Businesses, large and small, are curious about blockchain. The curiosity is not about cryptocurrencies. It is about the technology itself. Companies like Microsoft and IBM are heavily investing in it. Even though the financial industry was the early adopter, other industries like healthcare, law, and transportation are joining the blockchain revolution. However, if you are looking to adopt it for your business, you should not jump in blindly. First, you must understand the benefits of the technology. Then, take a systematic approach to develop your blockchain strategy.
Understanding the Benefits of Blockchain
The blockchain is a distributed digital ledger that can be maintained on a peer-to-peer network. The technology allows two parties to make transactions without the need for an intermediary. Here are some of the benefits your business can derive from using blockchain applications:
The elimination of intermediaries mean that you can run your business without dealing with a disruptive third-party. If you move your financial transactions to the blockchain, you can save time and money through eliminating bank fees and credit card payouts. You can streamline your business processes and improve your bottom line.
The records on blockchain are immutable and chronological. Using blockchain creates a reliable audit trail for your company. It’s so reliable that diamond businesses are using blockchain to keep conflict diamonds out of their supply-chain. So if regulatory compliance is an issue, blockchain solutions can help you keep your business audit-ready.
Blockchain provides a great way to trace objects without paperwork. As a result, the logistics and transportation industries are heavily investing in blockchain applications for inventory and supply-chain management. The technology is taking such a prominent role that the logistics industry has created Blockchain in Transportation Alliance (BITA). BITA's objective is to define a common framework, promote innovative applications and educate the industry participants.
Businesses that value transparency can rely on blockchain to create a relationship of trust with their customers. The blockchain is open and distributed by its nature. So anyone involved in the network can take a look and verify the authenticity of every transaction. When you place your records on a blockchain, your customers will know you are serious about transparency.
At the beginning, even though the technology theoretically looked secure, there was a lot of skepticism. However, the 9-year tenure of bitcoin blockchain has proven that it is a secure and reliable way to conduct business. Today there is no doubt that blockchain provides one of the most secure ways of transacting values on the internet.
As a business, you should look into these benefits and see what applies to your particular case. If it seems that blockchain can help your business, then you should proceed to develop a strategy that will help you move forward.
Steps to Create and Implement a Blockchain Solution
Developing a blockchain strategy requires a systematic approach. Here are steps that will help you with your efforts:
Step 1: Identify Use Cases and Set Your Goals
Implementing a blockchain solution will require the help of your whole organization. So from the start, try to get everyone involved. Prepare team members and stakeholders through education about blockchain. Then work with everyone to identify the areas of your organization that can leverage blockchain technology to gain value. Discuss use cases, identify achievable goals and define a plan.
At this stage of the cycle, your organization should inspect aspects of your business process and determine the benefits that apply to different areas. Ask questions like:
Through brainstorming, you can come up with potential uses of blockchain for your particular business.
Step 2: Develop a Proof of Concept Project
Your team input will help you create valuable ideas. But ideas need to be tested for viability. At this stage, investing huge amounts of time, money and resources in a project might be counterproductive. It’s better to take an incremental approach. Take the ideas and try to come up with a proof of concept (POC) project where you can validate the key ideas in a real-world scenario. You are not creating a full-fledged application. The POC project should only involve the bare essentials. It should be a prototype of the application you want to develop in the end.
Once you have a prototype sketched out, try to set up a project release date just like your normal products. And make sure you have the support of your whole organization for testing and evaluating the prototype.
Step 3: Field Trial Through Building the System
In order to evaluate the ideas, there is no substitute for real-world trials. You need to build the prototype to test it. If your teams have the technical expertise and know-how, you can build it internally. Otherwise, you can get help from contractors. Of course, there might be vendors who have already created blockchain solutions for your industry. For example, IBM Blockchain has various business solutions. You can evaluate these solutions if they are appropriate for your business. Building a prototype will give you a better idea of the viability and associated cost of the blockchain application you are planning.
Step 4: Roll Out and Measure through KPIs
Before you roll out your POC prototype, talk to stakeholders and agree on key performance indicators (KPIs) and benchmarks for the new system. This process will help you objectively evaluate the benefits of the blockchain application.
Once you have your KPIs, roll out the prototype and measure the results to find out if the return on investment (ROI) will make sense in the short term or long term. You might realize that the cost of building the overall system is prohibitive or it might require a different approach. You can repeat the process to test out a different idea or solution. Also, different parts of your organization can build parallel prototypes to play with multiple ideas.
The above steps will help you discover the benefits of blockchain for your organization. It might take a few iterations to come up with applications that are relevant to your business. Also, the landscape of blockchain is changing fast. You should always keep track of the current innovations and update your blockchain strategy accordingly.
If you need help developing a blockchain strategy for your small business, our experts at IoTCoreSoft are ready to help. Contact us today.
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