When the Internet came to the world decades ago, it didn’t immediately change human behavior or have an impact on our everyday lives. It’s the enabling technologies that came afterward, such as Wi-Fi, broadband, email, cloud, and the smartphone that changed the way we used the Internet forever, personally and at the workplace.
We are in the nascent years of the blockchain revolution but it’s clear the applications of the technology in the business world are limitless. However, enterprises need more than just a platform with the strongest technological capabilities to adopt blockchain. They need real-world business use cases and concrete examples of how blockchain is transforming their industry. In my experience, there are several key approaches to getting enterprise blockchain adoption. Here’s how:
Make blockchain real
Blockchain is often cited as a transformational technology, but executives are frustrated about how nebulous and intangible it is. Use cases appear to be hard to identify. The pace of progress with blockchain technology in the enterprise context has been far slower than many had initially hoped. According to a study by Capgemini’s Research Institutive, only 3% of organizations that are deploying blockchain do it at scale, 10% have a pilot in place, while 87% are in the early stages of experimentation of blockchain.
However, blockchain has amazing potential for businesses large and small. According to Accenture, blockchain technology is estimated to allow financial institutions to save between $8 billion and $12 billion in annual infrastructure costs. While blockchain adoption may be slow to start, enterprises are risking data privacy, decreased operational efficiencies and overall security as it becomes as ubiquitous as cloud computing.
Know what blockchain is good for, and isn’t good for
While there are hundreds of blockchain startups trying to capture the attention of enterprises, it’s not a universal technology that will solve all business problems. However, blockchain is inherently good at dealing with databases, transactions, and transparency.
For example, the Synaptic Healthcare Alliance pioneered by Humana, Optum, Quest Diagnostics, and Multi-plan are collaborating to solve the $2.1 billion problem of provider data management. Currently every quarter, provider data (names and locations of physicians, contact details) must be validated and updated by health plans (payers) individually, yet much of the effort -- 75% -- is duplicative, with each plan contacting the same providers. The alliance has proposed a blockchain based data marketplace where this data can be bought and sold, thereby turning data from a cost into an asset.
Participants can either decide to generate revenue from their data collection efforts by selling records, whereas other parties may decide to stop collecting records altogether and instead purchase them for less cost from more efficient parties.
On the other hand, many organizations have discovered that blockchain is far from a panacea for many of their troubles.
In many cases, the technology has proven to be a solution looking for a problem. The Depository Trust & Clearing Corporation (DTCC) recently put the brakes on a repurchase agreement proof of concept with Digital Asset Holdings (DA), citing that “…the same results could be achieved more cheaply using current technology.”
Understand your technology
Blockchain is often considered a technology project. However, it is wider than this; it is a transformation between an organization and its ecosystem of companies. Whereas a typical technology project requires approval from one to three executives, blockchain for a typical project requires over 120 sign-offs from business decision makers in several departments, from marketing to finance across multiple organizations.
The benefits of blockchain tend to be fairly clear-cut in a sterile environment where there is little to no legacy technology. In most cases, adopters do not have this benefit and instead must operate with a complex and rigid environment. This makes the implementation of blockchain akin to keyhole surgery, the precise implementation of a new set of business practices without disrupting existing operations.
It is imperative that your blockchain partner not just be your technology vendor, but your business partner. They must be able to execute their platform in a way developers and non-developers can understand across the entire business.
Restoring faith in blockchain
By considering these key points to properly adopt blockchain, enterprises can truly advance without the hurdles limiting its impact and scale. While the crypto craze has calmed down a bit since fraudulent ICOs were running rampant earlier this year, the underlying blockchain technology is here to stay and will change the way we do business forever.
Ben Jessel directs Kadena’s growth strategy and brings unparalleled knowledge of the landscape of private enterprise blockchain solutions across a variety of industries, particularly in healthcare, parametric insurance, and financial technology. He has 18 years of experience in managing technology change within large-scale business transformation programs focusing on the overall strategic shaping of the initiative, road mapping, execution planning, and execution.
As the former Head of Blockchain and Innovation at Capital Markets Company, Ben oversaw numerous projects implementing blockchain governance and operating models across financial institutions and the airline industry.