Excitement about blockchain, the distributed digital ledger for sharing information securely across different organizations, is understandable. But as with any emerging technology, the questions CEOs want answered have less to do with how it works and are more along the lines of how it will help boost revenue, increase productivity, streamline costs, and create a better customer experience.
When I talk with people about how they could use blockchain, I describe it as providing two separate opportunities.
The first opportunity is to use blockchain features that are integrated into your company’s supply chain, finance, HR, and other core business applications, rather than treat blockchain as a standalone application. For example, a drug maker might use a blockchain to track its pharmaceuticals throughout the entire sourcing, manufacturing, and delivery process so there’s a clear record of every step and less chance of counterfeits entering the supply chain.
Having blockchain technology built into the company’s cloud-based supply chain application gives it advanced track-and-trace capabilities without having to hire a specialized team of blockchain experts to implement it. Blockchain-embedded supply chain features could also let the company do more than just keep tabs on goods. They could also monitor the “cold chain,” to know whether a heat-sensitive shipment ever rose above a certain temperature level.
Because blockchains are cloud-based, even small and midsize companies can tap into them. One California microbrewery is using blockchain to track the hops, malt, and yeast that go into its beer, and it’s sharing that information with customers, so that they know the IPA they’re drinking is fresh. In the past, a small company wouldn’t have had the IT resources to take advantage of such cutting-edge technology.
We’re seeing this same thing happen with other emerging technologies, such as artificial intelligence. Within the next few years, AI will be baked into every business application, letting companies large and small apply its self-learning, predictive benefits to their existing processes.
The second opportunity is for companies to create new value by setting up unique blockchain networks. Here’s an example in higher education.
If you’re a recent college grad, you’ve probably started applying for jobs, and potential employers will want to know whether you really aced those courses and earned that degree you claim to have. Colleges and universities could set up a network in which they agree to put student degree and transcript information on a trusted blockchain, with rules for who can access it and how data can be shared. Being included in such a coordinated network is valuable to everyone who takes part—institutions, students, and would-be employers.
This network also could tie back to a company’s business applications. Its recruiting application, for example, will need to be able to access that blockchain information provided by colleges, saving both parties a lot of wasted time verifying information and freeing the company’s HR team to focus on finding the best talent.
When it comes to blockchain, look for those business value opportunities along two dimensions: using new blockchain-powered features built into your core business applications, and creating unique networks with your partners and customers.