Integrating Blockchain into your Business: The How-to

Ever since its inception about a decade ago, Blockchain has been touted as an ideal solution to every business problem. Originally designed to support cryptocurrencies like Bitcoin, Litecoin, Dash, and Ethereum, Blockchain technology has found its way into the operational processes of various industry segments, including banking, healthcare, hospitality, supply chain, real estate, and more, thanks to its potential uses and applications. 

It is indeed a powerful go-to solution whether you are looking to improve client retention, strengthen consumer base, reduce operational costs, or streamline business processes in minimal time and effort. However, Blockchain has its limitations, and depending on the type of project you want to implement, it might or might not be the ideal solution for “You”.

Therefore, before deciding to jump into the Blockchain wagon, you must answer this very important question: Is the Blockchain the right technology for “Your business”? 

Continue reading to find out...

Below is a four-step roadmap that will help you decide whether Blockchain is the right technology for you:

1) Beginning with the basics: 

First, you should educate yourself to acquire a strong grasp of what Blockchain technology is, how it works and can be applied to your organization and industry. 

2) Then answer the following questions: 

Where is your company headed and how integrating Blockchain into your business operations can help you decrease expenses? Will adopting this innovative tech lure in more customers or retain existing customers? Will it help you save on auditing costs? How about using blockchain to enhance data transfer, security, and transparency within your organization? Are you trying to remove intermediaries or middlemen from the equation? Be sure you know the answer to all these questions before moving further to the next step. This will help you make a quick initial assessment of whether you should explore this solution further. 

3) Next, decide on your budget for Blockchain R&D and Implementation: 

Blockchain projects can cost from a few thousand dollars to tens of thousands of dollars depending on the type of project. Your solution provider should in most case provide you with an estimate of cost. 

4) Last but most importantly, spend wisely:

You can opt to train your existing staff, hire new experienced staff or outsource your efforts to a reliable consulting firm to help you achieve your goals. The decision will be based on your perceived trade-offs between time and cost necessary to train inexperienced staff vs. hiring and managing new staff vs. outsourcing to a company with a ready to go team and experience. You will need to factor in your decision the margin of errors you are allowing yourself in deciding to manage everything in house vs. externally. 

Perhaps, for your first steps venturing into this emerging field, it might be wise to seek the guidance of external experts.

As Blockchain continues to disrupt the way industries conduct business, companies must fend off the temptation of chasing the hype without having fully performed their own due diligence. So, before pouring your next dollar into Blockchain implementation, let’s get a glimpse of its better known potential benefits and drawbacks. 

Merits and Demerits of Blockchain Technology 

Blockchain comes with a multitude of benefits, some of which include greater transparency, improved traceability, speedy and real-time transactions, enhanced security, increased efficiency, and reduced costs. What makes Blockchain so safe and reliable is its incorruptible algorithm, which relies on math, codes and facts rather than human interventions and dependency. It uses a consensus mechanism to agree on the legality of transactions. Plus, with its decentralized nature, Blockchain removes intermediaries and middlemen from the picture, thereby diminishing the possibility of fraud and third-party manipulation.

However, just like any other technology, Blockchain has its fair share of shortcomings that cannot be overlooked. The tech involves an entirely new vocabulary. The data stored on a Blockchain is not inherently trustworthy, so events need to be recorded accurately in the first place. It is just as subject to the “garbage in, garbage out” rules as any other technologies. Another potential problem with Blockchain is the transaction time that gets slower as the network gets bigger. Transactions throughput is, however, very much reliant on the type of blockchain one elect to use (permissioned vs. permissionless) as it is on the type of consensus mechanism. According to Alex de Vries, the annual power consumption of Bitcoin is estimated at 2.55 gigawatts per year which equates Ireland’s; meanwhile, a permissioned blockchain such as Hyperledger is capable of running on enterprise-grade servers and does not necessitate the same amount of energy.

Blockchain Implementation: How it Can Be Mastered

Blockchain ensures the integrity of data as long as it is implemented correctly. In case there are any loopholes in its execution, undesired after-effects are likely to ensue. That is why it is always recommended to carry out Blockchain implementations precisely. 

Some factors that you need to consider while implementing this emerging tech into your business operations include:

• Defining your business objective: First, you need to meticulously define what you are trying to achieve through Blockchain. Starting on the right foot is of utmost importance.
• Deciding on the business areas: Next, determine the business areas which you think should ideally be moved to Blockchain first, and why. It’s always recommended to start with the ones that are complex and take most of your time and money. 
• Uncovering the benefits of the transition: Discover what your business will gain from Blockchain technology in terms of cost savings, increased transaction speed, and simplified processing. Always plan your transition around meeting your explicit business objectives and gaining the advantages defined. 
• Understanding the difference between centralized and decentralized (Blockchain) databases: Last but most importantly, discern how a decentralized ledger system like Blockchain differs from the traditional centralized databases. Do a side by side comparison of the advantages and disadvantages of both systems before making your decision. 

This list of factors is not exhaustive but a great way to start thinking about your blockchain implementation.

***Final Words*** 

To sum up, leveraging Blockchain technology can bring tremendous operational and strategic benefits to your business, however each implementation must be done right. While your business can certainly capture these benefits for small scale projects, larger scale projects have a better chance of making a substantial and noticeable impact. 

If you want to learn more about blockchain technologies and whether it could be a great solution for your business, please contact us at [email protected] to sign up for a free one-hour consultation or visit our website at www.innovfin.ca