It is always smart to start with a business case before deciding to move forward with a specific technology in your digital transformation. The same is true with blockchain.
In prior podcasts I’ve described several categories of business benefit to consider in creating your digital transformation roadmap. We’ve considered machine health, connected employees, and more, without focusing on the technologies that make those things possible and effective.
In blockchain, it is important to understand the high-level capabilities of the technology and then determine if that capability is of potential value to you right now.
First and foremost, understand that blockchain is NOT cryptocurrency. It is the technology that underlies much of those, but it is not the same. Think of Excel as the technology that underlies the financial spreadsheets you use. They are not at all the same thing; your spreadsheet is of value to you and uses Excel as the enabling technology.
Blockchain is extremely valuable in creating an agreed upon and verified history of transactions. One use case is known as “smart contracts” in which blockchain recognizes when conditions are met per a contract and can initiate the next step, for example payment approval. This is especially useful in financial transactions and those related to import/export trade.
A second use case is that of traceability.
Now American manufacturers must sign something that assures the minerals used are not conflict minerals. The reality is that very few actually know. We ask our supplier to assure us of that, and based on their word, we assure the next company in the process. Blockchain can enable traceability from the beginning to the end-point of interest.
This is currently in use in much of the diamond industry, where guaranteeing that product is NOT blood diamonds is important to value. Walmart is beginning the process of requiring food suppliers to join their blockchain network to enable traceability of fresh foods from the store all the way back to the field.
If your business is transaction light and traceabilty is unimportant, you can likely put blockchain on the back burner for now. But you do owe it to the future of your business to know what it is and what it is not as you draft your digital transformation roadmap.