In a very detailed, informative and lengthy tome on Blockchain at strategy+business (s+b) published by PwC Strategy& LLC PwC heavyweights John Plansky, Tim O’Donnell and Kimberly Richards take on the complex task of corporate strategy when it boils down to Blockchain.
“…blockchain technology could become a game-changing force in any venue where trading occurs, where trust is at a premium, and where people need protection from identity theft — including the public sector (managing public records and elections), healthcare (keeping records anonymous but easily available), retail (handling large-ticket purchases such as auto leasing and real estate), and, of course, all forms of financial services. Indeed, some farsighted banks are already exploring how blockchain might transform their approaches to trading and settling, back-office operations, and investment and capital assets management. They recognize that the technology could become a differentiating factor in their own capabilities, enabling them to process transactions with more efficiency, security, privacy, reliability, and speed. It is possible that blockchain could transform transactions to the same degree that the global positioning system (GPS) transformed transportation, by making data accessible through a common electronic platform.
But although the potential is immense, so is the uncertainty. Distributed ledger technologies are so new, so complex, and so prone to rapid change that it’s difficult to predict what form they will ultimately take — or even to be sure they will work. The Gartner Group declared in an August 2015 report that crypto-currency was traveling a “hype cycle”: it had passed the Peak of Inflated Expectations and was headed for the Trough of Disillusionment. Another research firm, Forrester, titled it’s 2015 blockchain report “Don’t Believe in Miracles,” advising enterprises to wait five to 10 years before introducing blockchain, in part because of legal restrictions.”
It seems the PwC trio is a little more bullish on Blockchain than Forrester. They recommend strategists proceed deliberately, but be cautious and don’t try to convert existing systems to blockchain initiatives right away. Their recommendation is to focus more on exploring how others might try to disrupt your business with distributed ledger technology and maybe putting one or two pilot projects into place.
Four Steps to a Blockchain-Enabled Strategy
Your blockchain and distributed ledger efforts will be most effective if you see them as ways to reinforce or strengthen your company’s most distinctive capabilities — the ones that differentiate you in the market. For example, if you’re known for rapid fulfillment and responsive customer service, the fast turnaround rates enabled by blockchain could allow you to stay ahead of competitors. At the same time, the technology is too new and unproven to base your company on. Therefore, your best investments are those that allow you to explore new approaches with strategic potential and understand the costs involved before committing to them.
We recommend creating a core technology working group to better understand the possibilities. But keep a close watch. Working groups like these can easily get caught up in the promise of new technologies, at the expense of your overarching strategy. To counter this tendency, they need to have a clear idea of your company’s strategic goals, and how blockchain could enhance its value proposition — and then they need to constrain their efforts accordingly.
Step 1: Find specific opportunities.
Step 2: Explore feasibility and readiness.
Step 3: Put your prototypes to work.
Step 4: Scale your efforts appropriately.
Read in full here.