Blockers to Blockchain Series: The Executives Dilemma
Subject of thought by Jennifer Zimnowski
In the second article of our Blockers to Blockchain series, we explore enterprise adoption of blockchain technology. Blockchain was first introduced in 2008 and while the finance industry has absolutely wrapped its arms around the tech (‘96% of financial service experts believe that blockchain has achieved mainstream adoption.’) and other industries, like manufacturing, are starting to show interest because of blockchains transparent tracking ability, the technology is still not widely considered by executives in mainstream enterprise. We’re curious why and offer a few suggestions that may help tip the scales in favor of further exploring this disruptive technology.
Before getting into why we think enterprise executives might be hesitant to invest in blockchain, you might be wondering why a digital experience business (Figyr) cares about blockchain at all. There are a few reasons, but the most important reason, I believe, is that by using blockchain technology, organizations can provide trustworthy, accurate and authentic experiences that their customers curate, in a fraction of the time it takes to deliver products and applications today. Let me explain.
Trustworthy, Accurate and Authentic Experiences Curated By The Customer
Today, applications collect customer information in a few different ways. Assuming a user accepts cookies, brands understand product usage and engagement patterns. If you transact with an organization, you are providing personal information that is saved and organized alongside a set of infused second and third party data in order to create as robust a profile as possible. By collecting and understanding this data, brands are trying to provide the most contextual and personalized experiences suggested by the data they have. This route is difficult for companies. The collection, organization and upkeep of customer data is complex and expensive and frankly, not done well often enough. And because of the complexity and expense - corners are cut and guesses are made. This comes at the expense of the customer's unpersonalized experience.
In walks blockchain: potentially, a ledger that stores and facilitates the transaction of customer data. Imagine each artifact of customer data is attributed a value and can be transacted upon using blockchain technology. Customer’s can select what information to be transacted (shared, distributed, used, sold) to support an experience. And because user’s can opt in, signaling the personal information they’re allowing brands to use, customers are, in effect, curating their own experiences, validating the authenticity of the information that they are providing and (potentially) financially benefiting from the sale of their information. There are some considerations to using blockchain as a ledger to transact customer data: the records are transparent and publicly available. And because of this, not every customer may be interested in providing their personal information or maybe they’ll only be interested in providing inconsequential information. Additionally, while some GDPR and CCPA regulations conflict with the tenets of blockchain (confidentiality, right to deletion) the core principles of the regulations are right in line and favor the core concepts that blockchain offers: transparency, purpose limitations, accountability, accuracy and control.
Despite the limitations, it can be argued that reliable and accurate data that is given to a brand by their customer holds more value than difficult to organize guesses.
Now that we’ve established why we think blockchain is important for customers' products and experiences, we can dig into why execs might be reluctant to adopt the technology with the hope of facilitating even a little bit of mindset change for both blockchain orgs and enterprise organizations.
In our last Blockers to Blockchain article, we talked about the general advantages the technology offers to organizations: Increased transparency, heightened efficiency, decreased cost and enhanced security. In fact, 89% of fortune 500 companies believe that the next 10 years of web3 innovation will define the next 100 years of business. So why aren’t Enterprises rushing to implement blockchain technology at a faster pace? Below are just three constraints we feel enterprise executives are up against.
Outside of finance and manufacturing, or an industry requiring transparency and traceability, it can be challenging for executives to understand how blockchain can fit into their processes or improve their products and productivity. As we talked about in the Vernacular of Blockchain article, it takes time, thought and Youtube videos to understand how blockchain works in general. Now try to envision using the technology as part of your operations or incorporated into your go to market strategy. With so many priorities in our fast moving environments, taking the time to learn about a potentially risky, disruptive technology and figuring how it fits within the context of the business is likely not high on an executives list.
Blockchain organizations would benefit from creating pilot scenarios requiring few resources for different industries. A bite sized program that does not interfere with business as usual and that can quickly demonstrate relevance to benefit to the organization might just get the foot in the door needed to prove the case for blockchain and foster enough interest for a second pilot.
Lack of ROI Definition
With the investment of any new technology, you never really know how much return you will get; it can feel like a step into the unknown. And in the absence of implementations across several industries, there’s not an existing business model or case to use as a baseline in trying to understand how much can be garnered or saved from implementing blockchain.
It might be worthwhile for blockchain organizations to model out different scenarios that can be presented to enterprise executives. Even if the smallest perception of risk exists by implementing blockchain, having a blueprint or roadmap to set expectations can diffuse second guessing and act as an accelerant to selling the idea.
Finding the Right Talent
As enterprises look to experiment with blockchain, they may come to find that they don’t have the right skill sets in house to implement and build on different networks. Training is always an option to upskill team members, but that too takes away from revenue generating work and it may be hard to find additional budget for experimentation and innovation.
It would be beneficial for blockchain organizations to offer consulting and implementation services in addition to network accessibility so that a case can be proven before investing in the right talent.
These ideas are just scratching the surface of what can be done by both Enterprises and blockchain organizations to accelerate adoption of the technology. I’d personally love to see more learning management systems around the topic geared towards Enterprise execs and developers interested in learning more about how to implement, what to implement and what to expect. Blockchain offers so many advantages. Let’s find a way to ease the unapparent industries into understanding and realizing the benefits for their processes, their products and their customer experiences.