Strategies for Implementing Blockchain Technology in Enterprise Solutions
Once developed for maintaining digital currency transactions transparency and security, blockchain has made a splash in the entire tech world.
Using decentralization and immutability principles, the technology allows for converting complex and multi-faceted environments into well-synchronized and manageable systems that work like a charm.
Today, blockchain has proved to be effective not only for digital currency systems operation but also for multiple other industries such as healthcare and social services, logistics and transportation, manufacturing, education, real estate, finance, etc.
With all the merits and perks it offers, though, the technology still entails implementation challenges. Wonder how to use the best of the blockchain potential with the fewest difficulties? If so, consider the implementation strategies we’ve outlined below.
How Do Enterprise Solutions Benefit From Blockchain?
Blockchain or distributed ledger technology (DLT) transforms the way businesses transact, exchange data, manage their inventories, and coordinate their internal systems. Already used by such global giants as IBM, Pfizer, AIG, Unilever, Walmart, and Siemens, technology can become a game changer for multiple other companies.
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In fact, today, over 80% of enterprises already use the technology to some extent to bring their business processes and systems to yet another level.
Many business people can save money on project development and design by using templates such as TemplateMonster and its counterparts, but they don't want to save money on implementing Blockchain into their processes.
The approach tends to grow, and the use of DLT for business uses will further expand.
The main purpose of DLT for enterprise solutions is to ensure a decentralized and secure way of storing and sharing information, transactions, and assets.
The technology creates a transparent and immutable ledger to be shared across a computer network, thus, eliminating the need for a centralized authority or intermediary.
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Here are the major benefits blockchain offers to enterprises:
Using advanced cryptographic algorithms, DLT allows businesses to streamline their operations, reduce the risk of fraud and cyber-attacks, and prevent unauthorized access.
Once recorded and verified in the blockchain system, transactions and data can be neither modified nor deleted, thus, ensuring better sensitive data security.
DLT enables all stakeholders involved in transactions to access the same information in a real-time format making it easier to track those transactions, enhancing accountability, and ensuring transparency.
DLT automates complex business processes to facilitate and expedite multiple transactions and eliminate the impact of intermediaries. Besides, blockchain unlocks the opportunities to create new business models and operating systems that are better customized and more effective in current business realia.
With DLT, enterprises can trace the entire product life cycle, from raw materials supply through production to delivery. This allows for more efficient and functional supply chain management and prevents counterfeits or fakes.
Thanks to control and management decentralization and well-organized processes and interactions inside the system, blockchain helps business owners optimize budgets and cut down costs.
Within DLT-based systems, parties can transact directly, without mediators. They use smart contracts that automatically enforce the agreement terms minimizing the risks and improving business operations efficiency.
All in all, when used for enterprise solutions, blockchain technology is aimed at scaling up operational security and efficiency while driving innovation and growth.
Major Hurdles in Blockchain Deployment in Enterprise Solutions
Without a doubt, DLT has huge potential to revolutionize the way businesses operate by neutralizing the risks and difficulties of complex systems. However, as a relatively new technology, it still has areas that require improvement.
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Yet, forewarned is forearmed. Hence, before we look into how to approach blockchain implementation in enterprise solutions, let’s consider the main roadblocks you might stumble over when deploying the technology:
Talent shortage: Though launched in 2008, blockchain is not as widespread as many other techs. The lack of adoption results in the lack of experienced DLT specialists who can ensure smooth turnkey blockchain integration to systems in your company.
Regulatory uncertainty: DLT legal framework is still evolving. Continuous changes and updates make it unclear for companies how regulators will treat blockchain networks in the future.
Scalability: It’s one of the biggest pitfalls in the DLT industry for now. While other networks can process hundreds of transactions per second, DLT platforms can only manage dozens at their best. As such, the current blockchain is not scalable enough for scenarios with a large number of users.
Security threats: Though a highly secure technology overall, DLT is not bulletproof. There have been cases of vulnerability to hacker attacks. At this point, proper implementation of the technology is vital since incorrect deployment might result in sensitive data exposure to theft.
Interoperability issues: With a variety of DLT platforms and protocols available, not all of them are compatible, thus, making it difficult for enterprises to integrate the technology. Likewise, existing company systems might be also different, which further complicates interactions within a single network. Mostly, this happens due to the lack of a unified standard for the technology.
Tactic for Blockchain Implementation in Enterprise Solutions
While some organizations are still reluctant to use distributed ledger technology (DLT), others move forward supported by blockchain and seek to get the most out of it.
One way or another, DLT is a complex solution that requires careful planning and execution. And a lot depends on how you implement it from the start. So, let’s consider the steps you need to take to integrate blockchain into your business solutions the right way.
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1. Determine Your Use Case
The starting point is to identify your organization’s prime problems and needs since using DL for each and every aspect doesn’t make sense. First, you should specify the issues you have and how blockchain development services can help you address them.
If you are new to DLT, it might be reasonable to start with a smaller trial project to get a chance to assess the results without compromising the whole system’s functionality. Thus, you’ll get a chance to observe the technology in action, explore how it works for your business solution, and detect the weaknesses and pitfalls you might encounter.
By starting small, you’ll get ready for full-scale implementation and will be able to prepare for it with diligence.
2. Get Your Proof of Concept (POC)
Since DLT is a technology, it requires software to be deployed in and further functions as a part of your enterprise solution. Hence, the next step is to verify that the blockchain will be viable in your system. This is what the process of getting a proof of concept is about.
To achieve reliable and true-to-life results, the POC procedure should embrace the following:
Creating a set of instructions to describe the project;
Developing a software prototype to analyze its design and applicability;
Testing that prototype to evaluate its efficiency and figure out the weak points and areas for improvement;
Analyzing the product test version to nail down its best features.
3. Decide Upon a Blockchain Type
Basically, your choice will fall between private and public DLT. You should pick a technology that will be the most beneficial for your enterprise.
As the name suggests, public blockchain implies open network access for anyone. It incites new users to join the system to keep it flexible and active.
The use of a private DLT, on the other hand, is limited to trusted participants only. They have the right to control software and introduce changes. Besides, this type is compatible with other DLT networks to form more diverse and complex systems.
4. Pick a Blockchain Platform
Now, you’ve come to make a strategic decision since the DLT platform you are going to choose for your project should fit your business solution to a tee, both technically and from the budget point of view. Before making a final choice, it’s recommended that you do the following:
Find out as much as you can about blockchain platforms available and compare them;
Ensure that all stakeholders gain a general vision of this technology;
Work out a comprehensive strategy for DLT use;
Consult with regulators to clarify any related legal and regulatory aspects.
The most popular platforms you can come across today are Ethereum, Quorum, Hyperledger Fabric, Stellar, Open Chain, Corda, and Multichain.
5. Choose an Optimal Consensus Protocol
DLT ensures the creation of a decentralized network using a consensus mechanism, ensuring the ultimate data protection, aligned work of multiple connected devices, and keeping hacking attacks at bay.
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The right consensus protocol will maintain smooth and hassle-free network functioning. Several most important protocols include the following:
Proof of Stake;
Delegated Proof of Stake;
Proof of Work;
Proof of Weight;
Byzantine Fault Tolerance.
6. Develop Smart Contracts
Stored on the blockchain, self-executing contracts eliminate the need for trusted intermediaries for the parties to make an agreement, thus greatly optimizing the whole process through automation. This results in quick, transparent, and secure direct transactions between all the parties involved in the network.
To streamline your DLT network and make it efficient to the max, you should use this tool and tailor it to your specific business needs.
7. Establish an Ecosystem
Blockchain technology brings the best results when fueled by stakeholders. Initially, it’s designed for complex networks with multiple parties involved. So, to make your DLT project a success, you should implement it as an ecosystem with a supportive community of stakeholders governing the network and ready to share related costs and responsibilities.
Aware of the system's potential, they’ll drive improvements, upgrades, and scale-up. Follow these steps to build a well-organized ecosystem for your DLT project:
Create a blockchain with fewer participants in it yet open to further expansion;
Investigate other DLT deployments across the industry;
Analyze the partnership potential by exploring the competition;
Search for DLT communities to join.
Obviously enough, blockchain technology has not reached its full potential yet. As such, it’s something that offers excellent perspectives and opportunities for the future. So, you should strive to embrace DLT today to lay a solid base for further achievements and go ahead of your competitors.
Speaking of DLT deployment beyond digital currency industries, it’s certainly a challenging task. However, with a due degree of planning and the right team of skilled developers, this task is feasible and will bring great results in many cases.