Challenges to adoption of Blockchain in the Enterprise

On one occasion, after I had finished a demo on Hyperledger, a guy from the audience walked up to me and asked (I am paraphrasing), “you are saying that, in an ideal Blockchain (consortium) network, every participant in the value chain, should be on-boarded; and you want us to first pay for the entire solution and then go from door to door asking everyone to use it?”

Of course, there are valid responses to this rhetorical question, but the point is that, there are non-technical challenges to Enterprise adoption of Blockchain that we enthusiasts sometimes overlook.

Here are my top five picks:

1. Incentive: In the short run, it is not easy to articulate the benefits to all the participants of your Blockchain network, especially if you are concerned with consortium Blockchain. For instance, in the case of food tracking, transparency in order tracking may be high on the wish-list of the end consumer of the item who wants to know every detail about the product, but can be a difficult proposition for the freight partner, who suddenly has to be more scrupulous and may have to spend more money to adhere to regulatory requirements. [In the long run however they will benefit from an improved reputation, which they can cash-in to charge a premium]
2. Laggards: Not all stakeholders are eager to adopt a new technology, especially if the old one is still working. And then there will also be partners unable to adjust to the new paradigm of doing business, even if it doesn’t cost anything. For instance, a ground handler comfortable in just picking the parcel and dumping it in the truck may be careless to scan every label in every parcel manually, or the warehouse might be too financially constrained to integrate a new solution in their system.
3. Internal buy-ins: Corporates are rife with politics. If you have ever tried selling your idea internally, you would know. The push has to come from the top, else you will be explaining “why Blockchain” in vain.
4. Business case: It is not easy to make a Business case for Blockchain. The technology has a lot of promise, but it is still at an early stage of evolution. Business needs a quantitative measure of the costs and the benefits. You will also need to figure out at least a rough implementation plan for Integrating a Blockchain application to an over-complex, sub-optimal IT landscape. There are many uncertainties around operating a Blockchain, and if you are using a consortium Blockchain, it is not just about how you manage your application; you have to coordinate with your business partners, which is extremely resource-intensive.
5. Talent: This is the least of the concern, but nonetheless be aware that the talent pool for delivering a production-grade enterprise Blockchain solution is not abundant. People are still tinkering and experimenting. Blockchain allows people from diverse background to find a niche to contribute, but there are specific developer requirements depending upon your architecture and framework, which may not be abundantly found in the current resource pool.

If you are working in Blockchain space- incubating a project, tinkering with it, validating use-cases or simply talking about it, you may have identified other practical challenges that Blockchain needs to overcome. Feel invited to share your list.