While there is no doubt blockchain will have a revolutionary impact on many facets of our lives, it cannot overcome poor business planning, Keith Pritchard said.
Mr. Pritchard is a consultant for base60, one of the services offered by global consultancy JDX. He advises clients on technology choices, beginning with the proper consideration of all available options before moving on to a successful implementation.
In order to have a successful implementation of any technology, including blockchain, one must look before they leap, Mr. Pritchard said. Failure to do so can leave you worse off than when you began.
According to Deloitte, only eight per cent of the 26,000 open source blockchain projects initiated in 2016 are still being actively maintained. A project’s average lifespan is one year.
Proper evaluation begins with considering several factors, Mr. Pritchard said. Determine what business problem (if any) you are trying to solve. Sometimes people can become so enamoured with a shiny new toy they force it into use.
Analyze your domain and identify its problems. Then consider the distributed ledger’s best features and see if there is a fit. Once those questions are answered you can weight blockchain against all other available choices.
To properly evaluate blockchain in this context, you need to understand it, and that takes time. Read all you can. Talk to experts at conferences. Blockchain can be confusing for everyone, including decision makers, so the better you understand it the better you can communicate the benefits to executives and frontline staff who have to work with it, a challenge Mr. Pritchard said he faced when developing a training manual while with JPMorgan.
“I was writing it for regular people,” Mr. Pritchard said. “If I could clearly explain it to them, that’s the level you need to understand it in order to decide what problems you can solve.”
It’s no different than the process of properly evaluating any preceding technology, Mr. Pritchard said. In his position he closely looks at the solution, breaking it down into its core aspects to understand how it works. Spending time with new technology providers, he gets them to explain how it works and holds joint discussions which consider different aspects and use cases.
So now you have to convince the board, and money talks. Identify areas where the blockchain can save money and time. And remember blockchain isn’t a magic panacea that you turn on and watch while it does your work.
Fail to take these steps increases the chance your project is among the 92 per cent identified by Deloitte that die on the vine within a year.
“Launching a project is easy,” Mr. Pritchard said. “Write something and download Ethereum.”
That’s the sexy part, but then comes months of thinking about the problem you wish to solve and the amount of re-engineering, assessing the business case and developing a long-term roadmap to success.
Questions inevitably come that force you to constantly evaluate the merits of what you’ve been working on for so long.
How does this one tool compare with other options available to you?
Is it simpler to adapt existing technology?
“That is a concern in financial services where large banks have complex, expensive infrastructure,” Mr. Pritchard said. “If any solution involved making wholesale changes…there’s the pressure of profitability, waves of regulation and the absorption of investment dollars.”