As with AI and machine learning — and cloud-enabled SaaS a decade ago — interest and investment in blockchain technology have intensified within progressive enterprises. However, Gartner recently made a disturbing prediction: 90% of blockchain projects will be obsolete within 18 months. This is not a new story for emerging technologies. Too often, enterprises seeking a first-mover advantage will invest in a buzzwordy technology that fails to bear fruit because they lack the tools to ensure success.
The reason so many executives struggle with crossing the chasm from pilot to production is simple: poor planning. They say an ounce of prevention is worth a pound of cure. So, for blockchain, how can executives ensure they have adequately planned to prevent deployment failures? Below I will outline three core steps: work use-case backward, understand the multiplier effect and anticipate deep integration issues.
Working Use-Case Backward
Before committing budget to blockchain projects, executives must ask themselves if this is something they really need. It may be very tempting to buy the newest iPhone, but if you already have last year’s model, a new one is not likely to deliver much value. Don’t look for cool blockchain applications and find ways to justify investment; instead, identify the pain points caused by a process that could be addressed by blockchain.
This is the “use-case backward” approach. Stakeholders don’t care whether you are using the latest tech, but they will be grateful if you’ve identified a flawed process and articulated the value in replacing or fixing it.
For example, any company dealing with supply chain management for perishable goods knows that logistics for transports is a major headache and that losses can run into billions of dollars. Building blockchain and internet of thing (IoT) solutions can ensure data across the goods’ journey gets captured in real-time on a trusted ledger that bad actors can’t tamper with. This solution provides business value by identifying where losses occurred and why.
The Multiplier Effect
Think of blockchain projects like baking a cake: It’s a mixture of ingredients that must all come together in a certain way to be successful.
Likewise, blockchain projects require building blocks such as security, distributed computing, peer-to-peer networking and more in order to be properly deployed. This is where the multiplier effect first comes into play — those core components need to be built first before blockchain can be developed. Then, when the project gets ready for deployment across the enterprise, it needs to interact with multiple technologies such as the internet of things or an artificial intelligence or machine learning-based hybrid cloud. These technologies can then converge with the blockchain initiative to produce a multiplier effect on the project.
The icing on the cake is how to present the project to end-users that ensures transparency, accountability and reporting. Plan for each of these interactions from day one; otherwise, they have the potential to create serious obstacles.
Preparing For Deep Integration Issues
It’s been said that 30% of a new technology project is building it and 70% is integrating it, including aligning all members in the shared solution ecosystem, aggregating integration efforts and establishing the multiple processes within the organization. New enterprise technologies are usually designed to be flexible within the existing enterprise infrastructure. Instead, most of them end up supplanting existing business processes and technical systems due to a lack of interoperability. Gartner has called out how many organizations struggle with full implementation of blockchain as they maintain the architectural aspects of pre-blockchain computing, “use traditional constructs for data management, user participation, and network control … [and] largely replicate existing centralized enterprise transaction and information systems.”
Importantly, anything related to redefining user experiences and how people consume a product, service or offering is going to be very effective. Any successful deployment requires familiarizing employees with new ways of working with blockchain. IT and developer teams will need to plan to make blockchain solutions as user-friendly as possible, and team managers will need to adapt their team structures and related business processes to accommodate.
While it’s conventional wisdom that companies need to adopt new technologies fast enough to stay competitive, this doesn’t mean rushing into pilot without scoping them out. I’m a big fan of the phrase “hurry makes bad curry,” and I stress it with my team members, especially when starting new projects. Ensure that deployments are blueprinted in advance by mapping out the return on investment, the number of project iterations and potential bottlenecks. All technology takes time to mature, so be patient and careful during the planning process to ensure the processes and end-result can work for all scenarios.