Quick Wins for Big Success with Blockchain
People do not often realize that blockchain technology projects do not need to have high expectations from the get-go. This article explains one important step you can take for your blockchain technology project to succeed
A blockchain project's return on investment usually takes more time to achieve due to the nature of the technology. As a result, quick wins are helpful in the process. Leaders are surprised by this approach since they often think the only option is all or nothing. However, it does not have to be. You can start small, get some quick wins and then build on these for big success.
Collaborating with competitors is new and uncharted territory for businesses. You may start your journey corralling everyone around one use case. But as we see with the blockchain network maturity model, as the network grows, new use cases will evolve based on how the group matures. In reality, there would be multiple use cases that the consortium can tap into. All of them necessarily may not be visible from the start. When you are looking at ROI, if you can prove that the returns on one use case show a pretty good cost-benefit, you should consider going forward with it. Eventually, newer ones that show up over and above the starter use case will add to the returns part of the ROI, even though you can’t quantify them at this time.
Looking for some early traction helps with the ROI situation. It helps to focus on how early users can get some value from their participation and investment. You should think of it more in terms of incremental returns to start with. Eventually, as the network grows, there should be an expectation of higher returns coming in.
Quick wins to encourage adoption
When designing your system, you look at the use cases and determine that the real value comes when many industry stakeholders are on the network participating in multilateral transactions. It would then make sense to provide that rich feature set at the launch. However, suppose the actual value comes after many players have been on-boarded. In that case, there will be a long period during which there isn’t much value coming from the network while you wait for everyone to show up. While you may have big goals after the network matures, you should balance that against early quick wins to encourage adoption by more participants in the long term. And as the momentum builds up with more players adopting the network, you can also build up functionality toward a more feature-rich solution.
As Dustin Helland put it: “When you think about different types of use cases, and you are looking at how, quickly, can an organization begin to achieve some level of value, there are some use cases that you can start to achieve some level of value with a smaller network . . . if you have a use case that’s targeting business to business transaction efficiencies—while you need a larger group to be involved to really get significant value—you can get some value right out of the gates with a smaller network.”
Iterative approach to blockchain ROI
On their part, State Farm approached the project by breaking it down into phases. Through each phase, they gain additional insights for ROI projections. The first phase was a prototype that was evaluated at the end of the phase. Phase 2 is the shadow network phase, where they implemented the system in production in parallel to the existing processes. This dual implementation proves the solution and validates the expected business process efficiencies. “So we’ve taken an iterative approach to both development and revisiting the actual business case ROI,” explains Dustin. The blockchain network maturity curve is one way to look at a possible progression and decide on the kinds of use cases to target as you look at incremental ROI.
It would be best if you looked at blockchain technology’s benefits holistically over the long term. Otherwise, you will miss the intrinsic benefits that blockchain brings to the table to build distributed solutions with other companies, get cost synergy, and enable new revenue opportunities. Concluding in the words of Dustin Helland: “Sometimes you are willing to invest upfront for future returns, and time is a risk factor. But maybe there’s a bigger opportunity at the end of that, and you are willing to invest in it and take the risk.”
By changing the way you approach your blockchain project, you can make a huge difference in the long run. Win small. Win early. And you win big with blockchain technology.
Realize that it is possible to launch a blockchain technology project without all the pieces in place to gain maximum value. While keeping the longer term in mind, plan your project with a short-term focus. Obtain early wins for the participants and strengthen the business case for continuing the project.
Ep. 69 – State Farm’s blockchain – Auto Claims Subrogation - Insureblocks
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