How to shift blockchain governance challenges into opportunities

The Impact of the economic slowdown on current, and future, blockchain projects. Takeaways from the virtual panel took place on April 9th, 2020.

On April 9th I moderated a discussion on blockchain governance and current #covit19 outbreak that went beyond the topic itself and touched crucial points about blockchain adoption for the enterprise.

One of the many profound suggestions from the speakers was:

think about blockchain governance as an outcome rather than input, and substitute the worlds, governance and blockchain, with collaboration and solution that streamline existing processes and cut costs.

Blockchain is a powerful technology but needs to be proven to trigger a domino effect in adoption. In order to do that, we need to make blockchain as easy as pragmatic as possible, using words from daily operations and, above all, choosing use cases that allow the quickest win, always equal to gaining cost saving.

What is happening is a catalyst to be more pragmatic, to solve old problems quicker, and to move from analysis paralysis to production.

Thanks to Loudon Owen Chair and CEO DLT Labs, Shannon Hamilton VP Sales North America, DLT Labs, Lisa Marks -Canty President, and Managing Partner NEST Global Solutions, that answered my questions sharing their seasoned experience and how they successfully deploy blockchain solutions allowing their clients to save money.

Below you can find the summary of the conversation we had during the virtual panel

1. Introduction to the topic
2. Questions to the panel
3. Takeaways from the discussion: opportunities and how to overcome the challenges
4. Conclusion

INTRODUCTION

Something I rarely hear is the fact that blockchain projects require a long term investment and governance able to sustain a business model consortium-based.

• Before covid-19 we discussed the value of blockchain in every possible way. Now that we are stepping in a long economic slowdown how can we sell blockchain projects?
• If on one side governance has been so far one of the biggest blockchain challenges, on the other side, is it possible that this crisis will boost consortium based business models? a) Many initiatives funded by governments. b) Private groups of companies that for the first time find more convenient cooperation rather than competition.
• It might be possible that organizations have finally understood that in order to survive and be relevant in the market they need to adopt an open collaboration approach?

QUESTIONS

1- What are the challenges you faced with blockchain governance before covid19?

2- Which challenges do you forecast right after the lockdown due to the economic slowdown? Are you going to change your services and adapt to the situation?

3- Do you see the possibility that this crisis will boost digital transformation with an easier adoption of a consortium-based business model?

TAKEAWAYS

OPPORTUNITIES

• The current situation pushes to find concrete solutions, for example, in healthcare and logistics, and moving forward the analysis paralysis stage where we were stuck before. People are reconsidering blockchain challenges that were facing before covid19 since right now the need to fix well-known problems has become urgent. For example, building a consortium of data in healthcare, easier to access, that enforce data consistency and integrity allowing at the same time security and privacy, has become now a priority.
• In these days companies are focused on reengineering costs and streamline processes and although innovation is not at the center of the attention, it came up naturally the shift from the technology to improving operations.
• This crisis has grown awareness on how interdependent is the world so consequently, the focus has moved to technologies that allow collaboration
• If we think about the supply chain and the impact of the outbreak, there is a great potential for improving a sector with historic inefficiencies.
• Now more than before in order to explain the value of blockchain, we need to speak about what the technology enables rather than what the technology itself is. Since the attention is on business continuity and its immediate implications, we need to speak about improving what is in place for saving money rather than transforming building something new.

HOW TO OVERCOME THE CHALLENGES

• What is happening is an enormous catalyst but the development of the technology needs to be pushed towards PoC and proved. Proving the reduction of cost and streamline operations, in order to trigger a domino effect that will bring blockchain governance as an outcome rather than input. Once the technology is successfully deployed, then you can gain the buy-in of the participants and incrementally build the governance.
• It takes a large organization to try and scale to prove the technology works and saves money. At the moment giant corporations are the ones with the budget to afford collaborative blockchain networks and to sustain governance that is predetermined by who pays the network.
• We need to see things under the right perspective taking into account that governance at the enterprise level will take years before radically substitute the current enterprise operations. Meanwhile, we can take elements of the technology, and apply them to BtoB in order to improve operations incrementally.
• Instead of governance or consortium, we should speak about collaboration, a word that especially now, it is easier to understand.

CONCLUSION

We heard many blockchain initiatives popping up every day. Although they feed the hype of the readers, they miss information about time to market, budget, and business strategy. Will the technology scale after the PoC? Is the business model viable and the network design sustainable?

Blockchain is a powerful technology that in the hands of experienced professionals, with a proper budget, can bring consistent cost containment and, eventually, new revenue generation. Choose a use case wisely taking into account:

• Decentralization is a progressive exercise that needs to start where there are resources and capabilities to trigger network effect.
• Blockchain governance for enterprises will take years before substitute the status quo within big organizations. Enterprise by design absorbs changes slowly.
• The evolution of new technologies requires time before reaching business maturity.
• Improving processes and relationships already existing, it is easier to implement and prove that works, rather than establish new cooperation, independently by the technology chosen.

The whole conversation can be also found:

• Video on Hyperledger youtube channel
• Audio in the Blockchain Mentoring Lab podcast

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