How To Decide – “Where” To Use Blockchain?
By Aayush Bhatnagar on ALTCOIN MAGAZINE
It All Plays Out Like This…Sounds Familiar?
With all promising technologies, we experience a “hype curve”.
During the initial days of the hype curve, software and business teams come under immense pressure to adopt an emerging technology — whether they need it or not!
The reputation of products and companies is measured by how well they have adopted the latest trend.
Marketing and Sales teams go into a warp drive – displaying the new shiny toy in their presentations, blogs, white papers, and social media videos.
Research analysts are not left far behind – soon we get a 97-page research report from reputed firms talking about the new trend, slicing and dicing industry adoption into “quadrants”!
Business leaders scuttle to get their hands on this new report – credit cards are swiped – and finally, the elusive report emerges from the shadows.
Have You Also Been Blockchain”ed”?
Blockchain is also traversing the expected hype curve, which can be depicted as shown in the figure below.
In my opinion, when it comes to Blockchain, we are somewhere mid-way between the “Peak of inflated expectations” and the “Trough of Disillusionment”
Different organizations may be at varying levels of this curve – but, by and large – the industry is at a stage where we have a healthy mix of enthusiasts and skeptics of Blockchain.
The Peak of Inflated Expectations
Many people consider Blockchain as an ultimate source of corporate nirvana – all technical aches, pains, and sufferings would come to an end – business efficiency would quadruple – the world will never be the same again, and suddenly milk and honey would start flowing!
Trough of Disillusionment
On the other hand, we have skeptics who have written off the technology – they do not see its practical use, and offer a common argument – “But…this can also be done without blockchain”
How To Navigate This “Confusion”?
In such an ecosystem, it can become extremely disorienting for a business leader and decision-maker to take the next steps.
Consider the following situations, all of which would sound familiar -
- Whether they should proceed with the adoption of Blockchain in their enterprise?
- Whether they should stick to existing practices?
- Whether they should “prolong” the PoCs and evaluations to adopt a “wait and watch” approach?
- Should they just use Blockchain as a marketing gimmick, and change nothing under the hood?
- Should they acquire a Blockchain start-up where they will get skilled people & then depend on them to figure it out?
- Should they hire a consultant who would tell them what to do through his workshops, slides, and articles?
Enter – The Slope Of Enlightenment
If you are looking for a “one word” answer on whether your digital enterprise should adopt blockchain or not – the answer is Yes!
However, what leads us to this conclusion?
To assess Blockchain’s use for our business, we need to consider the strengths of Blockchain and understand its application in our business context.
In this section, I detail out some “thumb rules” that we must consider while adopting blockchain.
Silence the Skeptics – Perform Cost-Benefit Analysis
First – to answer the skeptics – of course, everything can be done without Blockchain! But the question is – “At what cost?”
Everything is possible by writing software – but the investment, time and effort required to achieve “everything” from “first principles” can be devastating for a business.
Business owners get sucked into long drawn IT systems integration projects based on proprietary vendor controlled middleware – and this becomes a constant capital drain.
Whenever your business requires agility, “new requirements” are billed by the systems integrator. Many organizations have been through this vicious circle, and understand how taxing it can be.
Hence, business owners must identify those processes which are the “largest cost centers” for their business, and evaluate Blockchain “strictly” in the context of lowering the OPEX of these processes. Do not let “use cases” drive decisions – let business fundamentals drive the use cases.
Blockchain Is Not Replacing Your BPM System
Blockchain smart contracts and the DApp framework can facilitate how business processes across systems can operate more transparently without the need for manual intervention.
It is important to understand that Blockchain is not “replacing” your current BPMN system – but connecting to your IT systems to bring in transactional transparency.
Smart Contracts ensure that there are no “paper pushers” in the organization which inject delay in operations, and create “person dependencies”.
How your business process is modeled and executed remains in your BPM system.
Blockchain – “Cost” Or “Investment”?
Blockchain is not a “cost” for a business, but an “investment” – which would reap handsome returns if done in a balanced manner.
Hence, it is important that when we talk about Blockchain, we should understand the operational efficiency it would bring in businesses as described above.
Hence, for decision-makers – it is important to undergo a mindset shift and consider Blockchain as an investment in business agility.
This is in sharp contrast to “doing stuff” outside Blockchain (as voiced by Skeptics) – which would surely become a service cost on the balance sheet.
Blockchain For Business Accountability
Blockchain is not just a distributed ledger that provides provenance of business transactions – it is a technological framework that institutionalizes “accountability” in business operations.
Blockchain transactions are open, auditable and immutable – which makes them credible and available for scrutiny.
This leads to a smooth delegation of activities through smart contracts and reduced probability of corruption and fraud (for which we have Fraud Management Systems).
Businesses often struggle with the dependence of specific people, office dynamics, a long chain of approvals, and many times suffer from “pass the buck” syndrome!
This can significantly slow down the business.
Blockchain can help in establishing trust and transparency in this ecosystem of enterprise operations. This would bring “awareness” to the management of how their business is operating, and what are the bottlenecks – if any.
Tamper-Proof Business Intelligence
Business owners are used to consuming detailed executive dashboards, and KPI reports.
Many times, these dashboards not always represent the ground reality.
Assumptions are made consciously or unconsciously – information is misinterpreted, and these factors can mislead the management into taking wrong decisions.
Blockchain can contribute to bringing transactional transparency to an enterprise.
Business DApps can be built on top of the ledger to “audit” and visualize reports and KPIs in a tamper-proof manner.
The Outcome Of Blockchain – The Plateau Of Productivity
While reviewing the hype curve – a successful implementation and adoption of Blockchain can be measured by how quickly an enterprise is able to transition from the “peak of inflated expectations” to the “plateau of productivity”.
It is possible, that many enterprises would bail themselves out from Blockchain in the “trough of disillusionment” phase.
However, if we consider some of the pointers explained in the previous section carefully – we can exploit the advantages of Blockchain, and move beyond criticizing the technology.
Criticizing Blockchain or any other new technology only wastes precious time and energy. Hence, an organization should not remain in the “Trough of disillusionment” for too long.
In this article we adopted a contrarian approach – to be “aware” of the strengths of Blockchain, evaluate them in a specific business context and how those strengths can be leveraged for business agility.
This is more productive, rather than counting a hundred reasons for not using the technology.
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