Despite the fact that blockchain technology represents one of the greatest innovations of the 21stcentury, many people still consider the real value of it. While there is public hype on cryptocurrencies, many of them question the true value of digital assets and technology behind them.
Cryptocurrencies may be extremely volatile, but that should not underestimate the value of blockchain technology. Most people who have heard of cryptocurrencies and bitcoins, do not understand that blockchain is not just about cryptocurrencies.
There have been projects to determine if the blockchain technology is viable at most major companies around the world but most of them haven’t progressed beyond that stage because of lack of confidence in new technology. This is because most companies evaluate blockchain by its outcomes, and not by the value that blockchain brings to their enterprise.
Read below 6 short chapters that will help you understand the real value of blockchain technology.
A blockchain is a transformation tool
This technology excels at tasks that cut across organizational silos and provides information exchange and management of operations between disparate parties. This is not a substitute for the database you are currently using but provides unique capabilities where information is shared across enterprises and democratized participation is advantageous.
You don’t need to test this technology to see if it works, instead, you should conduct a pilot project that generates observable business value by identifying Key Performance Indicators (KPIs), compare current performance with the desired result (gap analysis) and structure the business case. If you choose experienced Blockchain integrator for key skills and tools to partner with, a pilot project can be executed in six to eight weeks. Don’t wait for winners to emerge from the 17 blockchain technology platforms available in the market because platforms will either interconnect directly or via specialized smart-platforms that provide connectivity.
Blockchain solves business challenges
Blockchain technology can be used in many industries and sectors such as the automotive industry, tourism, and travel, medicine, energy industry, social networks, stock markets etc. This technology presents an opportunity to solve business challenges and revolutionize revenue streams, the current payments, and supply chain.
But companies focus on duplicating an existing automated business process during a pilot with Blockchain rather than testing a business challenge that would provide real benefit. When you select a pilot project that crosses enterprise boundaries, with less than optimal performance, you can achieve success in using blockchain. Areas well-suited to this technology are supply chain visibility, manufacturing flow, and provenance of goods.
“Blockchain ecosystem” refers to the parts that constitute the whole and how they interact with each other and how they interact with the outside world. For example, Bitcoin ecosystem contains 4 parts: the users sending and receiving payments, the miners generating the cryptocurrency, the investors buying it and the developers that monitor and maintain the whole thing.
The success of the blockchain ecosystem will depend on participants behind in an orchestrated manner. While members of this ecosystem come and go, blockchain adoption accelerates new business, regulatory and legal frameworks will be required to deal with data ownership, information sharing, IP ownership, cybersecurity, data storage etc.
The blockchain is a fundamental business transformation
Try to gain senior management support by explaining that blockchain is not an IT or R&D project. It is a fundamental business transformation which will significantly impact revenue and cost if it’s properly implemented. Multiple organizations and business functions may be affected and buy-in is required in order to be successful.
A survey put out by Constellation Research, Inc. in 2017, found that 52% of companies are considering or are already experimenting with blockchain technology while trying to transform business.
Scale for production
The key to a successful implementation of blockchain technology lies in the governance of the ecosystem and the sharing of data across logical and physical boundaries. After conducting a successful pilot project, take some time to consider the next steps:
- Build blockchain competence. Try to establish blockchain unit to ramp up capability and build skills
- Design for information sharing. Determine what information will be shared and with whom, bring more benefits to your suppliers and buyers by providing transparency
- Set corporate standards. Think about platforms you are going to use, about the ecosystem and which data sharing standard are required, and how you’ll control your data.
- Determine ecosystem governance. Decide how you will design your blockchain network, who will participate and how will it be governed.
- Adapt as Blockchain platform evolve. There are no standard or limit for blockchain platform, so keep in touch with its evolution.
If you want to take advantage, blockchain is a powerful transformation tool you can use to achieve business challenges. Experts say that blockchain is a system that will change our way of understanding business and society itself in the future.