    A Resource – A rack-mounted server running Windows 2012 and SQL Server Enterprise.

    A Capability – Walmart’s Integration of IT systems with routine managerial decision making to consistantly reduce operating costs.