Blockchain brings significant implications to the business economy, and enterprises are beginning to examine where the technology may or may not fit into their organization.
When evaluating whether blockchain makes sense for your organization, there are many considerations – namely the importance of careful, extensive planning and the potential data privacy and regulatory issues that may arise along the integration decision path.
For organizations that have identified where blockchain solutions are likely to benefit their processes, there are some practical steps to take in moving forward with implementation.
The real work is in the initial phases of conducting a use case study, needs analysis, ROI study; mapping process and ensuring information governance around it from proof of concept to full deployment is also essential.
Adoption of distributed ledger technology (DLT) isn’t a routine IT migration, but rather a massive shift to new workflows and processes empowered by an entirely novel technology. Initial key steps, and guidance for how to conduct them thoroughly, include:
# 1 | Needs analysis and assessment
The CIO and IT department must work with various stakeholders within the organization to understand the goals of the business. That way, current business models can be reviewed to identify areas in which blockchain technology may be utilized to improve existing workflows and/or to create new workflows with maximum return on investment. This step in the process will also consider data privacy, legal and regulatory requirements that must be met.
Since blockchain technology may be impactful in many areas of a business, teams may want to work with experts to help prioritize the best and highest-use scenarios that will meet business goals. Outside partners can share known lessons learned and insights gained from industry activity. They can also help compare current workflows to proposed blockchain workflows, so teams can evaluate their full range of options. Ultimately, after the needs analysis exercise is completed, teams will have a high-level project plan to inform next steps.
# 2 | ROI Study
Once a business decides to pursue a blockchain initiative/implementation, it’s important to understand the investment needs of the engagement, including time, resources and costs. Equally important is a specific understanding of the expected ROI. Organizations must take time to calculate the full potential returns of a blockchain implementation. This information will help secure executive buy-in and adequate resources needed to make the project successful. The ROI study should provide short- and long-term projections, as well as broader strategic benefits and potential risks that will be introduced.
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# 3 | Software selection, implementation and support
There are numerous blockchain technologies available, and each has its strengths, benefits and weaknesses. Careful selection of the most beneficial technology, to ensure it aligns with the needs and ROI study, is critical to success. Factors to consider include stability and sophistication of the platform, particular strengths and functionality, such as data security, flexibility, ease of programming, ease of use, etc. The software selection for DLT should be treated with the same care as any other major technology purchase, with additional oversight from IG and legal stakeholders.
# 4 | Proof of Concept/Pilot project
A pilot project is a relatively low-risk and meaningful opportunity to discover and/or validate benefits. By applying the solution concepts in a limited-scope fashion, teams can get a realistic view of how the technology will perform and meet expectations. The scope of a pilot project should be reasonable in complexity and representative of the long-range project scope. In addition to working out potential real-world problems and reducing the risk of the full-scale implementation, a pilot project also allows the business to confirm ROI expectations and begin to evangelize change within the organization.
# 5 | Change management
Change is rarely easy, and it can be even more difficult when introducing a completely new workflow or technology. There are numerous frameworks teams can utilize to help guide the change management process. Generally, best practices include training and education exercises to help users understand the practicalities of the new system. These should be simplified and straightforward to avoid information overload and published on an internal resource that users can access regularly. Incentives that help people feel that they stand to benefit from the new technology are also effective at encouraging adoption and goodwill.
During these early years of adoption, as CIOs and IT decision makers pursue blockchain, they must focus their energies on the applications that will deliver the biggest benefits. Implementing new workflows is a significant undertaking, that requires ample resources to educate users and manage change. Implementations will have much greater success when users and company leadership can truly see the impact. Flexibility, transparency, and collaboration are critical and will ensure the project does not fall short like many well-intentioned technology implementations do.
This article was contributed by Steve McNew, Senior Managing Director within the Technology Practice of FTI Consulting.