Choose your learning path – Blockchain Foundation or Advanced

Hear from two blockchain analysts, Martha Bennett of Forrester and Craig Wentworth of Independent Thought, as they share their insights around using blockchain to solve critical business problems. Starting from the foundational building blocks to taking advanced steps for your business, Martha and Craig provide their perspectives on how you can make an impact with blockchain.

Foundation

By Martha Bennett at Forrester

Martha Bennett picture

 

Analyst Perspective on Blockchain

Q1

Why should businesses care about blockchain, particularly in today's environment?

During 2020, pandemic-induced disruptions drove home the need to increase process efficiency, improve supply chain visibility, and find new ways of collaborating, both internally and externally. Digitizing processes and paperwork go a long way to addressing these issues; adding a blockchain element unlocks even more value. Blockchain-based systems further increase efficiencies and savings through enabling the automation of multiparty workflows and processes, and allowing value chain participants to reinvent entire processes. Companies are also working on entirely new business and service models that wouldn’t be possible without blockchain technology.

Q2

In simple terms, what is blockchain and what can it do?

Forrester’s definition of blockchain (aka Distributed Ledger Technology or DLT) is “A software architecture that supports multiparty workflows around trusted data that may be shared and distributed across organizational (and potentially national) boundaries”. This architectural principle has been translated into reality in many different ways, but there are common features.

As to what a blockchain can do, there are still a few common misperceptions. So let’s clear those up:

  • Blockchains can support time-stamping, notarization and certification; they’re also great at preserving data integrity. What the technology can’t do is ensure that the data that’s being notarized or captured is accurate and truthful. Data quality and veracity must be taken care of before that data gets anywhere near a blockchain.
  • Blockchains can support the transfer of asset ownership (subject to legal agreement and applicable legislation or regulation). But the technology can’t ascertain the real-world legal ownership status – this has to be done off-chain.
  • Blockchains can support track-and-trace of digital and physical assets, provide a provenance record or prove compliance with shipping conditions; and smart contracts are great for process automation. What the technology can’t do is define the processes and contractual agreements that you’re wanting to automate. It also can’t ensure the continued integrity of the physical goods as they move along the supply chain, and it can’t prevent tampering with source data (e.g. from a sensor); other technologies (both IT and non-IT) are needed for that.

Q3

For those things blockchain can do, where is it best applied and how can it benefit businesses and/or customers?

Not surprisingly, given the current environment, track-and-trace/proof of provenance continue to be key areas of investment, as are invoicing and inventory management. Through removing friction from multiparty workflows, these systems save cost and time. Being able to prove data provenance and integrity is another key use case; we’ll increasingly see blockchain-based systems used to demonstrate compliance with regulations regarding data source and data handling. Trustworthy data is also key to sustainability reporting; an added bonus is that many blockchain-based solutions (e.g. track-and-trace, or contract compliance in resource extraction) already have this data.

Credentials sharing and verification have moved into the limelight more recently, as businesses and governments work on finding ways to allow individuals to prove their health or vaccination status, while also preserving personal privacy.

On the more strategic side, the tokenization of assets is receiving increased attention. Those assets could be digital (e.g. an artwork), physical (e.g. a building, heavy machinery, a race horse) or an artefact like an invoice or a bill of lading. For some, the key objective is making an asset more easily tradeable. For many, that’s not the key focus today: They look to reap the benefits of increased efficiency and reduced fraud that asset tokenization can bring to a process.

Q4

While there are key business benefits to adopting blockchain, why do some projects fail? What are the pitfalls to avoid?

  • Expecting too much from the technology. If the data is bad, the process is broken, or there’s a market structure issue, technology on its own can’t fix that.
  • Not having a clear objective for the project. It’s true that you often don’t understand the full potential of technology until you’ve tried it. But you still need to start with a clear understanding of what problem you’re trying to solve, or which new idea you want to support.
  • Working on the blockchain element in isolation. Projects that don’t consider right from the start how the blockchain piece fits into the end-to-end process, which existing systems it’ll need to integrate with, and which supplementary technologies may be needed, are bound to fail.
  • Involving security, risk and compliance too late in the process. “We’ll take care of that later” isn’t an option with blockchain projects. In the best case, the project will be delayed at a later stage (and for longer than it would have done otherwise); in the worst case, firms have had to throw everything they already developed because of a key deficiency.
  • Failing to consider the benefits for other ecosystem participants. Blockchains are a team sport; and while dominant firms can dictate terms, they won’t get full participation (and hence maximum benefit) from others in the value chain if those firms can’t see what’s in it for them.

Q5

Now that we understand the dos and don’ts, how can businesses get started successfully?

To reap the maximum strategic gain from blockchain, think big, but start small. Your ultimate goal may be to completely revamp all your industry’s supply chain processes. But you won’t get buy-in for that. Starting with a project that can go from pilot project to production quickly, and which makes an existing process more efficient, will result in a win/win situation: Tangible business benefits will make it easier to get more funding; and as decision-makers get more comfortable with the technology, they’ll start championing the initiative, and may even come along with new ideas.

Another key success factor is understanding that blockchain projects are 80% business; and of that remaining 20%, the blockchain piece is only one feature in a bigger technology landscape. That’s why, ideally, we’d stop talking about “blockchain projects” – the focus should be on the solution.

To maximize your chances of project success:

  • Focus on the outcome: What are you trying to achieve?
  • Be able to articulate quantifiable benefits.
  • If you need to bring ecosystem partners on board, make sure there’s something in it for everybody.
  • Consult with your colleagues from Risk, Compliance and Security right from the beginning.
  • Don’t position your initiative as a “blockchain project.” If possible, don’t even talk about blockchain or DLT — focus on benefits and problems solved.
  • The overall solution will typically involve elements other than blockchain. Consider these early:
    • Integration with existing systems.
    • Other technologies, e.g., IoT, geospatial systems, advanced analytics, and AI.
    • Non-IT technologies.

About Martha Bennett

Martha serves CIOs and other tech leaders, helping them understand the impact of emerging technologies on their business. She also provides best practice guidance on how to assess and introduce new and emerging technologies. Martha provides in-depth coverage of blockchain technology and digital assets, aswell as analytics and artificial intelligence at a strategic level. She has also started a new research stream, looking at types of non-IT innovation that are necessary to get the most out of new and emerging technologies.

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Advanced

By Craig Wentworth at Independent Thought

Craig Wentworth picture

 

Analyst Perspective on Blockchain

Q1

As more blockchain projects make it into production, what do you hear from the trailblazers who have successfully implemented a blockchain solution for their business?

Overall, these trailblazers have managed to get to the point where blockchain is no longer just a technology story – it’s a business value story. And they’ve been able to demonstrate that value in concrete and provable ways; in language that resonates with senior stakeholders across the business.

Successful blockchain adopters have moved on from thinking of it as a novel, standalone capability. It’s part of the team now, alongside other (more familiar) technologies. Having seen the technical concepts proved already, they’ve ‘normalised’ their attitudes to the blockchain-related components in their midst such that they can now be designed-in and productionised in ways similar to how other, more traditional solution components are treated. Ultimately, business users and end-customers don’t care what’s under the hood as long as it works.

These trailblazers have become more sophisticated at recognising and understanding which particular aspects of blockchain-related technology they need too, where they need it in amongst their existing technology suite, and why; in order to make a compelling business case for its adoption.

Because advanced blockchain-assisted service design and development is more nuanced than simply ‘plugging in’ a blockchain solution, there will be times when those capabilities need to be partially ‘atomised’ so that they can be more delicately interwoven with what came before (and thus, what’s already stable and reliable). This holds true for integrations with the traditional business application bedrock of supply chain management systems, HR and finance systems, ERP, etc. as much as it does with other new technologies like AI and IoT.

We’ll thus increasingly see services that are powered-by / enabled-by signature elements of blockchain related tech (say, immutable ledgers, decentralised consensus, cryptographically-assured confidential computing) – and which need these components in order to do what they do. These advanced, ‘smart adopters’ will take what they require from the blockchain stable and deploy it, in context, to take things to another level.

But all this is achievable – by organisations large and small. It’s more of a pragmatic evolution than a big bang, decentralisation transformation revolution.

Q2

To gain further value out of using blockchain, what are some of the key elements that leaders should start to consider, by foreseeing the ‘next’ where this technology capability and market is heading?

There were numerous business process pain points that COVID exposed which served to highlight where ‘the old ways’ of doing things no longer cut it.

Uses such as the validation of research data and the proliferation of unsubstantiated fake news, an acute need to onboard and verify the credentials of new or returning professionals in key roles, asset provenance and tracking across fragile supply chains, and the need to build trust across new and unfamiliar partners as fractured ecosystems were being re-made, we saw the case for blockchain technologies here build and strengthen in the most obvious scenarios. And through Independent Thought’s Blockchain Index research, we’re now also seeing the long tail beyond these re-grow – with 2021’s burgeoning activity around tokens, decentralised finance (DeFi), and decentralised alternatives to centrally-controlled databases, all gaining traction as organisations choose to build back differently as they attempt to ‘build back better’ (and fairer).

Q3

How does the advent of extreme tokenisation, and an increasing level of ‘financialisation’ in wider blockchain-related application, impact businesses?

Asset tokenisation brings a further layer of robust financial service functionality and authority to business ecosystems. From their origins in the cryptocurrency space, tokens and tokenomic incentives now permeate the processes and mechanics in diverse sectors – from renewable energy trading, through data marketplaces for connected cars, to media and IP rights management, and the use of digital ‘token twins’ of both tangible and intangible assets which can be tracked, traded, and fractionalised in the manner of more familiar financial products.

It’s this creeping decentralised ‘financialisation’, facilitated by blockchain technologies, which is serving to imbue traditional markets and systems with new opportunities – open to new and diverse participants. The world won’t immediately ‘go crypto’, but cryptographic tokens – be they for security (representing asset ownership), utility (providing access to services), governance (providing a voice in decision-making processes), or transaction (to be exchanged for goods and services) – will play an increasingly greater role in a widening range of use cases, across a diverse array of industry sectors.

And whilst recent high-profile activities in the Non-Fungible Token (NFT) space (such as the nose-bleed valuations of select digital art) may not have direct relevance to enterprise interests, nevertheless they’ve increased mainstream understanding of digital token fundamentals. It’s now a shorter step for business to understand how tokens can play a role in the business models and processes they follow – the asset value they can represent, and the in-system transactions which can be undertaken (and with whom). It’s opening the door for more business-relevant applications to nudge perceptions and disrupt behaviours as they establish new ways of decentralised working.

Q4

We've heard of blockchain’s benefits for tracking and tracing in industries such as food and retail, but how is this going to evolve and be used in elsewhere?

It’s all because of the irrefutable, independently verifiable provenance which blockchain ledgers give you that makes the technology such a good fit for multi-partner supply chains and beyond – encompassing the ‘three Ps’ of Products, People, and Personal data.

During the pandemic we’ve seen more and more blockchain-related activities in healthcare and life sciences – establishing the origin and tracking the distribution of personal protective equipment (PPE) and drugs to help guard against counterfeit and substandard products, and – particularly in the case of vaccines – ensure that proper cold-chain conditions are maintained in transit, etc.

We’ve also seen the same principles applied to digital identities. For example, to support decentralised alternatives to centralised tracking apps and ‘health passports’ (certifying test status and vaccination record, and providing the means to prompt individuals if they are put at risk without revealing any more personal data than is absolutely necessary), and to verify educational credentials and qualifications as health personnel joined th e workforce early (or came out of retirement) to help out in times of national crisis.

And data provenance. Blockchain is also being used to underpin confidence in the proper sourcing of data for research, as the world looks to new and disparate sources of research to expand collective knowledgebases on viral transmission, treatment and vaccine effectiveness, etc. in the wild. It can also be used to assure the robustness of AI model development – providing a chain of data custody that can be tracked back to source, enhancing the auditability of automated decision-making and helping to guard against the introduction of biases.

Q5

What’s the secret to turning a successful pilot into a successful, scalable service?

Start with the blockchain-enhanced outcome you’re seeking to achieve (and how you’d recognise and publicise that state when you achieve it). Always keep that in mind, as you work backwards in your planning. Don’t be satisfied with a shiny new thing that behaves perfectly (technologically) in isolation, but which you’ll have trouble scaling, integrating, getting widely adopted in real world conditions as you meet each milestone. It’s no good just throwing it over the fence from innovation lab to implementation team and hoping for the best. Involve all relevant stakeholder parties early and often, to ensure you don’t build a house of cards on shaky ground.

But assuming you are ticking those boxes, it’s also about gaining and maintaining buy-in from senior sponsors, in something that might feel inherently different to what’s gone before. Your project has to be able to pay its way in order to justify continued investment in time, money, and attention. No innovation without compensation.

Focus on where, when, and how you’re going to see value; who is going to be most impacted (preferably positively!), and how you’re best going to be able to sell them what you see. Metrics are key… but meaningful ones, please! Count what counts, not just what’s ‘easy to count’. And do make sure you measure the ‘as-is’ state, so you can show off how much better the ‘to-be’ state is when your blockchain project gets you there.

It’s also important to tell a story to spread your news further and wider (and ultimately demonstrate that your new solution is Useful, Usable, and worth Using – the ‘three Us’). You need to present your learning in an easily transferrable manner to best help more people understand the benefits as they’ll experience them in their particular context.

It won’t all be plain sailing, though. There might be initial losers as well as winners amongst all concerned in the ecosystem you inhabit (intermediaries that aren’t super-keen on being disintermediated, for example). Help all parties see how and where the new ways of working benefit them. It may not be immediately obvious, but often there are unanticipated – even indirect – opportunities. Things might look and feel different, but look for what ticks their particular boxes and tease out the ‘specific’ from the ‘general’ in terms of what blockchain benefits have to offer – in order to keep that adoption a pull rather than an uphill push.

Q6

As you explained, major shifts are happening in the market. How is IBM better aligned to meet (and foresee) business demands in the new unstable normal?

Blockchain is the archetypal convergent emergent technology. Not only is it a ‘team sport’ in terms of organisational involvement and suitability for ecosystem business relationships, but it plays particularly well with other tech too (in terms of amplifying its applicability).

On its own, it certainly provides capabilities impractical or impossible by other means; but it’s really when combined with other (often new) technologies where it begins to shine outside of the pure fintech scenarios that characterised its crypto origins. AI and IoT are two of the most obvious pairings with blockchain tech.

It’s a symbiotic relationship that drives the value in many use cases – where IoT feeds in unbiased and reliable data; blockchain drives trusted data exchange across multiple parties; and AI brings intelligence. The blockchain element can also be used to provide data provenance for AI model auditability, and permit federated learning at the local level so source data doesn’t even need to be shared if not appropriate (only the model that’s been trained on that data) – thus enhancing privacy protections as data sources become more disparate.

There’s therefore a strong business benefit to be had by choosing a full stack vendor that has strong offerings in related technology spaces (such as IBM’s AI and hybrid cloud focus); is business-orientated (and so can help you zero-in on the most effective application of the technology to maximise business benefits, for you; and minimise the time taken to realise them); and the integration capabilities to pull it all together. And IBM has service offerings, experience, and expertise here in spades. IBM’s path of integrating blockchain with other technologies where the clearest defined use cases are (e.g. supply chain) is spot on and aligns with market trends / customer needs where organisations are looking for business value vs. technology features.

Plus, its hundreds of engagements, across an impressive breadth of industries and use case types, also means it’s able to have learnt from these experiences and ‘skate to where the demand will be’. Chances are, whatever your particular need are… it won’t be IBM’s first rodeo in that area. And so you can learn from that too.

 

About Craig Wentworth

Craig Wentworth is the Co-founder and Research Director at Independent Thought, where he focuses on emergent technologies – helping tech suppliers better anticipate and respond to their customers’ needs, and tech buyers get the best value from their investments.

He has over 25 years of experience in technology and change across the commercial and not-for-profit sectors, in a broad range of roles (including analyst research, consultancy, technology strategy, innovation, and service delivery).

Independent thought logo

 

 

Foundation

By Martha Bennett at Forrester

Martha Bennett picture

Enterprise agility is essential for modern, digital companies. IT may seem like you have to start over to acheiving, but in reality, agility is about improving what you already have.

1. Flex

A simplified enterprise application portfolio allows you to get ahead of disruption, better compete and, ultimately, reinvent your business. We'll help you maximize the capabilities of your Microsoft solutions to navigate your cloud journey, guide digital transformation and deliver experiences to customers on almost any channel or device.

The IBM and Microsoft practice is focused on helping you identify, design and capture business opportunities. We help you simplify your enterprise application portfolio, fine-tune the required infrastructure, and maximize the capabilities of Microsoft solutions such as Dynamics, Office 365 and Azure.

2. Balance

Migrating all SAP ERP Central Component (ECC) instances to SAP S/4HANA by the end of 2027 to meet mandates is a daunting, though unavoidable, task. But to succeed in the digital era, you must leverage the flexible, fast, scalable cloud; ultimately, the transition will accelerate business value.

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The IBM Cloud platform can help you get the best outcomes. It has the flexibility, security and performance to deploy SAP S/4HANA and provides a full portfolio of solutions to support enterprise-scale SAP workloads. Additionally, world-class services offerings from IBM Services or our robust global partner ecosystem can simplify your journey from planning and migration to transformation and optimization. Compete strategically in today’s business environment with a database that accelerates real-time, data-driven decisions.

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3. Maximize

Blend cloud and on-premises resources.

A hybrid cloud platforms allows you to run applications and workloads wherever they perform best, while built-in container-level security protects production workloads. You can modernize 25% faster and reduce IT operational spend by up to 75%.

Lorem ipsum dolor sit amet, consectetur adipiscing elit

Lorem ipsum dolor sit amet, consectetur adipiscing elit

Take the journey to the lcoud with confidence using IBM Cloud Services. It brings together unique capabilities to help you modernize, manage and optimize your mission-critical applications and infrastructure – enabling your business to be agile, data-driven and innovation-centered.1

1.  Lorem Ipsum, Lorem ipsum dolor sit amet, consectetur adipiscing elit, Placeholder, September 2040.
2.  Lorem Ipsum, Lorem ipsum dolor sit amet, consectetur adipiscing elit, IBM, September 2040.

Advanced

By Craig Wentworth at Independent Thought

Craig Wentworth picture

Enterprise agility is essential for modern, digital companies. IT may seem like you have to start over to acheiving, but in reality, agility is about improving what you already have.

1. Flex

A simplified enterprise application portfolio allows you to get ahead of disruption, better compete and, ultimately, reinvent your business. We'll help you maximize the capabilities of your Microsoft solutions to navigate your cloud journey, guide digital transformation and deliver experiences to customers on almost any channel or device.

The IBM and Microsoft practice is focused on helping you identify, design and capture business opportunities. We help you simplify your enterprise application portfolio, fine-tune the required infrastructure, and maximize the capabilities of Microsoft solutions such as Dynamics, Office 365 and Azure.

2. Balance

Migrating all SAP ERP Central Component (ECC) instances to SAP S/4HANA by the end of 2027 to meet mandates is a daunting, though unavoidable, task. But to succeed in the digital era, you must leverage the flexible, fast, scalable cloud; ultimately, the transition will accelerate business value.

Curabitur facilisis nec erat vitae sagittis. Nulla placerat facilisis leo at ultrices1
— Nunc a sem condimentum

The IBM Cloud platform can help you get the best outcomes. It has the flexibility, security and performance to deploy SAP S/4HANA and provides a full portfolio of solutions to support enterprise-scale SAP workloads. Additionally, world-class services offerings from IBM Services or our robust global partner ecosystem can simplify your journey from planning and migration to transformation and optimization. Compete strategically in today’s business environment with a database that accelerates real-time, data-driven decisions.

Image ALT
Sample caption is here. It is optional.

3. Maximize

Blend cloud and on-premises resources.

A hybrid cloud platforms allows you to run applications and workloads wherever they perform best, while built-in container-level security protects production workloads. You can modernize 25% faster and reduce IT operational spend by up to 75%.

Lorem ipsum dolor sit amet, consectetur adipiscing elit

Lorem ipsum dolor sit amet, consectetur adipiscing elit

Take the journey to the lcoud with confidence using IBM Cloud Services. It brings together unique capabilities to help you modernize, manage and optimize your mission-critical applications and infrastructure – enabling your business to be agile, data-driven and innovation-centered.1

Migrating all SAP ERP Central Component (ECC) instances to SAP S/4HANA by the end of 2027 to meet mandates is a daunting, though unavoidable, task. But to succeed in the digital era, you must leverage the flexible, fast, scalable cloud; ultimately, the transition will accelerate business value.

Curabitur facilisis nec erat vitae sagittis. Nulla placerat facilisis leo at ultrices1
— Nunc a sem condimentum
1.  Lorem Ipsum, Lorem ipsum dolor sit amet, consectetur adipiscing elit, Placeholder, September 2040.
2.  Lorem Ipsum, Lorem ipsum dolor sit amet, consectetur adipiscing elit, IBM, September 2040.