Transcending the Enterprise
The Powerful Argument for Blockchain in Project Management
This story was first published here.
At the end of the 2010s, almost all businesses still plan, manage, and execute their projects inside corporate silos. This is inadequate and contradicts powerful and accelerating trends of global business. Emerging technologies are transforming global commerce towards ever more digitization, integration, and decentralization, unlimited by geography and legal organization. And so, as the 21st century progresses, the nature of this global system continues to increasingly overwhelm the capabilities of today’s siloed project management tools and approaches.
The Projectization of Global Supply Chains
In the 1980s and 1990s, the goal of enterprise resource planning (ERP) software was to break down the barriers inside corporations and to provide one common truth for the enterprise. Today, and in stark contradiction to the projects they manage, the project management profession’s tools still mostly end at these corporate borders. What has changed is that the same logic that triggered the creation and implementation of ERP now also extends to global supply chains. And these increasingly include projects and are managed like projects. The current trajectory of digitization and integration is turning an ever-larger share of global commercial activity into “unique endeavors to deliver a specific outcome” — projects. This projectization of global supply chains creates an urgency for our tools and methods to catch up.
The projectization of global supply chains, turning ever-more manufacturing into “discrete endeavors to deliver specific outcomes”, demands the breaking down of corporate barriers for project management.
The challenge is that at their core, and despite all advances toward collaboration and agile management methodologies, today’s tools remain corporation-centric and with limited outside connections. They deliver hierarchically broken-out deliverables via centrally managed project scheduling software. In that context, process “integration” often means little more than the multiplication and inflationary reconciliation of records, manually triggered data interfaces, complemented by emails, messaging, and social media collaboration tools.
Interfaces and More Interfaces: A Costly, Slow, Risky, Way of Delivering Substandard Solutions
To deal with the demands of an integrated world, an inflated number of bridges and interfaces create ever more complicated and inefficient workarounds and crutches. Amid rising organizational complexities and cybersecurity threats, nothing stays simple. The perpetual answer seems to be more effort, money, and additional layers of tools, establishing at least a semblance of control. But we are still largely unprepared for what is going to hit us as emerging technology trends shift into overdrive with the advent of the Internet of Things (IoT), 5th Generation communication (5G), autonomous controls using artificial intelligence (AI), new manufacturing methods like additive manufacturing, and virtual and extended reality (VR, XR).
New collaboration tools and user interfaces can only barely disguise the underlying contradictions and inefficiencies brought about by lopsided platforms not suitable to deal with exceeding complexity and with genuine process integration across organizational entities. Their end result is a series of siloed project data and tools, often disguised as “collaborative” because they can be accessed via web browsers and are hosted on a cloud. In reality, though, they resemble a patchwork of applications and backend interfaces between dispersed and often manually reproduced data, integrated into the back-end business systems of multiple organizations, and duplicated many times over across their services supply chains.
Current solutions leave project managers, their team members, and their customers with inadequate tools, outdated information, security holes, multiplication of effort, a focus on reconciliation, and decreasing visibility amidst a rapidly increasing data volume.
Often spread around the globe themselves, this leaves project managers, their team members, and their customers with inadequate tools, outdated information, security holes, multiplication of effort, a focus on reconciliation, and reducing visibility amidst a rapidly increasing data volume. The predictable results are higher costs, slower delivery times, inflated risks, and mismatches in scope and quality. The numbers and stories describing “project failure” are the stuff of legends.
Cutting Through the Gordian Knot: Blockchain
It is a Gordian knot and we need to cut through it. The result must be a simple, efficient, adaptive, and integrated project infrastructure that reflects the organic connectedness of all actors and processes. Indeed, there is also good news: We already have the technical capabilities to achieve this with existing modern technologies. They can remove the systemic disconnect, transform our infrastructure, and build a powerful new commercial and project management platform with unsurpassed adaptability, security, and reliability.
The heart of this new infrastructure consists of tools and capabilities leveraging crypto and distributed ledger technologies — Blockchains. Their design establishes a transparent, shared, and unchangeable truth without the need for multiplication across silos. They achieve this in a complex environment where the actors often do not know each other but still can establish enough trust to directly interact and conduct business via peer-to-peer (P2P) transactions.
Blockchains like Bitcoin are largely self-governed through built-in motivations encouraging competition in a “race toward the top” that strengthens their infrastructure. This enables team members to self-organize and adapt quickly and flexibly. And in the process, they still can provide sufficient levels of built-in privacy (or “pseudo-anonymity”) and security for data and transactions to exceed many or even most capabilities of today’s proprietary silos.
Such crypto-technologies, smartly implemented, accept the borderless digital world, eliminate inefficiencies, get rid of silos, interfaces, and reconciliations, and start with one common truth. Literally.
Why Blockchain Matters for Project Management
Amid increasing speed and complexity of business activities, most traditional organizations work only on a vertical sliver of supply chains. Despite large dependencies, project team members, contractors, and material suppliers often operate physically far from each other and lack visibility in the overall process. This introduces “ VUCA”: volatility, uncertainty, complexity, and ambiguity.
Blockchain’s transparency and focus on the shared truth can confront VUCA. It reliably establishes a single truth that is shared among all project contributors. Both project management and Blockchain align well with the past quarter century’s main systemic trends of business practices. They have inherent abilities to cope with increasing digitization, the emergence of distributed or decentralized solutions down to the level of the individual person, customization to the degree of personalization, and elimination of borders for conducting business, while sharing more data than ever before.
Both project management and Blockchain align well with the past quarter century’s main systemic trends of business practices
At the same time, Blockchains are ready to address new and mutually enforcing concerns that have started to dominate people’s priorities everywhere:
- Privacy, with the goal to stop mass surveillance by private entities and governmental authorities.
- Transparency, with the goal to document and keep track of real actions between various parties in a manner that is factual, sharable, and reliable.
- Cybersecurity, with the goal of preventing misuse of digital systems and data to manipulate, steal, destroy, or inflict physical harm to humans.
Ironically, integration could be very simple. And it should be. At its core, all project data is the same and entered only once. All we need to do is capture data once, correctly, at the source. Then we can and must share it, in a secure manner that is transparent for all parties involved. Considering this, it is highly inefficient and risky to manage cross-entity and cross-border projects using silos and interfaces.
The Unique Advantages Making Blockchains Lead the Way
Blockchains offer a technical platform that aligns well with the above trends and requirements. This makes them particularly suitable to address people’s concerns also. Their key technical features and capabilities, and most important characteristics are:
(1) Transparency, by documenting all records in a No-SQL, additive-only, ledger. In public Blockchains like Bitcoin, the ledger is immutable. This means that the distributed consensus about the common truth, and its cryptographic enforcement (i.e. via Merkle trees), makes it impossible to change the contents of records.
(2) Distributed governance, resulting in self-organization based on math and crypto-economics, independent of any borders. Crypto and Blockchain initiatives have explored many mechanisms, almost all of which encourage competitive activities that align personal and system interests. They reward the pursuit of such activities driven by self-interest that also strengthen the system. Without central control, this ideally establishes a hyper-connected small-world network of superior resilience.
(3) Confidentiality, by using keys and wallets to introduce pseudo-anonymity for the agents performing transactions and individualized control over the contents of data whose access Blockchains govern. Electronic traces make absolute anonymity impossible, but Blockchains can ensure balanced and practical solutions. Pseudo-anonymous privacy without absolute anonymity enables trust and lays an important foundation for business relationships.
(4) Personalization, enabling individual actors, people, to directly interact with each other, independent of geographic and legal limitations or organizational intermediaries. Customization often becomes personalization, targeting individual customers and tailoring solutions to their specific needs and wants. It eventually establishes peer-to-peer (P2P) interactions. This is the most extreme form of personalization since it involves both sides of the customer-vendor relationship.
(5) Security, via a combination of the above features, which can use personal and transaction-specific encryption and enable distributed and community-based access controls based on thresholds while transparently documenting all actions as immutable and in principle auditable transactions.
The first fully functional commercial public Blockchain-based platform for cross-border project management will have a huge early-mover advantage — and transform the world of business everywhere.
The Unique Advantages Making Blockchains Lead the Way
This leaves the question of how to go about building this platform. As of 2019, there were dozens of Blockchains and thousands of crypto-coins on the market. Only few of them get close to offering all the above capabilities. For example, a number of Blockchains are too small, too centralized, not self-governing, not transparent, too anonymous, and overall too volatile and susceptible to external control or attack.
Most Blockchains of 2019 are too small, too centralized, not self-governing, not transparent, too anonymous, and overall too volatile and susceptible to external control or attack. Some are getting ready for prime time, though.
Only public Blockchains can provide all of the above requirements and also show a credible path toward scalability and low cost. It goes beyond the scope of this article to discuss the merits of individual Blockchains, but scalability and low cost are absolute requirements for usability. Somewhat ironically, this currently excludes the most popular and highest-value chains, Bitcoin BTC and Ethereum. They are working on a series of performance improvements that may change this but are not fully functional yet.
Similarly, many Blockchains target “anonymity,” are centralized, private (“ permissioned “), or do not provide absolute transparency and immutability. Using these criteria still leaves a number of options, like Bitcoin Cash (BCH), Bitcoin SV (BSV), EOS, Stellar (XLM), Cardano (ADA), Quantum (QTUM), and several more. This is very promising!
For the fact remains that today’s convoluted, insecure, siloed, and slow project management solutions are inadequate and stretch and exceed the capabilities of project managers. Blockchain technologies do exist that can establish a new shared platform in line with large technological and economic trends. We better get going then.
The first such platform has a huge early-mover advantage. And the world will be better for it.
In a follow-up article I will outline more detailed requirements and specifications, and what we have so far achieved.
Originally published at https://radicalsolutions.tech on September 9, 2019.
