In the times of the Fourth Industrial Revolution, businesses know they need to innovate to keep staying relevant in their industries. However, with respect to blockchain technology, there are still some challenges among managers when deciding to embrace the true value of it.
The World Economic Forum’s White Paper “Building Value with Blockchain Technology: How to Evaluate Blockchain’s Benefits” suggests some questions we may want to ask ourselves - or the company we work for- to assess if adopting blockchain technology is a good fit for our strategy.
The WEF White Paper found out that there are 3 main areas of interest regarding blockchain technology: a-it is useful to control that data had not been altered, b-it allows full traceability of information on the blockchain, c- the technology is distributed in a certain way.
Today, the focus organizations are making on the blockchain is related to improving existing products and services rather than on investing in new opportunities.
Blockchain shares simplified real-time data in increasingly efficient ways so it helps to simplify and optimize complete value chains. It also removes bottlenecks as it is decentralized and distributed.
The World Economic Forum states in the paper, that the current focus for organizations is on improving existing products and services rather than considering investing in new opportunities. Furthermore, blockchain incites innovation around processes and products, as data is more reliable when improvements in smart contracts, digital identity, assets, and automation continue.
The Blockchain Value Framework
The blockchain value framework presented by the World Economic Forum proposes 4 key steps to assess if the adoption of blockchain technology is better than other digitization strategies or other technologies.
1- The framework proposes to ask some initial questions that are useful to build a business case once we identified the value of blockchain in their respective use-cases. The questions we may ask ourselves to resolve the first query should be: “What matters most to your organization? And What are its pain points and areas for opportunity*”.
Each use-case should initially be assessed for the pain points it addresses and/or the opportunities it creates. Next, those pain points and opportunities should be prioritized.
2-There are some questions that help to define where blockchain would transform a business. First, it can improve productivity and quality. Second, it could help to reinvent products and processes and third, it can be used to increase transparency among parties.
If we need to assess in which areas we could be using blockchain technologies we can pose the following questions:
Has blockchain any characteristics that can assist us with the pain points/areas of opportunities we identified before? Are there other technologies that can do the same more efficiently? How are the cost, risk, and speed of implementation of both - blockchain and not blockchain technologies?
3- To validate if blockchain is the best solution to help you with your current priorities and to decide where to focus in the future, the World Economic Forum’s Blockchain Value Framework suggests you ask the following questions: “How do those characteristics map to the enabling capabilities? Check in again – are these priority areas for your organization, and are these enabling capabilities specific to blockchain when considered holistically?”.
4- Last, we should identify the value drivers of our business. These could be drivers such as increased revenue, improved customer service or cost savings. The question we may ask to decide should be: “How can we think about measuring or capturing this type of impact? Have we made a strong case – both at the organization level and the ecosystem level?” Each driver has to do with the key components of your business driven by technology.
These 4 steps are helpful to decide whether or not Blockchain technology will help your business to reach its objectives or if you should go for a different technology. Have you tried the framework? Did it work for you?