Best Practices: Seven Steps To Success In Enterprise Blockchain

June 20, 2018

Enterprise Adoption of Blockchain Nascent For Now, But Rapidly Growing

Recent Constellation Research surveys from Q4 2017 show that less than 20% of our market leading and fast follower clients have either acquired and implemented blockchain or undergoing a proof of concept (see Figure 1). One-third of survey respondents still mull the implications as they consider POC's. Meanwhile, 47% have not yet adopted or considered blockchain in their portfolio of exponential technologies. Three reasons for low adoption include

Rapidly evolving platforms and standards. Blockchain remains a wild west as a plethora of platforms come and go. The ten most popular platforms and standards include Bigchain DB, Chain Core, Ethereum, Hyperledger Fabric, IOTA, LISK, OpenChain, R3 Corda, Ripple, and Quorum. Each platform has significant benefits and trade offs as they evolve to meet enterprise requirements. Most organizations have started on one platform and evolved into another.
Current performance barriers. Transaction performance of the blockchain remains a valid concern. Today Bitcoin can barely move beyond seven transactions per second (TPS). Across the board, overall transaction times remain slow with Ethereum at 20 TPS, IBM Blockchain at 1000 TPS, and Ripple at 1500 TPS. To put this in perspective, Visa payments does about 1700 TPS and Alibaba does about 325,000 TPS.
Lack of internal and external expertise. Most organizations have not been able to find significant blockchain technical resources let alone the business resources to craft new business models. The plethora of platforms and standards adds to the scarcity of resources. Today's resources have often risen from internal reskilling and training programs.

Figure 1. Most Organizations Still Not Ready For Enterprise Adoption Of Blockchain

The Bottom Line: Take Seven Steps To Enterprise Blockchain Success

Lessons learned from market leaders and fast followers show key design points for success (see Figure 2). Almost every early adopter has built on multiple platforms and have learned from their mistakes. Here are seven design points to craft a proper blockchain strategy:

Choose a platform. Understand the trade offs on existing platforms. Some platforms have better performance metrics. Other platforms support complex value exchange and smart contracts. Some platforms do better with value exchange. Every platform has its limitations.
Start experimenting. The market has rapidly evolved. Organizations who start early build out support networks and develop informal relationships which help with resolving implementation issues and recruiting talent. Staying current on the technology enables agility as the technology rapidly evolves.
Get security and scalability right. Security remains paramount on blockchain. Enterprises accustomed to centralized models must make a shift to decentralized approaches. Security requirements must combat system gaming, 51% consensus attacks, and smart contract bugs. Design will require that assets and securitization occur on the same token. Meanwhile, scalability remains limited to a sub 2000 TPS for most platforms. As the number of node increase, the scalability requirements will also geometrically increase.
Build a legal framework for engagement. Blockchain's decentralized premise often dis-intermediates existing legal frameworks and bypass global standards. Legal guidance should be brought in early to derisk potential legislative and regulatory environments.
Set up smart contracts. Smart contracts use computer code to set the terms and conditions for engaging with other parties without a middleman. As the heart of many blockchain business models, these smart contracts provide not only a framework for rules governing a transaction, but also provides a computer program to enforce the rules.
Understand value exchange and gamification. Value exchange and gamification provide the incentives to create a marketplace. Value exchange models often include monetary, non monetary, and consensus. Blockchain business models create gamified approaches to influence certain behaviors.
Model out the network ecosystems. Blockchain business models ultimately must reflect new economic models. Consequently, design of these new business models must determine how the entire ecosystem will engage and interact in a community of self-interest. In fact the value of these new business models will come from the insights derived from the network interactions.

Figure 2. Seven Design Points To Create An Enterprise Blockchain Strategy

The Bottom Line: Get Started Now

Digital Darwinism is unkind to those who wait. Constellation expects early adopter organizations to leap frog ahead of existing competitors who do not rethink business models and apply blockchain as an exponential technology in their overall portfolios. Those organizations who wait will notice the significant gaps among early adopters.

Your POV.

Ready to roll out your plans for digital transformation. Do you understand the business model implications? Are you ready to disrupt the board and jump start growth? Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org.

Please let us know if you need help with your Digital Business transformation efforts. Here’s how we can assist:

Developing your digital business strategy
Connecting with other pioneers
Sharing best practices
Vendor selection
Implementation partner selection
Providing contract negotiations and software licensing support
Demystifying software licensing

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Resources And Related Research

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy,stay tuned for the full client list on the Constellation Research website. * Not responsible for any factual errors or omissions. However, happy to correct any errors upon email receipt.
Copyright © 2001 – 2018 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Executive Network

Cupertino Ray Wang Ray R Wang @harvardbiz #digital #disruptingdigital Apps Strategy Boardroom Priorities Brand Promises CDO CEO Chief Digital Officer Chief Executive Officer Chief Financial Officer Chief HR Officer Chief Information Officer Chief Marketing Officer Chief People Officer Chief Technology Officer CIO CMO CTO Data to Decisions digital artisans Digital Business Digital CXO's Digital Disruption Digital Proficiency digital strategy digital transformation DigitalBiz digitaltransformation disrupting digital Disrupting Digital Business disruptive disruptive business models Disruptive Tech Life Cycle disruptive technology enterprise applications enterprise apps Enterprise apps strategy Enterprise Software Intention Driven mass personalization Mass Personalization At Scale Monday's Musings network economy News Analysis P2P P2P Networks People to People R "Ray" Wang; rwang0 Software Insider SoftwareInsider #WEF Attention Economy CHRO Constellation Research CXO Economics Economy Global Economy Harvard Business Review Press World Economic Forum #Davos2016 #WEFTalks cfo Chief Creative Officer Chief Data Officer Chief Information Security Officer Chief Procurement Officer Chief Revenue Officer Chief Sales Officer Chief Security Officer Chief Service Officer Davos Fourth Industrial Revolution @FT artificial intelligence man vs machine Wipro event report Featured future of work finance Transformation of Finance health healthcare #ENV16 2016 Big Data blockchain blockchain technology bots business disruption business transformation chatbots Chris Capossela Cloud Cloud Platform Consumer Tech Conversations as a Platform Cortana crm; CustExp customer engagement customer experience customer relationship management digital assistants financial services Lillian Rincon machine learning Microsoft Microsoft Delve Microsoft Dynamics Microsoft Envision Microsoft Office Microsoft Office 365 Natalie McCullough Office Graph People Analytics Satya Nadella user conference user event vendor events vendor strategy Volometrix ad networks audience acquisition audience development Brand brand promise brand strategy content content management creative to commerce customer care customer service CXM data driven digital commerce Digital Marketing Digital Marketing Transformation disruptive technologies Engagement marketing marketing agencies marketing automation marketing execution Marketing Strategy Peer to Peer Programmatic ROI Chief Operating Officer COO accounting appsexchange cloud computing Enterprise Resource Planning ERP financial management FinancialForce Research Summary NetSuite PaaS platform as a service user experience ux analytics data quality data services data stewardship master data Reltio big ideas DoubleDutch event marketing live engagement marketing AI Cognitive Computing HOLMES Wipro HOLMES #IOT Chief Customer Officer CX CXP Internet of Things Big Data Business Models data 2XU acquisition acquisitions adidas Adobe Amazon Amazon Web Services American Golf Anya Hindmarch AppExchange Avangate Avenue B2B B2C B2C E-commerce Bare Escentuals Brooks Brooks Brothers Browns Burton Callaway campaign to commerce carters's Clarins Cloud Wars Cole Haan Columbia Commerce Commerce Cloud content management system Converse Corporate Social Responsibility Cortefiel Crabtree & Evelyn crocs customer relationship management (CRM) Deckers Brands Demandware Digital River e-commerce ecco Elastic Path EMU Australia Ethan Allen Fila Gaiam Godiva GoPro Gore HotTopic House of Fraser Hurley IBM IBM Smarter Commerce Jack Wolfskin Jewlery Television JoAnn Karstad kate spade Kiehl's L'Oreal Labelux Lacoste Lancome Land's End Liebeskind Life is Good London Drugs Lush Fresh M. Gemi M&S Marc O'Polo Matrix Commerce mergers mergers and acquisitions Michael Hill Micheal's mothercare Mountain Hard Wear NewBalance Nine West OVS Pacsun Panasonic Pandora PartyCity Pentland Perry Ellis Picard Pier1 Imports Poppin Puma Quicksilver r Samsonite Reitmans Rituals Rockport Roots S.Olive Scotch & Soda Shopify Skis.com Skullcandy Sleepys Solstice Sorel Space.NK Speedo Stoenwall Kitchen Tory Burch Traeger Trina Turk True Religion UGG Urban Decay Vibram Vineyard Vines analysis BREXIT CoIT CoIT and the New CSuite Corporate Digital Divide Digital Divide Digital privacy Digital safety Next Gen Customer Experience Next Gen CXP PESTEL Technology Optimization Christian right Domestic gun violence gun violence Hate speech Hollywood Violence Hollywood’s influence Homophobia Islamic terrorism Islamic Terrrism Isolationism of 2nd generation Muslims jobs Lack of jobs Mental health coverage orlando Personal Log Pulse radical islamic terror religious right society Video game violence Cloud suites Oracle DemandCaster manufacturing Manufacturing Cloud Microsoft Dynamics AX MPS Plex Plex Systems s&op supply chain supply chain orchestration supply chain planning suppy chain management co creation co innovation Consumerization of IT design phase design thinking disrputing digital Enterprise Business Apps Enterprise Business Apps Vendors Infor Infor Digital board room C-Suite Chief Collaboration Officer early adopters future future of business Futurist Futurist framework enterprise mobile Enterprise Mobile Management mobile Mobile Biz mobile device management Mobile Enterprise mobile experience Mobile Management Mobile OS Mobile Security Mobile strategy Mobility Samsung Samsung Galaxy Samsung Galaxy Note7 alibaba Apple Augmented Humanity Baidu Facebook Google QQ recommendation engines sina tabao Tuesday's Tip Yahoo! Yandex @msignite Adobe Marketing Club alliances data models Marketing Cloud MIcroosft Cortana Analytics Suite Microsoft Azure Microsoft Dynamics 365 Microsoft Ignite partners partnerships SalesForce.com Shantanu Narayen 3D Printing adaptive cyber security anticipatory analytics API Management API Orchestration AstroChart Augemented Reality autonomous vehicles bio batteries communications platforms complex event processing crypto currencies data lakes digital monetization drones faceted search flexible displays fog computing IOT infrastructure IOT smart services Low code platforms Micro-services architecture mobile apps neural networks No code platforms Social Business stem cells Unified Communications universal digital identities Virtual agents virtual reality Wearables agile dev ops BPO business process outsourcing business trends Corporate Strategy Corporate Vision coworking spaces CSR Customer Success Management Data2Decisions demand driven networks digital ecosystem networks digital ethics enterprise strategy Gamification gig economy inclusion programs innovation centers job sharing robotic process automation sales by design situational awareness business impact business strategy Corporate Vision And Strategy Donald J Trump Economic Elections 2016 Environmental Legislative Political Societal Technological Washington DC Amazon EC2 Cisco Cloud options Cloud Security Data center DCIM hyperscale data centers IaaS infrastructure Infrastructure as a Service Microsoft Azure Services Platform open compute project Private Cloud Private clouds public cloud SDDC Trends Amazon.com cadence digital exhaust digital footprint immersive experiences orchestration of trust value exchange #Davos17 #Davos2017 #WEF17 #WEF2017 Dynamic Leadership leadership strategy 2017 adoption cause innovation meritocracy partner ecosystems Software Ecosystems software trends software vendors technology adoption technology budgets technology vendors user strategy value Vendor Selection VICEMAP #GCPNext #GoogleNext17 cost reduction enterprise class Google Apps Engine Google Cloud Platform Google Docs Google Drive GoogleNext @dhinchcliffe Dion Hinchcliffe e20 Enterprise 2.0 enterprise architecture Enterprise Irregulars Press Release robotic proces automation @ensono case study Constellation Academy Enterprise financial apps HCM HR HR Tech WorkDay #bigdata B2B E-commerce CEP channels cognitive reckoning collaboration context customer experience management Engagement Apps Personalization personalization at scale post sale Post sales service orchestrated engagement #FFComm17 ADP ASC606 force.com Force.com platform IFRS15 bitcoin Constellation ShortList™ synchronous ledgers dell Dell Boomi informatica integration Integration Platform As A Service iPaaS Jitterbit Mulesoft OptionEase SnapLogic Constellation Connected Enterprise Event Invitation Content Marketing context marketing data privacy demand generation #BT150 BT-150 Business Models Change Agents Chief Innovation Officer Constellation BT-150 Executive Profiles transformation life lessons thanks Thanksgiving Infinite Ambient Orchestration Research Report best practices C3 IOT cloud integration digital enterprise platforms indirect access lessons learned license policy Maintenance modernization Next Gen Apps next generation Next generation apps SAP SAP ERP SAP Fiori SAP Leonardo SAP User Group UK & Ireland SAUG SAUGSummit UKISUG Connect Uptake Software Assassin's Creed Free Will Ghost In The Shell Person of Interest The Matrix #Davos18 #Davos2018 #sharedfutures #WEF18 #WEF2018 #ML autonomous database FedEx last-mile UJET Unacast UPS #MSBizApps 2018 analyst event app dev application development application extension and usability architecture business intelligence deployment options digital feedback loops human capital management Microsoft Biz Apps MIcrosoft Dynamics CRM MIcrosoft Dynamics ERP MIcrosoft Dynamics365 SasS #MWC18 5G Android Google Assistant Huawei intel Mobile World Congress NEC Qualcomm Samsung Galaxy S9 Amazon AR View MIT ethics growth jump start growth Bigchain DB Chain Core Ethereum Hyperledger Fabric IOTA LISK OpenChain Quorum. R3 Corda Ripple