Disclaimer:
It is worth noting that Blockchain is in its infancy stage. There are no defined set of rules or regulatory bodies. The adoption rate and effectiveness is based on factual research and what we (Blockchain industry) know thus far. No one exactly knows the full effect, benefits, drawbacks, etc for each new blockchain strategy / approach undertaken. Results may vary and the entire Blockchain industry simply does not have a large enough sample size or data to analyze.
This article may be thought-provoking and educational to the en-masse. Hegion aims to increase the adoption rate of Blockchain technology among the general public through respectful and responsible promotional efforts.
Blockchain Strategy and Approaches
Just 3 years back, adoption of blockchain technology was just an afterthought or simply chatter. Fast-forward to 2021, the chatter is beginning to become serious forethought in many organizations across various industries.
This article piece is written on the assumption that you have at least a certain degree of knowledge of the Blockchain industry. Like all other industries, due diligence is paramount and one of the main factors is to ensure you deploy the optimal strategy or approach to increase efficiency in your organization.
Identify and Set goals
The application of Blockchain technology is plentiful and can be applied across a wide spectrum. This can be painstakingly troublesome for companies thinking to implement the technology optimally. Organizations planning on adopting Blockchain should identify issues and points they think they would be able to solve with the implementation of Blockchain.
Organizations should map out goals on what they wish or envision for Blockchain to achieve. The organization’s level of the resources such as expertise, knowledge, willingness of top management, etc will affect and influence feasibility of adopting Blockchain into the said organization.
Besides the internal locus of control, the organization would also need to take a look into the industry wide environment. Certain industries may be “blockchain-friendly” while Blockchain may be a hindrance in certain industries. If many requirements or answers such as ROI of implementation are still unclear, the organization should reconsider adopting Blockchain technology.
Optimizing Blockchain Strategy and Approaches
Once an organization has identified issues and is fundamentally ready to adopt Blockchain technology, they should choose the angle of approach and strategies that will best suit them. Hegion has identified and classified the various strategies into four (4) main approaches. Organizations should first need to know where in the industry they wish to be positioned – this would help streamline and optimize their adoption of Blockchain.
These approaches have all it’s pros and cons and there are certain other strategies that may cross realm or may not be mentioned in this article. For ease of reference, we have listed down the most common approaches.
Industry Leader
The “leader” approach must be willing and committed to take advantage of their positional approach to set the standard norms in their industry. Organizations who wish to take this approach would need to understand the resources required and back-end work needed to rally their other stakeholders in their respective ecosystem sphere. Organizations who take this approach will cement their market position in the industry and establish control of the market. Large financial institutions or service providers in the logistic or healthcare industry will usually be candidates for this approach.
Pro
Able to eliminate “first-mover advantage” disadvantage
Few regulatory rules and motions
Able to set the tone and greatly influence future regulatory rules when the time is right
Establish the market norms and be the de facto leader
Cons
Constant innovation and actions must be enacted
Technology advancement may render any adoption obsolete
Governmental oversight may happen quickly that may negatively affect de facto rules and norms
Things to take note for “Market Leader” positional approach
Resources such as skilled manpower and financial power are usually required
Constant R&D, innovation and implementation must be trickled down to all or most stakeholders in the industry ecosystem the organization is in. Slowing down will dissolve any advantages that had been built up by the organization
Ideal cooperation such as dialogues with Government regulatory bodies is encouraged. They stand between long-term growth and immediate cessation of service.
Disruptors
Organizations who identify with the “disruptors” approach are often entering a market which they need not worry about protecting. They are non-dominant and may be practically unknown to the wider community. A disruptor approach would mean offering services that the customers can leverage on – and eliminate steps or finding a more efficient way to reach the customers’ goals.
This approach is only considered useful if the organization adopting the “disruptor” approaches are able to pry away / reduce the customers’ dependence on existing players. Baas services are well-primed to adopt this approach if desired.
Pros
Able to approach markets with innovative solutions with lesser concerns as there is no existing market to “protect”
Services offered can be tailored with more ease to market demands and shifts
More fluid and able to adapt to future rules changes and regulations
Cons
Success of this approach is dependable on ecosystem and existing players
Market sentiments and limitations will affect the outcome. Even if solution is good, the public may not be ready to embrace it
Higher degree of knowledge and expertise is required from target market
Things to take note for “Disruptor” positional approach
Should be entering a market space where they are “new” – bringing novelty while solving issues. If they are not new in the market they serve, it is not considered an disruptor
Partnering up with notable or reputable players that are able to compliment each other’s offerings is essential.
This approach is not recommended for promoting (organizational) core services as it is a double-edge sword and ROI is usually on either end of the “success” spectrum.
Opportunists
Opportunists approach is doing what the name suggests. Organizations who will undertake this approach will usually wait, weigh its options and implement the most appropriate technology when it is required. These organizations usually do not have the full resources or are not in position to adopt the leadership approach – the ability to encapsulate their market ecosystem – for any reasons.
Pros
Beyond the initial higher investment required, it reaps long-term benefits and cost-savings if implemented optimally
The wait-and-see approach – the luxury of weighing options and choices. Joining a network that has “established” framework
Cons
Higher amount of initial resources is required to implement technology successfully
Higher risk of adopting the “wrong” blockchain technology as rules and regulations may change and affect the network (blockchain) bubble they joined
Things to take note for “Opportunistic” positional approach
Constant lookout for innovative approaches so as not to risk losing out to competitors in similar trade. The R&D or marketing team of each organization should always be alert to developments in the sector and ecosystem they are serving
Usually applicable for organizations who are in industries that leverage on permissioned network environment
Innovators
The innovator approach is a more unique strategy for an organization to undertake. These are usually larger organizations or players who can easily adopt the “leadership approach” but are looking to innovate or improve their current state of business. Organizations who embrace this strategy usually want to change the way things are done in their ecosystem – they are in a position of influence in their industry but unable to single-handedly convince the entire industry to adopt the Blockchain solution they are proposing.
“Innovators” approach will be useful to an organization when they are trying something “new” and there are no industry norms. Innovators will spearhead the movement of the feasibility of Blockchain technology they are planning with other stakeholders in their ecosystem through conversations, feasibility studies, partnership, etc
Conclusion
There is no single “correct” approach when adopting and implementing Blockchain technology for your organization or business. Chances are you will utilize a mixture of blockchain strategies. Keep in mind always that Blockchain is still at its infancy stage and there are no defined set or rules and regulations.
What may be today’s’ best blockchain solution for your organization may be obsolete tomorrow. When adopting strategies, always conduct your due diligence and conduct a feasibility study – just like any other business decision making process.
