As a teenager, I used to obsessively read SSD reviews on AnandTech back when the technology was still new, unknown, and prohibitively expensive. Having no formal electrical engineering degree, the reviews were hard to get through at first, but after a few years I kind of understood most of the concepts and the technology (since mostly forgotten). But the truth is, all of that nerdery wasn't needed to exploit the benefits of SSDs. Sure, read/write times matter, but should you also care about the quantum tunneling process NAND goes through, or the tunnel oxide degradation, or maybe the JEDEC endurance standards? I would hope not! A technology graduates to a product when its benefits can be understood by many. Do you really need to know how your car operates under the hood in order to be able to drive it?
The same analogy can be extended to new technologies. You don't necessarily need to understand the stack on a technical level (your company has great engineers for that, remember?). As a non-technical person, you should be asking the right questions on how it will impact your business. One such new technology is the blockchain (aka distributed ledger). Assuming you're working with a technical team who can do the implementation, here are some other questions you should be thinking about internally:
- What kind of impact would the elimination (or most likely reduction) of middlemen have on your organizations risk profiles?
- Is your organization ready to invest in blockchain tech, even if the solution is 5-10 years away? As a reminder, organizations that won on the internet were the result of cumulative advantage. Money spent on failed R&D projects might provide unexpected results many years ahead (many scientific breakthroughs occurred through by serendipity). Also, not everything can be measured on a spreadsheet, so do not forget the intangibles that get generated as a result of failed projects.
- What are the second and third order effects of updating your organizations plumbing? Everybody wants transactions to settle immediately, but would kind of consequences would that entail?
- Do you have the internal talent to undergo such an effort or would you have to hire external talent? Despite working at a consultancy firm, I think it's very important to have the internal talent to support the transition. Even if you hire outside help to implement the system, you should make sure you've got the internal talent to maintain it, especially since blockchain tech is relatively new as far as systems go.
- How will it impact your firms' competitive advantage? Apple's competitive advantage is creating beautiful hardware and seemingly less beautiful software, so upgrading its IT systems might not be a priority. Google, on the other hand, is a data company, which makes money through advertising, and increasingly, artificial intelligence. For a company that might be in the business of manufacturing autonomous cars in the next few decades, decentralized autonomous organizations might be an investment in its best interest. The same can be said about banks, which are being unbundled by startups. A bank is different from a startup because it has scale, while a startup has the innovation. Scale benefits from decreased costs, which a blockchain system can bring with it.
- What will a successful implementation look like? Before you go around hiring blockchain specialists and consultants, you should have a semblance of a plan for the endgame. You might be wrong, but you should at least plan to be right (and course-correct as you go). If you're a bank, you might want a system that, at its core, is designed to limit regulatory risk. If you're a medical company, your goal might to limit regulatory risk but also to design the system with privacy at the forefront. The point is every company is different, and there system you put place will most likely end up being proprietary.
- Talk with your stakeholders. Unless you are a private company and exist in a vacuum (which even then, you probably have stakeholders), your stakeholders will probably be effected if your organizations risk profiles change as a result of adoption of a new tech. If you are a wealth management company and manage people's money, you probably have LPs to consider. How would they feel about you spending money on adopting new tech XYZ, especially if it ends up reducing operational risk and saving their money? What about the auditors - would they increase or reduce audit fees? Can they audit your new system? Would regulators even support such a system rewrite? Think about your stakeholders, who in some businesses, might even be willing to subsidize your technological investment since it's in their best economic interest.
- Forget the hype. Part of Steve Job's magic and Apple's resultant success was a very simple concept: under-promise and over-deliver. Too many products end up doing exactly the opposite, which doesn't make them a failure relative to competing products, but does make them a failure compared to what they set out to accomplish. This can be ruinous for a company/technology, because if the company loses hope, employees tend to leave for greener pastures and the company ends up melting away. That's why it's important to compare the technology on a relative scale rather than an idealistic one. How does it compare to existing solutions? Not how does it compare to what it set out to be. In very rare cases does a technology overhype and over-deliver.
- Keep an open mind. As is often the case with new technology, everybody has an idea for how it should be implemented, and no idea is right or wrong. The Internet is an open standard, but the doors to it all have a different doorknob. Google Chrome, Internet Explorer, Firefox, Safari, Opera (I can go on) all have a certain vision for how you should be browsing. Sure, some of them are dominant, but they all steal implementation details from each other. No solution will be perfect, so always be skeptical of those masquerading to be. Oh, and don't forget, good ideas often look like bad ideas initially.
The technical problems are hard to solve, but many smart people are already figuring them out. The last thing you want to do is cram a shiny, new blockchain system because it is a shiny, new blockchain system. Ask the right questions, think about the opportunity costs, the repercussions, and finally, if you can even pull off such a transition.
Note: All thoughts are mine and do not reflect those of my employer.