Managing identity-challenging technology: a framework. A multiple case study on DLT in the financial services industry

Bitcoin, blockchain, Blockchain, Business models, digital transformation, Distributed Ledger Technologie (DLT)

Managing identity-challenging technology: a framework. A multiple case study on DLT in the financial services industry. By Maxime Lubbers.

Two-thirds of organizations say that innovation is crucial to survival. However, less than a third say they are actually successfully innovating to drive growth and increase revenue (Trapp, 2017). Especially established organizations suffer from existing organizational structures when dealing with innovation (Chang et al., 2012; Tripsas & Gavetti, 2000). Besides the structure of the firm, the nature of the firm also influences its ability to innovate and adapt to change. For example, financial firms, that are risk-averse in nature, experience more difficulty than start-ups while innovating. It is even mentioned that renewing banks is a mission impossible (Betlem, 2018). Does this mean that it is impossible for banks and other financial institutions to innovate? No. However, as technology changes the way we do things, incumbents often focus too much on understanding the novel technology while neglecting the impact it has on the organization itself (Cámison & Villar-López, 2014).

Understanding the impact of innovation on identity challenges 

Organizations should question how innovations affect the mission and core business of the firm. Are financial firms, as we know them, still relevant in the future? How should and could they re-establish products and services to innovate and remain relevant in their changing ecosystem? When an innovation is also impacting the mission of a firm and thus challenging the organization’s identity, managing the innovation becomes more complex (Tripsas, 2009). Different types of innovation require distinct types of management and organizational capabilities (Verganti, 2008). Understanding whether an innovation is identity challenging or not is therefore crucial (Tripsas, 2009). Innovation is by its nature about novelty and change, while identity is rooted in stability and endurance. This implies a fundamental tension is created.

How could organizations manage the tension created by an identity challenging technology?

An example of an identity challenging technology is distributed ledger technology (DLT). DLT has the potential to disrupt the mission and core business of (financial) firms, as we know them. Existing firms can largely benefit from novel and identity challenging technologies. Unfortunately, the established capabilities of the firms often negatively influence the ability of the firm to respond to a technological change (Ulrich & Smallwood, 2004). In addition, even though it is known for radical innovations to create new dominant designs in which a new set of core capabilities are needed (Chang et al., 2012) its relation to organizational identity is left out. To be able to contribute to existing literature and to support managers in transforming their organizations the following question structured my graduate research: “How can established organizations successfully manage the implementation of identity challenging technology?”

The research question has directed this study towards the development of a grounded framework (see figure 1) that scholars and managers can use to increase their ability to cope with identity challenging technologies. In addition, two key factors that positively influence the ability of a firm to successfully go through the phases of the grounded framework are identified (see figure 2). This novel perspective towards capability development, positively influences the way organizations develop and adapt them to manage an identity challenging technology. If a firm does not incorporate the impact of the identity-challenging characteristic of the technology this can be problematic and result in costly and ineffective innovation practices. The findings of this study emphasize that established firms must do more than grasp novel technologies: they need to reconsider the context in which their firm is operating and developing capabilities.

Figure 1. Grounded framework “Successful management of Identity Challenging Technology”

Two identified key factors

As mentioned, I found two key factors that influence a firm’s ability to successfully walk through the five phases identified in the grounded framework: strategic alignment and absorptive capacity. Absorptive capacity is the firm’s ability to recognize the value of new information, integrate it, and apply to commercial ends. A crucial aspect of absorptive capacity is the firm’s ability to transform its structure, systems and behavior. Strategic innovation alignment indicates that both strategic and executive levels within the organization understand and support each other on the identity-challenging aspect of the innovation. Unfortunately, due to the risk-averse nature of financial firms, most of them did not have the capability to understand the identity challenging aspect that is required to scope the impact of DLT properly. To support managers in understanding where their company is at and how they can successfully manage DLT the two key factors are visualized in the matrix visible in figure 2. The different cases made visible in the matrix are independent organizations in the financial services industry that participated in my research. I placed them in the matrix based on multiple in-depth interviews that I analyzed.

Figure 2. Strategic innovation alignment and absorptive capacity matrix.

Enabling & developing organizational capabilities

Beyond the two key factors that are required for firms to successfully manage DLT, it should be stressed that the different phases require specific organizational capabilities. If a firm invests in an innovation lab, but moves existing hires into a novel context, it should be questioned whether these employees understand why they are moved there. The same accounts for innovating within core business processes. It has shown that the more autonomous an innovation lab is, the more productive the innovation practices and their implementations become. Considering phase 4, it becomes clear that firms need to understand whether DLT is a fitting technological enabler for their business problems. By solely developing DLT related capabilities a business problem will not come to the surface and will thus not be solved.

If firms do not reconsider their organizational design, including governance structure and systems, it is impossible to develop a strategy and capabilities that facilitate the firm in innovating and remaining relevant in the (near) future. If an established firm can create a new context in which it facilitates its business and creates its customer value it becomes possible to compete with fintechs. They might even include them into their ecosystem. A new context facilitates new ways of thinking; doing and innovating which at the same time provides a fruitful perspective on capability development.

Personal note on DLT in the financial services industry

As the financial services industry is by nature risk-averse and highly regulated it is not the easiest sector to experiment with emerging technologies. Let alone implementing them. However, as customers are getting used to seamless, mobile and individually optimized services, financial firms need to act and innovate. Innovation is essential for survival as fin-techs and other financial start-ups are offering extremely competitive services. Solely focusing on emerging and identity challenging technology such as DLT is however a major pitfall. Many firms focus on understanding the ins and outs of novel and trendy technologies, however forgetting that the technology should be used as a means to an end. Technology is not an end, it is a means that could optimize multiple administrative and business processes.

Firms should wary that they focus on the business problems they need to solve for their customers.

Keeping up to date with technological trends is important, understanding what business problems are present is however key. Without a thorough understanding of the source of the problem, no technology will support a financial firm in creating that smooth and seamless experience the customer is already expecting.

Sources

  • Betlem, R. (2018). Bestaande Bank Vernieuwen is Mission Impossible. Retrieved June 6, 64 2018. From: https://fd.nl/beurs/1257047/bestaande-bank-vernieuwen-is-missionimpossible.
  • Camisón, C., & Villar-López, A. (2014). Organizational innovation as an enabler of technological innovation capabilities and firm performance. Journal of business research, 67(1), 2891-2902.
  • Chang, Y. C., Chang, H. T., Chi, H. R., Chen, M. H., & Deng, L. L. (2012). How do established firms improve radical innovation performance? The organizational capabilities view. Technovation32(7-8), 441-451.
  • Trapp, R. (2017). Why Business Leaders Continue to Struggle with Innovation. Retrieved June 3, 2018. From: https://www.forbes.com/sites/rogertrapp/2017/04/10/why business-leaders-continue-to-struggle-with-innovation/#4a153f3842de.
  • Tripsas, M., & Gavetti, G. (2000). Capabilities, cognition, and inertia: Evidence from digital imaging. Strategic management journal, 1147-1161.
  • Tripsas, M. (2013). Exploring the interaction between organizational identity and organizational design in technological transitions. Working paper.
  • Ulrich, D., & Smallwood, N. (2004). Capitalizing on capabilities. Harvard business review, 119-128.
  • Verganti, R. (2008). Design, meanings, and radical innovation: A metamodel and a research agenda. Journal of product innovation management, 25(5), 436-456.

Bio Maxime Lubbers

Maxime is an ambitious and driven graduate from the University of Amsterdam. She successfully pursued two master degrees in Entrepreneurship and Digital Business. She aims to be the connection between business and technology as it allows her to solve problems by combining her passion and growing knowledge of technology with her other passion for people. For her final graduate internship, she researched which organizational capabilities established financial firms need to be ready to successfully manage Distributed Ledger Technology (DLT). If you are interested in following Maxime you can find here on LinkedIn

Blockchain: In consortia & corporates we trust?

blockchain, Blockchain, Business models, data, digital transformation, Distributed Ledger Technologie (DLT), Inspiring

Is Blockchain a hype or a (the next) big thing? Many discussions, meet-ups and events are filled with speakers and worksession on solving this question. Let me help you on this item and introduce a bigger question related to Distributed Ledger Technology (DLT).If you ask me Blockchain is both, hype and a technology that we can use to gain many benefits from it. That is what we have seen with previous technology developments and that is what we will see in the (near) future as well.

Curing the hype

If people do not understand the real potential of a technology there will be created a buzz of hype. This can be on several levels, for example on a conceptual phase where people think about what concept can we think about and how does this fit in our strategy? On the other hand this can be on a technical level where people do not have clear vision on to what extend a certain technology can help them improve. In this phase of Blockchain technology people are under- and overestimating of the potential of the DLT. What we need besides time is: common sense, research and experimentation which are most of the time the cure for this.

Bitcoin in, banks & governments out

The Guardian posted an article on their website Saturday the 10th of March 2018 titeled: “Does blockchain offer hype or hope?” In this article the stated the following:

“The blockchain was born as the digital scaffolding for cryptocurrency transactions. When devising bitcoin, pseudonymous inventor Satoshi Nakamoto’s aim was to create a stateless virtual currency, not controlled by any bank or government.”

If you ask me, it is good that there is the possibilities to connect with people on a P2P (Peer to Peer) basis to do transactions with. Over the past years we have ‘trusted’ parties with our money (banks), our insurance policies (insurance companies) our transactions (Notary) and other state related business (government on several levels). No or less involvement of these third parties can make lifes easier, more honest and realize more productivity. In special the last one of the most important benefits of what Blockchain technology could bring us. This movement can be increased in speed if these same parties facilitate this instead of (over)regulating it.

Trust transition: from the one institution to the other

But aren’t we forgetting one thing? Why are we so keen on getting away from banks, insurance companies and government institutions? The most commonly answer is: “I do not trust them” Fair enough. But do you trust technology? And more important the organizations who use this technology?

When we talk about corporate application of Blockchain they will mainly be in private and consortia Blockchains. Have you ever thought on who builds the chain, maintains it and is in charge of orchestrating the roles & rights in these environments. Based on what criteria these elements are provided by the authority of whom?

Blockchain is not the same as digital trust. Offcourse technology can enable and facilitate this partly. But if you do any form of business with an organization you also need to trust the Blockchain they (privatly) build or the consortia they are part of.

In whom we trust?

And this is exactly where I think we are missing a very big point. Stop shouting that you do not trust banks and governments. When using Blockchain related services you are also trusting parties that you most of the time do not trust. You are also trusting the way they give people and other parties rights and roles within the Blockchain ecosystem.  So before getting trustless towards the current instutions, be consious on who owns your trust in the future…

Image source: GCN

Wie Blockchain und Internet of Things voneinander profitieren und sich gegenseitig fördern

Blockchain, Business Model Innovation, Business models, Distributed Ledger Technologie (DLT), Internet of things, IoT, Uncategorized

The article on Blockchain & Internet of Things which I wrote with Martin Aarnoudse, is picked-up by the German colleagues of OV Software of Martin. The team asked us if they could translate the article in German for their website. You can find the result here: OV Software: Blockchain und IoT

Blockchain & IoT – zwei vielversprechende und große (R)Evolutionen in der digitalen Welt.Die Blockchain Technologie auf der einen Seite verspricht uns, dass wir in der digitalen Welt ein reales Vertrauensverhältnis erreichen, und das mit weniger Einmischung von Dritten, von Regierungen und Institutionen. Das Internet der Dinge (Internet of Thing – IoT) gibt uns andererseits völlig neue Einblicke, anhand derer wir heute steuernd eingreifen können. Einblicke, die uns Erkenntnisse über den Zustand eines äußeren Umfelds oder den inneren Zustand von Menschen, Tieren, Anwendungen oder was auch immer liefern.

Werfen wir zunächst einen Blick auf die Vor- und Nachteile dieser beiden Technologien, bevor wir uns ihnen inhaltlich zuwenden

Zentrale Versprechen der Blockchain

Beginnen wir mit den Schlüsselmerkmalen und den wesentlichen Versprechen der Blockchain:

Digitales Vertrauen
Denken Sie einmal an all die Möglichkeiten, Geschäfte zu tätigen und produktiv zu sein, wenn es keine Einmischung von Institutionen oder anderen Dritten gäbe. Die Stärke der Blockchain liegt darin, dass wir zur Steigerung der Produktivität eine Umgebung digitalen Vertrauens schaffen. Sie müssen nicht einmal der Person vertrauen, mit der Sie Geschäfte machen – Sie beide vertrauen der Technologie.

Transparenz und Dezentralisierung
Eine Blockchain ist ein System dezentraler und verteilter Datenbanken. Jeder kann eine Kopie der Daten haben. Aus diesem Grund ist die Blockchain vielversprechend, was die Bereitstellung von Daten angeht: Die richtige Person hat im richtigen Moment Zugriff auf die richtigen Kenntnisse.

Double Spending – Doppelte Ausgaben
In der Blockchain kann ein Betrag nicht zweimal ausgegeben werden. Sie können ein Haus nicht zweimal verkaufen oder die gleiche Banknote zweimal ausgeben. Die Blockchain garantiert in ihrem Algorithmus, dass doppelte Ausgaben unmöglich sind. Sie können sich darauf verlassen, dass Sie die/der Einzige sind, der/dem ein bestimmter Wert gehört.

Eigentum
Als Konsument möchten Sie sicher sein, dass der Absender in der Blockchain tatsächlich auch Eigentümer eines Wertes ist. Die verwendete Kryptographie sorgt dafür, dass nur die Person mit dem „Private Key“ diesen Wert an den Empfänger senden kann. Daher ist es sehr wichtig, dass dieser sicher gespeichert wird, idealerweise in einem Offline-Vault.

Smart Contracts
Die meisten Blockchains unterstützen Smart Contracts – eine sehr leistungsstarkes Feature, mit dem sich Vertrauen und Geld nun programmieren lassen. Investopedia gibt eine recht gute Definition von Smart Contracting: „Smart Contracts sind selbstausführende Verträge, wobei die Bedingungen der Vereinbarung zwischen Käufer und Verkäufer direkt in die Codezeilen geschrieben werden. Der Code und die darin enthaltenen Vereinbarungen existieren innerhalb eines verteilten, dezentralen Blockchain-Netzwerks. Smart Contracts ermöglichen die gesicherte Durchführung von Transaktionen und Vereinbarungen zwischen verschiedenen anonymen Parteien ohne die Notwendigkeit einer zentralen Behörde, eines Rechtssystems oder eines externen Durchsetzungsmechanismus. Sie machen Transaktionen nachvollziehbar, transparent und irreversibel.“ (Quelle: Definition von „Smart Contracts“, Investopedia (www.investopedia.com), übersetzt aus dem Englischen).

Fragen rund um Blockchain

Sehen wir uns nun einmal einige der Fragen an, die in Zusammenhang mit der Blockchain- und Distributed-Ledger-Technologie auftauchen.

Sicherheit und Datenschutz
Hier gibt es viele Fragezeichen: Woher weiß ich, dass die Blockchain nicht gehackt werden kann? Welche Auswirkungen hat das Quantencomputing auf die Sicherheit? Das Recht auf Vergessenwerden, wie wird das umgesetzt? Wenn jeder die Daten lesen kann, wie sichere ich diese? Wo werden meine Daten gespeichert? Wie kann ich den Daten in der Blockchain vertrauen? Welche Möglichkeiten hat ein Identity Provider? Die Liste ließe sich beliebig fortsetzen. Aber wir möchten an dieser Stelle lediglich einen Eindruck davon vermitteln, welche Fragen zu Sicherheit und Datenschutz sich im Hinblick auf Blockchain/DLT stellen.

Vorschriften
Viele legen ihr Hauptaugenmerk auf die Tatsache, dass es in der Blockchain weniger Eingriffe durch Dritte gibt – und das ist korrekt. Tatsache ist aber auch, dass diese manchmal durch andere ersetzt werden. Nehmen Sie zum Beispiel einen Versicherungsabschluss via Blockchain. Sie müssen immer noch der Versicherungsgesellschaft als (z. B.) Regulator in diesem Prozess vertrauen, einer Organisation, deren Aufgabe es ist… – Sie verstehen.

Internet der Dinge: die wichtigsten Vorteile

Nachdem wir nun einige der zahlreichen Vor- und Nachteile der Blockchain betrachtet haben, stürzen wir uns jetzt auf das Internet der Dinge (IoT) und machen dasselbe mit dieser Technologie.

Erkenntnisse
Der größte Vorteil des Internet der Dinge ist, dass wir auf Erkenntnisse vertrauen können, die wir in dieser Form noch nie hatten. Vor dem Zeitalter von IoT, Sensoren, Industry X.0 erfolgte die Steuerung basierend auf Unternehmensdaten, die oftmals unvollständig oder ungenau waren oder nicht richtig interpretiert wurden.

Echtzeitdaten
Ein weiterer großer Vorteil ist die Veränderung weg von historischen Daten hin zu (beinahe) Echtzeitdaten. Das Internet der Dinge hilft uns enorm dabei, anhand von „jetzt“-Daten  zu entscheiden. Aus diesem Grund ist es einer der Hauptmotoren für Dinge wie die präventive und die vorausschauende Wartung.

Öffentliche Daten
Auch im Bereich der öffentlichen Daten wie Wetter- und Regierungsinformationen treibt das Internet der Dinge die Entwicklung bedeutend voran. Mit dieser Art von externen Informationen und „Big Data“ können wir datengesteuerte Entscheidungen treffen und auf Informationen reagieren, von denen wir vor einigen Jahrzehnten nicht einmal träumen konnten.

Fragen zum Internet der Dinge

Nach den Vorteilen wollen wir uns die Nachteile des Internet der Dinge näher ansehen.

Datenschutz
Mit Sensoren, Kameras und mehr an jeder Straßenecke stellt sich die Frage, wie wir unser Recht und Privileg namens Datenschutz umsetzen können. Ein Beispiel dafür, wie das Internet der Dinge beispielsweise einen Überwachungsstaat ermöglicht, ist das, was gerade in China geschieht. „Die chinesische Regierung plant, im Jahr 2020 ihr Social Credit System einzuführen. Das Ziel? Zu beurteilen, wie vertrauenswürdig – oder nicht – ihre 1,3 Milliarden Einwohner sind.“ Das ist der Header eines auf Wired (www.wired.com) erschienene Artikels mit dem Titel „Big data meets Big Brother as China moves to rate its citizens”.

Sicherheit
Ein weiterer Punkt, der einem in den Sinn kommt, ist der sehr unsichere Zustand des IoT heutzutage. Wie können wir bei der Zunahme von vernetzten Maschinen und Produkten eine sichere Datenspeicherung und den Transport von (lokalen) Gateways in die Cloud verwalten? Die Definition von „Wert“ verschiebt sich –  weg von materiellen und physischen Dingen, hin zu Daten. Cyberattacken und Hackerangriffe nehmen zu, werden immer größer und richten immer mehr Schaden an.

Die Stärke in der Kombination dieser beiden mächtigen Technologien

Beim Lesen dieses Artikels könnte man sich fragen: Warum sollte ich zwei Technologien kombinieren, bei denen ich Dinge wie Datenschutz und Sicherheit in Frage stelle? Hier einige Antworten darauf.

Einer der wichtigen Punkte ist: Wie kann den Blockchain-Daten vertraut werden? An dieser Stelle kommen die Stärken von IoT und Blockchain zusammen. Können die vom IoT-Gerät generierten Daten als Input für die Transaktion in der Blockchain verwendet werden, so lässt sich die Eingabe validieren. Aber wie kann ich dem IoT-Gerät vertrauen? Müssen Sie dem IoT-Gerät vertrauen? In den meisten Fällen lautet die Antwort natürlich „ja“. Aber betrachten wir einmal den Punkt, nachdem die Daten generiert wurden. Wir haben drei Gründe zusammengefasst, warum die Kombination von Internet of Things & Blockchain so viel Potenzial hat und warum es lohnend ist, sich mit diesen Bereichen zu beschäftigen:

Verschlüsselung und verteilter Speicher
Werden die von Sensor und Auslöser erzeugten Daten gespeichert und mit der Blockchain-Technologie verschlüsselt, so können diese Rohdaten zu einem verteilten Netzwerk transportiert werden. Aber welche Daten müssen gespeichert werden? Eine Lösung besteht darin, alle Daten in einer dezentralen verteilten Cloud-Speicherumgebung zu speichern und den Hash der Rohdaten in der Blockchain hinzuzufügen. So können die Daten nicht verändert werden, da dies auch den Hashwert verändern würde. Die Größe dieser Transaktion ist sehr gering, da sie nur einen Hash enthält. Sie können Gleiches aber auch mit vollständigen Dokumenten oder Bildern tun.

Perfekte Audit Trails
Mit einer wachsenden Zahl von Netzwerken und Daten gewinnt die Frage, was real ist und was nicht, immer mehr an Bedeutung. Aus diesem Grund kann die Blockchain zur Erstellung eines perfekten Audit-Trails eingesetzt werden, um die Quelle und die Verbindung zwischen Daten zu lokalisieren.

IoT-Geräten vertrauen
Wie kann ich einem Unternehmen vertrauen? Woher weiß ich, ob ein B & B gut ist? Durch Bewertungen. Kann ich den Bewertungen vertrauen? Oftmals nicht. Die gleiche Frage stellt sich bei der Nutzung von Daten der IoT-Geräte. Es ist sehr wahrscheinlich, dass diese in Zukunft bewertet werden. Und ja, die Bewertungen sind dann in der Blockchain, sodass Sie überprüfen können, ob die Bewertung authentisch ist. Eine andere Lösung wäre die Speicherung alle gültigen „Public Keys“ von vertrauenswürdigen IoT-Geräten in einer Blockchain.

Experimentiere und iteriere – immer und immer wieder

Wir möchten den Artikel mit folgendem Hinweis abschließen. Alle technologischen Durchbrüche beginnen, indem das wahre Potenzial bestimmter Technologien erkannt wird. Wie oft waren Erfinder „aus Versehen“ erfolgreich? Daher ist es wichtig, das Vertrauen und das Budget bereitzustellen, um mit einer neuen Technologie zu experimentieren und herauszufinden, welche Möglichkeiten tatsächlich in ihr stecken. Kennen wir das wahre Potenzial, so haben wir einen Ausgangspunkt, um die Auswirkungen auf das Geschäft(smodell) von Morgen auszuarbeiten und wir können damit beginnen, den Traum Wirklichkeit werden zu lassen.

Das bringt uns zu unserem letzten Punkt – „Moonshots“ (dt: Mondflug). Oftmals ist damit Folgendes gemeint: „Ein Moonshot im Technologiekontext ist ein ehrgeiziges, exploratives und bahnbrechendes Projekt, bei dem keine kurzfristige Rentabilität oder kurzfristiger Nutzen erwartet wird, und das – möglicherweise – ohne eine umfassende Untersuchung potenzieller Risiken und Vorteile durchgeführt wird“ (Quelle: TechTarget). Also…, die große Frage nach dem Lesen dieses Artikels ist:

Was ist Ihr Moonshot, wenn es um die Zusammenführung des Potentials von IoT & Blockchain geht?

 

Über die Autoren

Martin Aarnoudse – ist IT-Fachmann bei OVSoftware und spezialisiert auf auf .NET und Blockchain. Für ihn ist die Blockchain-Technologie der nächste große Renner. Er hat einige interne Sessions zu Blockchain gegeben und für dieses Jahr sind externe Veranstaltungen für Entwickler geplant. Darüber hinaus betreut er zwei Studienabsolventen zu diesem Thema.

Rick Bouter – ist Berater „Emerging Technology” bei Accenture Consulting. In dieser Funktion hilft Rick Unternehmen, die Auswirkungen neuer und aufkommender Technologien zu verstehen und sie für ihre Kunden einzusetzen. In seiner Freizeit schreibt Rick Artikel über Innovationen und Trends wie Blockchain, Internet der Dinge, künstliche Intelligenz und andere, die auf seiner Website zu finden sind. (www.rickbouter.com.) Die Auswirkungen neuer Technologien auf Mensch, Ethik und Wirtschaft sind Themen, die ihn ansprechen.

Beide Autoren können über ihre LinkedIn-Seiten kontaktiert werden.

Dieser Artikel wurde am 4. Juni 2018 in englischer Sprache auf www.rickbouter.com veröffentlicht.

 

Blockchain Technology – A Cure for Pharmaceutical Counterfeit (2/2)

Big Data, blockchain, Blockchain, Business Model Innovation, Business models, Distributed Ledger Technologie (DLT), Innovation, Inspiring, Leading Digital, technology, Trends, Trendwatching, Uncategorized

A few weeks back the first part of Marlou her article appeared on www.rickbouter.com. You can find the start of this article here: “Part I – Current status, Impact on the Industry

Part II – how/ practicalities

On the bright side, Blockchain is expected to totally transform the pharmaceutical industry far beyond compliance. In addition to eliminating counterfeit, reassuring patient safety, adhering to regulations, optimizing supply chain operations, and protecting revenue, Blockchain is expected to standardize and automate multiple procedures, making an intermediary party redundant.

The patient in the lead of the supply chain

The patient will be put at the lead of the supply chain, allowing a more direct patient-stakeholder interaction, and is thought to facilitate the trend of personalized medicine, by making real-time patient data accessible to pharmaceutical companies. Combined with optimal utilization of analytics, pharmaceutical companies can better meet the patient demand and more directly reach their target market. This not only eases entrance barriers of market penetration, but also provides the opportunity to restrict premium pricing. The ‘pay-for-efficacy’ principle allows the price of a pharmaceutical product to be set according to the – relative – efficacy of a pharmaceutical product. This shows similarity with the ‘no cure no pay’ principle, requiring pharmaceutical companies to even more deliberately invest in secure and stable R&D projects.

Long term vs. short term impact of Blockchain in pharma

The benefits of Blockchain for the pharmaceutical industry may not be directly reflected in their revenues, but for sure have a long term impact with the potential extension to the healthcare sector in providing healthcare of a higher quality and the ability to better shape healthcare according to specific patient needs.

Optimizing impact of Blockchain due to technological add-ons

The optimizing impact of Blockchain can be further utilized by technological add-ons such as smart contracts, sensors, artificial intelligence, and different applications of IoT. Cold-chain logistics is a concrete example of an extended concept of Blockchain, where the integration of sensors and IoT allow supply chain stakeholders to track and confirm the conditions to which the products were exposed. This strongly contributes to the ability to confirm product quality and enables the industry to specifically remove individual products in case of an error, rather than reclamation of entire batches. The bottom line of these improvements is a business case for the pharmaceutical industry, of cost reduction and increased profits, accordingly.

Blockchain: Tangible prove of potential business value

We can easily write a bookwork about the speculations of what Blockchain can and cannot do. However, what we need exactly is not found in speculations, but rather in tangible prove of potential and unlocking of the business value for the pharmaceutical industry. The industry needs to take big and concrete steps towards implementation if they want to benefit from Blockchain’s potential. A concept unknown is a concept unloved, and therefore a critical act is to increase awareness around Blockchain as a technology and break through Blockchain’s technological abstractness.

Penetrating the pharmaceutical ecosystem

Although the core concept of Blockchain has already, to a certain extent, penetrated the pharmaceutical ecosystem, the majority is still unaware of the far-reaching and innovative applicability of Blockchain in digitally transforming the pharmaceutical industry. There are several steps the industry is recommended to follow if they want to unlock the business value of Blockchain for the industry. Education is a primary aspect to address the often existing asymmetry in awareness, knowledge, and understanding of Blockchain as a technology and what it has to offer in terms of potential. Part of getting stakeholders aligned with each other is to get them on the same level of expertise and thus to provide them with the required information. In addition, stakeholder’s hesitative or negative attitude towards Blockchain is to some extent a result of their deviating or wrong perception of Blockchain’s potential and how it works, also in their advantage. A better understanding of the technology would help the industry to better grasp the concept and its application.

Stakeholders intrests at stake

To reach the stakeholders of interest and in the run-up to get them on board, a pharmaceutical consortium should be formed as a starting point. In order to create alignment across the industry, stakeholders will need to discuss their objectives, perspectives, and expectations regarding an implementation of Blockchain. A consortium creates solid ground to further build on a pharmaceutical Blockchain, step by step. Together, stakeholders can determine the pain points that deserve priority in exploring and testing and formulate a consensus as the basis of the Blockchain.

Formulating specific use cases in a fragmented industry

Generally, it is important to determine and formulate specific use cases beforehand. To prevent the industry to come up with a pain point merely to follow the Blockchain hype, there should be focused on the recognition and formulation of specific use cases in the pharmaceutical environment. Specification allows for focused testing of pilots and concepts, generating tailored outcomes rather than standardized parameters that need to be translated to a particular use case. For this to be successful, the operational processes of pharmaceutical companies need to be overseen and frameworked. Given the fragmented nature of pharmaceutical companies, let alone the industry as a whole, achieving adoption is a fairly complicated process.

Mobilizing the pharmaceutical chain

The pharmaceutical industry will need to better cooperate with each other, allowing for change in their processes and behaviors. However, this is not so much of a rational process as it might have been pretended to be. Proving business value and encouraging stakeholders to embrace Blockchain definitely are steps in the right direction, but do not provide a guarantee of the technology to succeed in the pharmaceutical ecosystem. Practically, the conventional, risk-averse nature of the pharmaceutical industry and their need for evolution over revolution may just be difficult to unify with the disruptive, revolutionizing character of Blockchain. This large gap between technology and business may strain industry-wide adoption, even though stakeholders are on board with the solution. Another aspect challenging the implementation of Blockchain, but is difficult to address, is the quality of the input and the data recorded onto the Blockchain. Despite the immutable nature of the technology, the quality of the Blockchain is only as good as the quality of the information that is entered. It will be extremely difficult to qualify the channel where the information enters the Blockchain, which impinges on the promised trustless character of Blockchain.

Conclusion: Blockchain: turning the inevitable into the desirable

All in all, the previously anticipated resistance coming from the pharmaceutical industry is better to be redefined as hesitation to get involved with what is uncertain and unknown. The pharmaceutical industry needs to put the blocks together and build a solid ground to embrace digitalization, which does not imply having to set aside their cautious, hesitative attitude nor their responsibility. A way to go is to invest in education, the formation of a pharmaceutical consortium, and additional testing in the act to unlock Blockchain’s business value for the pharmaceutical industry, to once and forever turn the inevitable into the desirable, and harvest the benefits. Nevertheless, the pharmaceutical industry should keep a critical eye on the anticipated challenges as well as on new emerging technologies that are on their way to overhaul the potential of Blockchain.

Biography

With a background in Pharmaceutical Sciences, Marlou is currently in the last stage of the Master’s program Science and Business Management, pursuing her passion of unlocking the synergy between life science and business. Her ambition is to improve and strengthen the collaborative relationship of life science and business development, through encouraging communication and cooperation between the different fields. After finalizing her graduate internship at Accenture Strategy, The Netherlands, focusing on the potential of Blockchain for the pharmaceutical supply chain, Marlou is starting a PhD in human psychopharmacology at Swinburne University, Melbourne, Australia, striving for the aspired career in the pharmaceutical industry.

Image credits: Image 1, Disruptordaily Image 2, UKRInvest Image 3, Statnews

What happens with Blockchain in the Dutch government?

bitcoin, Bitcoin, blockchain, Blockchain, Business Model Innovation, Business models, Distributed Ledger Technologie (DLT), Innovation, Inspiring

Are you interested what happens with Blockchain within the Dutch government?

Make sure you look out this 389 pages counting .pdf. In this document called: Results Blockchain pilots june – november 2016 there is a very nice overview on a diversity of Blockchain pilots within the Dutch government.

Verkenningen_Pilots bij Rijksoverheid_Resultaten blockchainpilots jun-nov 2016

Source: DA2020

 

If you want to share your thoughts on Blockchain within the Dutch government you can join our community:

Blockchain voor Overheid

Blochchain: re-organizing productivity as we know it

bitcoin, Bitcoin, blockchain, Blockchain, Business Model Innovation, Business models, Distributed Ledger Technologie (DLT), Innovation, Inspiring

Blochchain is a Distributed Ledger Technology (DLT) which has a huge potential to re-organize productivity as we know it.

Together with Eddie Altenburg, Daan Bunte & Dibran Mulder, I wrote this whitepaper on Blockchain (Dutch) called: “Blockchain, de hype voorbij!”

 

Blockchain is een Distributed Ledger Technology (DLT) welke een enorm potentieel biedt om productiviteit zoals wij het nu kennen te re-organiseren.

Samen met Eddie Altenburg, Daan Bunte & Dibran Mulder,schreef ik het whitepaper:”Blockchain, de hype voorbij!”

Bitcoin: A Peer-to-Peer Electronic Cash System

bitcoin, Bitcoin, blockchain, Blockchain, Distributed Ledger Technologie (DLT), Innovation, Inspiring

Initial Bitcoin paper by Satoshi Nakamoto

Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network.
The network timestamps transactions by hashing them into an ongoing chain of
hash-based proof-of-work, forming a record that cannot be changed without redoing
the proof-of-work. The longest chain not only serves as proof of the sequence of
events witnessed, but proof that it came from the largest pool of CPU power. As
long as a majority of CPU power is controlled by nodes that are not cooperating to
attack the network, they’ll generate the longest chain and outpace attackers. The
network itself requires minimal structure. Messages are broadcast on a best effort
basis, and nodes can leave and rejoin the network at will, accepting the longest
proof-of-work chain as proof of what happened while they were gone.

Source: Bitcoin.org

“Blockchain, de hype voorbij!”

Bitcoin, Blockchain, Business Model Innovation, Business models, Caesar, Caesar Experts, digital transformation, Distributed Ledger Technologie (DLT), Innovation

Naar aanleiding van het event: “Blockchain en kansen binnen de overheid” van begin oktober bleven vragen binnenkomen bij Caesar Overheid over Blockchain. Vragen over wat Blockchain en Distributed Ledger Technology zijn. Hoe je tot Blockchain use cases komt, maar ook hoe je van concept naar experimentatie fase gaat. Kortom genoeg vragen om een whitepaper over te schrijven. Om deze reden lanceert Caesar het whitepaper met als titel:

“Blockchain, de hype voorbij!”

In dit whitepaper hopen de schrijvers drie vragen te beantwoorden:

1. Wat is Blockchain?

Hier gaan we in op de technologie Blockchain, wat Digital Ledger Technology is en wat bijvoorbeeld digitaal vertrouwen is. Ook gaan we in op de werking van Blockchain en open en closed Blockchains.

2. Wat gebeurt er binnen de (overheids)markt?

In dit gedeelte geven we een overzicht van pilots welke plaatsvinden binnen de overheid. Hier kijken we naar de huidige situatie van een scenario, de impact en het concept van Blockchain en de waarde ervan.

3. Hoe moeten wij als organisatie nu concreet beginnen?

Hier geven we een aantal concrete tips om aan de slag te gaan met Distributed Ledger Technology (DLT).

Benieuwd hoe ik je kan helpen in het experimenteren en organiseren van Blockchain? Laat het weten in de comments en ik neem contact met je op om de mogelijkheden te bespreken.

Meer weten over Blockchain en wat er gebeurt binnen de overheidsmarkt? In de LinkedIn groep Blockchain Overheid gaan we hierover verder in gesprek.