Three options for leveraging the secure digital ledger.
In last month’s introduction to blockchain technology,1 we noted how the technology offers a way to automate and simplify multiparty processes that are time-consuming, resource-intense, and therefore costly. We often summarize this sort of process as “high-friction.” But pioneers in applying blockchain to improve multiparty processes learned early that it wasn’t enough to find a process that was slow or frustrating. There needed to be a quantifiable performance (often financial) benefit as well. This wasn’t always easy to establish. Unlike applying automation to improve internal processes, the “friction” in multiparty processes occurs outside an organization. As a result, the costs and performance issues caused by that friction may not be captured well enough inside the organization to understand its true impact.
Perhaps it’s understandable, then, that the most successful early blockchain applications were often driven by companies large and sophisticated enough to not only recognize, but quantify, the opportunities and to have enough influence with their partner companies that those partners were willing to collaborate on a solution. Indeed, a recent article in MIT Sloan Management Review2 states, “The biggest challenge to companies creating blockchain apps isn’t the technology – it’s successfully collaborating with ecosystem partners.”
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