Is Blockchain a Good Fit For Your Business?
By now you’ve likely heard of Blockchain from friends, family, colleagues or a news outlet. Many are calling Blockchain the most transformative technology available for business today — so much so that giant companies like IBM, Samsung, Oracle, Microsoft, among others are allocating significant resources to their own Blockchain initiatives.
With so many conflicting opinions on “the right” Blockchain applications in addition to the costs of development and implementation, you may have a difficult time knowing whether to buy into Blockchain technology today, wait and see, or put aside the concept entirely.
This post aims to help you discover if you have good Business-Blockchain fit. If you don’t have a great understanding of Blockchain here is a good primer:
What Problems Can Blockchain Solve For Your Business?
Identifying what you hope to achieve using Blockchain technology can be a challenging approach. After all, Blockchain is still in its infancy with few case studies to compare against.
Furthermore, Blockchain use cases can be broad and transcend any industry. This is why determining the problems that can be solved is extremely important to knowing if Blockchain should be applied in the first place.
Blockchain is best applied to businesses that have points of friction with counter parties, and each party can benefit from addressing the friction. For instance you may have a lack of trust for a suppliers materials and data accuracy and your supplier might question your reputation and ability to pay which may increase the time and/or cost for transactions.
How Do I Identify Friction Points?
Identifying points of friction, quantifying their impact and coming up with a solution requires deep industry expertise and the meeting of minds across your value chain. Blockchain applications cannot be created in isolation.
Counter parties in the value chain must buy in to the platform for it to be successful. Because of this, it is worth having conversations early with counter parties to understand their friction points and needs before starting anything technical.
It’s important to map out your value chain as it functions today identifying the friction points to all parties involved. Marking them in order of highest friction to lowest friction you’ll see where you should prioritise your efforts for improvement. Focus on one or two friction points as you continue to dive deeper into determining whether you have Business-Blockchain fit.
Can These Friction Points Be Cleared Up With Blockchain?
Remember, Blockchain is a type of database that’s shared, replicated and synchronised among the members of a decentralised network. It records specific information from participants in the network.
At it’s core, Blockchains offer a verified origin of data and the ability to track each step in a value chain.
How the value of Blockchain fits or does not fit into your business requires more investigation. But at a high-level here’s a few examples of when Blockchain might not be a good fit:
- If you don’t require a shared ledger and have a network of counter parties
- If you don’t transfer assets or transact between multiple counter parties
- If you have no need for data privacy (i.e. protecting pricing information, customer lists, etc.)
- If your value chain has little to no regulation, audits or need for a trusted record of transaction history
- If your value chain has little to no paper documentation and coordination of information
Assuming you have good Business-Blockchain fit, you can now start to outline the scope of your project. More details on this to follow!