Implementing Blockchain Technology in Project Management a Challenge?

By Sam

What is Blockchain?

Blockchain is often described as "a distributed, decentralized, public ledger," but that doesn't mean you are familiar with it.

It involves taking digital information (the block) and storing it within a public, decentralized database ("the chain"). The block contains critical information about a transaction and the parties involved. It also identifies what makes this transaction different from other transactions.

Anyone can view a block once it is added to a Blockchain solution. It does not reveal any personal information about transaction participants. Unique digital signatures are used to record them. Criminal hackers can hold a company's computer system hostage for ransom. (Pay us, or we'll wipe your database). They will often request bitcoin payment.

Anybody can see the contents of a Blockchain. Users can also connect to a Blockchain project managers network to see the latest version of each block. The same Blockchain can be accessed by many computers simultaneously (in bitcoin's case, millions), and the information is difficult to modify or alter. This provides a critical layer of security.

Perhaps you have heard that Blockchain will revolutionize how we work. This is a gross understatement. Many industries are already using blockchain technology to improve workflows and project management. We are still early in the adoption process, and more industries will adopt the technology as time passes.

Blockchain will be the backbone of every industry's operations one day. It will be the backbone for many companies operating systems. How will blockchain technology impact existing methods of project management? And why is it expected to be the new norm in the future?

What does Blockchain mean for other industries?

Blockchain technology's heart is a system that offers unparalleled transparency and security. Blockchain is often misunderstood as anonymous. All major projects use open public blockchains (blockchains), which allow users to view and scrutinize each transaction.

Companies also have private blockchains. They are not publically accessible but require permissions. All data is displayed transparently - but only those with access can see it. This transparency is vital for project management and oversight. Companies can use Blockchain to monitor all activities.

This solves three common issues in project management:

  • Corruption. Blockchain technology allows funds to be sent exactly as the overseer desires. Blockchain technology ensures that funds don't disappear and that bad actor can't manipulate them to move them around without leaving a clear audit trail.

  • The delegation of tasks. Communication and information sharing are problems in most projects. Blockchain can automate many processes. This eliminates the possibility of human error. Everyone knows what their responsibilities are for the project and can access them via the Blockchain.

  • Invoicing, Payments, and Tax. All transactions are securely stored on a blockchain ledger. The Blockchain can keep track of all taxes and make payments. Another beautiful feature of Blockchain is the ability to invoice using smart contracts. Once the contract parameters have been met, funds are placed in a smart contract.

Is it a challenge to implement blockchain technology in project management?

This is the answer: Blockchain technology can be very efficient when it is properly set up. A company must decide how each process works on the Blockchain. Invoicing, for example, is usually done using a trial and requires multiple authorizations. With Blockchain, this will need to be integrated into a smart contract so that it behaves as expected.

A functional blockchain will take time, considering the number of processes companies need to perform daily. It is, therefore, slow, meticulous, and methodical to implement it. It will dramatically improve workflows once it is in place. It also reduces the amount of work required by a company.

Implementing a blockchain can be expensive because it is still a poorly understood new technology. The rise of cryptocurrency trading, e.g., As cryptocurrency trading, e.g., Ethereum, has become more popular. Projects become more streamlined; it will be easier to get companies on board blockchain technology without too much hassle and cost.

Blockchain's Benefits for Project Management

Implementing blockchain technology can bring companies five main benefits.

1. Managing digital records

In most industries, record-keeping can be a difficult task. Much paperwork can be lost, altered, or incorrectly filled out. Hire blockchain project managers that will technology stops all these things from happening by storing all information on the Blockchain. None of the information can be altered or altered.

This is particularly useful for property deeds, legal documentation, and medical records. A blockchain protects the information. There is no need to be concerned about anything unexpected. All information is easily accessible to all who have the right access levels.

2. Exchanging digital assets

Payment barriers are a common problem in the world today. Cross-border transactions are especially vulnerable to these payment barriers. A European company will need to exchange its local currency at cost, then make an international payment at cost. This usually incurs a fee at the receiving end. These costs are usually built into the payment system, and most people don't know they exist.

This is true for both cross-border and internal transactions. Choosing a service that offers transparent terms for digital asset swaps is important. Currency, for example, has no hidden fees or moderate commissions. This allows people to know exactly what they are paying and how much.

Blockchains can now communicate with each other, allowing for payments across networks without any network fees. You might not even know you were charged network fees for blockchains. Blockchains operate without bureaucracy and are, therefore, borderless.

3. Validating and improving acceptable performance

Blockchain can automate many processes. You will be able to manage a project with less work. This also means blockchains are pre-programmed to validate decision-making processes, improving performance.

This is commonly known as streamlining processes. This is something that project managers strive for in real life but find extremely difficult to achieve without a system.

4. Building reputation systems

One of the major problems with current industry operations is that users have to believe in every part of the system. Blockchain gives users confidence in the system. They are assured of their safety throughout the entire process. Blockchain will make sure that Contractor A is paid only after they have completed Task C.

5. Smart contracts: Execute smart contracts

Smart contracts, a continuation of the previous point, allow transparency and security to be integral parts of reputation systems. Once the contract is locked in, neither party can cancel it. Both parties receive equal protection. Smart contracts are not subject to disputes over payment or work. Once all conditions are met, the thresholds will be applied to complete the contract.

Blockchain is gaining widespread attention, and some early adopters are reaping the benefits. My organization, APQC, discovered that 66% of organizations were aware of Blockchain in 2019. However, that number has risen to 80% within a year. However, most organizations are still in the initial stages of blockchain adoption.

Only 12% of respondents report being interested in blockchain technology or using it as a service. What's stopping 34% of participants from exploring Blockchain?

These are the challenges that blockchain organizations face

1. In the Adoption

Blockchains are an ecosystem that requires widespread adoption to function effectively. A company must adopt a blockchain network to track and trace supply chain management items. It would also require its suppliers to do the same. APQC found that 29% of organizations have either fully or partially implemented Blockchain. Blockchains' effectiveness and scalability will be limited if they are not widely adopted.

There are many reasons to believe that blockchain adoption will increase. Blockchain is becoming more popular among organizations. They are forming working groups that collaborate with Blockchain to solve common problems and find solutions that benefit all without disclosing proprietary information.

Many large pharmaceutical companies joined Deloitte in forming the Blockchain for Clinical Supply Chain Industry Working Group, which was formed before the COVID-19 pandemic. The group created an app called the kitchen in collaboration with LedgerDomain, a blockchain developer. The application, called the kitchen, allows companies to track the shipment of packaged medicine. This secures the supply chain, reduces dependence on paper logs, and protects medical trial data.

2. Skills gap

Blockchain technology is still a new technology. The skills required to use and develop it are scarce that 49% of participants in the research consider this a major challenge. There is a lot of competition in the market for blockchain skills, and it has been for a while. Blockchain Council reports that the demand for blockchain engineers increased by more than 500% in 2019, with the base salary for blockchain developers increasing. Organizations are concerned about adopting blockchain technology and integrating it into legacy systems because of the difficulty and expense involved in talent acquisition.

Blockchain as a Service (BaaS) is one way to address the skills gap. It allows organizations to reap the rewards of Blockchain without needing to invest in technical talent.

This model has already helped to reduce the skill gap for other technologies, such as robotic process automation (RPA). Instead of creating bots or writing code internally, organizations can now turn to multiple vendors with the experience to implement RPA and tailor it to their needs. To reap the benefits of RPA, users don't have to know much about the technology. Users will also need to know how to execute the smart contract (which uses Blockchain to execute actions once terms are met automatically). However, they won't need to have specialized knowledge about distributed ledgers. BaaS could help to reduce the need for blockchain skills.

3. Users can trust each other.

The third obstacle to widespread implementation is the lack of trust among users. This problem is a two-way street. Organizations might not be able to trust the security of blockchain technology. Still, they may not be able to trust others on the network.

Blockchain transactions are considered secure, private, and verified. The Blockchain is decentralized, so there is no central authority to verify and validate transactions. Consensus algorithms are the core of any blockchain network. They drive consensus about the current status of the state of the distributed ledger across the network. This ensures that each new block is the only version of the truth that all nodes agree upon. Business leaders have trusted private blockchains because there are no unknown users.

Platforms such as TradeLens, a global logistics network created by Maersk (using the IBM Blockchain Platform), demonstrate how trust can be built between users. It is a platform that allows peers and rivals to work together to solve common problems. TradeLens' private Blockchain is not anonymous. The network members are called "Trust Anchors" and have cryptographic identities. TradeLens employs a permissioned Blockchain to provide immutability, privacy, and traceability for shipping documents.

4. Financial resources

Participants in APQC's research found that the fourth barrier to the widespread adoption of blockchain technology is a lack of financial resources. Blockchain implementation isn't easy. Many organizations have been hit hard by the disruption and pandemic of 2020. Another lesson from the pandemic was that IT departments, in particular, can adapt faster than they thought.

This barrier is caused by organizations' lack of understanding and awareness of blockchain technology. As new technologies become more widely known, so does the ability to make a business case for adoption. Blockchain will also be able to do this, provided the advocates of blockchain focus on building a business case that shows how the technology's benefits will outweigh the costs involved in implementation.

5. Blockchain Interoperability

With more organizations adopting Blockchain, it is becoming easier for them to create their systems. These different blockchains don't work together, and no standard will allow them to communicate with one another.

6. Lack of Technology Partners

Blockchain is an emerging technology. As we have already explained, many people still don't know much about it. It is important to note that there is no clear roadmap for how Blockchain will be implemented in organizations.

Not surprisingly, there is much more information than is useful due to the lack of clear standards. However, efforts are being made to make the process easier for enterprise blockchain users. Before you jump, it is important to identify the right technology partner who will guide you through this maze.

But there is another problem. How can you tell if you have found the right partner and who is best? This is a significant problem in blockchain implementation. An organization can find the best roadmap for blockchain implementation by working with the right partner.

There are currently umbrella projects such as Hyperledger, Enterprise Ethereum Alliance, and blockchain platforms like Corda and Microsoft Azure enterprises. These private platforms are primarily for blockchain-focused organizations.

Realistically, the cost of blockchain implementation is prohibitive. It is prudent to look for a partner who can help you implement the technology. Even though there are many well-known partners, getting access to their platforms can sometimes be quite expensive. The existing platforms are becoming increasingly full, so they may soon become overcrowded. Given the high demand, obtaining customized services in such an environment is difficult.

7. Security issues

There are many challenges to deploying Blockchain. Blockchain's resilience to cyberattacks is one of its greatest selling points.

However, there are many risks to the blockchain sector from bad actors. Notably, hackers are being exposed to parts of the blockchain industry due to the speed at which the technology is being implemented.

Technology is not perfect. There are many vulnerabilities due to insecure defenses and immature processes. The chances of someone falling for phishing scams are high, for example. A lack of standards for development means that malware is often lurking in the industry. These vulnerabilities, along with implementation exploits and technology vulnerabilities, present a serious threat to users who are not aware.

Users are constantly looking for private blockchain networks to avoid security issues. These networks are not accessible to the general public and require authentication before they can be accessed. Various enterprise blockchain projects use these platforms. Private networks are not as autonomous as public ones. This is because the "presiding node" tends to restrict what participants can do. This restricts users' ability to use the platform how they want.

8. The difficulty of transitioning from legacy networks

The transitioning phase to Blockchain from legacy networks is another challenge. Most of the things Blockchain is trying to change were already in operation before Blockchain came along.

The industries delivered services and products to customers, despite any difficulties. The industries were particularly used to the legacy structures and their standards.

This is a major challenge when implementing Blockchain, especially in the supply chain space. The people working in these industries are well-versed in the existing legacy structures. They will not be able to introduce new structures. The financial sector is one of the most vulnerable sectors to the blockchain revolution. The sector has created structures to guide service delivery.

VISA is used for trans-border transactions. Banks use SWIFT and various other methods to move cash in bulk. These structures are so well-established that it will be difficult to create new ones. This is what Blockchain is doing, which is quite interesting. This technology fundamentally changes the nature of operations in every way imaginable.

As we have discussed previously, legacy systems are so deeply embedded in the industry that people may be reluctant to experiment with new technologies. People in the financial sector could be resistant to blockchain technology adoption because they don't know enough about it and fear it could lead to massive job losses as some jobs become redundant.

9. The increasing expense of implementing blockchain

The cost of the entire process is one of the biggest challenges in blockchain implementation. Most existing blockchain platforms are inefficient in terms of speed and energy consumption. While the bitcoin network does only three to five transactions per second, it consumes a lot of energy.

Ethereum, on the other hand, can handle up to 15 transactions per minute. These numbers are not as good as VISA's 1,667 transactions per second. Enterprise blockchain platforms work similarly to bitcoin and other cryptocurrency networks. The bitcoin network was the first blockchain-based technology to be discovered.

However, enterprise blockchain platforms have made significant progress in terms of transaction speeds. Hyperledger Fabric, for instance, claims speeds up to 3.500 TPS. This is almost twice the speed of a VISA. Hyperledger Fabric is incompatible with proof-of-work platforms such as bitcoin and therefore consumes less power.

However, this does not mean that implementation is easy. First, it is necessary to find the right people. Additionally, software requirements can be quite expensive. This includes joining the consortium that pushes enterprise blockchain projects, which is a private sector. Let's now look at the problems and solutions to Blockchain in the next segment.

10. Scalability at a low level

The problem of the inability to service many users is the challenge facing blockchain technology and enterprise blockchain technology.

Companies that can scale up their enterprise blockchain platforms and reap the benefits of increased enterprise blockchain demand will be well served. The technology must handle sufficient throughput to be wide range adopted by mainstream organizations. There are many ongoing projects to explore ways enterprise platforms can maintain high transaction speeds even with many users.

Enterprises with a lot of customers will need to think about scaling technology. Unfortunately, many of the existing enterprise blockchain networks are not yet tested to this extent. This is one of the biggest blockchain implementation challenges currently. There is no evidence that large banks use an enterprise blockchain network such as Corda or Hyperledger Fabric to determine success rates. Dedicated blockchain project managers must demonstrate that their platforms can be scaled by using them in practice. Let's examine Blockchain's problems and solutions in the next segment.

Blockchain interoperability is the ability to see, share and access information across multiple blockchain networks without a central authority or intermediary. Mass adoption can be made difficult by a lack of interoperability.

Interoperability with Blockchain is crucial in a post-pandemic environment that requires collaboration between functions, suppliers, and customers. Interoperability for Blockchain is essential for organizations to get the best value from their investments. There has been an increase in interoperability projects over the last year that bridge the gap between blockchains. Many of these interoperability projects are designed to connect private networks or public Blockchains. These systems will ultimately be more useful to business leaders than prior approaches focused on public blockchains and cryptocurrency-related tools.

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Blockchain and project management go hand-in-hand. It's only a matter of time before every industry becomes 100% blockchain-reliant. There will be a steep learning curve until then. Blockchain technology will reduce costs, improve workflows, and propel humanity into the digital age.

You now better understand the risks involved in deploying top blockchain project managers. This will help you make an informed decision about whether or not you want to use it. Blockchain technology will be the future, even though there are still some issues with blockchain technology. In many cases, companies already use private blockchain technology to address the problems.

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