The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology, by William Mougayar
Innovators Dilemma
It is difficult to innovate within your business model, because you will typically attempt to tie everything back to it, resulting in a shortsighted and limited view of what is possible. This is especially true if your business has a trust-related function (such as a clearinghouse). Current intermediaries will encounter the hardest change, because the blockchain hits at the core of their value proposition. They will need to be creative, and dare disrupting themselves while folding some blockchain capabilities under their offerings, and creatively developing new value proposition elements. They will need to realize that it is better to shoot yourself in the foot, rather than to have someone else shoot you in the head. This will not be an easy transition, because changing business models could be difficult to achieve in large organizations for a variety of factors.
13 STRATEGIES FOR CIOS AND CORPORATE EXECUTIVES (Excerpts)
Issue 1: Blockchain Redefines Legacy
Large companies are always battling with their legacy applications, because these can be anchors that drag them when new technologies arrive. Even when you thought corporate IT was safe with modern software environments that make use of modular cloud-based capabilities, container-based technology to facilitate operations deployments, or continuous delivery with agile and rapid developments practices, the blockchain is yet another “modern technology” that will need to be absorbed and integrated into the technology toolset of any software development teams.Issue 2: Blockchain is a Strategic IT Platform
… the blockchain, in its fullest form, is a new major software development platform. Therefore, it is becoming increasingly strategic. Strategic means that it is not just there to reduce costs and improve transactions latency. Strategic means that it needs to find strategic usages that can give you a competitive advantage.Issue 3: What Competencies?
There are 5 categories of competencies required to fully roll out blockchain solutions within a company: Education, Discovery, Design, Development and Management.Issue 4: What Partners to Choose?
Every organization sits at a different starting point, based on their resources and capabilities, so the chosen approach will rest with your particular situation.Issue 5: Back-end Integrations
… the blockchain also has the potential to replace some back-end processes, so you must take that likely scenario into account. But keep in mind that it will be easier to start implementing blockchain solutions in some new segments, without internal integrations. If your starting position includes your current systems, then you are inherently extending your implementation horizon by potentially as long as an extra 18– 24 months. So, why not consider starting with no baggage and earn new customers who want to try something new?Issue 6: Blockchain as a Shared Services Platform
In addition to internal applications and use cases, there will be a number of new opportunities for creating shared blockchain services…Issue 7: Disrupt or Construct?
For startups, there is no doubt the blockchain is a disruptor, but large companies do not like to disrupt themselves unless they are forced to. Within large companies, the first likely scenarios will be to deploy blockchain technology to strengthen their existing operations, by achieving new levels of efficiency or seeing cost reductions. However, it may not be enough. The specter of outside disruption will still loom if you stop short at the constructive/defensive stages.Issue 8: Blockchain As the New Database
Knowing when to use a traditional database and when to use a blockchain will be important, and knowing how to optimize their dual operations will be even more important.Issue 9: Blockchain Platforms
In 2016, we are seeing many pieces and choices, and “hand assembly” is still required. We may be in similar stages as when we had to build Web pages by writing HTML code, page by page. Blockchains that come out of the box will be a welcomed evolution, although Blockchain-as-a-Service is a step in that direction.Issue 10: How to Get Educated
You can take a proactive approach to educating various departments about blockchain technology, or you can wait until the market continues to educate everybody generically. If there is no sense of urgency, it probably means that either you have not taken the time to understand the full potential of the blockchain, or that the blockchain effort is not being led by the right person whose job will be to light-up the required sparks within the various business units.Issue 11: Dead-End vs. End-to-End
Proof of Concepts (POCs) are popular in some large companies, as a way to dip your toes into new technology without getting totally wet. But the risks are that they could be timid experiments that do not show commitments and they might reach a dead-end, because they will not always allow you to see the potential benefits. It’s better to implement smaller blockchain projects end-to-end where you can see results and a full lifecycle of usage with real users. That said, POCs can be used to narrow down a portfolio of committed projects, but you need to move beyond them.Issue 12: Business Process vs.Technology
I have long argued that implementing the blockchain is 80% about business process changes and 20% about figuring out the technology behind it. Of course, this assumes that you want to be ambitious enough to tackle the required toughness in changing business processes. If you think that the blockchain technology is not ready yet, or has some weaknesses that might be solved later, then use that time to start reengineering your business process, and by the time you are done the technology will be ready.Issue 13: Use Cases Saturation
Brainstorming to find use cases is good as an initial entry point, but it is not enough. The risk is in thinking that use cases are disposables. You try them, and if you do not like them, you throw them out. Use cases could lead to something, or maybe not. The term “use case” assumes that something has to fit within existing processes, so the bar is not high enough for making more difficult choices that go beyond the obvious, and into the innovation discovery potential.