The first thing an entrepreneur would think of when suddenly recognizing the need for blockchain integration is one simple question of “how”. How to find the right solution? How to implement it? How to make sure you took every little aspect of it into account? How is the blockchain business strategy any different from the others? There are a lot of hows on this matter and we will answer each and every one of them.
By the way, if you want to know more about other innovative technologies, we advise you to take a glance at our Technologies for Business series. There you may find more information about machine learning, artificial intelligence, and even more articles about the use of blockchain in business software development.
What is the blockchain business strategy
First of all, let’s figure out the definition of ‘blockchain’. It’s an innovative technology that uses crypto-cyphering for direct and secure data transfer. You can find more about it here.
By the way, take a look at the detailed infographics on how the blockchain works exactly:
Blockchain strategy, however, is similar to any other strategy for technology implementation. Simply put, it is a roadmap that your business will use to integrate blockchain into its workflow safely, thoughtfully, and successfully. It, like any other, helps businesses to smoothly integrate innovative technology without major losses in costs or time resources.
Basically, it’s the only thing that can ensure your business will make a profit on every step as well as in the long run. The difference between this strategy and any other hides in three pillars of the blockchain strategy.
- the first is value. The business value of blockchain stands for the changes the technology will make to your business. It’s about everything you want from your software - improvements in business processes, optimization, cutting costs, etc. Blockchain can be used for many things, from transferring money to buying music, so you decide what purpose it will have in your company;
- the second is the short-time profits. It is a base of the blockchain business strategy because the short-term return of investment is needed for scaling. And scaling is a pain point for every blockchain-based project. So, you need to think about short-term goals, ROI, and profits when you come up with the scalable idea;
- and the third one is the customization plan. Integrate every little thing from big to small into your blockchain business strategy. Because of blockchain’s specific features, you need to think about implementing solutions for making profits today as well as tools for long-term ROI.
Here’s how it works in practice: one company really needs a blockchain solution for, perhaps, an e-commerce application. Thanks to short-term ROI, in this case, the middlemen services costs would be reduced and business workflow goes uninterrupted because of direct transactions and 24/7 work. In the long run, however, this company might get a competitive advantage and even disrupt the market with innovative technology. A much quicker workflow also plays a role in business success.
So, short-time profit is basically money while long-run wins are more about being able to scale. With the right approach to blockchain strategy, possibilities are truly endless - you can gain a competitive advantage on the market.
So, even if you’re planning on creating your own blockchain solution, you need to focus on small steps. It will take a lot of time and resources, so make sure that you have something to make profits now, not many years later. You may think about implementing ready-made solutions for:
- basic understanding of blockchain effectiveness and its necessity for your business specifically;
- making short-time profits even if the ready-made tool is just a temporary solution.
So, despite that it’s similar to any other in many ways, blockchain strategy has its unique features. Most importantly, every step you take must lead to a short-time profit and be taken into account in the strategy itself. But taking it a bit further, let’s say that the first step for every innovative technology implementation strategy is deciding on its main goal.
Now when you know about what blockchain strategy is, let’s see why the business needs it?
Why do you need a blockchain business strategy?
With the correct blockchain business strategy, you’ll be able to identify the most important aspects of your company’s workflow and decide on what your blockchain-based software needs to optimize. But to understand why blockchain business strategy is so important we need to take a glance at some statistical data.
For example, the fact that in 2024 digital payments are predicted to almost triple from today's numbers is pretty impressive. Especially considering that in 2020 the total transaction value is US$4,406,431m. It’s just math but it shows how people are thinking about blockchain since it’s considered the safest tool for digital transactions. Hence, investing in it is probably your best solution for granting your business a place in the future.
Don’t think that it's just a cheap means of marketing - numbers are on its side! About 36% of all companies participating in this survey said that they have plans on investing in blockchain technology about US$1 million. So it’s clearly obvious that blockchain solutions are on-demand these years and at least 4 years to come. The global market has a trend for innovative technology and something new, as every business has an opportunity to be somewhat disruptive itself.
Integrating innovative technology immediately gives your business a competitive advantage. But what will your business have with blockchain business strategy? We’ll look upon reasons why exactly you need it just this instant.
From the business point of view specifically, blockchain strategy will help you build:
More effective resource management
You’ll be able to improve resource management through slow and gradual blockchain implementation if you know exactly why and for what you need it. Aside from this, blockchain strategy creation helps to understand which features are the most important for the implementation. And this, in turn, lets your business avoid the typical mistake of putting on blockchain-based solution tasks which are unnecessary or impossible for this technology to do.
The possibility of short-time profits
Blockchain-based or powered solutions take a lot of time to develop, as well as it’s actually a cost-consuming process. Implementing a blockchain strategy will help you see if the business can achieve profits on every step of blockchain creation. And even with constant spendings on blockchain-based solution development, you will be able to maintain the high profits if you take into account short-time solutions and MVP in your blockchain strategy.
Bonus: MVP helps you with understanding whether your business really needs a blockchain-based solution.
From the technical point of view you will get:
Accurate planning and estimation of development
A wrong estimation can lead you to failure. Many projects were closed or stopped which, in turn, brings nothing but material losses. The correct blockchain business strategy may be your lifeline in such cases. It helps to evaluate the development and implements blockchain partially, and this not only makes you allocate resources but also get profits along with the development process. And even if you’re forced to take a break in blockchain, MVP will still work and earn for you.
Improved blockchain implementation from staff training to the technology effectiveness measurements
The correct step-by-step blockchain strategy provides all means for the correct implementation of this technology into the software. You’ll be able to train your staff to work with the blockchain-based solution, set the analytical tools, and include the desired results into the implementation plan. After the MVP creation, you’ll have an opportunity to compare desired results and real achievements to find the loopholes in the process. Hence, you’ll know what to do next - better staff training, adding new features, or scaling a blockchain solution itself.
What blockchain solution to choose?
If you find yourself stuck with this question, we can help you a little bit. These are the selected blockchain solutions that we can recommend integrating into your project.
Quorum - GitHub open-source project which provides users with both private and public blockchain;
Kaleido - provides a platform and services that are needed for next-gen decentralized applications development;
Amazon Managed Blockchain - using the popular blockchain open-source frameworks (which are listed below) to create scalable blockchain networks;
Hyperledger - an open-source platform for promoting the intersectoral blockchain technologies;
Ethereum - open-source blockchain solution with its own cryptocurrency Ether (ETH).
Choosing the right solution is halfway to success. And this is as much important, as it is complicated. And we know the exact thing that can simplify it for you.
IT-consulting will help you think through all the aspects of blockchain strategy and its implementation as well as look at the technology effectiveness directly. We advise you to always look back onto the desired results and compare them to the real numbers.
And, of course, have a reliable IT-partner. They will help you with staff training, business needs evaluation, business analysis, and competitors’ research. If you need an ultimate blockchain success story you might need ultimate help as well.
Step-by-step blockchain business strategy creation
First of all, let's talk about 3 pillars of a blockchain business strategy:
- Focus on the selected needs
It's important to focus on one process instead of trying to improve everything at once. And it's correct for each and every innovative technology business process. Such an approach can optimize both blockchain effectiveness and business profits. Blockchain technology can be applied to many business-processes from logistics to reporting and improve every one of them, but you need to focus on something your business sees as drastic. Before implementing this technology into the soft you need to give it the right and narrow purpose.
For this, you may conduct a brainstorm and research your business needs to find processes that need to be optimized as quickly as possible. After you’ve found these processes you need to focus the blockchain strategy on it specifically.
- Find those steps you need to take
Blockchain in business must be implemented step-by-step as every innovative technology. In this matter blockchain is really similar to changes in a general business strategy - it’s a big change that can affect your business as a whole. And you can’t do it immediately at once.
To preserve your business profits you may consider implementing temporary solutions. If you're planning on developing your own custom blockchain, think about ready-made solutions that can help you evaluate the general need for blockchain in your business.
Besides, make up your mind about scaling - do you need one solution for all, or you can take something small but capable of scaling later? It depends on market conditions, the process for which you’ll be using blockchain, and your business itself.
- Form proof of concept
Planning of expected effectiveness and results are one of the most important aspects of blockchain strategy creation and integration. This way you’ll have an opportunity to analyze the expected and real results, hence, finding out if the blockchain is necessary for your business and if it really works for your business’ success. In the case of the discrepancy of expected and actual results, you will be able to reform and improve the blockchain solution to make its performance better.
Now let's look at what qualitative blockchain implementation strategy consists of:
.1 Finding the problem and its solution
- analyze the business and find the problem you can solve by implementing blockchain into the software;
- create an option of technology usage for optimizing the selected business processes;
- find the goals you need to achieve by blockchain implementation;
.2 PoC creation
- brainstorm to find optimal blockchain solution for your business specifically;
- as a result, create a proof of concept;
- create a schedule and write down all the deadlines for every implementation step;
.3 The first iteration of blockchain-powered software
- create a prototype;
- test the work of blockchain;
- evaluate malfunctions and try to resolve them;
- evaluate wins and benefits in technology performance and try to perfect software based on its best parts;
.4 Release of blockchain-powered software
- test the quality of blockchain-powered solution and then roll it out to the big market;
- maintenance and evolution - develop new versions and improve the blockchain performance based on what your software needs and what works for your target audience the best.
Now is the time for us to say that a reliable IT-partner can help you with all of this. Aside from this, they will maintain the software and make sure that it’s evolving with time.
To summarize all of this let’s just say that blockchain implementation strategy is a core of the success of your software. You can stand tall relying on both a strategy you had created and help from a third-party expert, for example, a technical partner. You need a roadmap for success and the people who are ready to help you with its implementation.
Think about it wisely, and we know that one day your business will be the one people are looking up to.