Executive decision makers of regional, medium and large organizations are often struggling to unpack the complex, multifaceted world that is digital, namely blockchain and their AI digital cousins.
Given the dramatic, market volatility in cryptocurrencies, rampant fraud, unprofessionalism in the ICO market, steep learning curve, and an embryonic rapidly transforming technology, many executives are sitting on the sidelines reluctant to pull the trigger on what could be a costly and long adventure.
Certainly, many senior managers do not yet comprehend or are vague on the gravity of the threat that blockchain, other distributed ledger technologies, and AI could pose to their business. Executives are finding it difficult to envision what a blockchain deployment would require and more importantly cannot yet envision reasonable use cases with measurable ROIs. After all most seasoned executives have had their exposure to costly tech projects that have gone awry and taken their toll on organizations.
Often in the blockchain space, many feel disconnected from the tech oracles, with their mind-numbing presentations of the coming blockchain revolution. More importantly decision makers’ grapple with a myriad of concerns over privacy, compliance, security of data and systems requirements that blockchain may present.
Despite all the conferences, articles, seminars and sales presentations many senior decision makers are still left confused with a long list of unanswered questions.
Where is the disconnect?
Many of the newer firms selling blockchain solutions have failed to incorporate sound business logic and simplified phased-in plans into their sales process. The large consulting and technology firms have partnered with multinationals and governments on ambitious use cases utilizing their top talent. Medium to large organizations have received sales teams proposing relatively costly, ambitious projects with questionable ROI and vague business cases at best. Many new tech start-ups develop avid crypto disciples that propose solutions with utopian visions yet lack real-world practicalities. In addition, most top blockchain talent has been deeply involved in developing the constantly morphing technical infrastructure with scant business partnering.
Having said all that, none of the above will let any of us off the hook for not comprehending the full transformational power that blockchain and other digital technologies possess.
The industrial tectonic plates are on the move. Prepare, and keep your ears to the ground; become engaged or join the long list businesses that have failed to embrace previous technological waves.
Taking a first step — Team Building
Take the first step by building your in-house expertise, internalize the blockchain culture and prepare for the ensuing cultural shifts. Many decision-makers have already embarked on the journey up the steep learning curve. However, this multifaceted technology leaves many executives paralyzed and concerned with the risks. None-the-less the only way forward is through it.
Form a working group in your company with team members from multiple disciplines, understanding that digital technologies are going to be with us from now on and will require an evolution in our organizations.
Onboard experienced blockchain talent to energize and train your team. Bring in a few blockchain experienced staff and advisors, who will ignite a learning process and provide an experienced hand when dealing with vendors and developers.
A Simplified approach — Back to business basics
When we use the word blockchain, in fact, we are talking about a variety of technologies that fall into the category of Distributed Ledger Technologies (DLT) some of which are not, strictly speaking, blockchains at all. I will not go into the breakdown here as there are plenty of good infographics and videos available online to bring teams up to speed. In addition, what we refer to, as blockchain is comprised of several technologies, algorithms, various combinations of data storage, consensus models and protocols etc., the combination of which makes up a tech stack.
Break down this complex and fluid world by going back to the basic questions we use for any new technology.
How will this technology impact my customers, alliances, processes, and plans for growth? How do I deploy? What opportunities will this technology present? What’s the roadmap for developing use cases? How can we start with practical use cases, which solve the basic operational problems of efficiencies and simplified processes for customers and partners? What kind of team and resources are needed for the medium term? First stage use cases can be developed to deliver an early win, positive ROI, and reduce the friction of inefficient process flows.
Certainly, cryptocurrency is an important part of the blockchain world but it is still a new and rapidly evolving component, as well as one that’s fraught with regulatory uncertainty and security issues. Keep your eyes on it but if you are risk-averse and lack in-house talent at least initially, begin with simpler implementations that do not require their use.
Understanding your macro flows and ID your use cases
Review all of your macro workflows; understand how customers and partners could be affected and what digital initiatives are already in development that will impact their business.
Have a deep-dive into how you pass documents, data, track materials, and products, authorize and validate users in your processes.
Look closely at the physical transfer and storage of tangible assets between customers and partners in your chain.
Understand the bottlenecks and design use case solutions that can deliver an early win.
Surely any business that is currently acting as a middleman or providing ancillary services for middlemen needs to be on extra high alert.
Direct to customer enterprises are embarking on serious blockchain initiatives that will bring savings and efficiencies to their product offerings. Crypto-anarchists are focusing on developing applications to decentralize data, reduce transaction cost and time, and act as an automated trusted third party for transactions, which could challenge the very core of your business models.
The good news is that we are still in very early stages of development, many tech start-ups have been slow to understand market dynamics and have not yet built teams capable of taking on such monumental tasks, but they are making progress and some will grow exponentially.
Cultural shifts will occur
“Culture eats strategy for breakfast”. This is a good time to remember Peter Drucker’s famous quote. Shifts in company culture are inevitable as we attempt to digest digital technologies. We are in this for the long haul; this is not a one-and-done implementation. The real sea of change will come when mass adoption occurs which is estimated to be only 3–6 years away.
We are moving to a world of federations of shared data where customers, suppliers, partners, and even industry competitors will pool certain subsets of data. Get ready to give customers more control over their data. As such, IT control and power will likewise experience shifts in how they manage operations, security, and compliance.
An important success factor will be spending more time with customers and partners to reduce process friction and develop the building blocks for these federations.
Indeed there are many new skills and cultural transformations that will be needed for the organization to onboard digital technologies and thrive in the distributed world.
Determining the ROI
There are many advantages to beginning a blockchain implementation process by starting with low hanging fruit. Identify processes that are loaded with multiple inputs or invoices in various systems which require multiple validations, cumbersome manual interventions, a high risk of fraud, high error rates and slow turnaround times. Also, look closely at cumbersome compliance processes for blockchain opportunities.
Targeting these weak operational processes will provide a more measurable ROI. The next bucket of use cases will likely be requiring deeper skills, new alliances and partnerships as well as data-sharing infrastructure.
The blockchain is but a piece of a larger set of digital technologies. Blockchain can be seen as part of the data infrastructure layer where AI can be applied, then data is analyzed, along with automated-learning to provide new insights on a scale previously inaccessible. When applying various AI technologies to datasets, one can easily see their potential transformative power on product offerings and fulfillment.
Now is the time to build an enterprise-wide digital culture and expertise. The digital toolkit should be viewed as complementary technologies that will work together to deliver value rather than separate unrelated projects. We are in this for the long haul and that will require adapting and developing the skills and culture to capture value in this new competitive landscape. But every long journey begins with a single step.
Blockchain, DLT, Bitcoin, ICO: Finding clarity from all the noise was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.