Although still a new technology, Blockchain is something that any company or business will sooner or later have to leverage, as a key feature of their technology strategy. Any organisation that wants to be part of the map in the next 10 years, will have to begin adopting blockchain now, even if the technology is still emerging.
The business world is undergoing a massive disruptive technological fast forward transformation. Blockchain is part of that disruption. The technology has been named as one of the major inventions of the last decades, and the reach of its impact is compared to the one of electricity. Blockchain brings new opportunities but also challenges, because it challenges us to re-think the way society and businesses operate and interact.
To look at blockchain and the reach of its proposed solutions, it is important to understand it and the reach of its power and why it is disrupting existing business paradigms. In a nutshell, blockchain is triggering a whole new way of thinking, organising, collaborating, and creating businesses, by using decentralised and P2P smart contract driven applications.
This article reviews blockchain and it thinks how you can deploy a blockchain project to your organization.
What is the paradigm shift brought by Blockchain?
Blockchain can be compared to a giant powerful excel database with a legal digital locker. Blockchain result from a cryptographic or encoded distributed ledger, comprising a digital log of all the transactions that occurred. That digital log is shared across a public or private network. Blockchain is particularly well suited for applications requiring a rapid, permanent time and date stamp such as the following:
- Financial asset transfers,
- Smart Contracts,
- Ownership splits and notary services.
The technology brings substantial benefits in terms of speed, security, convenience, and costs. According to a Mckinsey report, called “Blockchain Technology in the Insurance Sector”: “Blockchain has the potential to remove $80-$110 billion in costs for the global financial services industry over the next few years.”
The report states the following conclusions:
- Blockchain is a nascent technology with the potential to bring about step-function improvements in efficiency and security to the financial industry – or it could simply be over-hyped and unnecessary.
- The success of these investments is highly dependent on the collaboration in an emerging ecosystem primarily driven by innovation in the Insurtech and fintech industry
- 70% of financial organizations are in the early stages of experimentation; most executives expect to see material impact from this technology only in 5+ years
- Most of the impact from blockchain in financial services is likely to come from payments, and capital markets. Preliminary sizing of 4 use cases suggest significant value creation – the estimated impact of these use cases alone is $70-$85B but feasibility varies significantly.
McKinsey has identified 7 genuine use cases and associated pain points; all of those sized could generate multi-billion USD in impact.
The report says that blockchain technology could be:
“One of the most disruptive innovations since the advent of the Internet.”So it is wise to set up the technology to answer to any company needs and before going forward with any deployment is critical to map corporate demands/engagements and move it from there to map corporate commitments.”
“Blockchain technology is applicable across multiple use case categories as a static store of secure information or dynamic store of tradeable information.”
However, caution is called for when it comes to creating a regulatory environment around it. It states:“Enabling collaboration, shaping a positive regulatory environment and identifying clear business cases justifying the transition costs will pose the biggest challenges to implementation. “
Investment in blockchain is gaining momentum and it is expected to grow at a very high pace in the near future. Effective use case execution of Blockchain will depend highly on strong collaboration among players in an ecosystem (financial services example).
How can a company adopt blockchain?
Organisations and business can only unlock the value of blockchain through a deliberate solid six-step journey that has to include:
- Preparation and full company / organisation education,
- Readiness for moving into the game
- Sound and effective strategy,
- Solution design,
- Definition of a solid direction towards implementation,
- Approach towards the capacity for problem solving of the technology, (as they occur) and the organisation’s problems and capacity.
Blockchain should be employed only under certain conditions and requirements and it is particularly important to bear in mind if the company is ready for this step. The business or organisation must do their homework in the right way.
With this in mind, any company wanting to deploy or work on blockchain related projects needs to consider the following:
I. Where to start?
- Do you know what is blockchain?
- Do you know about centralised and decentralised technologies and P2P?
- Do you know its considerations?
- What are the foundations of blockchain?
- Are you over with the common silly and ignorant sense that Bitcoin and Blockchain are all the same? (unfortunately, most of the business world is still here. If you are here stop and go back!);
- Do you know how it can help your organisation?
Here are some thoughts once you are familiar with blockchain and understand you need to move forward:
- Make sure everyone in your company knows why blockchain is here to stay. If you don’t understand it and start adapting to it in short term, you will be out of the race in the middle long term.
- Define clearly a business plan which adopts it and get all clear stakeholders involved
- Create a map that highlights the problem that this project will answer
- Define all the solutions and answers such as replacing the manual process you have now to research when looking at a given company or business area;
- Define how this can disrupt and grew activism and empower your company worldwide.
- Map the exact requirements.
- What teams do you want to get involved on this?
- Do you want to have total control of the project on Greenpeace or get external partners?
- If so define what teams and what terms
- Define key partnerships and no go partners
- Get your legal teams involved from day one
II. Before you advance please consider and answer in detail to this list of considerations:
- Project overview: Why is the project taking place?
- What are the business drivers?
- What are the business benefits?
- Objectives: What will be accomplished by the project? What do you hope to achieve?
- Scope: What features of the project will be implemented?
- Which departments will be converted? What is specifically out of scope?
- Assumptions and risks: What events are you taking for granted (assumptions), and what events are you concerned about?
- Will the right technologies, hardware and infrastructure be in place?
- Do you have enough organisation bandwidth, technical people, storage and network capacity?
- Approach: How will the migration project unfold and proceed?
- Organisation: Show the significant roles on the project.
- Identify the project manager, but who is the sponsor? It might be the CEO, CIO for a project like this.
- Who is on the project team?
- Are any of the stakeholders represented?
- Get a document briefing and Signature page: Ask the sponsor and key stakeholders to approve this document, signifying that they agree on what is planned.
- Initial effort, cost, and duration estimates: These should start as best-guess estimates and then be revised, if necessary when the work plan is completed.
III. Look for signs that the project can advance or may be in trouble.
These issues could include the following:
- Is the company still not prepared? Was it too soon to start? If so, make sure you focus on preparation and internal education of key stakeholders.
- A small variance in schedule or budget starts to increase, quite early in the project. There is a tendency to think you can make it up, but this is a warning. If the tendencies are not corrected quickly, the impact will be unrecoverable.
- You discover that activities you think have already been completed are still being worked on. For example, users whom you think have migrated to a new platform are not there yet.
- You need to rely on unscheduled overtime to hit the deadlines, especially early in the project.
- Team morale starts to decline.
- Deliverable quality or service quality starts to deteriorate. For instance, users start to complain that their converted e-mail folders are not working correctly.
- Quality-control steps, testing activities, and project management time starts to be cut back from the original schedule. A big project, such as an exchange migration, can affect everyone in your organisation. Don’t cut back on the activities that ensure the work is done correctly.
Like any other technology before, blockchain is not the silver bullet solution for all the pain points of the multiple industries that have been looking at it with interest. However, companies and organisations that fail to adopt it will for sure be out of the game going forward. Do your homework and start now.