Earlier this year, in London, I presented at the Blockchain World Summit. The title of my presentation was ‘Bitcoin isn’t Blockchain’ and the focus of my work was how the media had portrayed and sensationalised Bitcoin to such an extent that Bitcoin and Blockchain were perceived, by many, to be one of the same. The stories written on both topics can often be exaggerated or misinformed and for those that do not find time to do their own research, readers are drawn in by ‘click-bait’ headlines that subconsciously shape a person’s thinking before they have had a chance to quantify the real story.
The belief that bitcoin and blockchain are no different to one another has led many businesses to base their blockchain strategies on the perceived limitations of Bitcoin. As a consequence, they have unwittingly placed their future at risk and are at threat from new incumbents or forward-thinking competitors that have recognised the transformative impact that blockchain technology can have. My team and I have met with and spoken to the CEOs of some of the UK’s biggest brands and they have openly admitted to believing the hype around bitcoin. The objections we have faced before they have even started any proof-of-concepts is that blockchain was either too slow or not scalable enough to support their business operations; whilst others have gone further and concluded blockchain as being ‘that scammy thing’ linked to financial crime, silk road or other sensationalised stories that have stigmatised the maturity curve of bitcoin over the last decade. As a consequence, blockchain has been rejected out of hand before the technology has even been tested.
If you do find yourself working for a company that has decided not to pursue a blockchain strategy on the basis of such ideals, you should understand that you are aligning your business strategy against those of the companies you are constantly trying to keep up with. Whilst you allow sensationalised stories of bitcoin and its fluctuating price shape your thinking; behind the scenes almost every Fortune 500 company is currently looking for ways to extract more value from their business processes and how that can be applied to create more meaningful experiences for their customers. For those Fortune 500 companies that are not looking towards blockchain… well they won’t be in the Fortune 500 for much longer.
If you’re part of a company that operates in heavily regulated environments such as financial services, commodities, food, automotive and healthcare it is perhaps more important than ever to get to grips with this emerging technology. Within these industries regulation can become so burdensome that being compliant often comes at the expense of innovation. In such instances it can force many businesses to operate in silos, meaning you have to work tremendously hard to keep the lights on legacy ERPs that are simply incapable of providing your customers (both internal and external) with the types of digital experiences they have become accustomed to in the modern world (when using applications such as Facebook, Amazon and Uber, for example).
Indeed, whilst it is impossible to compete with the amount of money they have at their disposal, millennials simply do not care. They aren’t loyal and will switch over to a company that can provide them with the speed of service they have come to expect. To counter this, we have seen many companies compete against one another in the race for digital excellence, but the experiences are still so far off what they could be.
Many companies today still run large scale digital business transformation projects by focussing the effort on linear customer journeys, effectively structuring data to assume that what you did in the past will be an event certain to take place in the future. Whilst I understand the logic, to me that is merely a guess. With the advent of blockchain technology, businesses (and the big consultancies guiding them) have to quickly realise that the digital transformation projects of today will simply end up being tomorrow’s spam.
A decentralised digital business transformation – the convergence of Blockchain with other emerging technologies such as IoT devices – will add much longer-term value to brands across all industries and sectors. Used correctly these technologies will help companies unlock new sources of value that will enrich customer experiences and relationships with a brand. Rather than telling customers things they already know, focus on telling them things they don’t know. Now that is a real digital experience.
For those readers responsible for managing ERP systems, the idea of unlocking new data and becoming decentralised simultaneously might well sound like a paradox. We have worked with clients who are concerned by the thought of creating more data and giving it away, when they are already struggling to manage what they have. Once we take them through a process of education, however, they quickly understand that they should not be fearful of becoming decentralised, for decentralisation sits on a scale. It represents the process of compressing steep, inefficient, hierarchical business structures into something much flatter and more manageable. It is simply a process of optimisation and automation.
Blockchain technology will enable businesses to work from a single, immutable record of truth which will provides opportunity to break down the data and culture siloes of your organisations whilst offering a whole new level of transparency to your company. By working from a single record of truth it will put to an end the need to continue using expensive legacy systems and inefficient processes that exist within your ERP environment today. Whilst it might seem like a daunting concept to take onboard the truth is that nothing quite like blockchain has ever been seen before.
Wayne Lloyd is the Founder and CEO of Smarter Contracts. He is also a partner of London Derivatives Exchange, an advisor to the All-Party Parliamentary Group on Blockchain and a founder member of the Oxford Blockchain Foundation.