It’s been almost a decade since blockchain technology made its debut. Since then, blockchain has evolved more quickly than anyone could have anticipated. It was designed to be a decentralized tool with potentially dozens of applications. Blockchain startups have attracted billions in venture capital and everyone—from banks to supply chains—is exploring blockchain-based projects.
For many, though, a key challenge remains: quantifying success. How can an organization tell when it’s making gains with the technology and justify moving projects forward to the next level? With many companies thinly spreading their resources between different emerging technologies, a mature approach to evaluating your blockchain implementation is crucial.
For many companies, blockchain is a bandwagon technology. It’s new, it’s exciting, and it lends superficial credibility to projects. They adopt blockchain technology for the wrong reasons and inevitably see their projects fail. The more failures the industry sees, the more disillusioned people become.
It’s the same with many technologies, which is why Gartner developed the Hype Cylce for emerging technologies, which charts a young technology’s journey from research lab to commercial adoption and beyond. Somewhere along their journey lies the trough of disillusionment, when early adopters find the technology lagging behind expectations. According to Gartner, blockchain technology entered that phase this summer.
To make your blockchain implementation truly transformative, projects should begin with the business objectives and apply blockchain technology when they can capitalize on its key characteristics. A decentralized, immutable trust model keeps all players honest. For example, for financial settlements or supply-chain management, blockchain can be a powerful tool.
Alignment between technology outcomes and business goals is a key factor in blockchain project success. Start with business objectives, which should be specific, measurable, agreed-upon, realistic, and time-based (SMART). Because SMART business goals have measurable objectives, executives can use them to create key performance indicators (KPIs). They can then use these to measure the performance of the blockchain-based business system. For example, a business goal might involve cutting costs and time by limiting an intermediate third party and dealing directly with customers. That could be a candidate for a blockchain implementation because there is clear mapping between blockchain qualities and the business goal. It’s the right tool for the job.
