Blockchain has been deemed by some “the most promising technological innovation since the advent of the Internet”. And it’s not just about Bitcoins. While cryptocurrencies have – clearly – been the most visible use of this fairly new tool, large companies have been relying on it for various purposes over the past few years. Blockchain, in essence, allows you to track and memorize intangible events; it’s no wonder that investment banks and insurers should have been early adopters. Today, supply chain businesses are also getting enthusiastic, and Internet-of-Things designers are catching up as well.
And it’s just beginning. As the technology improves and awareness spreads, many companies have developed their own in-house blockchain teams to better understand how distributed ledgers can support or disrupt their business models. The key question is: can any business – can your business – benefit from a bit of blockchain? Luca Comparini, Blockchain Leader at IBM France gave us the big picture.
ONE BLOCKCHAIN DOESN’T FIT ALL
Let’s be blunt about it: do you actually need blockchain in your business? Or do you just want to hang with the cool kids? The answer is pretty straightforward, according to Luca – who can’t recall how many times he’s had to discourage blockchain enthusiasts from launching costly development projects with no actual business case.
“If your business has no benefit in sharing a ledger of events (assets’ lifecycle events, or just information of value) across your ecosystem of stakeholders then blockchain is actually the most stupid (i.e. ineffective) choice you can make. If, on the other hand, the opposite applies, then you’d better consider it as an accelerator for your digital transformation.
SECURING YOUR MINIMUM VIABLE ECOSYSTEM
Initial intuitions may be supported by a Proof of Concept (POC), but once you know that you do have a strong business case (and yes, that includes running some numbers), implementation needs to follow the following steps described by Luca:
→ First, make sure that your blockchain project makes sense for ALL the major partners in your value chain. Not just for a few clients. Blockchain simply does not work unless the majority of your network sees the point and can take it.
→ Design your Minimum Viable Ecosystem (MVE), i.e. the minimum number of key stakeholders you’ll need riding along in order to make this work. Are they ready to take the technological leap? How will you go about convincing them? What’s in it for them?”
→ Once these questions are cleared, you can go ahead and set up your Minimum Viable Product (MVP), a platform which works on a small scale.
Finally, if the MVE is sound and the MVP is a success, you can take it up a notch and deploy your new tool at industrial level.
GETTING TO KNOW THE BLOCKCHAIN INDUSTRY
Speaking about ecosystems: as demand for blockchain is growing, thanks to wider public awareness, IBM France is dealing with more and more clients asking for distributed ledgers solutions. This has led the company to:
1) build strong relations with blockchain startups all over the world, and to act as a catalyzer for open innovation between established businesses and fast teams developing innovative solutions
2) bootstrap interconnected teams across the globe. The hot topics right now (beyond those in financial services and insurance) are those linked to supply chain, global logistics, goods provenance and food safety, with a major interest in “smart contracts” – some blockchain protocols can be programmed to check whether predetermined conditions have been met before executing a transaction.
EDUCATING THE NEXT BLOCKCHAIN EXPERTS
Blockchain is a tech tool – and a complex one at that – and you’ll need first-rate developers to help you set it up. If you have no blockchain master at hand, fear not: this being quite a new field, experts are still a rare breed, but most great developers can learn the ropes and the right languages. Just note that it might take a few months, as Luca warned.
It doesn’t stop there: you’ll need business-oriented people to get on board with the whole project. Keep in mind that blockchain is not a stand-alone technology, but one that should serve your operations and your bottom line. Business developers and finance profiles should therefore be invited to collaborate. The blockchain team at IBM France reflects this multidisciplinary approach, combining talents from all backgrounds.
Finally, we can assume that your blockchain project is not the only thing on your teams’ agenda. Time management is therefore of the essence: make sure everyone can stay agile as they walk through the necessary steps of design thinking, planning, and implementing. That includes determining a timeline and setting up checkpoints along the road, so that all teams can make sure they stay on topic and on track at appropriate intervals.
EMBRACING OPEN SOURCE
Good news: since its “genesis block”, the decentralized nature of blockchain has naturally attracted many talents with a taste for open source collaboration. For instance, IBM is a cofounder and strong member ofHyperledger, a project which incubates and promotes open-source blockchain technology solutions, under the aegis of theLinux Foundation. Since 2015, Hyperledger has developed several blockchain frameworks and implementation tools, the most famous being Hyperledger Fabric whose v1.0 has been developed by 160 people from 28 companies (all committing to an open source, open standard and open governance charter).
Investing in open source makes good business sense, as Luca Comparini pointed out referring to blockchain guru Don Tapscott and Williams book Wikinomics: “they estimated that even if $100 million are spent on a yearly basis to contribute to Linux open source software, IBM’ return over investment is at least five to ten times bigger considering that Linux community produces an output valued at $1 billion”. Yep, these numbers are impressive.
IBM is a pioneer in corporate Open Source – since the inception of Apache Foundation in 1999, that created the governance conditions for developing the most known HTTP webserver –and leveraged on it for a wide range of products and services. Prior to leading the blockchain business in France, Luca spent almost two years managing IBM’ European ecosystem of partners working with open source projects, and has become a strong advocate of community-led platform development, even though the process is a bit more messy than with proprietary code. “It’s a bit like democracy: any roadmap requires a consensus, but the results can be quite strong,” he added. This is how you can get Open Source tools developed by some of the brightest tech teams out there, complete with specific frameworks, snippets of code, and, most importantly, a dedicated and fast moving community. For free.
TLDR: SHOULD YOU ADD BLOCKCHAIN TO YOUR BUSINESS’S TOOLBOX, AND HOW?
• Make sure your business actually needs blockchain
• Secure your Minimum Viable Environment before anything else
• Invest in educating your best talents
• Explore Open Source material and get involved with those strong communities