Is Blockchain Ready for Prime-time?
I’m continually searching for better ways to serve our clients and improve and reinvent business processes. So, I’ve been reading and thinking about Blockchain technology. Per a January 2019 McKinsey Financial Services article, blockchain has yet to become the game-changer futurists thought it would be. McKinsey reports that the financial industry spends about $1.7 billion annually on innovation related to blockchain development. Venture-capital funding for blockchain startups has reached a billion dollars, with huge investments by Google and the Internet of Things. And yet, despite this level of investment in this emerging technology, there’s not much show for it at this time.
Sure this technology was extolled as a revolution in business technology, but, to me, this technology got ahead of the development phase. On the other hand, there have been a few innovations stemming from the development of blockchain and some of them are beginning to reshape business processes. But as they say, “We’re not there yet.” When you consider life-cycle theory, blockchain appears to be lingering in the “pioneering” stage of growth. While at the same time, other emerging technologies appear to be on a more secure footing with lower development costs and quicker roll-outs. The real issue with blockchain development seems to one of lack of useful applications at an economy of scale. To be sure, there are industries forging ahead with blockchain applications, but it appears that the most impressive results at this time are in of data storage, greater coordination between companies, and compliance with data standards.
- Data Integration: distributed ledgers tackle inefficiency, process opacity, and fraud
- Modernization Value: Appeals to industries focused on modernization, digitization, process simplification, and collaboration.
- Reputational Value: Demonstrating to investors and customers an ability to innovate.
Is There a Future for Blockchain?
Is blockchain technology really going to revolutionize transaction processing and lead to economy of scale? How do entrepreneurs and corporate innovators plan to deal with the expense of developing blockchain solutions? What about the perceived cultural resistance to the possible loss of jobs caused by blockchain. CFO’s are charged with analyzing how revenue streams might be disrupted during the development phase and how that will impact the organization’s ROI. But is this practical?
When organizations look at pain-points, the proposed solutions need to be “simple” and easily understood. The proposed solutions have to add value and support the overall business goals. Conceptually, blockchain has the potential to revolutionize business processes; however, at this time it just doesn’t pass Occam’s razor scrutiny. It is possible that with the advancement of this blockchain technology, at some point it can be used to rid insurers of the frustration of repeatedly having to ask for data for verification. Additionally, blockchain can track the claims progress and enhance payment processes. Blockchain also has the potential to identify fraud, something that the insurance industry has always had to deal with.
The bottom line is technology changes continually. Some innovations in technology hold a great deal of promise and some fade a way. Without economy of scale, ease of use, and a reasonable development trajectory, and GOOD TIMING even great ideas are sometimes doomed. What are your thoughts about blockchain?
Michael A. DiManno is a thought leader and entrepreneur with over 30 years experience of innovation and fast growth with startup companies in Technology, Insurance, and Employment, or as he calls it “TIE” Services. Mr DiManno founded EmployInsure, LLC (EI) a holding company and incubator for developing “cool stuff” for clients not being served by traditional “TIE” industries. He currently serves as CEO of EI’s signature brands Samuel Hale and TalentHire.
Michael is a writer and speaker for entrepreneurial groups as well as “TIE” industries. He also supports his wife Debbie’s a non-profit, Cour Training, which helps teens survive and thrive in the modern era of constant connection. They have raised 4 children and live with their two Rhodesian Ridgebacks in Northern California.
For more information, contact Mike directly at michaeladimanno.com