“Across all industries we’re seeing movement on blockchain on the enterprise level,” Cognizant’s Fletcher McCraw said.
Mr. McCraw directs partnerships and consulting on blockchain for the digital operations, business and technology strategy firm. He said while most industries are becoming aware of the blockchain’s potential impacts on their industry, some sectors are further into development than others.
Financial services are well down the path, with 95 per cent of organizations surveyed stating they are in the process of identifying blockchain use cases. The market has moved from the early adopters who researched the options to ones overcoming challenges and bringing solutions to market.
That shift was the result of an education process where companies took a problem, walked through different options and chose the blockchain. That is important to note as companies should not automatically jump at the blockchain because it’s hot for there may be better options at their disposal.
“In financial services, the challenge does not come down to any limitations of technology,” Mr. McCraw explained. “It’s not really a technology challenge but a business challenge.”
Because blockchain is so new, there is no long-term record of successful projects to serve as models for companies considering adopting the technology, Mr.McCraw said. It can also be difficult to identify risk and ROI.
Blockchain’s unique decentralized structure poses a challenge for companies that will have to adapt to a more collaborative and open mindset, he added. Think of a telephone network with only a few lines; its success is limited, Mr. McCraw said.
Companies need to consider how to safely build their networks across value and supply chains, or in some cases even adding competitors to the mix. Collaboration is key and a new kind of business model marked by openness emerges.
To illustrate, Mr. McCraw cited the example of a group of insurance companies operating within a specific geography. They realized if they shared certain customer information with each other they could save money by eliminating the need to access credit agencies.
“They can come together and see a business benefit and savings,” Mr. McCraw said. “Cognizant comes in and helps them think through the process.”
Companies are now beginning to see the blockchain as a revenue opportunity and are developing ways to quantify it for executives and shareholders, a step that provides more incentives for them to work with other companies, Mr. McCraw said.
But they still have to protect proprietary information and luckily there are several ways to do that, Mr. McCraw said, including sharding, permission data streams and z-snarks, which are a type of proof where someone confirms they have certain information (secret key) without revealing that information and without having to interact with the prover.
“We help our companies think through which information could be exposed and identify, of the many platforms, which ones offer the types of privacy and security models they need,” Mr. McCraw said.
The most underreported story on blockchain transformation contains what Mr. McCraw believes is the most critical element of a company’s blockchain strategy – change management.
“Only six per cent of respondents to a recent survey said change management and cultural change were seen as a priority. I would argue it is the number one thing in this process.”
Likening it to the companies who best capitalized on the internet, Mr. McCraw said the most successful companies adapt their core culture to ones embracing the blockchain. Think Amazon and e-commerce.
“They have to build that into their DNA and hat takes a long time to do,” Mr. McCraw said. “They have to start now, whether they are an early adopter or not. They can’t wait for it to develop or they will be leapfrogged.”
There already is competition for the top blockchain talent, which is limited in supply. While the pool will grow, companies still need to have a talent development strategy to make sense of the mutating number of blockchain-related operating systems available to them. Close to half of firms across industries have experimented with seven or more.
“There’s so much to sort through, companies don’t know which platform to build on,” Mr. McCraw said. “Eighty-six per cent of firms said they are hesitating on choosing one moving forward.”
If you are one of the 86 per cent, consider three factors, Mr. McCraw suggested. What is the most applicable technology for your use case? Which one has the capability to best deliver your needed metrics? Do you have people assigned to watch the market for the newest risks so they can identify how they effect the company?
Such factors will help separate the winners from the losers, the Facebooks from the MySpaces, in the battle to produce the most extensive and effective decentralized networks.