Where to begin?
Although some commentators may dispute the merits of blockchain, nobody can deny the level of current investment and potential future value of this technology. The business value-add of blockchain will be more than $176 billion by 2025 and $3.1 trillion by 2030, according to Gartner. Beyond investing and finance, major blockchain projects have been implemented in industries including cybersecurity, healthcare and agriculture, writes Forbes. The business magazine highlights three trends that support increased application of blockchain: availability of ready-to-use software from top vendors; significant improvements in interoperability; and overall improved understanding and sentiment.
This article examines topics for mid-sized and larger companies undergoing digital transformation to consider in deciding whether, or how, to implement an enterprise blockchain approach.
Identify opportunity areas
In our experience, organizations consistently make a major mistake when looking to deploy a new technology: failing to clearly identify the measurable outcome they are trying to achieve. This applies for any type of company undergoing a “digital transformation” of any kind, but especially for those looking to experiment with a nascent technology such as blockchain. Without a clear understanding of underlying business challenges and associated outcomes to achieve – whether for speed to market, improved quality, new market penetration, or operational cost savings – clear and measurable value needs to be part of the initial discussion when first exploring blockchain.
When looking for the areas where blockchain technology can bring the greatest value, our recommendation is to examine those areas of your business where multiple parties and a large number of handoffs exist: at its core, blockchain technology has the greatest opportunity to drive benefits around improved integration and collaboration between institutions. Some interesting examples we have seen include cross-border payments, supply chain optimization, and areas around intellectual property (IP) distribution. With all of these, sharing data, simplifying outdated processes, and instilling transparency are all tangible benefits that blockchain brings to the table.
After determining what problem needs to be solved and where most value could be gained, we recommend leveraging a framework to identify key processes/transactions with potential for a blockchain strategy. The University of Oxford Blockchain Strategy Program – attended recently by this blog’s author – proposes a solid framework for this process to assesses readiness:
- Is there a predictable, repeatable process or transaction that lends itself well to automation?
- Is this process or transaction ongoing or long-running, rather than one-off?
- Are multiple stakeholders involved in the process or value chain?
- Are disparate data usually reconciled by one party or a limited number of parties?
- Keeping in mind that value is not only monetary, is there an element of value transfer? Is there value in an immutable record? Or is an immutable record a requirement?
Consider solutions and next steps
If the answer to any of these five questions is ‘yes,’ then you will need to begin to formulate what a blockchain solution could look like by detailing initial requirements – these will drive decisions around many of your next steps, including whether to use a public vs. private blockchain, speed and data storage thresholds, and end user experience design. All of this will first be driven by deconstructing your current process and considering how best a blockchain solution can provide greater transparency and effectiveness to the process. Once you have outlined these needs, then we recommend clearly considering risks, outlining potential business value, validating staffing options (internal resources vs. leveraging outside expertise) and deriving funding options to move forward on a pilot program as a next step. While there will be many questions that still remain unanswered, executing the above will launch you on your journey with a practical mindset.
Can you afford not to experiment with blockchain?
The operational potential of blockchain-based decentralized ecosystem is something every enterprise should explore – but mindfully and not blindly.
Reach out to us at Liberty for advice on strategically defining your organizational challenges, gaining value from technologies such as blockchain, and executing the required workshops to help you plan accordingly. We can also offer expert counsel on questions around privacy, security and scalability. By developing a pragmatic, stepwise approach to experimenting with this promising new technology, we can help you minimize risk and maximize value.
About Liberty Advisor Group
Liberty Advisor Group is a goal-oriented, client-focused and results-driven consulting firm. We are a lean, hand-picked team of strategists, technologists and entrepreneurs – battle-tested experts with a steadfast, start-up attitude. A team with an average experience of 15+ years, that has delivered over $1 billion in operating income improvement and over 300 M&A deals for our clients. Liberty has a proven track record in Business and Technology Strategy, Transformation and Assurance, Data Analytics, Business Threat Intelligence, and Mergers and Acquisitions. We collaborate, integrate and ideate in real-time with our clients to deliver situation-specific solutions that work.
This year, Liberty has been named to the 2019 Best Places to Work in Chicago and to FORTUNE’s list of Best Workplaces in Consulting and Professional Services.