The frenzy around blockchain is slowly dying down and the technology is now moving into a new phase where organizations are actively exploring suitable use cases and deploying them. But deploying a blockchain project comes with its fair share of challenges.
A new joint report by the World Economic Forum and Accenture Research on blockchain deployments, identified five main obstacles and challenges faced by blockchain projects.
1. Blockchain hype
Despite the promising potential of blockchain to enable the seamless transformation of business processes, the hype around the technology is still a major challenge. Simply put, organizations are setting unrealistic expectations for blockchain. The report reveals a striking difference between expected returns on investment (ROI) and realized returns. On average, the surveyed respondents expected a 24% ROI on their blockchain projects, but realized only a 10% return.
Some companies also launch blockchain projects to improve their brand. According to the findings, 87% of respondents reported seeing a significant increase in their brand equity upon delivering a blockchain solution. While having an enthusiasm for blockchain is sensible, it is important for companies to carefully evaluate the possibility of using other technologies to streamline processes more effectively and efficiently.
2. Proof of concept development
The proof of concept is one of the most critical stages in blockchain implementation. It enables the company to demonstrate that the solution is financially viable. Tech evangelists rarely involve relevant parties in the proof of concept process. But that can be a real challenge as lack of stakeholder buy-in can result in problems, particularly when moving to the production stage. Companies should make efforts to ensure stakeholders understand the technology and its benefits. Some of the players include the leadership team, employees as well as business partners.
3. Difficulty collaborating with others
Blockchain projects cannot work in silos so it’s worth considering to collaborate with partners that have experience with implementing some form of blockchain. By working together with other organizations, companies can set standards and develop infrastructure for effective deployment of blockchain. Perhaps you could consider joining one of the many blockchain consortia that have emerged to promote blockchain adoption in various industries.
4. Complex legacy systems
Another survey result shows some 87% of respondents acknowledged that implementing blockchain as part of an existing digital transformation is extremely challenging. This problem is compounded in cases where the company has already spent a substantial amount of its finances on legacy technology.
In order to implement blockchain projects successfully, companies should follow a pragmatic approach. This strategy involves understanding and evaluating the long-term benefits that come with implementing such blockchain solutions.
5. Uncertainty exits
There’s still skepticism around the world that blockchain is not yet ready for production due to scalability issues and other limitations. Of those firms that deployed blockchain projects, more than half of the respondents said they had no confidence in the project to deliver positive returns. In addition, 38% had not developed a business case before investing in the technology.
These results signal that many companies have doubts about implementing blockchain projects. However, it is important to note that blockchain is still in its nascent stages and there will be limitations as a result. Some of the challenges that are not yet fully addressed include speed, efficiency, and security.
With careful preparation, strategic implementation, and honest evaluation, blockchain technology can be seamlessly integrated and painlessly adopted by any company—large and small.