What exactly is blockchain?
The Blockchain is the technology that powers Bitcoin. It has been successfully applied to other cryptocurrencies, but this is not the only field of application.
In the simplest terms, blockchain maintains a register of every entity – who owns it, to what person/organization it is transferred to, and when. The reason why it is called blockchain is because a data structure block created every ten minutes. Each block is linked to the previous block, creating a ‘chain’ as a result.
Blockchain in the corporate world
In customer care, service requests, once created, could be transferred from the first point of contact to the next level, if required. Blockchain can revolutionize the way complaints are handled if there is an escalation matrix in place already. Because every transaction is encrypted, there is no way an unauthorized person can tamper with it.
Healthcare is another sector where blockchain’s ability to ensure tamper-proof records holds immense promise.
The possibilities are endless. The transfer-of-ownership concept in blockchain finds potential in real estate records. Anyone wanting to find out the owner(s) of a property can easily do so. In fact, a list of all the owners, right from the beginning, can be obtained. There is no need to pay an escrow agent some $300-$400 to do a search of the county office records.
The same could be said of motor vehicle records. You could find out at the click of a button if the car you are planning to purchase is a flooded vehicle. Having to pay $39.99 for a comprehensive report puts off a lot of used car buyers. So implementing blockchain would be a win-win situation for both sellers and buyers.
William Mougayar, the author of The Business Blockchain: Promise, Practice, and the Application of the Next Internet Technology, says that there are two ways blockchain can benefit businesses. It could make processes more efficient, and simultaneously also reduce the costs associated with these processes.
Joseph Guastella, Principal at Deloitte Consulting’s Financial Services, concurs. When clients approach his organization with problems, he asks them, “Have you considered blockchain? That could eliminate some ten post-transaction reconciliation steps and save a lot of money.”
How to get started
The technology is new, and there aren’t many qualified developers out there. It is recommended that you proceed with caution. As is the case with everything else, a lot of thought needs to go in. Don’t build blockchain into your processes straightaway. See if your competitors could gain an edge over you by opting for blockchain. If yes, that is a good use case.
- Find a use case, where blockchain technology could be implemented
- Incorporate blockchain into the process
- Conduct a field trial with limited customer data
- Move to a full roll-out
Take baby steps. Start with one or two pilot projects. But keep track of your investment, the time required to move on to blockchain and most importantly, the value addition it delivers. This is just plain business sense. If something doesn’t provide you with returns, there is no point spending your money on it. The pilot project(s) should tell you whether it is worthwhile to spend your money on blockchain technology.
You also need to evaluate whether things have improved. Does the overall process (with blockchain) now take up more time than it used to in the past? Theoretically, it shouldn’t – but it is possible that something went wrong somewhere during the implementation. Or stakeholders are struggling to adapt to the new technology. This is why two pilot projects, outsourced to two different vendors, are better than one.
Blockchain technology is just the back-end. For the front-end, it integrates with a lot of other technologies that are in use today. If your pilot project is capable of adjusting itself to new front-end technologies as and when they appear, that is a good effort. Something which cannot, as it cannot be used in conjunction with new technology, is destined for a sure death. These are the pitfalls you need to be aware of when implementing blockchain technology at your organization.
At the time of writing, there are only about 300 startups that specialize in blockchain technology. But industry leaders like IBM and Microsoft too are actively involved, and they have begun offering their services to small companies and/or on small projects. They are no longer high-billing top technology companies that offer only enterprise-wide applications. In fact, Jeff Garzik, who heads blockchain technology company Bloq, says that there are no enterprise blockchain applications as of yet.
Some of these companies take blockchain technology to the next level – the cloud. So it pays to choose your vendor wisely. The best blockchain technology company for your business is not the one who promises to deliver the most advanced, state-of-the-art application. It is the one which promises to deliver value in the long run.
PriceWaterhouseCoopers, one of the top 4 consulting firms in the world, terms blockchain a disruptive technology that comes only once in a generation. Just like car-sharing became possible, enabled by GPS, blockchain technology could give rise to other applications that improve the quality of life for mankind. The point is to bet on it without putting your entire organization at risk.