Blockchain is a decentralized ledger of each transaction that occurs across a network, which enables the decentralized exchange of trusted data – a “shared record book.”
Blockchain is a digital peer-to-peer asset transaction exchange, shared among a distributed network of computers, that can help increase the speed of completion or settlement and improve security. It has the potential to streamline and accelerate your business processes, increase protection against cyber threats and reduce or eliminate the roles of intermediaries.
Blockchain can offer you a compelling option when data that should be stored collectively is fragmented at the source or there is an absence of data security. Some benefits of leveraging this technology include data reconciliation, standardization and harmonization and reduced risks.
Three key features of blockchain are:
1. Distributed ledger
· Every participant in the network keeps a copy of all transactions
· Transactions are secured by encryption to prevent tampering
The most obvious benefit of blockchain is the ability to maintain an immutable record of events using distributed ledger technology (DLT).
In tomorrow’s project management workflows, your team could rely on DLT for a number of critical functions, such as maintaining an unalterable source of truth.
In a distributed ledger, each node or computer will independently host project data. Each node will also update that data. In other words, no single party in this system can alter or change this data and, in turn, the entire project team will reference a single source of truth.
This will be helpful when investigating discrepancies and disputes, especially with an external project stakeholder, such as a client or subcontractor. For example, if you had scheduled your construction contractor to send people on a certain date and they send their people too late or too early, everyone on the ledger can verify if the subcontractor made a mistake or not.
Internally, you can also trust the data on the ledger when analysing business operations to see how much time is spent on tasks, identify opportunities for efficiencies, and other benefits.
Yes, you can do the same today with a centralized cloud-based project management suite. But there is a chance of losing some of that data due to downtime from the cloud host or tampering.
With DLT, you can trust that the data set from your team is complete and untampered. In this respect, you also get data redundancy thanks to the availability of multiple nodes — in case your node is temporarily down as a result of transitioning your software and data.
2. Consensus algorithm
· No one node or server is responsible for approving transactions, leading to genuinely distributed transaction processing
· Each entry is validated and recorded on all ledgers across the network
3. Smart contracts/programmable ledger
· Transactions can be sent with rules attached – small programs that govern when and how transactions are processed.
In complex project management workflows, you could potentially use smart contracts as a means to manage interdependent tasks.
For example, in the construction industry the use of building, information, and modeling (BIM) is growing. The basic idea of BIM is to facilitate collaboration between the different stakeholders in the construction project, such as the architectural firm, civil engineers, suppliers, and others.
Let’s imagine a building construction project involving the concrete supplier, construction crew, and the building project owner. The project owner could set smart contracts that will only notify the construction crew to come on the scheduled date after the concrete is delivered to the site.
If the concrete is not delivered, then the crew subcontractor would not need to commit to that scheduled date. This could prevent the risk of idle labor and, in turn, help control the budget of the project. Likewise, the crew subcontractor could freely send its people to another project in lieu of the original project without having to notify the project owner — they can just refer to the information shown in the BIM software.
Similarly, you could have smart contracts to only release specific orders to suppliers — for example the amount and grade of steel you need — only when the civil engineer greenlights the design. If the engineer detects a clash, the suppliers will not be notified until the designers resolve the clash.
But when that is done, the suppliers will only get orders based on the updated design, thereby saving the project owner of cost overruns resulting from incompatible materials. You can apply this to aviation, auto-manufacturing, electronics manufacturing, and other project types too.
Our approach to blockchain starts with a maturity assessment where various service lines can support the following enterprise developments:
1. Creating organizational awareness. The aim of the first phase is to raise the level of your awareness, working together to identify blockchain potential.
2. Performing a blockchain opportunity assessment. During the second phase, the focus is on identifying the areas of application and use cases that would bring the highest added value.
3. Developing a transformation road map. In the third phase, we help consolidate, prioritize and build a multi-phase transformational road map.
4. Supporting implementation. In this phase, we support you with the definition and implementation of proofs of concept, pilots and full-scale blockchain implementations integrated with your organization and its value chain.
Have you considered these five questions?
· How can blockchain unlock value in your organization’s value chain?
· How will blockchain affect your organization over the next 2, 5, and 10 years?
· What are the taxation and legal implications of blockchain for your organization?
· What are the barriers to organizations pushing off their blockchain agenda?
· What does product innovation look like for your company?
Our Advisory group is here to help you answer these important questions with better answers.