Globally we are seeing 3 trends emerging in Technology space, viz., Open Source Software, Sharing Economy and Decentralized Decision Making. Blockchain is at the intersection of all three of these and as a technology is capable of tremendous industry disruption and growth. Gone is time frame when Blockchain as emerging technology had just theoretical applications; currently we are all set for adoption of Blockchain in a big way. Below graphic showcases the current stage and future prospects of Blockchain technology.
Way forward towards Adoption of Blockchain
There already is available a broad scope of unique Blockchain platforms, viz. Ethereum, Hyperledger, Multichain, HydraChain, Open Chain, IBM Bluemix Blockchain, Chain, IOTA, Ripple, and many others.
And going forward adoption of Blockchain is going to be driven by three broad set of supply drivers:
- Challenger disruptions developed outside of the core business and/or Technolgy markets ecosystem. These can expected in the next 12 to 18 months
- Collaborative efforts to shift the existing value chain to blockchains. While such efforts are already starting, with potentially massive benefits, it is likely to take more than ten years to reach core parts of the system.
- Mandated policy where supervisors direct the industry to introduce new market infrastructure, so that costs are reduced or that operational or systemic risk is lessened
Challenges and Opportunities for incumbent IT Services providers
Blockchain presents an extremely complex implementation challenge. In terms of Technology, Blockchain is a confluence of many latest technologies – Data Science, Big Data, Cloud, Analytic, Encryption, Cryptocurrencies. From a business angle, Blockchain adoption needs comprehensive knowledge and awareness about the fit of Blockchain towards Revenue driving measures as well as Cost and Operational efficiencies.
Given that most IT organizations are mandated to focus on their current work as usual, Blockchain present a big opportunity to mid-size IT companies to build “New” capability in a big way and be poised to capture a big chunk of future market and revenue.
How a Blockchain COE can help organisations
Being nimble and agile, Mid to small size IT Companies in niche/focused verticals providing end-to-end services across Business Consulting, Technology and Digital, can adopt Blockchain technology in a big way by building real use case-driven applications using Blockchain. With this in mind, they need to establish Blockchain Center of Excellence (COE) with a foremost aim to define the use cases that would help solve real business challenges while simultaneously building in-house solutions and leverage existing platforms. This could ultimately reshape the industries they serve and also help their own top-line. Basically this become an investment area for them with huge potential ROI.
Mid to small size IT Companies can set out to achieve this by establishing a COE to work on Blockchain proofs of concepts (POCs) across each of the leading open source blockchain platforms, initially focusing on Ethereum, Hyperledger Fabric, and Ripple. To build the COE, they need to assemble business analysts (BAs) from across section of their customer-facing teams/verticals to identify problems facing the industry as a whole. Next, the COE should insource a diverse set of talent across consulting, technology and digital. Based on the use cases provided by the BAs, the team can develop Blockchain Accelerators – prototype applications – addressing industry challenges such as, but not limited to, Identity management (Security risks), KYC, insurance claims, mortgage financing, trade finance, payments, and capital market post-trade processing. With each platform requiring different skillsets, coding languages, consensus mechanisms, and more, they can establish dedicated teams for each platform, and expand to other platforms like, Corda and Quorum based on client and industry demand.
The Blockchain ecosystem encompasses large number of players – such as financial institutions, and technology companies, service providers, consortia, start-ups, regulatory institutions and government. To further expand its presence within the Blockchain ecosystem, the COE can establish strategic partnerships with various industry Blockchain forums. Eg. the Enterprise Ethereum Alliance, Microsoft Azure Blockchain Council, the Hyperledger forum, etc.
Below graphic show priority focus area for the Blockchain COE.
The COE can work on POCs/project and take learnings from these for fundamental business requirements and modify the application architecture per the learnings. Depending on the learnings, the team can be expanded from an initial 10-15 person core team to 50+ dedicated business consultants, technologists and digital experts. The COE can pivot from lab-driven development to client-driven pilots and advise clients on project scoping, building business cases with a high probability of entering production. Additionally, Blockchain COEs can advise clients on how to run parallel production for a seamless future transition to Blockchain. They can also work with clients to advise them on how to set up their own Blockchain COEs that align with their respective business goals. In the long run each of these initiatives will lead to projects and corresponding revenue, as well as build capability and solutions and IPs.
Evolving landscape for Blockchain and Digital Tech adoption in India
India’s central bank, the RBI, came out with a detailed white paper detailing the technical aspects of Blockchain and how it is beneficial for financial services sector in India in January 2017 itself. Apart from these below are few big tailwinds for Blockchain adoption in India.
- India Demonetization Or Currency Withdrawal
- Progressive Central Bank in Reserve Bank of India (RBI)
- Availability of “IndiaStack” – Technology for 1.2 Billion Indians. IndiaStack is a set of APIs that allows governments, businesses, startups and developers to utilise an unique digital Infrastructure to solve India’s hard problems towards presence-less, paperless, and cashless service delivery.
COE Ideas for India specific needs
As the penetration of internet in India grows and as people get more comfortable with the idea of transacting digitally, digitisation of assets will increase as well. In fact, digitisation of land records scheduled to be completed by 2021 is one of primary aims of the Indian Government under the Digital India Campaign. Below are some steps which the Blockchain COE can take specific to India market.
- Integrating with Adhaar for verification
- Run Community Events and Encourage Innovation
- Roadshows at Incubators and Accelerators
- Approaching Corporates and Businesses through Partners and Affiliates
- Work with various players and government bodies as the Regulatory landscape evolves
- Work with Banks and Financial Institutions on BankChain an intra-bank Blockchain
- Work on use cases like Fraud Prevention
We are all set for a stage where Blockchain adoption would require a fundamental shift in Supplier Ecosystem, which includes the current incumbent IT Services providers. Blockchain presents a big opportunity to mid-size IT companies to build capability in a big way and be prepared to capture a big chunk of upcoming market and revenue. Setting up Blockchain COE is the foremost step they can take to get started on this journey. This article presented a broad framework and focus areas for such a Blockchain COE. Following these steps will accelerate the Blockchain journey.